ENGLEWOOD, Colo., April 29 /PRNewswire/ -- Echo Bay Mines Ltd.
(AMEX and TSE: ECO) today reported a net loss of $16.8 million ($0.12 per
share) in the first quarter, compared with a net loss of $16.2 million ($0.12
per share) a year ago.
The quarterly results reflect higher gold production, lower cash operating
costs, and reduced exploration and development expenses. These improvements
were partially offset by a lower gold price realized ($372 per ounce compared
with $397 a year ago).
The company produced 183,328 ounces of gold, up 14% from 161,246 ounces a
year ago. Silver production doubled, to 2.4 million ounces from 1.2 million
ounces. Cash operating costs decreased to $255 per ounce from $261 in 1996,
reflecting increased production at the company's two largest producers, Round
Mountain and McCoy/Cove, both located in Nevada.
First quarter production was consistent with full-year production targets
of 700-725,000 ounces of gold and 7.0 million ounces of silver.
Debt Reduction
During the quarter, the company repaid $118 million of debt, reducing
total debt to $67 million at quarter's end from $183 million three months
earlier. The majority of the funds was generated by the issuance of $100
million of capital securities in March. The 11% capital securities due 2027
are unsecured, subordinate and junior in right of payment to all senior
indebtedness of the company, and will be accounted for primarily as
shareholders' equity in accordance with generally accepted accounting
principles in Canada.
On the company's balance sheet, the present value of the securities'
principal amount, $4.0 million, has been classified as a liability within gold
and other financings. The present value of the future interest payments,
$96.0 million, has been classified as a separate component of shareholders'
equity. Issuance costs of $3.3 million have been allocated proportionately.
On the income statement, a similarly proportionate amount of the interest
payments will be allocated to interest expense, while the remainder of the
total interest payments will appear on the balance sheet as a reduction of
shareholders' equity, based on the respective debt and equity portions in all
accounting periods. This means that in 1997, approximately 4% of the total
interest payments will be reported as interest expense (on the income
statement) and 96% as a reduction of shareholders' equity (on the balance
sheet).
Cash Position
During the quarter, the company closed out all of its gold and silver
forward sales, realizing cash proceeds of $63.1 million. In addition, it
closed out a large portion of its Canadian dollar hedged position for $6.7
million in cash proceeds. Both of these transactions were undertaken to
harvest the cash differential between the current market and future hedge
positions, bringing the cash proceeds forward. For income statement purposes,
the gains on the transactions will be recognized in the periods in which the
gold, silver and dollars had been scheduled for delivery.
The net effect of these transactions was to repay $118 million of debt, to
reduce the company's total remaining debt to $67 million and to give the
company a cash position of $105 million at March 31, 1997.
Management Change
Robert L. Leclerc, Q.C., a director of the company since 1992 and chairman
since May 1996, was named to the additional position of chief executive
officer on an interim basis. As previously announced, he succeeds Richard C.
Kraus, who resigned to pursue other interests.
Kingking Feasibility Study Completed
The initial feasibility study was completed in late April on the Kingking
copper-gold project in the Philippines. Included in this study were
preliminary estimates of the contained copper and gold, which indicated
significantly more tons at slightly lower grades than earlier Benguet Corp.
(NYSE: BE) estimates.
Estimates of the contained copper and gold are based on the results of
66,000 meters (216,500 feet) of diamond core hole drilling, 46,000 meters
(150,900 feet) of which were completed by Echo Bay and its joint venture
partner, TVI Pacific Inc. (TSE: TVI).
Based on variable cutoff grades, several open pit optimization studies,
and metal prices of $375 per ounce of gold and $0.90 per pound of copper, a
minable "base case" was selected for the initial feasibility study. The
selected pit design includes 96.5 million tons of oxide material at an average
grade of 0.477% total copper and 0.022 ounce/ton gold, and 342.3 million tons
of sulfide material at an average grade of 0.303% total copper and 0.013
ounce/ton gold. This results in total Other Mineralization of 438.8 million
tons at an overall grade of 0.342% total copper and 0.015 ounce/ton gold.
