ENGLEWOOD, Colo., Nov. 4 /PRNewswire/ -_ Echo Bay Mines Ltd.
(Amex and TSE: ECO) today announced a special one-time restructuring charge of
$309.8 million ($2.22 per share), following completion of a previously
reported comprehensive review of the carrying values of the company's assets.
    The restructuring charge is included in the company's third quarter net
loss of $327.5 million, or $2.36 per share.  Before the restructuring
provision, the company had a net loss from operations of $17.7 million, or
$0.14 per share.  (For details, see separate news release issued today.)
    The restructuring provision is a non-cash charge.  It reduces the cost
basis of the company's assets on the consolidated balance sheet.  It also
reduces the company's future gold production costs by an estimated $20-30 per
ounce of gold produced over the lives of the mines, as it reduces deferred
mining costs and future depreciation and amortization amounts.  There is no
tax effect; the amount is the same pre-tax and after-tax.
    The restructuring provision resulted from a previously reported review of
the carrying values of the company's assets, including four producing gold
mines and a portfolio of exploration properties, development projects and
other assets, in light of current market conditions.  As reported, Echo Bay
initiated the asset value review in the second quarter of this year.


    Details of the non-cash charges follow:
    * $107.4 million write-down of Echo Bay's investment in Santa Elina Mines
Corporation in Brazil to its current market value of $45.0 million.
    * $50.0 million write-off of Echo Bay's entire investment in the Kingking
copper-gold project in the Philippines.
    * $127.0 million reduction in the carrying values of three producing mines
in the United States and Canada (McCoy/Cove, Lupin and Kettle River) as a
result of continuing low gold prices.
    * $25.4 million to write down certain other investments and assets to
market value and to provide for estimated legal and restructuring expenses.

    The company assessed the recoverability of the carrying values of all
assets in light of both short-term and long-term views of the gold price.  A
brief discussion of each carrying value assessment follows.  The attached
tables provide additional details.
    Santa Elina Mines Corporation:  The market value of Echo Bay's investment
in this gold exploration and development company in Brazil has dropped
precipitously in the wake of the decline in value of many junior exploration
companies and the plunge in world gold prices to 12-year lows.  The company
wrote down its investment by $107.4 million to Santa Elina's estimated market
value of $45.0 million.
    Kingking:  Echo Bay took a $50.0 million charge to write off its entire
investment in this copper-gold project in the Philippines.  As reported, Echo
Bay and its joint venture partner, TVI Pacific Inc. (TSE: TVI), completed a
feasibility study in April of this year.  The study concluded that Kingking
would not meet the joint venture's desired rates of return, principally due to
the required payment of $67 million in order to exercise the purchase option
(Echo Bay's 75% share, $50.3 million).  The joint venture elected to let the
option expire.
    Share Investments and Other:  This $25.4 million charge includes $15.6
million to write down Echo Bay's portfolio of share investments in other
companies, reflecting the decline in market value of many gold exploration and
development companies and continued low gold prices, and $9.8 million for
miscellaneous asset write-downs and estimated legal and restructuring
expenses.  The share investments are principally common shares of exploration-
oriented companies acquired by Echo Bay as part of a global strategic-alliance
strategy over a period of years.  Because Echo Bay has sharply refocused its
exploration strategy, most of these share investments now are non-core assets
and will be disposed of.  The miscellaneous asset write-down (mostly leasehold
improvements related to office downsizings and closures) is $2.1 million, and
the accrual for estimated legal and restructuring expenses is $7.7 million.
Echo Bay implemented the final steps of a company-wide downsizing in the third
quarter, reducing Denver corporate office personnel from 116 to 75 and closing
a number of exploration offices around the world.  The company expects a
reduction of approximately $4 million in annual cash operating costs and
general & administrative expenses as a result.
    Three Producing Mines:  As a result of continuing low gold prices, Echo
Bay reduced by a total of $127.0 million the carrying value of three gold
mines _ McCoy/Cove, Lupin and Kettle River.  The non-cash charge reduces Echo
Bay's consolidated gold production costs by an estimated $20-30 per ounce of
gold produced over the lives of the mines.  Approximately half of the future
cost reduction, $10-15 per ounce of gold produced, is in cash operating costs
(reflecting a $64.2 million reduction in deferred mining costs) and the other
$10-15 reduction in non-cash depreciation and
amortization expenses (reflecting a $62.8 million reduction in ore bodies,
plant and equipment).
    In evaluating the carrying values of its producing gold mines, the company
restricted the basis of its calculations to proven and probable ore reserves,
excluding other mineralization (called "possible reserves" in Canada).  For
the year 1998, the company used a gold price assumption of $325 per ounce.
For 1999 and thereafter, a gold price of $375 was used for undiscounted cash
flow analysis (as required by Canadian generally accepted accounting
principles) but this price was effectively reduced to an average of
approximately $350 per ounce on a consolidated basis over the lives of the
mines by application of appropriate debt charges imputed to the assets at each
mine and deducted from the undiscounted cash flows.
    Echo Bay noted that the write-down puts its gold mines in a position to
weather a prolonged period of low gold prices.  All four mines continue to
perform well, and further improvements are anticipated.  The Round Mountain
mine approved a new mining plan in the third quarter that increases cash flow
and profitability and reduces cash operating costs.  At McCoy/Cove, additional
mineralization has been discovered just outside the Cove open pit that has the
potential of adding to production and extending mine life.  Lupin has
introduced new mining and blasting methods at depth that make deeper levels
economic, potentially adding 2-3 additional years at current production rates.
At Kettle River, positive exploration results along extensions of two ore
bodies indicate the potential is excellent to add minable ounces and
additional years of mine life in 1998 and beyond.
    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.

