ENGLEWOOD, Colo., Nov. 5 /PRNewswire/ -- Echo Bay Mines Ltd.
(Amex: ECO; Toronto) today reported a net loss of $6.0 million ($0.06 per
share) for the third quarter of 1998. This compares with a net loss of $14.6
million ($0.12 per share) in the third quarter of 1997 before special charges
of $313.0 million ($2.25 per share). The special charges taken in 1997
brought the total quarterly loss that year to $327.5 million ($2.36 per
share). Both quarters' loss per share includes the equity portion of the
interest on the company's capital securities, $3.0 million ($0.02 per share)
in 1998 and $1.5 million ($0.01 per share) in 1997.
The smaller loss in 1998 was in large part a result of sharply lower cash
operating costs, reduced exploration and development spending and lower
depreciation and amortization. Increased production and operating
efficiencies at the company's two largest mines, Round Mountain and McCoy/Cove
in Nevada, contributed to a reduction in cash operating costs of $49 per ounce
of gold produced, to $202 this year from $251 a year ago. Exploration and
development spending was reduced by $8.6 million, to $2.5 million from $11.1
million in the same quarter of the previous year. Depreciation and
amortization charges were lower by $5.4 million, principally a result of the
write-downs taken in the third quarter of 1997 and the absence of production
from the Lupin mine in the Northwest Territories, where operations were
suspended in January 1998 as gold prices slumped to 18-year lows.
Revenue was reduced from $74.5 million in the 1997 quarter to $55.6
million in the third quarter of 1998, primarily as a result of fewer gold
ounces sold, 140,044 ounces compared with 156,862 ounces in 1997, and a lower
gold price realized, as discussed below. The primary cause of the lower
production was the suspension of operations at the Lupin mine. Lupin
contributed 35,200 ounces to gold sold in the year-ago quarter. Silver ounces
sold fell to 1.7 million from 2.9 million in the year-ago quarter as a result
of significantly lower silver grades treated at McCoy/Cove.
The reduced quarterly loss was achieved despite a gold price realized that
was $62 per ounce lower on a revenue basis than the same period in 1997
($318 vs. $380 per ounce). Revenue in both periods was affected by changes in
the hedge position. In the third quarter of 1998, $2.6 million was deferred;
while in the same quarter of 1997, $6.8 million in deferred revenue was
recognized. The 1998 deferral of gold revenue was partly offset by the
recognition of $2.4 million in deferred silver revenue from prior-period
hedging program changes. On a cash basis, the company's hedging program
helped to realize an average gold price in the 1998 quarter that was $49 per
ounce higher than the average spot price during the same time frame, $338 per
ounce as compared with an average spot price for the period of $289 per ounce.
The 1998 results also include a charge of $1.6 million required to "mark
to market" the carrying value of share positions held by Echo Bay in other
mining and junior exploration companies, reflecting the current low gold price
and its impact on share values, and $1.3 million from foreign exchange losses.
The loss for the 1997 quarter included special non-cash charges to reduce the
carrying value of certain of the company's assets on the consolidated balance
sheet.
Hedge Program Provides Floor for 1999
Increased hedging has guaranteed that the minimum average cash price Echo
Bay will receive for 430,000 ounces of its 1999 gold production will be $348
per ounce. The company recently bought put options on 100,000 ounces
exercisable at a price of $300 per ounce. While helping to mitigate against
any further decline in the gold price, the use of puts also allows the company
to retain its participation in any upside movement in the gold price. Echo
Bay's put options give it the right, but not the obligation, to deliver or
"put" gold to the option sellers at a predetermined price on a predetermined
date. Echo Bay paid for its put options by selling call options on 300,000
ounces of gold at $305 per ounce, 200,000 of which expired in late October
with the remainder exercisable in mid-November 1998. Call options give the
holders the right, but not the obligation, to buy or "call" the precious metal
from Echo Bay at a predetermined price on a predetermined date.
Lupin, Northwest Territories: Initial Re-engineering Complete -- Lower
Costs
Since the suspension of activities earlier this year, the company has been
evaluating every aspect of operations at Lupin to determine where costs could
be lowered without compromising safety and while increasing productivity. The
results indicate the site can accomplish an average life-of-mine cash
operating cost of $245-255 per ounce. This compares with a cash operating
cost of $284 per ounce experienced in 1997. A conservative Canadian/U.S.
exchange rate of 0.71:1 has been used in the plan, compared with the more
favorable current rate of 0.66:1.
