Earnings Summary
Dollar amounts in thousands of US dollars,
except amounts per share 2001 2000
THREE MONTHS ENDED SEPTEMBER 30:
Revenue $58,545 $76,415
Net earnings (loss) $(187) $8,998
Net earnings (loss) attributable
to common shareholders $(4,252) $5,154
Earnings (loss) per share $(0.03) $0.04
Weighted average common shares outstanding 140,607,145 140,607,145
NINE MONTHS ENDED SEPTEMBER 30:
Revenue $186,658 $212,505
Net earnings (loss) $3,203 $16,493
Net earnings (loss) attributable
to common shareholders $(9,518) $5,176
Earnings (loss) per share $(0.07) $0.04
Weighted average common shares outstanding 140,607,145 140,607,145
EDMONTON, Alberta, Nov. 1 /PRNewswire/ -- Echo Bay Mines Ltd.
(Toronto; Amex: ECO) today reported a third quarter 2001 net loss of
$0.2 million compared with net earnings of $9.0 in the third 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, $4.1 million ($0.03 per share)
in 2001 and $3.8 million ($0.03 per share) in 2000.
Net earnings for the nine months ended September 30, 2001 were
$3.2 million compared with net earnings of $16.5 million in the same period in
2000. The loss per share was $0.07 in 2001 compared with earnings of $0.04 in
the same period of 2000 when capital securities interest of $12.7 million
($0.09 per share) in 2001 and $11.3 million ($0.08 per share) in 2000 is
added.
Total gold production for the quarter was 171,533 ounces compared with
2000 third quarter production of 184,449 ounces. This year's quarter reflects
the reducing production from the McCoy/Cove mine which has been partially
offset by an increase in gold production at the Round Mountain mine. Silver
production from McCoy/Cove was 1.7 million ounces, compared with 2.7 million
ounces produced in 2000. As a result of the lower production during the
quarter, consolidated cash operating costs increased to $217 per ounce from
$197 in 2000.
Total gold production for the nine months ended September 30, 2001 was
521,287 ounces, slightly higher than the 513,094 ounces produced in the same
period of 2000. Silver production from McCoy/Cove was 5.0 million ounces
compared with the production of 10.1 million ounces in the same period of
2000.
Revenues in the quarter were lower than in the same quarter in 2000
because the company realized lower average gold prices ($298 per ounce in
2001; $313 per ounce in 2000) and lower average silver prices ($4.43 per ounce
in 2001; $5.13 per ounce in 2000). Revenues for the nine months ended
September 30, 2001 were lower than the same period in 2000 as a result of the
company realizing lower average gold prices ($302 per ounce in 2001; $318 per
ounce in 2000) and lower average silver prices ($4.77 per ounce in 2001;
$5.34 per ounce in 2000). The decrease in silver ounces contributed
significantly to the lower revenues.
Debt and liquidity
The company ended the quarter with $10.9 million in cash and cash
equivalents. During the third quarter, the company repaid debt of $2 million.
On October 5, 2001, a new $17 million revolving credit and $4 million letter
of credit facility was established with HSBC Bank USA, one of the company's
syndicated bankers. The new facility has been guaranteed by an affiliate of
Franco-Nevada Mining Corporation Limited, which holds approximately
72.4 percent of the company's capital securities. The company has drawn on
the revolving credit to repay bank debt of $17 million and has replaced the
$4.0 million letter of credit issued under the syndicated facility. The
principal amount of the new credit facility matures on September 30, 2002 and
interest is payable quarterly. As a result of the Franco-Nevada guarantee,
the interest rate payable by the company is lower than it would have been
without the guarantee. Accordingly, the company has agreed to pay
Franco-Nevada a fee equal to 50% of the saving it will realize, making the
effective annual interest rate cost to the company LIBOR plus 2.125 percent.