For this "base case," the Other Mineralization at Kingking is estimated to
contain 3.0 billion pounds of copper and 6.6 million ounces of gold, up
significantly from the earlier estimate by Benguet of 2.1 billion pounds of
copper and 3.8 million ounces of gold.
The development scenarios considered in the initial feasibility study were
based on a milling rate of 77,000 tons/day, resulting in a 16-year mine life.
Capital and operating costs were estimated using both submarine and land-based
tailings disposal methods. The initial capital requirements ranged from $600
million to $650 million, with operating costs estimated at $257 per ounce of
gold or $0.69 per pound of copper on a metal equivalent basis.
The results of the initial feasibility study will be optimized over the
next several months by the joint venture partners. Options will be evaluated
for lowering both capital and operating costs. These include variations of
mining rates, throughput levels, and processing alternatives.
The study indicated that upside potential exists for lower capital and
operating costs, improved metallurgical recoveries, and an expansion of the
known resource. The study also indicated that at a $400 per ounce gold price
and a $1.10 per pound copper price, Kingking's after-tax internal rate of
return on a project basis ranges from 8% to 11%, excluding sunk and
acquisition costs, based on the two tailings disposal scenarios studied.
Aquarius - New Gold Mine in Canada
In January, Echo Bay made the decision to proceed with construction of the
Aquarius gold mine, located near Timmins, Ontario. Detailed engineering is
well under way, and contractor bids are being evaluated. Other activities
continue on schedule for the goal of production startup in late 1998 and full
production in early 1999. The mine is anticipated to produce an average of
166,000 ounces of gold per year. Additional exploration work is under way
directed at adding to the mine's current 1.3 million ounces of gold reserves
and expanding the mine's seven-year life.
Preparation of the site has included timber harvesting and road
construction for installation of the underground freeze wall, a cost-effective
method for dealing with the large quantities of subsurface water found at the
site. The freeze wall is designed to create an impermeable barrier of frozen
ground around the mine's open pit, keeping underground water from flowing into
the pit. Drilling of the holes necessary for the piping system is scheduled to
begin early in the second quarter and be completed early in the fourth
quarter. The freezing is projected to take approximately four months and
occur while mill construction is under way. Final environmental studies are
completed, and mining permits are anticipated by year's end.
The land position associated with the site was increased during the
quarter, and additional exploration targets have been identified. Drilling
activities are aimed at investigating the continuation of the gold-bearing
structures principally to the east. Initial exploration results are
encouraging.
Negotiations for arrangement of financing are well under way. Completion
is expected in the second quarter.
Paredones Amarillos in Mexico
In January, a contingent construction decision was made on the Paredones
Amarillos gold mine in Mexico, subject to project financing and Viceroy
Resource Corporation (TSE: VOY), Echo Bay's 40% joint venture partner,
approving the project and obtaining its share of the financing.
Paredones Amarillos could be in full production in early 1999. The mine,
if Viceroy concurs with the decision to proceed, is planned to produce an
average of 128,000 ounces of gold per year (Echo Bay's 60% share, 77,000
ounces) for over nine years, based on current reserves of 1.3 million ounces
of gold (Echo Bay's 60% share, 775,200 ounces).
During the quarter, initiation of detailed engineering and additional
metallurgical work resulted in further optimization of the process flow sheet.
The process changes resulted in reduced capital costs and improved mill
efficiencies. This kind of fine-tuning will be ongoing as the joint venture
continues to look for ways to maximize gold recoveries and minimize costs
associated with the project.
Negotiations for acquisition of the remaining land and water rights are
being completed. Detailed engineering and definitive cost estimates are
continuing. The project continues to receive strong local and national
support in Mexico. The Paredones Amarillos mine would be one of the largest
employers in Baja California Sur.
Santa Elina Projects in Brazil
During the first quarter, feasibility studies were advanced on a number of
properties in Brazil controlled by 51%-owned Santa Elina Mines Corporation.