Cost reductions under the re-engineered mine operating plan relate to
fewer tons mined and lower overall manpower requirements. The plan calls for
construction of an underground hoisting system (winze) to access the ore
located below the existing underground crusher at 1,130 meters (3,710 feet)
beneath the surface. This is a more efficient and cost-effective way to reach
this ore-bearing material.
Recommissioning of the Lupin mine will only be undertaken when the company
can secure a satisfactory cash margin over the cash operating costs. The
process of recommissioning would take approximately five months and be done
when access to the mine is made possible via a winter ice road. The cash
outlay for recommissioning would be $8.5 million, exclusive of anticipated
holding costs of $3-4 million for 1999. The plan assumes installation of the
winze in the first year after startup with an extension two years later. The
capital required to install the winze is $4.2 million and the extension is
$1.4 million.
The present proven and probable ore reserves (543,000 ounces) and other
mineralization are calculated to the 1340-meter level (4,400 feet) and support
an initial five-year mine plan averaging approximately 150,000 ounces of
production in each of those years. The Center, West and McPherson zones at
Lupin are all open at depth and have the potential to add reserves and mine
life.
The continued development of the Ulu satellite deposit represents an
opportunity for additional production ounces and the potential to lower costs.
Its development is not considered in the current re-engineering plan but may
be advanced when market conditions warrant. Additional drilling is in
progress on the McPherson zone to see if that zone shares the same continuity
at depth as other portions of the ore body.
An independent third-party consultant has been retained to review the
Lupin re-engineering study. This review is expected to be completed in the
fourth quarter of 1998.
Round Mountain - Another Quarter of Solid Performance
The 50%-owned Round Mountain mine in Nevada accomplished another quarter
of increased production and reduced costs per ounce. Echo Bay's portion of
gold production rose by 10% to 69,143 ounces from 62,803 ounces produced in
the same quarter of 1997. Cash operating costs decreased by 12% to $186 per
ounce of gold produced from $212 a year ago.
The results for the quarter benefited by the addition of 12,962 production
ounces (Echo Bay's 50% share) from the new mill. Completed in September 1997,
the mill was built to process large quantities of non-oxide ores that are
uneconomic to process by heap leaching. Mill recoveries have been averaging
better than 75% -- significantly higher than the 30-40% recoveries anticipated
if the non-oxide ores were heap leached.
Gold production from the dedicated heap leach pad increased by 37% from
the year-ago quarter. The tons treated during the period from the reusable
pad off-load stockpiles experienced higher-than-normal recoveries.
Some areas of the Round Mountain ore body contain more waste than others.
As a result, during certain periods fewer tons of ore are available to be
loaded on both the dedicated and the reusable heap leach pads, which affects
production in future periods. During the third quarter, the mine entered a
period of increased waste removal relative to the mining of ore. Slightly
lower production and slightly higher unit costs are therefore anticipated
through the latter half of 1999.
Round Mountain expects to meet or exceed its full-year 1998 production
target of 460-480,000 ounces of gold (Echo Bay's 50% share, 230-240,000
ounces). In July 1998, increased production, cost reductions and the benefits
of its 1997 revised mine plan allowed Round Mountain to lower its anticipated
cash operating cost target for the full year 1998 to $200-210 per ounce of
gold produced, down $30 per ounce from its initial target of $230-240 per
ounce.
The exploration program undertaken by the joint venture partners on the
area of mutual interest associated with Round Mountain has identified a number
of target areas. Preliminary drilling, aimed at identifying the underlying
geological structures and their ability to host gold mineralization, is
currently under way in two of these areas.
McCoy/Cove - Successfully Managing Costs
At McCoy/Cove in Nevada, third quarter gold production was up by 28%, to
50,057 ounces this year from 39,073 ounces last year, reflecting increased
tonnages of ore milled to compensate for lower gold grades processed. Silver
production was 2.0 million ounces, compared with 3.3 million ounces in the
same period of last year when the mill was treating mostly carbonaceous ore
with significantly higher silver grades. Increased mill throughput only
partially offset the 56% drop in silver grade.
