ENGLEWOOD, Colo., July 31 /PRNewswire/ -- Echo Bay Mines Ltd.
(AMEX and TSE: ECO) today reported a net loss of $14.6 million ($0.11
per share) in the second quarter of 1996, compared with a net loss of
$12.9 million ($0.12 per share) a year ago.
The results reflect continued high levels of exploration and
development expenditures in the company's international search for new
gold reserves and production. Echo Bay expensed $18.0 million on
exploration and development during the quarter, compared with $15.4
million a year ago. These funds were spent on a number of projects the
company believes will provide expanded reserves and increased production
in future periods.
Gold production rose to 205,601 ounces, 28% higher than the first
quarter and 12% higher than the same quarter last year, reflecting
operational and grade improvements. Cash operating costs were $239 per
ounce of gold produced during the second quarter, down from $261 in the
first quarter and even with the previous year. Silver production was
1.6 million ounces, down from 3.3 million ounces a year ago. This was
due to lower grades and lower recoveries.
Second quarter revenues were $95.1 million this year compared with
$90.6 million a year ago. The average price received per ounce of gold
sold during the quarter by Echo Bay was $392, compared with $391 in
1995.
The conversion of Echo Bay's preferred stock in late 1995 resulted
in the company not having a dividend expense of $2.6 million in the
period compared to the same period the previous year.
Acquired 50% of Santa Elina Gold
On July 9, the shareholders of Santa Elina Gold Corp. who voted at
the Special Meeting of Shareholders unanimously approved the transaction
in which Echo Bay has acquired a 50% interest in that company. The
transaction was closed on July 16, with shareholders of Santa Elina
receiving one share of Echo Bay common stock for every 6.67 shares of
Santa Elina. This resulted in 8,830,934 shares of Echo Bay common stock
being issued with a market value of $86.1 million on July 16. In
connection with the transaction, Echo Bay and Santa Elina's other 50%
owner, Sercor Ltd., have each contributed $12.5 million to Santa Elina
for working capital purposes.
Santa Elina is a gold exploration and development company with a
majority of its assets located in Brazil. These include 83% interests
in the Chapada copper-gold deposit; two gold exploration prospects,
Fazenda Nova and Sao Francisco; and a small gold mine, Sao Vicente; as
well as exploration rights or applications for the rights to
approximately 12 million hectares (30 million acres) of prime
exploration concessions in Brazil.
Robert C. Armstrong, executive vice president of Echo Bay, was
appointed president and chief executive officer of the Brazilian
activities. Richard C. Kraus, Echo Bay president and CEO, stated,
"Bob's appointment indicates our commitment to Brazil and the important
role Santa Elina and its assets will play in Echo Bay's growth."
Seven exploration drilling rigs are currently on site at Chapada,
Santa Elina's largest asset. This property has mineralization of 1.3
million ounces of gold and 972 million pounds of copper as reported at
year-end 1995 (83% to Santa Elina's account). Echo Bay has the right,
through the exercise of an option, to increase its interest in this
property to 66.5% from its current 41.5%. In 1996, 12,000 meters
(39,400 feet) of drilling have been completed. A detailed feasibility
study is expected to be finished by the end of this year incorporating
exploration drill results through October.
Exploration work continues at both the Fazenda Nova and Sao
Francisco gold projects. Additional drill rigs will be brought on site
in the third quarter to provide the data necessary to prepare initial
feasibility studies on both properties by year's end.
In future periods, Echo Bay will report 50% of the assets,
liabilities, revenues and expenses of Santa Elina in Echo Bay's
financial statements.
Exploration and Development Properties
Echo Bay is completing feasibility studies on seven projects this
year. Advanced feasibility studies are being completed on Chapada in
Brazil, Paredones Amarillos in Mexico, Aquarius in Ontario, and Alaska-
Juneau in Alaska. Initial feasibility studies are being completed on
Kingking in the Philippines and Fazenda Nova and Sao Francisco in
Brazil.
During the quarter, in connection with activities to advance its
exploration and development prospects, Echo Bay charged $18.0 million
against current earnings and capitalized another $10.8 million. These
programs have the potential to add to reserves and increase production
in the years to come.