Until detailed feasibility studies are completed, the gold contained in the
deposits that have been discovered at these projects can only be considered as
contained gold mineralization, not minable reserves. There can be no
assurance that Santa Elina will determine to proceed with construction of a
mine at any of these deposits.
A detailed feasibility study is scheduled to be completed later in the
year on Chapada, a low-grade copper/gold porphyry deposit. Echo Bay's share of
minable gold mineralization at Chapada at year-end was 56.7 million tons at an
average gold grade of 0.012 ounce/ton. Results from the 1996 drill program
are being incorporated into a revised estimate of the minable gold
mineralization, on which mining scenarios and economic parameters will then be
applied. Alternatives are being evaluated for dealing with issues such as
high capital and transportation costs as well as treatment and refining costs.
The results of a detailed feasibility study will help to determine whether
Chapada advances to construction.
In-fill drilling and metallurgical test work are under way at the Sao
Francisco gold project. While gold mineralization is known to exist on the
property, its economic viability under an open pit heap leach scenario is
still being evaluated. An initial feasibility study is currently expected to
be completed later in the year.
Mining operations at Sao Vicente, a small-scale open pit operation, were
suspended in the first quarter. Cost reductions accomplished in the milling
operation were not sufficient to make the project economic at today's gold
price. Evaluations are currently under way to determine if the implementation
of lower-cost heap leaching can sufficiently improve economics to restart the
operation. A detailed feasibility study evaluating this option is expected to
be completed by year-end.
An initial feasibility study is also being prepared for Fazenda Nova.
This near-surface deposit, if economic, could be brought into production
relatively quickly and at low cost. The feasibility study is currently
expected to be completed later in the year.
Other prospects in Santa Elina's portfolio are also being evaluated. A
number of joint venture proposals are being reviewed on portions of the 25-
million-hectare land position (96,000 square miles) claimed by Santa Elina.
These proposals could accelerate exploration of this vast land position and
help to realize its gold-producing potential sooner.
New Strategic Alliance at Buffalo Valley
In April, Echo Bay formed a strategic alliance with Fairmile Gold Corp.
(Alberta: FLA.CA) on the Buffalo Valley project in central Nevada. Located
approximately 15 miles north of the company's McCoy/Cove mine, Fairmile has
identified in-place mineralization of approximately 500,000 ounces at Buffalo
Valley with considerable upside potential. If these gold ounces are
economical, the proximity to McCoy/Cove would allow for the utilization of the
site's assets and personnel.
Echo Bay has agreed to acquire 700,000 shares of Fairmile for C$1.4
million (US$1.1 million), with 80% of the proceeds directed to the exploration
and development programs on Buffalo Valley. Using the funds from the private
placement, Fairmile will direct exploration efforts on other targets already
identified on the property while Echo Bay will direct development drilling and
engineering studies on the identified in-place mineralization.
Through additional equity investments and completion of a bankable
feasibility study, Echo Bay can earn the right to purchase up to 65% of the
project's recoverable reserves. If exercised, the cost will be $25 per ounce
of gold for Echo Bay's share of the first 420,000 ounces, and $20 for each
additional ounce to its account. The minimum purchase price will be $14.0
million.
Exploration and Development Properties
During the quarter, Echo Bay continued to pursue increased gold reserves
and future production through a more focused exploration program. As a result
of the aggressive program of property acquisition, exploration and development
over the last two years, the company now has a promising pipeline of projects
located mostly in North, South and Central America. During the first quarter
of 1997, $6.5 million was spent on exploration compared to $9.3 million in
1996.
Highlights of these programs follow:
-- At the Dolores project in Mexico, a strategic alliance with Minefinders
Corp. Ltd. (VSE: MFL), drilling results continue to be very encouraging. A
step-out drill program will look to further define and potentially to increase
the identified in-place mineralization. Project-to-date drilling stands at 48
holes for 10,615 meters (35,000 feet). The extension of the mineralization to
the south is currently being investigated.