The increased throughput was accomplished by rejecting material larger
than 3/8 inch. With the lower-grade ores being processed, the cost of sending
oversized material back through the milling circuit was greater than the
recoverable value at today's low gold prices. The oversized rejects are sent
directly to the waste pile, allowing the mill to exceed its rated capacity of
10,000 tons per day.
Despite lower gold and silver grades, cash operating costs were reduced by
$69 per ounce in the third quarter, to $201 per ounce produced this year from
$270 last year. McCoy/Cove continues to be aggressive with its cost-reduction
programs, which include operating with fewer people, reducing reagent
consumption, and lowering outside service expenses by utilizing site employees
for these programs. In the third quarter, programs like these helped to
decrease mining costs to $0.68 per ton of material mined from $0.79 per ton a
year ago and milling costs to $5.74 per ton of ore milled from $9.08 per ton
last year. Cash operating costs have also benefited from last year's
write-down of deferred mining expenses and from a lower gold-to-silver
equivalency ratio.
During the third quarter, McCoy/Cove removed approximately 4.4 million
tons of waste rock from a portion of the Cove pit wall that failed in 1996.
This waste rock removal program, slated to continue through the second quarter
of 1999, will allow access to ore containing an estimated 400,000 ounces of
gold and 22 million ounces of silver located directly beneath this portion of
the pit wall. Unusually high silver prices allowed the company to proceed
with this initiative by selling approximately 19 million ounces of silver at
$6.01 per ounce in the first quarter of this year for delivery in 1998-2001.
These forward sales, when combined with the company's forward sales of gold
for the same period, provide a revenue stream that helps to fund the waste
removal and to guarantee an acceptable return for the ounces under this
portion of the pit wall.
McCoy/Cove reduced its full-year 1998 cash operating cost target at the
end of the second quarter by $40 per ounce, to $220-230 from $260-270 per
ounce produced. This reflects the excellent cost reductions and operational
improvements at the site. The mine expects to meet or exceed its full-year
production targets of 160-170,000 ounces of gold and 7-8 million ounces of
silver.
During the third quarter, exploration drilling continued on three targets
adjacent to the bottom of the Cove pit. These targets are being investigated
for underground development. Initial drill intercepts indicate that ore
grades are sufficient to support underground development, but additional
drilling is needed to determine the extent of this material.
Kettle River: Lower-Grade Ores Mined, As Planned
At Kettle River in the state of Washington, gold production was 29,363
ounces in the third quarter, down 12% from 33,554 ounces a year ago, a
function of lower-grade ores being milled, as planned. As a result, cash
operating costs increased to $241 per ounce of gold produced from $218 in the
year-ago quarter.
As deeper levels are mined in both the Lamefoot and K-2 deposits, gold
production is expected to continue to decline gradually, and cash operating
costs are expected to rise gradually. For the full year 1998, Kettle River is
on track to meet its targets of 100-110,000 ounces of production at a cost of
$240-250 per ounce produced.
Regional exploration has been reduced during 1998 because low gold prices
have limited the availability of discretionary dollars for exploration.
Compilation of all existing geological data on the surrounding area is under
way to identify the most promising targets for future work.
Echo Bay mines gold and silver in North America. The primary markets for
its shares are the American and Toronto stock exchanges.
Statistical Tables Attached
"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,
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.
ECHO BAY MINES
Highlights
Three months ended Nine months ended
September 30 September 30
U.S. dollars 1998 1997 1998 1997
Financial Data
Revenue (millions) $55.6 $74.5 $173.8 $224.1
Net loss (millions):
Before special charges $(6.0) $(14.6) $(11.6) $(49.8)
After special charges $(6.0) $(327.5) $(11.6) $(365.0)
Gold ounces sold (a) 140,044 156,862 415,915 515,098
Silver ounces sold (a) 1,681,081 2,893,077 5,881,786 6,752,249
Average price realized
- revenue basis: (b)
Per ounce of gold sold $318 $380 $332 $366
Per ounce of silver sold $6.59 $5.11 $6.08 $5.24
Average price realized
- cash basis: (c)
Per ounce of gold sold $338 $337 $342 $347
Per ounce of silver sold $5.18 $4.84 $5.47 $4.92
Cash operating costs:
Per ounce of gold produced $202 $251 $206 $256
Per ounce of silver
produced $3.60 $3.77 $4.05 $4.06
% of revenue from gold 80% 80% 79% 84%
% of revenue from silver 20% 20% 21% 16%
Production and Reserves
Production (ounces): (a)
Gold 148,563 177,502 421,926 551,227
Silver 1,993,141 3,271,677 6,305,770 7,642,678
Reserves (ounces): (d)
Gold -- -- 7,479,000 8,573,000
Silver -- -- 46,525,000 53,858,000
Per Share Data
Net loss:
Before special charges $(0.06) $(0.12) $(0.15) $(0.39)
After special charges $(0.06) $(2.36) $(0.15) $(2.65)
Shares outstanding (millions):
Weighted average 140.6 139.4 139.9 139.4
Period end 140.6 139.4 140.6 139.4
(a) Amounts sold differ from amounts produced due to inventory changes.