During the quarter, Echo Bay funded exploration work on a number of
projects in North America and throughout the world. In addition, Echo
Bay's strategic alliance partners conducted exploration programs at
several promising prospects. Highlights include:
* Eight exploration drill rigs are now employed at the Kingking
copper-gold development property in the Philippines, with two more rigs
available if required. Over 45,000 meters (150,000 feet) of drilling
are expected to be completed by the joint venture for the 1996 drill
program. Particular emphasis is being made on the Lumanggang area to
better define the gold and copper values in this richer ore zone. Two
drilling rigs will also be set up in the Tiogdan area to investigate the
lateral and depth extensions of the higher-grade gold-copper Tiogdan-
Casagumayan stockwork. The initial feasibility study is on schedule to
be completed by the end of 1996.
* At the 60%-owned Paredones Amarillos development project in Baja
California Sur, Mexico, the 1996 in-fill drilling program was completed
by the end of July with a total of 18,000 meters (59,000 feet) drilled.
Water and other studies are under way at the site in order to prepare a
detailed feasibility study by year's end. Additional drilling targets
have been identified, and geological mapping and soil sampling are under
way to further expand the existing mineralization.
* Echo Bay has completed the work necessary to earn a 70% interest
in the San Antonio property located immediately to the north of
Paredones Amarillos. A number of targets have been identified for
future exploration.
* At Aquarius in the Timmins gold district of Ontario, over 31,500
meters (105,000 feet) of drilling have been completed year-to-date, 85%
of the 1996 program. Exploration drilling also continues on an
extension of the mineralization to the southeast. In addition, three
wells are being drilled to test dewatering and pumping requirements, and
metallurgical tests are under way to identify possible processing
alternatives. This information will be included in the detailed
feasibility study, which is scheduled for completion by year's end.
* A revised feasibility study is under way at the Alaska-Juneau
development project in Juneau, Alaska. This study is addressing the
submarine tailings disposal method currently under consideration by the
Environmental Protection Agency. Alternative mining methods are also
being considered. The revised feasibility study is expected to be
completed by year-end 1996.
* During the second quarter, Echo Bay acquired a 12% interest in
Rift Resources Ltd. (VSE: RIF) as part of a strategic alliance between
the two companies to explore for gold in Ethiopia and Eritrea in
northeast Africa.
* Echo Bay has completed the work necessary to earn a 51% interest
in the Kilgore property in Idaho. Approximately 17,700 meters (58,000
feet) of drilling has occurred project-to-date. A fall program is
currently planned to step out the mineralization. This is an
intermediate-stage exploration project with an epithermal-style,
volcanic-hosted gold system.
* Trenching work and initial drilling at the Youga property,
located in Burkina Faso, West Africa, have shown positive early results.
Discussions on future exploration programs in Ghana and Burkina Faso
continue with Echo Bay's joint venture partner, Ashanti Goldfields Co.
Ltd.
* The first phase of exploration drilling is in progress at the
Huaco Cucho exploration property in Peru. Two drill rigs are currently
in operation. A joint venture agreement was recently signed on the
adjacent Patacancha property with Buenaventura, a Peruvian mining
company, which nearly doubles the exploration area controlled.
McCoy/Cove, Nevada: More Feed to Expanded Mill Circuit
At McCoy/Cove, Echo Bay's largest producer, 69,574 ounces of gold
were produced during the quarter, down 14% from 80,870 ounces in 1995.
While tonnage, gold grades and recoveries in the mill were higher than
the same quarter of the previous year, production was down as there were
approximately 25,000 ounces of gold precipitate in work-in-process
inventory at quarter's end. The $4.5 million cost associated with the
mining and processing of these inventory ounces will be expensed when
the ounces are poured.
Silver production was 1,649,162 ounces in the quarter, compared with
3,327,373 ounces in 1995. Silver grades and recoveries were both down
during the quarter, reflecting lower silver grades in the portion of the
ore body currently being mined. Silver precipitate contained in the
work-in-process inventory was approximately 460,000 ounces at quarter's
end.