-- At the Youga concession in Burkina Faso, West Africa, a joint venture
with Ashanti Goldfields, the partners have agreed to proceed with the planned
1997 drill program in the first six months. Drill results from 1996 were very
positive, with 16 out of 19 holes encountering at ore grade mineralization
over a minimum of five meters. The 1997 program will include 7,000 meters
(23,000 feet) of additional drilling. Preliminary results indicate a
favorable down-dip extension of the previously identified mineralization.
Evaluation efforts will also be directed at other targets on this and the
adjacent Bitou and Nangodi concessions.
-- At Kilgore in Idaho, now 100%-owned by Echo Bay, the 1997 exploration
program will primarily consist of drilling as well as additional mapping and
sampling work. This program is anticipated to start in June. Drilling will
attempt to expand the mineralized material identified from previous work and
to test several targets in the immediate area.
-- Late in 1996, Echo Bay entered into a joint venture on the Jessup
property in Nevada with Americomm Resources Corp. (Nasdaq: AREC). During the
first quarter, approximately 2,100 meters (7,000 feet) of drilling was
completed with positive results. Early indications are that Jessup is a
typical Nevada-style epithermal mineralization located close to the surface.
A second round of drilling commenced in April to offset and expand on
encouraging mineralized intercepts. This program calls for 35 holes, totaling
5,200 meters (17,000 feet), of drilling.
McCoy/Cove, Nevada: Production Up, Costs Down
McCoy/Cove produced 52,286 ounces of gold during the first quarter, up
from 48,890 ounces a year ago. Cash operating costs declined to $285 per
ounce of gold produced from $314 a year ago, reflecting the increased
production.
More than three-quarters of the gold produced at McCoy/Cove is milled, and
less than one-quarter heap leached. Mill production rose to 40,894 ounces of
gold in the first quarter from 34,300 ounces a year ago, reflecting increased
mill throughput. Mill production of silver more than doubled, to 2.4 million
from 1.0 million ounces, reflecting the increased mill throughput and also
higher silver grades.
Heap leaching production fell, reflecting lower ore grades processed.
Gold production from heap leach processing was down by 22%, to 11,392 ounces.
Silver production from heap leach operations fell to 81,830 from 141,480
ounces.
A series of exploration drill holes is currently being drilled beneath the
Cove pit. In addition, evaluations are ongoing of nearby exploration
projects, including joint ventures such as Buffalo Valley, as well as other
deposits possibly looking for custom milling opportunities, as ways to extend
the life, to maximize the assets, and to utilize further the skilled staff in
place at McCoy/Cove.
Round Mountain, Nevada: Mill Construction on Schedule
At 50%-owned Round Mountain in Nevada, Echo Bay's portion of gold
production totaled 56,161 ounces, up 41% from 39,716 ounces in 1996. The
increase in production resulted principally from the reduction of high in-
process inventories existing at year-end. Cash operating costs were $210 per
ounce, down from $216 a year ago. The lower unit costs were a function of more
ounces produced.
During the quarter, 26,904 tons/day were loaded on the reusable pad and
88,539 tons/day on the dedicated pads, up from 25,902 and 74,713 respectively
in 1996. These higher volumes and the increased solution capacity on the
dedicated pad more than offset a slight decrease in the grades treated.
Construction of the 8,000-ton/day mill facilities to treat nonoxidized
ores is well advanced. Testing is expected to begin late in the second
quarter, with full production scheduled for early in the fourth quarter.
Mining is currently concentrated in a portion of the ore body containing
larger quantities of nonoxidized ore than in previous periods. These ores are
currently being stockpiled and will be treated at the mill once it is
completed. These larger quantities of nonoxide ores mean that less oxide ore
is available for heap leaching. Consequently, production is expected to be
lower in the third quarter until the mill comes into full production. Round
Mountain expects to meet its full-year production target of 190-200,000 ounces
of gold (Echo Bay's 50% share).
Exploration at the Round Mountain project has been expanded to new targets
within the claim block. Work also continues on further defining the reserves
that exist within the boundaries of the ultimate pit.