(b) Includes non-cash items affecting gold and silver revenue, such as
the recognition of deferred income or deferral of revenue to future
periods for hedge accounting purposes.
(c) Prices reported are the cash amounts received per ounce of gold and
silver sold during each period.
(b) Proven and probable reserves at the beginning the year.
ECHO BAY MINES
Production and Costs
Three months ended Nine months ended
September 30 September 30
1998 1997 1998 1997
Gold Production (ounces)
Round Mountain (50%) 69,143 62,803 208,230 183,912
McCoy/Cove 50,057 39,073 125,501 143,900
Kettle River 29,363 33,554 88,195 102,137
Lupin (a) -- 42,072 -- 121,278
Total gold 148,563 177,502 421,926 551,227
Silver Production (ounces)
McCoy/Cove 1,993,141 3,271,677 6,305,770 7,642,678
Total silver 1,993,141 3,271,677 6,305,770 7,642,678
Cash Operating Costs (U.S. dollars per ounce of gold produced)
Round Mountain $186 $212 $189 $205
McCoy/Cove (b) 201 270 208 291
Kettle River 241 218 241 217
Lupin (a) -- 296 -- 294
Company average $202 $251 $206 $256
Consolidated Costs (U.S. dollars per ounce of gold produced)
Cash operating costs $202 $251 $206 $256
Royalties 11 11 11 10
Production taxes 2 2 2 2
Total cash costs 215 264 219 268
Depreciation 59 57 60 61
Amortization 27 34 26 34
Reclamation and mine closure 9 10 10 10
Total production costs $310 $365 $315 $373
(a) In January 1998, operations at Lupin were temporarily suspended in
response to 18-year lows in the gold price.
(b) In 1998, cash operating costs per ounce of silver produced at
McCoy/Cove were $3.60 and $4.05 for the three-month and nine-month
periods respectively, based on average gold-to-silver price ratios of
55.8:1 and 51.4:1 respectively. In 1997, cash operating costs per
ounce of silver produced at McCoy/Cove were $3.77 and $4.06 for the
three-month and nine-month periods respectively, based on average
respective price ratios of 71.7:1 and 71.6:1.
ECHO BAY MINES
Consolidated Earnings Statement
(Unaudited)
Three months ended Nine months ended
Thousands of U.S. dollars September 30 September 30
except for per share data 1998 1997 1998 1997
Revenue $55,613 $74,450 $173,814 $224,103
Expenses:
Operating costs 34,649 50,242 110,387 158,005
Royalties 1,959 2,335 5,899 6,653
Production taxes 369 491 1,052 1,153
Depreciation and
amortization 14,793 20,228 46,111 61,549
Reclamation and mine
closure 1,616 2,226 4,803 6,599
General and
administrative 1,927 1,955 6,251 8,943
Exploration and
development 2,462 11,145 8,244 27,575
Interest and other (a) 3,756 (111) 2,371 1,625
Provision for impaired
assets and other
charges (a) -- 312,950 -- 315,255
61,531 401,461 185,118 587,357
Loss before income
taxes (5,918) (327,011) (11,304) (363,254)
Income tax expense (recovery):
Current 105 (68) 279 307
Deferred 20 582 20 1,457
125 514 299 1,764
Net loss $(6,043) $(327,525) $(11,603) $(365,018)
Net loss attributable
to common
shareholders $(9,089) $(329,017) $(20,806) $(369,149)
Loss per share (b) $(0.06) $(2.36) $(0.15) $(2.65)
Weighted average
number of shares
outstanding 140,607,145 139,370,031 139,909,286 139,365,715
(a) Certain prior-period items have been reclassified to conform with the
current presentation.
