Earnings Summary
Dollar amounts in thousands of US dollars,
except amounts per share 2001 2000
THREE MONTHS ENDED JUNE 30:
Revenue $63,652 $84,293
Net earnings (loss) $(403) $10,168
Net earnings (loss) attributable
to common shareholders $(4,729) $6,320
Earnings (loss) per share $(0.03) $0.04
Weighted average common shares outstanding 140,607,145 140,607,145
SIX MONTHS ENDED JUNE 30:
Revenue $128,113 $136,090
Net earnings (loss) $3,390 $7,495
Net earnings (loss) attributable
to common shareholders $(5,266) $22
Earnings (loss) per share $(0.04) $0.00
Weighted average common shares outstanding 140,607,145 140,607,145
ENGLEWOOD, Colo., Aug. 2 /PRNewswire/ -- Echo Bay Mines Ltd.
(Toronto; Amex: ECO) today reported a second quarter 2001 net loss of
$0.4 million compared with net earnings of $10.2 in the second quarter of
2000. For the quarter, the loss per share was $0.03 compared with earnings
per share of $0.04 in 2000. The per share amount includes the equity portion
of the interest on the company's capital securities, $4.3 million ($0.03 per
share) in 2001 and $3.8 million ($0.03 per share) in 2000.
Net earnings for the six months ended June 30, 2001 were $3.4 million
compared with net earnings of $7.5 million in the same period in 2000. The
loss per share was $0.04 in 2001 and $0.00 in the same period of 2000 when
capital securities interest of $8.7 million ($0.06 per share) in 2001 and
$7.5 million ($0.05 per share) in 2000 is added.
Total gold production for the quarter was 176,284 ounces, six percent
lower than 2000 second quarter production of 188,475 ounces. This year's
quarter reflects the reducing production profile from the McCoy/Cove mine
offset by an increase in gold production at the Round Mountain mine. Silver
production from McCoy/Cove was 1.7 million ounces, 51 percent lower than the
3.6 million ounces produced in 2000. With lower production during the
quarter, consolidated cash operating costs increased to $218 per ounce from
$186 in 2000.
Total gold production for the six months ended June 30, 2001 was
349,754 ounces, six percent higher than the 328,645 ounces produced in the
same period of 2000, reflecting the increased production at Round Mountain and
the re-commissioned Lupin mine, offset by the reduced production from
McCoy/Cove. Silver production from McCoy/Cove was 3.3 million ounces,
56 percent lower than the 7.4 million ounces produced in the same period of
2000.
Revenues in the quarter were 24 percent lower than in the same quarter in
2000 as the company realized lower average gold prices ($298 per ounce in
2001; $322 per ounce in 2000), lower average silver prices ($4.52 per ounce in
2001; $5.23 per ounce in 2000) and sold 63 percent fewer silver ounces.
Revenues for the six months ended June 30, 2001 were six percent lower
than the same period in 2000 as the company realized lower average gold prices
($304 per ounce in 2001; $321 per ounce in 2000) and lower average silver
prices ($4.93 per ounce in 2001; $5.42 per ounce in 2000). Gold ounces sold
increased by 20 percent and were offset by 47 percent fewer silver ounces
sold.
With the better than anticipated gold production achieved during the first
half of 2001, production for the full year is now expected to total 670,000
ounces, 18 percent higher than originally forecast primarily due to the better
grades at Round Mountain and more production from McCoy/Cove. The company
expects to achieve the planned cash operating costs of $225 per ounce.
Debt and liquidity
The company ended the quarter with $10.0 million in cash and cash
equivalents. During the second quarter, the company repaid debt of
$3.7 million. The existing syndicated bank debt, which has a balance of
$19 million, has been extended to September 5, 2001. The company expects to
finalize the terms of a refinancing with the current syndicate and have formal
documentation in place on or before that date.
Round Mountain: continues outstanding performance
The company has a 50 percent ownership interest in, and is the operator
of, the Round Mountain mine in Nevada. The company's share of mine production
was 97,770 ounces for the quarter compared with 76,408 ounces in 2000. The
mine continues to have an excellent year, which is attributable to better heap
leach recoveries as well as the benefit of higher grade ore having been placed
on the pads during the first quarter of the year. Cash operating costs per
ounce for the quarter were $194, compared with $202 in 2000. Increased
reagent and power costs prevented the cash operating costs from being lower
than what is reported.