Lupin, Northwest Territories: Winter Road Completed
Production at Lupin in the Northwest Territories was 36,602 ounces of
gold, down 9% from 40,310 ounces in 1996. Cash operating costs increased to
$325 per ounce from $291 a year ago.
Mining at Lupin continues to move to lower depths with some deterioration
of ground conditions. Ore grades declined in the first quarter (0.206
ounce/ton compared with 0.235 ounce/ton in 1996), and were only partially
offset by increased mill throughput (2,120 tons/day compared with 2,039
tons/day in 1996).
Mining is scheduled to move to slightly higher-grade sections of the ore
body in the second and third quarters. Associated costs per ounce are
anticipated to decrease as a result.
Transportation of supplies into Lupin via the winter road is complete.
Between late January and early April, over 25.1 million liters of fuel and
17,425 tonnes of freight were delivered to the site via a 360-mile-long ice
road across the frozen lakes between Yellowknife and Lupin. This is
sufficient for a full year of operations. Additional development and mining
equipment was also trucked in to support development of the satellite Ulu
deposit.
An underground ramp being driven into the Ulu deposit has been advanced to
a depth of 115 meters (380 feet). Ore-grade mineralization has been
encountered on several levels, but the main mineralization is located at the
175 meter (575 feet) level. Further definition of the mineralization will be
undertaken with an extensive diamond drilling program beginning in the second
quarter. Current activities focus on developing the deposit and securing the
permits necessary for the site to start providing additional ore feed to Lupin
in early 1999.
Kettle River, Washington: K-2 Brought into Commercial Production
At the Kettle River mine in Washington State, gold production increased to
38,279 ounces from 32,330 ounces in 1996. The first quarter marked the start
of commercial production of gold from the K-2 ore body, the sixth deposit
developed at the site. The blending of ores from the K-2 and Lamefoot deposits
resulted in more tons per day being treated (1,958 tons compared with 1,461
tons in 1996) but at a lower overall grade (0.243 ounce/ton compared with
0.274 ounce/ton in 1996). The lower grade and higher mining costs associated
with the K-2 deposit resulted in rising cash operating costs ($185 per ounce,
up from $170 per ounce a year ago).
Close to 50,000 tons of material were mined from the K-2 deposit during
the quarter. The ore is transported to the mill, where it is blended with
Lamefoot ore. While the availability of K-2 ore allows for full mill
utilization, the mining of this ore is at a higher cost than at Lamefoot. For
the remainder of the year, cash operating costs at Kettle River are expected
to be above $200 per ounce.
Exploration efforts continue on extensions of both the Lamefoot and K-2
deposits.
Pending Litigation
During the second quarter, a trial began in Nevada State Court regarding
alleged royalty underpayments to Summa Corporation by Echo Bay and the
predecessor owner of the McCoy/Cove and Manhattan mines. The company has
accrued $2.0 million with regard to this matter and will defend itself against
any claims in excess of this amount.
Echo Bay is a major gold producer with mines in Canada and the United
States. The primary markets for its shares are the American and Toronto stock
exchanges. Its shares are also listed on stock exchanges in Switzerland,
France, Germany and Belgium.
Statistical Tables Follow
"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 and copper
prices, which could render projects uneconomic; differences in ore grades,
recovery rates, and tons mined from those expected; changes in mining and
milling rates from currently planned rates; the results of future exploration
activities and new exploration opportunities; conclusions of feasibility
studies now under way; changes in project parameters as plans continue to be
refined; and other factors detailed in the company's filings with the
Securities and Exchange Commission, particularly those on Forms 10-Q, 10-K,
8-K and S-4.