During the quarter, the number of tons milled per day increased to
8,680 tons from 7,149 tons in 1995. This increase resulted from the
completion of the mill flotation circuit expansion in mid-April. The $4
million expansion provides increased retention time for sulfide ore in
the flotation circuit, which improves recoveries. With the mill
capacity increased to a nominal 10,000 tons/day from 7,500 tons/day, the
higher levels of ore throughput will continue in future periods.
Cash operating costs were $256 per ounce of gold produced, compared
with $223 per ounce a year ago, reflecting the lower gold and silver
production and higher cost of mining the deeper levels of the pit.
During the quarter, the number of tons per day placed on the heap
leach pad increased as well, to 15,661 tons from 10,694 tons. Heap
leaching accounted for 21% of the gold and 7% of the silver produced
during the quarter.
Full-year gold production at McCoy/Cove is currently expected to be
around 20% less than in 1995 (see "1996 Targets" on page 10). Because
of lower silver grades, silver production for the year is currently
expected to be no better than the lower end of the previously announced
target range of 7.5-8.5 million ounces for the full year.
Round Mountain, Nevada: More Tons Result in More Ounces
At the 50%-owned Round Mountain mine in Nevada, Echo Bay's portion
of gold production totaled 57,617 ounces, compared with 40,333 ounces in
1995, up 43%. Cash operating costs were $202 per ounce in both periods.
Unit costs were flat despite higher production principally due to the
increased volume of tons processed and longer haul routes.
The increased production during the quarter resulted from
acceleration of the loading of tons of ore on both the reusable and
dedicated leach pad. Leached ores are then moved from the reusable pad
to the dedicated leach pad for additional processing over the longer
term. Total production from both pads increased approximately 45% over
the same quarter the previous year.
In the second quarter, 126,754 tons of ore were processed per day at
Round Mountain, up from 99,984 tons in 1995. The increased ore movement
has been facilitated by the use of contract miners and the addition of
four new 190-ton haul trucks to the fleet.
Second quarter results were in line with the full-year forecast that
has Round Mountain's production increasing 5-10% over 1995 production
levels (see "1996 Targets" on page 10).
Construction of a mill at Round Mountain began in March and is on
track with the company's projection for late 1997 startup. Beginning in
1998, the 8,000-ton/day mill will process large quantities of
nonoxidized ore. More nonoxidized ore is being added to the stockpile
each quarter in preparation for mill startup.
Lupin, Northwest Territories: East Zone Mining Boosts Production
Production at Lupin, located in the Northwest Territories, was
48,248 ounces, up from 37,369 ounces in 1995. Cash operating costs
decreased to $264 per ounce from $319 a year ago.
Mining of the final phase of the East Zone, which started in the
fourth quarter of 1995, resulted in 30% more tons being milled during
the quarter than in the same quarter a year ago, when only the Centre
and West Zones were producing ore. Grades and recoveries were similar
during the two periods.
The Centre and West Zones will provide the majority of the millfeed
for the third and fourth quarters as the ore from the East Zone
diminishes. Full-year production at Lupin is currently expected to
increase by around 5% over the 172,110 ounces produced in 1995 instead
of the 10% projected earlier (see "1996 Targets" on page 10).
Development permits for the Ulu deposit were received in June.
Current activities at this satellite deposit include camp and road
construction. Portal construction for the underground ramp was started
in July. The ramp will be driven into the mineralization 280 meters
(920 feet) under the surface to confirm the 608,000 ounces of gold
indicated by drilling from the surface. Upon full development, ore from
Ulu would be trucked to the surface and stockpiled. Beginning in late
1998, the stockpiled ore would be trucked to the Lupin mill over a 100-
mile ice road during a five-month period each year. The ore would then
be used as supplemental millfeed year-round.
Kettle River, Washington: Production Up, Costs Down
At the Kettle River mine in Washington State, gold production
increased to 30,162 ounces during the quarter from 24,535 ounces a year
ago, and cash operating costs were reduced to $220 from $263 per ounce.
The improvement reflects another quarter of production from the higher-
grade Lamefoot deposit. For the full year 1996, Kettle River's
production target is about 20% more gold than in 1995 (see "1996
Targets" on page 10).