                                   Table I
                           Restructuring Provision

                                     Before                         After
    Millions of U.S. dollars      Provision       Provision     Provision

    Net book value at Sept. 30, 1997:

    Producing mines

    Round Mountain:
      Ore body, plant & equipment    $110.2            $---        $110.2
      Deferred mining costs            12.2             ---          12.2
        Property, plant & equipment   122.4             ---         122.4

    McCoy/Cove:
      Ore body, plant & equipment      99.0             ---          99.0
      Deferred mining costs            49.8            47.0           2.8
        Property, plant & equipment   148.8            47.0         101.8

    Lupin:
      Ore body, plant & equipment      93.6            47.8          45.8
      Deferred mining costs            17.2            17.2            --
       Property, plant & equipment    110.8            65.0          45.8

    Kettle River:
      Ore body, plant & equipment      31.6            15.0          16.6
      Deferred mining costs             2.5              --           2.5
       Property, plant & equipment     34.1            15.0          19.1

    Subtotal - Producing mines        416.1           127.0         289.1

    Development properties
      Aquarius                         41.2             --_          41.2
      Paredones Amarillos               8.3             _--           8.3
      Kingking                         50.0            50.0           --_
       Subtotal - Development
        properties                     99.5            50.0          49.5

    Investments and other assets
      Santa Elina Mines               152.4           107.4          45.0
      Share investments and other (a)  33.7            25.4          16.0
        Subtotal - Investments and
         other assets                 186.1           132.8          61.0

                                     $701.7          $309.8        $399.6

    (a)   See details attached in Table II.

                                   Table II
                         Share Investments and Other

                                       Cost                      Net Book
    Millions of U.S. dollars          Basis       Provision     Value (a)

    Carrying value at Sept. 30, 1997:

    Common share investments:
      TVI Pacific                     $12.6           $10.2          $2.4
      Minefinders (b)                   5.1             --_           5.1
      Ashanti Goldfields                4.4             1.5           2.9
      Canarc Resource                   4.3             2.8           1.5
      Rift Resources                    1.4             1.1           0.3
      Kit Resources                     1.1             --_           1.1
      Sutton Resources                  0.3             --_           0.3
      Mar-West Resources                0.2             --_           0.2
                                       29.4            15.6          13.8

    Other (c)                           4.3             9.8           2.2

                                      $33.7           $25.4         $16.0

    (a)  Net book value is the lower of market value on Sept. 30 or the
company's cost basis.
    (b)  Excludes an additional 1.25 million common shares of Minefinders with
a market value of $3.5 million that Echo Bay received on Oct. 3.
    (c)  Provision includes $2.1 million to write down miscellaneous assets,
principally leasehold improvements related to office downsizings and closures,
and a $7.7 million accrual for estimated legal and restructuring expenses.

    "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; 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.

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