ECHO BAY MINES
Highlights
Three months ended March 3
1
U.S. dollars 1997 1996
Financial Data
Revenue (millions) $73.8 $67.7
Net loss (millions) $(16.8) $(16.2)
Exploration and development (millions) $6.5 $14.0
Cash flow before exploration and
development (millions) (1) $7.5 $14.9
Cash flow after exploration and
development (millions) (1) $1.2 $2.3
Gold ounces sold (2) 171,232 155,189
Silver ounces sold (2) 1,936,345 1,105,256
Average price realized:
Per ounce of gold sold $372 $397
Per ounce of silver sold $5.25 $5.57
Cash operating costs:
Per ounce of gold produced $255 $261
Per ounce of silver produced $4.00 $4.35
% of revenue from gold 86% 91%
% of revenue from silver 14% 9%
Production and Reserves
Production (ounces) (2)
Gold 183,328 161,246
Silver 2,437,413 1,175,057
Reserves (ounces) (3)
Gold 8,573,000 10,983,000
Silver 53,858,000 62,913,000
Per Share Data
Net loss $(0.12) $(0.12)
Operating cash flow (1) $0.01 $0.02
Gold production (milliounces) (4) 1.3 1.2
Gold reserves (milliounces) (3,4) 61.5 84.6
Shares outstanding (millions):
Weighted average 139.4 130.0
Period end 139.4 130.5
(1) Working capital provided by operations.
(2) Amounts sold differ from amounts produced due to inventory changes.
(3) Proven and probable reserves at the beginning of the year.
(4) One milliounce = 0.001 ounce.
ECHO BAY MINES
Production and Costs
Three months ended March 31
1997 1996
Gold Production (ounces)
McCoy/Cove 52,286 48,890
Round Mountain (50%) 56,161 39,716
Lupin 36,602 40,310
Kettle River 38,279 32,330
Total gold 183,328 161,246
Silver Production (ounces)
McCoy/Cove 2,437,413 1,175,057
Total silver 2,437,413 1,175,057
Cash Operating Costs (U.S. dollars per
ounce of gold produced)
McCoy/Cove (1) $285 $314
Round Mountain 210 216
Lupin 325 291
Kettle River 185 170
Company average $255 $261
Consolidated Costs (U.S. dollars per
ounce of gold produced)
Cash operating costs $255 $261
Royalties 10 11
Production taxes 2 4
Total cash costs 267 276
Depreciation 63 76
Amortization 35 33
Reclamation and mine closure 10 6
Total production costs $375 $391
(1) Cash operating costs per ounce of silver produced at McCoy/Cove were
$4.00 in 1997 and $4.35 in 1996, based on average gold-to-silver price ratios
of 71.2:1 and 72.2:1 respectively.
ECHO BAY MINES
Consolidated Earnings Statement
(Unaudited)
Three months ended March 3
1
Thousands of U.S. dollars, except for per share data 1997 1996
Revenue $73,838 $67,750
Expenses:
Operating costs 51,453 44,565
Royalties 2,244 2,103
Production taxes 439 709
Depreciation and amortization 19,973 18,497
Reclamation and mine closure 2,186 1,144
General and administrative 3,418 3,332
Exploration and development 6,490 14,008
Interest and other 3,641 (846)
89,844 83,512
Loss before income taxes (16,006) (15,762)
Income tax expense:
Current 318 206
Deferred 437 188
755 394
Net loss $(16,761) $(16,156)
Loss per share $(0.12) $(0.12)
Weighted average number of shares outstanding 139,357,083 130,045,870
ECHO BAY MINES
Consolidated Balance Sheet
(Unaudited)
March 31 Dec. 31 March 31
Thousands of U.S. dollars 1997 1996 1996
Assets
Current assets:
Cash and cash equivalents $104,847 $103,196 $149,981
Interest and accounts receivable 9,702 9,739 14,209
Inventories 44,078 33,941 43,204
Prepaid expenses and other assets 5,596 6,573 6,053
164,223 153,449 213,447
Plant and equipment 231,328 233,984 251,398
Mining properties 404,474 405,011 328,554
Long-term investments and other assets 48,972 39,701 55,469
$848,997 $832,145 $848,868
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued
liabilities $67,970 $72,421 $53,186
Income and mining taxes payable 3,696 3,651 2,249
Current portion of gold and other
financings (1) 16,408 129,445 35,833
Current portion of deferred income 14,708 876 12,192
102,782 206,393 103,460
Long-term gold and other financings (1) 51,051 53,478 114,373
Long-term deferred income 55,578 1,581 12,920
Other long-term obligations 63,287 69,992 32,337
Deferred income taxes 8,789 8,392 8,298
Common shareholders' equity:
Common shares 709,593 709,534 623,577
Capital securities 95,974 -- --
Deficit (221,974) (201,931) (31,265)
Foreign currency translation (16,083) (15,294) (14,832)
567,510 492,309 577,480
$848,997 $832,145 $848,868
(1) Total gold and other financings were $67.5 million at March 31, 1997
(including current portion of $16.4 million), down $82.7 million from $150.2
million at March 31, 1996 (including current portion of $35.8 million).