During the quarter, development work continued on the K-2 deposit,
located adjacent to the original Kettle deposit and approximately 22
miles from the mill. A bulk sample has been processed through the mill
to test for process amenability. Recoveries were in the low 90% range.
The K-2 orebody is being developed in preparation for production to
start early next year. Underground drifting continues to confirm ore
with grades and widths equal to or higher than predicted by surface
drilling.
Echo Bay is a major gold producer with mines in Canada and the
United States. The company has expanded its search for new gold
production worldwide. The company's goal is to double annual gold
production by the year 2000 to 1.5 million ounces of gold at a cash
production cost well below current levels, and to increase gold reserves
to more than 20 million ounces.
7/31/96 Revision
ECHO BAY MINES
1996 Targets Update
Current Original
1996 1996 1995
Production and Costs: Target Target Actual
Gold production On target 725,000- 754,762 oz.
750,000 oz.
Change from 1995
production levels:
McCoy/Cove Around 20% less 20-25% less 310,016 oz.
Round Mountain On target 5-10% more 172,217 oz.
Lupin Around 5% more 10% more 172,110 oz.
Kettle River On target 20% more 100,419 oz.
Silver production No better 7.5-8.5 11.9 million
than lower million oz. oz.
end of range
Cash operating costs On target $245-$255/oz. $229/oz.
Current Original
1996 1996 1995
Significant Expenses: Target Target Actual
Depreciation and amortization On target $100/oz. $97/oz.
Exploration expense(1) (millions) $45 $43 $47
Development property expense(2) (millions)
Alaska-Juneau(3) $19 $15 $20
Kensington(4) -- -- 3
$19 $15 $23
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: The above forward-looking statements involve risks
and uncertainties that could cause actual results to vary materially
from targeted results. These include but are not limited to differences
in ore grades and tons mined from those expected, changes in project
parameters as plans continue to be refined, successful mining and
milling at currently planned rates, continued compliance with
environmental permits, the results of current exploration activities and
new exploration opportunities, and the conclusions of feasibility
studies currently under way. Please refer to a discussion of these and
other factors in the company's 10-K, 10-Q and other Securities and
Exchange Commission filings.
(1) Including noncash portions of $4 million in 1996 and $3 million
in 1995. Included is Echo Bay's share of the loss reported by Etruscan
Enterprises Ltd., reflecting the equity method of accounting for Echo
Bay's 24.5% investment in Etruscan.
(2) Including noncash portions of $5 million in 1996 and $7 million
in 1995.
(3) Current company targets have been increased by $4 million from
earlier projections to reflect anticipated additional submarine tailings
disposal permitting costs.
(4) Kensington was sold in June 1995.
ECHO BAY MINES
Highlights
Three months Six months
ended June 30 ended June 30
U.S. dollars 1996 1995 1996 1995
Financial Data
Revenue (millions) $95.1 $90.6 $162.8 $174.8
After-tax loss before preferred
stock dividends (millions) $(14.6) $(10.3) $(30.8) $(19.2)
Net loss (millions) $(14.6) $(12.9) $(30.8) $(24.6)
Exploration expense (millions) $13.3 $10.7 $22.6 $17.2
Development properties expense
(millions) $4.7 $4.6 $9.4 $12.5
Working capital provided by operations
before exploration and development
properties expenses (millions) $27.6 $28.2 $41.9 $55.9
Working capital provided by operations
after exploration and development
properties expenses (millions) $11.9 $14.1 $14.2 $30.3
Gold ounces sold (1) 216,884 188,771 372,073 368,270
Silver ounces sold (thousand) (1) 1,749.9 3,095.4 2,855.2 6,035.0
Average price realized
Per ounce of gold sold $392 $391 $394 $388
Per ounce of silver sold $5.77 $5.40 $5.69 $5.27
Cash operating costs
Per ounce of gold produced $239 $239 $249 $237
Per ounce of silver produced $3.48 $3.13 $3.84 $2.98
% of revenue from gold 89% 82% 90% 82%
% of revenue from silver 11% 18% 10% 18%
Production and Reserves
Production (thousands of ounces) (1)
Gold 205.6 183.1 366.8 365.9
Silver 1,649.2 3,327.4 2,824.2 6,060.1
Reserves (thousands of ounces) (2)
Gold 10,983 11,300
Silver 62,913 82,724
Per Share Data
Net loss $(0.11) $(0.12) $(0.24) $(0.22)
Working capital provided by
operations $0.09 $0.13 $0.11 $0.27
Gold production (milliounces) (3) 1.6 1.6 2.8 3.2
Gold reserves (milliounces) (2,3) 84.6 100.3
Shares outstanding (millions)
Weighted average 130.5 112.8 130.4 112.8
Period end 130.5 112.8 130.5 112.8
(1) Amounts sold differ from amounts produced due to inventory
changes.