(b) Echo Bay's financial statements are prepared in accordance with
accounting principles generally accepted in Canada. Earnings (loss)
per share equals the net earnings (loss) attributable to common
shareholders divided by the weighted average number of shares
outstanding during the period. The net loss attributable to common
shareholders includes the interest on the $100 million capital
securities for the period, a portion of which is charged directly to
the deficit in common shareholders' equity, rather than to interest
expense on the consolidated earnings statement. The capital
securities were issued in March 1997; interest on these securities
that was charged to the deficit was $3.0 million in the third quarter
of 1998 and $1.5 million in the third quarter of 1997.
ECHO BAY MINES
Consolidated Balance Sheet
(Unaudited)
Sept. 30 Dec. 31 Sept. 30
Thousands of U.S. dollars 1998 1997 1997
Assets
Current assets:
Cash and cash equivalents $13,333 $16,953 $5,910
Short-term investments 3,624 10,325 13,828
Interest and accounts
receivable 3,063 5,927 18,293
Inventories 42,786 41,168 48,734
Prepaid expenses and
other assets 6,470 5,068 5,070
69,276 79,441 91,835
Plant and equipment 207,850 238,948 241,791
Mining properties 97,922 107,820 139,605
Long-term investments
and other assets 15,012 6,558 9,717
$390,060 $432,767 $482,948
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and
accrued liabilities $59,459 $82,371 $81,319
Income and mining taxes payable 2,547 3,494 3,441
Current portion of gold
and other financings (a) 12,602 14,779 15,182
Current portion of
deferred income 12,898 7,461 16,041
87,506 108,105 115,983
Long-term gold and
other financings (a) 43,856 51,745 41,938
Long-term deferred income 54,284 54,708 45,112
Other long-term obligations 52,615 56,607 55,500
Deferred income taxes 7,664 7,941 9,993
Common shareholders' equity:
Common shares 713,343 709,593 709,593
Capital securities 107,879 95,753 95,974
Deficit (652,126) (631,320) (574,247)
Foreign currency translation (24,961) (20,365) (16,898)
144,135 153,661 214,422
$390,060 $432,767 $482,948
(a) Total gold and other financings were $56.5 million at September 30,
1998 (including current portion of $12.6 million), down $0.6 million
from $57.1 million at September 30, 1997 (including current portion
of $15.2 million).
ECHO BAY MINES
Consolidated Statement Of Cash Flow
(Unaudited)
Three months ended Nine months ended
September 30 September 30
Thousands of U.S. dollars 1998 1997 1998 1997
Cash Provided From (Used in):
Operating Activities
Net loss $(6,043) $(327,525) $(11,603) $(365,018)
Add (deduct):
Depreciation and
amortization 14,793 20,228 46,111 61,549
Deferred income taxes 20 582 20 1,457
Gain on sale of assets (188) (1,408) (7,569) (1,113)
Unrealized losses on
share investments 1,607 -- 2,813 --
Non-cash portion of
provision for impaired
assets and other
charges -- 309,800 -- 309,800
Other 1,341 (7,301) 520 (11,345)
Change in cash invested in operating assets and liabilities:
Interest and accounts
receivable 295 (9,890) 2,421 (9,856)
Inventories (2,777) (2,115) 675 (12,107)
Prepaid expenses and
other assets (3,204) (773) (1,733) 2,266
Accounts payable and
other liabilities 46 4,350 (25,472) (4,367)
Income and mining
taxes payable (1,455) (276) (906) (210)
4,435 (14,328) 5,277 (28,944)
Financing Activities
Debt repayments (4,999) (4,706) (13,327) (127,585)
Capital securities issued,
net of issuance costs -- -- -- 96,700
Common share issues, net