With the improved operating performance during the first half of the year,
the company has revised its full year production forecast to 370,000 ounces
from 300,000 ounces (Echo Bay share) at average cash operating costs of
$200 per ounce.
McCoy/Cove: continues to process stockpile ore
At McCoy/Cove in Nevada, gold production was 27,385 ounces for the quarter
compared with 49,448 ounces in 2000. Silver production amounted to
1.7 million ounces compared with 3.6 million ounces in the prior year. The
lower production level reflects the processing of low grade stockpiles as
mining was completed last year. With the lower production, cash operating
costs for the quarter were $234 per ounce, compared to $163 per ounce in 2000.
The company had been concerned about its ability to ensure the processing
of stockpiled concentrates, given the shutdown of a major smelter which had
been contracted to handle this material. During the quarter, however,
alternate arrangements were secured and the processing challenge has been
overcome. In result, the company has revised its production forecast upward
for the full year to 90,000 ounces of gold from 60,000 ounces and 6.5 million
ounces of silver from the previous 5 million ounces. Cash operating costs per
ounce for the year are now expected to be $250 compared with $275 per ounce
embedded in the full year forecast announced earlier.
Reclamation activities continued during the quarter with the contouring of
rock stockpiles, infiltration basins, and leach pads. Contouring of slopes,
application of an alluvial growth media, and seeding with a mixture of native
plant species has been accomplished on 1,571 acres. Reclamation will be
underway on an additional 500 acres by the end of the year.
Lupin: produces its 3,000,000th ounce
The Lupin underground mine, which began commercial production in 1982,
reached a lifetime total of three million ounces of gold produced on May 1,
2001. Gold production for the quarter was 34,756 ounces compared to
38,359 ounces in 2000. Cash operating costs were $230 per ounce compared to
$213 per ounce last year. Mining costs were higher and grades lower than in
2000 due to the sequencing of production areas in the mine. It is expected
that Lupin will meet its 2001 production target of 150,000 ounces. The cash
operating costs include a $0.7 million benefit ($19 per ounce) in the second
quarter from hedging Canadian dollars for Lupin expenditures. A $6.0 million
gain was realized when certain contracts were closed during the first quarter
of 1997. The gain was deferred and will be recognized through the third
quarter of 2001.
The internal hoisting system (winze), completed in late April, is
operating well. This is a more cost effective method of transporting ore and
waste from the lower levels of the mine.
Kettle River: extension of K-2 mine continues, new exploration targets
Production for the quarter amounted to 16,373 gold ounces, 33 percent
lower than the 24,260 ounces produced in the same quarter last year.
Production in 2001 was from existing stockpiles and the K-2 mine and, as
anticipated, was lower than 2000 production, due to the completion of mining
at the Lamefoot deposit in the fourth quarter of 2000. Cash operating costs
per ounce were $274 compared to $201 per ounce in the second quarter of 2000,
reflecting the lower production. Kettle River is expected to produce
60,000 ounces with cash operating costs of $240 per ounce in 2001.
Underground exploration and development of the previously reported north
east extension to the K-2 mine is currently being conducted.
Exploration and development projects
The company continues its focused approach to exploration and development
activities primarily within close proximity to existing mine sites as well as
in the western United States and the Timmins area of Ontario.
Statistical information is available with this release at the press
release area of the company's web site, http://www.echobay.com.
Echo Bay mines gold and silver in North America. The primary markets for
its shares are the American and Toronto stock exchanges.
Contact: Lois-Ann L. Brodrick, Vice President and Secretary -
303-714-8838
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995: The statements herein that are not historical facts are forward-
looking statements. They involve risks and uncertainties that could cause
actual results to differ materially from targeted results. These risks and
uncertainties include, but are not limited to, future changes in gold prices
(including derivatives) and/or production costs which could render projects
uneconomic; ability to access financing; availability of hedging
opportunities; differences in ore grades, recovery rates and tons mined from
those expected; changes in mining and milling/heap leaching rates from
currently planned rates; the results of future exploration activities and new
exploration opportunities; changes in project parameters as plans continue to
be refined; increasingly stringent reclamation requirements imposed by
regulatory authorities; and other factors detailed in the company's filings
with the Securities and Exchange Commission.
SOURCE Echo Bay Mines Ltd.
 back to top
Related links:
http://www.echobay.com
CONTACT:
Lois-Ann L. Brodrick, Vice President and
Secretary of Echo Bay Mines Ltd., +1-303-714-8838
|