(2) Proven and probable reserves at the beginning of the year.
(3) 1 milliounce = 0.001 ounce.
ECHO BAY MINES
Production and Costs
Three months Six months
ended June 30 ended June 30
1996 1995 1996 1995
Gold Production (ounces)
McCoy/Cove 69,574 80,870 118,464 159,741
Round Mountain (50%) 57,617 40,333 97,333 86,217
Lupin 48,248 37,369 88,558 72,884
Kettle River 30,162 24,535 62,492 47,091
Total gold 205,601 183,107 366,847 365,933
Silver Production (thousands of ounces)
McCoy/Cove 1,649.2 3,327.4 2,824.2 6,060.1
Total silver 1,649.2 3,327.4 2,824.2 6,060.1
Cash Operating Costs (1) (U.S. dollars per ounce of gold produced)
McCoy/Cove (2) $256 $223 $280 $224
Round Mountain 202 202 208 189
Lupin 264 319 276 321
Kettle River 220 263 194 258
Company average $239 $239 $249 $237
Consolidated Costs (U.S. dollars per ounce of gold produced)
Cash operating costs (1) $239 $239 $249 $237
Royalties 9 9 10 9
Production taxes 3 7 4 6
Total cash costs 251 255 263 252
Depreciation 63 60 69 61
Amortization 33 37 33 37
Reclamation 6 6 6 5
Total production costs 353 358 371 355
General and administrative 16 13 17 13
Exploration expense 58 47 56 39
Development properties expense 21 20 23 28
Interest expense (income) 1 (6) 1 (7)
Other 8 7 2 5
Income taxes 1 -- 2 --
Breakeven (3) $458 $439 $472 $433
(1) Effective January 1, 1996, Echo Bay adopted the new Gold
Production Cost Standard developed by the Gold Institute as a means
of facilitating meaningful comparisons among companies through
uniform presentation of all cost data industry-wide. "Cash
production costs" reported by Echo Bay in prior periods have been
converted into "cash operating costs" in accordance with the new
standard. In Echo Bay's case, there is no material difference
between the two.
(2) In 1996, cash operating costs per ounce of silver produced at
McCoy/Cove were $3.48 and $3.84 for the three-month and six-month
periods respectively, based on average gold-to-silver price ratios
of 73.5:1 and 73.0:1 respectively. In 1995, cash operating costs
per ounce of silver produced at McCoy/Cove were $3.13 and $2.98 for
the three-month and six-month periods respectively, based on average
respective price ratios of 71.3:1 and 75.2:1.
(3) Before preferred stock dividends of subsidiary, net of interest
income (expense) from related interest swaps. The entire issue of
convertible preferred stock was converted or redeemed in late 1995.