of issuance costs -- -- -- 60
Other (112) (2,174) (338) (185)
(5,111) (6,880) (13,665) (31,010)
Investing Activities
Mining properties, plant
and equipment (7,061) (41,581) (16,927) (91,546)
Proceeds on repurchase of the company's:
Gold and silver forward
sales -- -- 8,673 54,963
Gold swap -- -- -- 8,107
Foreign exchange contracts -- -- -- 5,995
Short-term investments -- -- 3,018 --
Long-term investments
and other assets (117) (6,749) (570) (23,266)
Proceeds on sale of
investment in Santa Elina -- -- 6,252 --
Proceeds on sale of
plant and equipment 734 1,155 3,184 1,319
Proceeds on sale of mining
properties -- -- 1,195 --
Proceeds on sale of
long-term investments -- 7,894 -- 7,894
Other 495 (739) (57) (798)
(5,949) (40,020) 4,768 (37,332)
Net decrease in cash
and cash equivalents (6,625) (61,228) (3,620) (97,286)
Cash and cash equivalents,
beginning of period 19,958 67,138 16,953 103,196
Cash and cash equivalents,
end of period $13,333 $5,910 $13,333 $5,910
ECHO BAY MINES
Mine Operating Data
Three months ended Nine months ended
U.S. dollars, September 30 September 30
except where indicated 1998 1997 1998 1997
Round Mountain Mine (50% owned)
Gold produced (ounces):
Reusable heap leach
pad (50%) 18,400 33,591 77,045 104,655
Dedicated heap leach
pad (50%) 36,336 26,573 90,282 76,618
Milled (50%) 12,962 -- 37,602 --
Other (50%) 1,445 2,639 3,301 2,639
Total (50%) 69,143 62,803 208,230 183,912
Ore and waste mined
(tons) (100%) 18,640,000 18,871,000 52,081,000 53,625,000
Mining cost/ton of
ore and waste $0.66 $0.66 $0.65 $0.67
Heap leaching cost/
ton of ore $0.89 $0.64 $0.70 $0.63
Milling cost/ton of ore $3.25 -- $3.42 --
Production cost per ounce of gold produced:
Direct mining expense $199 $205 $190 $202
Deferred stripping cost (7) 6 3 5
Inventory movements
and other (6) 1 (4) (2)
Cash operating cost 186 212 189 205
Royalties 20 24 20 23
Production taxes 2 7 2 4
Total cash cost 208 243 211 232
Depreciation 44 33 42 38
Amortization 17 18 18 18
Reclamation and mine closure 7 7 7 7
Total production cost $276 $301 $278 $295
Reusable heap leach pad:
Ore processed (tons/day)
(100%) 16,167 26,185 20,801 27,145
Grade (ounce/ton) 0.032 0.032 0.037 0.035
Recovery rate (%) 61.6 80.9 69.6 76.2
Dedicated heap leach pad:
Ore processed (tons/day)
(100%) 88,297 101,209 108,429 100,052
Grade (ounce/ton) 0.010 0.010 0.010 0.010
Recovery rate (a)
Milled:
Ore processed (tons/day)
(100%) 8,055 -- 7,895 --
Gold grade (ounce/ton) 0.044 -- 0.047 --
Gold recovery rate (%) 79.4 -- 76.6 --
McCoy/Cove Mine (100% owned)
Gold produced (ounces):
Milled 36,504 25,564 84,385 105,706
Heap leached 13,553 13,509 41,116 38,194
Total gold 50,057 39,073 125,501 143,900
Silver produced (ounces):
Milled 1,907,457 3,174,066 5,988,628 7,353,652
Heap leached 85,684 97,611 317,142 289,026
Total silver 1,993,141 3,271,677 6,305,770 7,642,678
Ore and waste mined
(tons) 12,188,334 12,218,337 30,709,634 42,704,262
Mining cost/ton of
ore and waste $0.68 $0.79 $0.69 $0.73
Milling cost/ton of ore $5.74 $9.08 $5.94 $9.01
Heap leaching cost/ton
of ore $1.90 $1.69 $1.67 $1.67
ECHO BAY MINES
Mine Operating Data (continued)
Three months ended Nine months ended
U.S. dollars, September 30 September 30
except where indicated 1998 1997 1998 1997
McCoy/Cove Mine (continued)
Production cost per ounce of gold produced: (b)
Direct mining expense $198 $275 $211 $298
Deferred stripping cost -- (2) (9) (12)
Inventory movements
and other 3 (3) 6 5
Cash operating cost 201 270 208 291