Proposed conversion of capital securities
On September 5, 2001, the company announced that it proposed to issue up
to approximately 361.5 million common shares, in exchange for $100 million in
principal amount of its capital securities plus accrued and unpaid interest.
The capital securities were issued in early 1997 and interest may be deferred
for ten consecutive semi-annual periods. The Company first elected in
March 1998 to defer, which has had the result of building up an interest
obligation that must be met on March 31, 2003. At September 30, 2001, the
principal plus accrued interest amounted to $159.4 million.
The Company has entered into support and lock-up agreements with the
holders of 98 percent of the capital securities. Each holder has agreed to
exchange all capital securities owned by it on the basis of a ratio which
would require the company to issue up to approximately 361.5 million common
shares in addition to the approximate 140.6 million presently issued and
outstanding, assuming all holders of capital securities elect to exchange. If
all holders of capital securities elect to exchange, the ratio between the
respective aggregate ownership interest of capital security holders and
present shareholders will be 72:28.
The share issuance will be presented to shareholders for their
consideration, and approval will be recommended. If shareholders approve and
all other transaction conditions are satisfied, the exchange of capital
securities for common shares is expected to be completed in the first quarter
of 2002.
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 mine continues to have an
excellent year. The company's share of mine production was 102,883 ounces for
the quarter compared with 79,987 ounces in 2000. The increase in production
is attributable to an increase in mill tonnage, reduction of in-process
inventory and the dual processing of high grade oxide material. Dual
processing means the material is first leached on the reusable pad and then
processed through the mill allowing coarse gold to be recovered and increasing
the ultimate recovery. Cash operating costs per ounce for the quarter were
$191, compared with $201 in 2000. Revenues from higher production offset
increased reagent and power costs resulting in the lower cash cost per ounce.
McCoy/Cove: continues to process stockpile ore
At McCoy/Cove in Nevada, gold production was 23,450 ounces for the quarter
compared with 39,362 ounces in 2000. Silver production amounted to
1.7 million ounces compared with 2.7 million ounces in the prior year. The
lower production level reflects the processing of low grade stockpiles as open
pit mining was completed in 2000. With the lower production, cash operating
costs for the quarter were $239 per ounce, compared with $189 per ounce in
2000.
Reclamation activities continued during the quarter with the contouring of
rock stockpiles, infiltration basins, and leach pads. Work is on track to
have significant acreage available for the fall/winter planting season and
earthwork activities will proceed through the winter.
Lupin: lower grade encountered
At Lupin, located in Nunavut, Canada, gold production for the quarter was
33,000 ounces compared with 40,696 ounces in 2000. Cash operating costs were
$241 per ounce compared with $199 per ounce last year. Mining costs were
higher and grades lower than in 2000 due to the sequencing of production areas
in the mine. The cash operating costs include a $0.7 million benefit ($21 per
ounce) in the third quarter from hedging Canadian dollars for Lupin
expenditures. A $6.0 million gain, realized when certain contracts were
closed during the first quarter of 1997, has now been fully amortized.
Kettle River: extension of K-2 mine continues, new exploration targets
At Kettle River, located in the Republic District of Washington State,
production for the quarter amounted to 12,200 gold ounces compared with
24,404 ounces produced in the same quarter last year. Mining at the Lamefoot
deposit was completed in the fourth quarter of 2000 meaning that production in
2001 has been solely from existing stockpiles and the K-2 mine and, as
anticipated, is lower than 2000 production. Cash operating costs per ounce
were $278 compared to $206 per ounce in the second quarter of 2000, reflecting
the lower production. Underground exploration and development of an extension
to the K-2 mine is currently underway.
On August 22, 2001, each of the underground sites at Kettle River received
a Sentinels of Safety Award for its outstanding safety record in 2000.
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.
For further information, please contact Lois-Ann L. Brodrick, Vice
President and Secretary of Echo Bay Mines Ltd., +1-303-714-8838.
"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; the possibility that the exchange of the capital
securities for common shares will not be completed, 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
|