ECHO BAY MINES
Consolidated Earnings Statement
(Unaudited)
Three months Six months
Thousands of U.S. dollars, ended June 30 ended June 30
except for per share data 1996 1995 1996 1995
Revenue $95,086 $90,594 $162,83 $174,803
Expenses:(1)
Operating costs 57,959 55,218 102,524 105,809
Royalties 2,129 2,157 4,232 4,236
Production taxes 787 1,508 1,496 2,871
Depreciation 15,510 13,845 28,395 28,025
Amortization 8,009 8,284 13,621 16,189
Reclamation 1,439 1,233 2,583 2,420
General and administrative 3,550 2,910 6,882 5,617
Exploration expense 13,289 10,753 22,592 17,244
Development properties expense 4,724 4,635 9,429 12,530
Other expense 1,817 1,556 820 2,115
Interest (income) expense 173 (1,279) 324 (2,919)
109,386 100,820 192,898 194,137
Loss before taxes (14,300) (10,226) (30,062)(19,334)
Income tax recovery (expense):
Current (435) (577) (641) (841)
Deferred 132 475 (56) 950
(303) (102) (697) 109
After-tax loss before
preferred stock dividends (2) (14,603) (10,328) (30,759)(19,225)
Preferred stock dividends of
subsidiary (2) -- (2,649) -- (5,411)
Net loss $(14,603)$(12,977)$(30,759)$(24,636)
Loss per share $(0.11) $(0.12) $(0.24) $(0.22)
Weighted average number of
shares outstanding (millions) 130.5 112.8 130.4 112.8
(1) Effective January 1, 1996, Echo Bay adopted the new Gold
Production Cost Standard developed by the Gold Institute as a means
of facilitating meaningful comparisons among companies through
uniform presentation of all cost data industry-wide. Certain
accounts in this document have been reclassified to reflect the
change. The reclassification has no effect on earnings (loss).
(2) The entire issue of convertible shares of subsidiary was
converted or redeemed in late 1995.
ECHO BAY MINES
Consolidated Balance Sheet
(Unaudited)
June 30 Dec. 31 June 30
Thousands of U.S. dollars 1996 1995 1995
Assets
Current assets:
Cash and cash equivalents $134,274 $185,843 $168,503
Interest and accounts receivable 17,566 14,749 40,697
Inventories 40,760 34,173 39,759
Prepaid expenses and other assets 6,183 5,353 4,418
198,783 240,118 253,377
Plant and equipment 243,448 255,868 269,272
Mining properties 333,821 318,219 283,348
Long-term investments and other
assets 60,682 56,956 51,584
$836,734 $871,161 $857,581
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued
liabilities $61,755 $61,781 $41,199
Income and mining taxes payable 3,250 2,547 5,090
Current portion of gold and
other financings (1) 59,970 41,135 10,915
Current portion of deferred income 15,421 25,053 --
140,396 130,516 57,204
Long-term gold and other financings 86,006 111,679 119,121
Long-term deferred income 11,305 -- 27,028
Other long-term obligations 32,673 32,018 26,618
Deferred income taxes 8,159 8,096 7,561
Preferred stock of subsidiary -- -- 136,233
Common shareholders' equity:
Common shares 623,709 618,965 483,888
Retained earnings (deficit) (50,763) (15,109) 15,273
Foreign currency translation (14,751) (15,004) (15,345)
558,195 588,852 483,816
$836,734 $871,161 $857,581
(1) Total gold and other financings were $146.0 million at June 30,
1996 (including current portion of $60.0 million), up $16.0 million
from $130.0 million at June 30, 1995 (including current portion of
$10.9 million).
ECHO BAY MINES
Consolidated Statement of Cash Flow
(Unaudited)
Three months Six months
ended June 30 ended June 30
Thousands of U.S. dollars 1996 1995 1996 1995
Cash Provided by (Used in):
Operating Activities
Net loss $(14,603) $(12,977) $(30,759) $(24,636)
Add items not affecting working capital:
Depreciation and
amortization 23,519 22,129 42,016 44,214
Dividends on preferred stock
of subsidiary net of interest