ECHO BAY MINES
Consolidated Statement of Cash Flow
(Unaudited)
Three months ended March 3
1
Thousands of U.S. dollars 1997 1996
Cash Provided by (Used in):
Operating Activities
Net loss $(16,761) $(16,156)
Add items not affecting working capital:
Depreciation and amortization 19,973 18,497
Non-cash portion of exploration and development
expense 146 1,400
Deferred income taxes 437 188
Loss (gain) on sale of assets 160 (2,580)
Other (2,781) 996
Working capital provided by operations 1,174 2,345
Change in cash invested in working capital
related to operations:
Interest and accounts receivable 3 362
Inventories (8,384) (7,889)
Prepaid expenses and other assets 2,028 618
Accounts payable and other liabilities (11,610) (11,034)
Income and mining taxes payable 45 (298)
(16,744) (15,896)
Financing Activities
Debt repayments (118,057) (2,463)
Capital securities issued, net of issuance costs 96,700 --
Common share issues, net of issuance costs 60 4,611
(21,297) 2,148
Investing Activities
Mining properties, plant and equipment (20,822) (26,692)
Proceeds on repurchase of the company's:
Gold and silver forward sales 54,963 --
Gold swap 8,107 --
Foreign exchange contracts 6,672 --
Long-term investments and other assets (9,377) (1,051)
Proceeds on sale of mining properties and
long-term investments -- 5,550
Other 149 79
39,692 (22,114)
Net increase (decrease) in cash and cash equivalents 1,651 (35,862)
Cash and cash equivalents, beginning of period 103,196 185,843
Cash and cash equivalents, end of period $104,847 $149,981
ECHO BAY MINES
Mine Operating Data
Three months ended March 3
1
U.S. dollars, except where indicated
1997 1996
McCoy/Cove Mine (100% owned)
Gold produced (ounces):
Milled 40,894 34,300
Heap leached 11,392 14,590
Total gold 52,286 48,890
Silver produced (ounces):
Milled 2,355,583 1,033,577
Heap leached 81,830 141,480
Total silver 2,437,413 1,175,057
Ore and waste mined (tons) 15,478,726 15,464,965
Mining cost/ton of ore and waste $0.69 $0.70
Milling cost/ton of ore $8.76 $9.92
Heap leaching cost/ton of ore $1.64 $2.09
Production cost per ounce of gold produced:(1)
Direct mining expense $293 $369
Deferred stripping cost (12) (58)
Inventory movement and other 4 3
Cash operating cost 285 314
Royalties 4 4
Production taxes 2 7
Total cash cost 291 325
Depreciation 70 95
Amortization 45 45
Reclamation and mine closure 10 6
Total production cost $416 $471
Average gold-to-silver price ratio (1) 71.2:1 72.2:1
Milled:
Ore processed (tons/day) 10,076 7,579
Gold grade (ounce/ton) 0.066 0.070
Silver grade (ounce/ton) 3.34 2.70
Gold recovery rate (%) 71.8 75.7
Silver recovery rate (%) 70.2 72.5
Heap leached:
Ore processed (tons/day) 17,648 11,658
Gold grade (ounce/ton) 0.012 0.023
Silver grade (ounce/ton) 0.17 0.38
Recovery rates (2)
Round Mountain Mine (50% owned)
Gold produced (ounces):
Reusable heap leach pad (50%) 31,945 25,972
Dedicated heap leach pad (50%) 24,216 13,744
Total (50%) 56,161 39,716
ECHO BAY MINES
Mine Operating Data
(continued)
Three months ended March
31
U.S. dollars, except where indicated 1997 1996
Round Mountain Mine (continued)
Ore and waste mined (tons) (100%) 16,252,000 14,541,712