Royalties 3 3 3 3
Production taxes 2 -- 2 1
Total cash cost 206 273 213 295
Depreciation 50 67 54 72
Amortization 42 45 40 45
Reclamation and mine
closure 9 10 9 10
Total production cost $307 $395 $316 $422
Average gold-to-silver
price ratio (b) 55.8:1 71.7:1 51.4:1 71.6:1
Milled:
Ore processed (tons/day) 12,675 8,332 11,932 9,324
Gold grade (ounce/ton) 0.054 0.065 0.044 0.063
Silver grade (ounce/ton) 2.95 6.74 2.67 4.23
Gold recovery rate (%) 63.0 59.9 57.4 67.1
Silver recovery rate (%) 66.3 71.0 70.3 70.9
Heap leached:
Ore processed (tons/day) 11,255 17,567 11,779 18,576
Gold grade (ounce/ton) 0.021 0.024 0.020 0.016
Silver grade (ounce/ton) 0.23 0.36 0.27 0.26
Recovery rate (a)
Kettle River Mine (100% owned)
Gold produced (ounces) 29,363 33,554 88,195 102,137
Tons of ore mined 171,932 204,833 537,442 587,897
Mining cost/ton of ore $22.30 $20.95 $21.86 $21.30
Milling cost/ton of ore $11.76 $11.18 $10.61 $10.50
Production cost per ounce of gold produced:
Direct mining expense $233 $229 $237 $221
Deferred mine development
cost -- -- -- --
Inventory movements and
other 8 (11) 4 (4)
Cash operating cost 241 218 241 217
Royalties 11 17 12 15
Production taxes 1 2 1 2
Total cash cost 253 237 254 234
Depreciation 86 60 73 58
Amortization 5 45 5 45
Reclamation and mine
closure 12 12 12 12
Total production cost $356 $354 $344 $349
Milled:
Ore processed (tons/day) 1,983 2,034 2,021 2,130
Total tons milled 180,452 185,137 551,807 581,446
Grade (ounce/ton) 0.193 0.216 0.193 0.217
Recovery rate (%) 84.1 83.8 82.8 86.1
ECHO BAY MINES
Mine Operating Data (continued)
Three months ended Nine months ended
U.S. dollars, September 30 September 30
except where indicated 1998 1997 1998 1997
Lupin Mine (100% owned)(c)
Gold produced (ounces) -- 42,072 -- 121,278
Tons of ore mined -- 199,637 -- 596,577
Mining cost/ton of ore
(Cdn. dollars) -- C$50.82 -- C$46.75
Milling cost/ton of ore
(Cdn. dollars) -- C$12.72 -- C$11.91
Production cost per ounce of gold produced:
Direct mining expense
(Cdn. dollars) -- C$382 -- C$389
Deferred mine development cost
(Cdn. dollars) -- 28 -- 17
Inventory movements and other
(Cdn. dollars) -- -- -- (1)
Cash operating cost
(Cdn. dollars) -- C$410 -- C$405
Cash operating cost
(U.S. dollars) -- US$296 -- US$294
Royalties -- -- -- --
Production taxes -- -- -- --
Total cash cost -- 296 -- 294
Depreciation -- 72 -- 74
Amortization -- 28 -- 28
Reclamation and mine closure -- 14 -- 14
Total production cost -- US$410 -- US$410
Milled:
Ore processed (tons/day) -- 2,196 -- 2,179
Total tons milled -- 199,861 -- 594,966
Grade (ounce/ton) -- 0.226 -- 0.221
Recovery rate (%) -- 93.0 -- 92.4
(a) Recovery rates on dedicated pads can only be estimated, as actual
recoveries will not be known until leaching is complete. At the
Round Mountain mine, the gold recovery rate on the dedicated heap
leach pad is estimated at 50%. At the McCoy/Cove mine, the gold
recovery rate is estimated at 68% for crushed ore and 48% for
uncrushed, run-of-mine ore, and the silver recovery rate is estimated
at 35% for crushed ore and 10% for uncrushed, run-of-mine ore.
(b) 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.
(c) In January 1998, operations at Lupin were temporarily suspended until
gold prices improve.
SOURCE Echo Bay Mines Ltd.
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Related links:
http://www.echobay.com
CONTACT:
Robbin Lee of Echo Bay Mines Ltd.,
303-714-8829
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