rate swap income -- 2,649 -- 5,411
Development properties
expense 1,279 1,279 2,558 4,133
Deferred income taxes (132) (475) 56 (950)
Environmental expenses at
non-producing properties -- 5,899 -- 5,899
Equity in loss of affiliate 920 -- 1,554 --
Loss (gain) on sale of assets 262 (5,346) (2,318) (5,374)
Other 599 941 1,082 1,568
Working capital provided from
operations 11,844 14,099 14,189 30,265
Decrease (increase) in cash invested in
working capital related to operations:
Interest and accounts
receivable (3,630) (2,844) (3,268) (2,344)
Inventories 1,129 683 (6,760) (8,193)
Prepaid expenses and
other assets (534) 140 84 747
Accounts payable and other
liabilities 8,932 2,087 (2,102) (5,061)
Income and mining taxes
payable 1,001 1,719 703 3,245
18,742 15,884 2,846 18,659
Financing Activities
Gold loan repayments (2,464) (2,464) (4,927) (4,927)
Dividends on preferred
stock of subsidiary -- (2,649) -- (5,411)
Common share dividends (4,895) (4,231) (4,895) (4,231)
Common share issues 134 2 4,745 766
(7,225) (9,342) (5,077) (13,803)
Investing Activities
Mining properties, plant
and equipment (22,067) (8,981) (48,759) (19,154)
Long-term investments and
other assets (5,667) (20,703) (6,718) (21,018)
Proceeds on sale of long-term
investments -- 2,104 5,550 2,155
Other 510 (57) 589 137
(27,224) (27,637) (49,338) (37,880)
Net decrease in cash (15,707) (21,095) (51,569) (33,024)
Cash and cash equivalents,
beginning of period 149,981 189,598 185,843 201,527
Cash and cash equivalents,
end of period $134,274 $168,503 $134,274 $168,503
ECHO BAY MINES
Mine Operating Data
Three months Six months
ended June 30 ended June 30
1996 1995 1996 1995
U.S. dollars, except where indicated
McCoy/Cove Mine (100% owned)
Gold produced (ounces):
Milled 54,841 63,588 89,141 127,534
Heap leached 14,733 17,282 29,323 32,207
Total gold 69,574 80,870 118,464 159,741
Silver produced (ounces):
Milled 1,534,328 3,066,824 2,567,905 5,567,615
Heap leached 114,834 260,549 256,314 492,528
Total silver 1,649,162 3,327,373 2,824,219 6,060,143
Ore and waste
mined (tons) 17,247,441 6,277,241 32,712,406 32,906,02
Mining cost/ton of ore
and waste $0.71 $0.65 $0.70 $0.65
Milling cost/ton of ore $9.79 $11.45 $9.85 $11.07
Heap leaching cost/ton
of ore $1.73 $2.59 $1.88 $2.36
Production cost per ounce of gold produced: (1)
Direct mining expense $302 $193 $330 $208
Deferred stripping cost (26) 20 (40) 18
Inventory movement and other (20) 10 (10) (2)
Cash operating cost 256 223 280 224
Royalties 4 6 4 5
Production taxes 4 10 6 10
Total cash cost 264 239 290 239
Depreciation 74 47 83 53
Amortization 46 45 46 46
Reclamation 6 5 6 5
Total production cost $390 $336 $425 $343
Average gold-to-silver
price ratio (2) 73.5:1 71.3:1 73.0:1 75.2:1
Milled:
Ore processed (tons/day) 8,680 7,149 8,129 7,216
Gold grade (ounce/ton) 0.141 0.110 0.107 0.115
Silver grade (ounce/ton) 4.15 5.72 3.47 5.25
Gold recovery rate (%) 86.5 80.2 81.1 83.2
Silver recovery rate (%) 73.9 80.2 73.4 80.1
Heap leached:
Ore processed (tons/day) 15,661 10,694 13,659 12,494
Gold grade (ounce/ton) 0.023 0.023 0.023 0.020
Silver grade (ounce/ton) 0.33 0.83 0.35 0.61
Recovery rates (3)
Round Mountain Mine (50% owned)
Gold produced (ounces):
Reusable heap leach
pad (50%) 32,420 22,400 58,392 49,061
Dedicated heap leach
pad (50%) 22,940 15,539 36,684 34,762
Other 2,257 2,394 2,257 2,394
Total (50%) 57,617 40,333 97,333 86,217
ECHO BAY MINES
Mine Operating Data
(continued)
Three months Six months
ended June 30 ended June 30
1996 1995 1996 1995
U.S. dollars, except where indicated
Round Mountain Mine (continued)
Ore and waste mined
