SALES AT Lundin Mining's Galmoy lead and zinc mine in Co Kilkenny fell by 16 per cent in 2007 to $119.6 million, according to results published by its Vancouver-based parent yesterday.

In the three months to the end of December, sales of ore from the mine more than halved from $38.2 million to $17.8 million, the quoted company said yesterday.

Production at Galmoy declined sharply last year to 453,444 tonnes of ore compared with 605,438 tonnes in 2006.

Lundin, which is quoted in Canada and lists Tony O'Reilly jnr among its directors, said this was due to unofficial industrial disputes, restricted accessibility to certain areas of the mine and a "slow start to its long hole" programme.

Zinc production was 24.6 per cent below 2006 levels, while lead production was 17.2 per cent down year on year. The grades of ore improved to 12.4 per cent for zinc and to 3.4 per cent for lead.

The cost per pound of metal fell by 7 per cent last year to 84 cent, due in part to lower treatment charges for zinc.

Lundin also gave an update on its exploration activities in Ireland. At Galmoy, it said a new high-grade zone of zinc-lead-silver mineralisation was discovered, which has the potential to extend the life of the mine.

The group also has a potential zinc and lead deposit at Keel in Co Longford. "One in three holes drilled intersected significant mineralisation within two zones adjacent to the known extent of the deposit," the company said. Drilling will continue this year.

In Limerick, Lundin has a licence for a site about 80km west of Galmoy. "Four holes have been completed to date with no significant mineralisation detected." Drilling will continue on additional targets until the end of March.

Galmoy went into production in 1997 and became part of Lundin following its merger in 2005 with Arcon Resources.