Mining cost/ton of ore and waste $0.70 $0.64
Heap leaching cost/ton of ore $0.69 $0.80
Production cost per ounce of gold produced:
Direct mining expense $211 $268
Deferred stripping cost -- (29)
Inventory movement and other (1) (23)
Cash operating cost 210 216
Royalties 27 34
Production taxes 3 4
Total cash cost 240 254
Depreciation 47 62
Amortization 18 18
Reclamation and mine closure 7 5
Total production cost $312 $339
Reusable heap leach pad:
Ore processed (tons/day) (100%) 26,904 25,902
Grade (ounce/ton) 0.037 0.038
Recovery rate (%) 65.5 65.6
Dedicated heap leach pad:
Ore processed (tons/day) (100%) 88,539 74,713
Grade (ounce/ton) 0.011 0.012
Recovery rate (%) (2)
Lupin Mine (100% owned)
Gold produced (ounces) 36,602 40,310
Tons of ore mined and milled 192,930 185,505
Mining cost/ton of ore (Canadian dollars) C$46.06 C$41.81
Milling cost/ton of ore (Canadian dollars) C$11.41 C$12.80
Production cost per ounce of gold produced:
Direct mining expense (Canadian dollars) C$423 C$428
Deferred mine development cost (Canadian dollars) 20 (29)
Inventory movement and other (Canadian dollars) (1) --
Cash operating cost (Canadian dollars) C$442 C$399
Cash operating cost (U.S. dollars) US$325 US$291
Royalties -- --
Production taxes -- --
Total cash cost 325 291
Depreciation 80 72
Amortization 29 18
Reclamation and mine closure 14 8
Total production cost US$448 US$389
Milled:
Ore processed (tons/day) 2,120 2,039
Total tons milled 192,930 185,505
Grade (ounce/ton) 0.206 0.235
Recovery rate (%) 91.9 92.3
ECHO BAY MINES
Mine Operating Data
(continued)
Three months ended March
31
U.S. dollars, except where indicated 1997 1996
Kettle River Mine (100% owned)
Gold produced (ounces) 38,279 32,330
Tons of ore mined and milled 178,175 132,973
Mining cost/ton of ore $20.68 $22.24
Milling cost/ton of ore $11.57 $11.99
Production cost per ounce of gold produced:
Direct mining expense $196 $172
Deferred mine development cost -- --
Inventory movement and other (11) (2)
Cash operating cost 185 170
Royalties 11 10
Production taxes 2 2
Total cash cost 198 182
Depreciation 51 56
Amortization 45 45
Reclamation and mine closure 12 8
Total production cost $306 $291
Milled:
Ore processed (tons/day) 1,958 1,461
Total tons milled 178,175 132,973
Grade (ounce/ton) 0.243 0.274
Recovery rate (%) 88.6 88.6
(1) To convert costs per ounce of gold into comparable costs per ounce of
co-product silver, divide by the period's average gold-to-silver price ratio.
(2) Recovery rates on dedicated heap leach pads can only be estimated, as
actual recoveries will not be known until leaching is complete. At the
McCoy/Cove mine, the gold recovery rate is estimated at 68% for crushed ore
and 48% for uncrushed, run-of-mine ore, while the silver recovery rate is
estimated at 30% for crushed ore and 10% for uncrushed, run-of-mine ore. At
the Round Mountain mine, the gold recovery rate on the dedicated heap leach
pad is estimated at 50%.
SOURCE Echo Bay Mines
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CONTACT:
Media Contact: Jill Paukert, 303-714-8825, or
Investor Contact: Robbin Lee, 303-714-8829, both of Echo Bay
Mines
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