(tons) (100%) 14,207,514 15,754,142 28,749,226 29,442,357
Mining cost/ton of
ore and waste $0.71 $0.54 $0.68 $0.55
Heap leaching cost/ton
of ore $0.76 $0.51 $0.78 $0.68
Production cost per ounce of gold produced: (1)
Direct mining expense $211 $220 $234 $202
Deferred stripping cost 3 (26) (10) (14)
Inventory movement
and other (12) 8 (16) 1
Cash operating cost 202 202 208 189
Royalties 26 30 29 29
Production taxes 6 6 5 5
Total cash cost 234 238 242 223
Depreciation 46 64 53 60
Amortization 18 20 18 20
Reclamation 5 5 5 5
Total production cost $303 $327 $318 $308
Reusable heap leach pad:
Ore processed
(tons/day) (100%) 30,293 21,518 28,122 20,716
Grade (ounce/ton) 0.038 0.036 0.038 0.033
Recovery rate (3)
Dedicated heap leach pad:
Ore processed
(tons/day) (100%) 96,461 78,466 85,709 56,496
Grade (ounce/ton) 0.013 0.012 0.013 0.012
Recovery rate (%) 66.8 69.3 66.0 76.4
Lupin Mine (100% owned)
Gold produced (ounces) 48,248 37,369 88,558 72,884
Tons of ore mined
and milled 214,882 165,514 400,387 319,577
Mining cost/ton of ore
(Canadian dollars) C$39.48 C$48.74 C$40.56 C$47.54
Milling cost/ton of ore
(Canadian dollars) C$11.12 C$12.63 C$11.90 C$12.86
Production cost per ounce of gold produced: (1)
Direct mining expense
(Canadian dollars) C$359 C$447 C$390 C$470
Deferred mine dev. cost
(Canadian dollars) -- (23) (13) (32)
Inventory movement & other
(Canadian dollars) 1 13 -- 7
Cash operating cost
(Canadian dollars) C$360 C$437 C$377 C$445
Cash operating cost
(U.S. dollars) US$264 US$319 US$276 US$321
Royalties -- -- -- --
Production taxes -- -- -- --
Total cash cost 264 319 $276 $321
Depreciation 62 78 66 79
Amortization 18 20 18 19
Reclamation 8 7 8 7
Total production cost $352 $424 $368 $426
Milled:
Ore processed (tons/day) 2,361 1,819 2,200 1,756
Total tons milled 214,882 165,514 400,387 319,577
Grade (ounce/ton) 0.243 0.245 0.239 0.247
Recovery rate (%) 92.4 92.0 92.4 92.4
ECHO BAY MINES
Mine Operating Data
(continued)
Three months Six months
ended June 30 ended June 30
1996 1995 1996 1995
U.S. dollars, except where indicated
Kettle River Mine (100% owned)
Gold produced (ounces) 30,162 24,535 62,492 47,091
Tons of ore mined
and milled 148,877 136,543 281,850 265,261
Mining cost/ton of ore $22.38 $26.36 $22.31 $24.64
Milling cost/ton of ore $12.46 $12.37 $12.24 $12.97
Production cost per ounce of gold produced: (1)
Direct mining expense $211 $251 $191 $258
Deferred mine development
cost -- -- -- --
Inventory movement and other 9 12 3 (--)
Cash operating cost 220 263 194 258
Royalties 8 8 9 9
Production taxes 2 2 2 2
Total cash cost 30 273 205 269
Depreciation 62 77 59 80
Amortization 45 45 45 45
Reclamation 8 6 8 7
Total production cost $345 $401 $317 $401
Milled:
Ore processed (tons/day) 1,636 1,500 1,549 1,457
Total tons milled 148,877 136,543 281,850 265,261
Grade (ounce/ton) 0.244 0.202 0.258 0.203
Recovery rate (%) 83.1 88.8 85.8 87.4
(1) Effective January 1, 1996, Echo Bay adopted the new Gold
Production Cost Standard developed by the Gold Institute as a means
of facilitating meaningful comparisons among companies through
uniform presentation of all cost data industry-wide. "Cash
production costs" reported by Echo Bay in prior periods have been
converted into "cash operating costs" in accordance with the new
standard. In Echo Bay's case, there is no material difference
between the two.
(2) 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 co-product price ratio.
(3) Recovery rates on 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%.
CONTACT:
Media: Jill Paukert, 303-714-8825; or
Investor: Ted Sheldon, 303-714-8813
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