Aur Resources Maintains Strong Cash Flow Through Low Cost Mining Operations In The Third Quarter Of Fiscal 1998.TORONTO--(BUSINESS WIRE)--Oct. 21, 1998-- Aur Resources Aur Resources Inc. (TSX: AUR) is a Toronto, Ontario, Canada, based, international mining company active in the acquisition, exploration, development and mining of mineral properties. Inc.(TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :AUR.) (ME:AUR.) Aur Resources Inc. announced today its results for the third quarter of 1998. Aur Resources Inc. sustained strong cash flow through the continued efficient, low cost operation of its Louvicourt and Andacollo Andacollo is a city in the Coquimbo Region, Chile. It is located at around . mines, made progress on the exploration front and acquired three new exploration properties during the third quarter of 1998. Financial Highlights Mining revenues were $24.8 million and cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses was $6.9 million for the three month period ended September September: see month. 30, 1998 as compared with $23.6 million revenue and $6.3 million cash flow for the same period in 1997. Working capital at September 30, 1998 was $85.8 million. A net loss of $0.8 million was incurred for the three months ended September 30, 1998 principally due to a $1.0 million provision for reduction in the value of marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has , an unrealized foreign exchange loss of $2.2 million and for $0.7 million of mineral property and exploration costs written off. Net earnings for the comparable period in 1997 were $1.3 million. For the nine month period ended September 30, 1998, net earnings were flat at $59,000 compared to $12.2 million for the same period in 1997. Cash flow from operations for the nine month period ended September 30, 1998 was $15.0 million. Copper prices, which averaged US$0.77 per pound to September 30, 1998 compared to US$1.09 per pound in 1997, have the most significant impact on Aur's cash flow from operations. Mining revenues were favourably Adv. 1. favourably - showing approval; "he reviewed the play favorably" favorably favourably U.S. favorably adverb 1. impacted by continued weakness in the Canadian dollar Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents , however, these gains have been adversely impacted by $3.4 million in foreign exchange losses related to Aur's bank debt and foreign exchange hedge during the first nine months of 1998. Despite the low metal prices, Aur continues to sustain positive cash flow and remain in a strong financial position. Production Highlights Aur's share of metal production for the third quarter of 1998 was 17.9 million pounds of copper, 3.2 million pounds of zinc zinc, metallic chemical element; symbol Zn; at. no. 30; at. wt. 65.38; m.p. 419.58°C;; b.p. 907°C;; sp. gr. 7.133 at 25°C;; valence +2. Zinc is a lustrous bluish-white metal. It is found in Group 12 of the periodic table. , 66,000 ounces of silver and 2,400 ounces of gold. Operating costs operating costs npl → gastos mpl operacionales per pound of copper produced net of by-product by·prod·uct or by-prod·uct n. 1. Something produced in the making of something else. 2. A secondary result; a side effect. by-product Noun 1. metal credits including all smelting smelting, in metallurgy, any process of melting or fusion, especially to extract a metal from its ore. Smelting processes vary in detail depending on the nature of the ore and the metal involved, but they are typified in the use of the blast furnace. , refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar , transportation and marketing costs, settlement adjustments and provisional Temporary; not permanent. Tentative, contingent, preliminary. A provisional civil service appointment is a temporary position that fills a vacancy until a test can be properly administered and statutory requirements can be fulfilled to make a permanent appointment. pricing was US$0.49 in the quarter, 12 percent better than budgeted. Cash flow from mining operations for the nine month period ended September 30, 1998 was $18.5 million. Louvicourt Mine The Louvicourt Mine produced 32.0 million pounds of copper and 10.7 million pounds of zinc during the third quarter at an all inclusive (theory) inclusive - In domain theory, a predicate P : D -> Bool is inclusive iff For any chain C, a subset of D, and for all c in C, P(c) => P(lub C) In other words, if the predicate holds for all elements of an increasing sequence then it holds for their least upper cash operating cost net of by-product credits of US$0.46 per pound of copper produced. Operating costs were $35.63 per tonne tonne measure of weight or mass; 1 tonne=1000 kg. See also ton. milled. Copper and zinc production to September 30, 1998 was as planned. The Louvicourt Mine continues to operate efficiently, in full environmental compliance and has operated without a lost time accident during 1998. Andacollo Mine The Andacollo Mine produced 11.9 million pounds of high quality cathode copper during the third quarter of 1998. Cash operating costs, including all transportation and marketing costs, were US$0.52 per pound of copper produced, a new low for the second consecutive quarter. Production in 1998 was approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 1.4 million pounds ahead of plan at September 30, 1998 and is forecast at 46 million pounds for the full year. The Andacollo Mine has established itself as a low cost copper mine. Exploration and Acquisitions Exploration work, comprised principally of geological ge·ol·o·gy n. pl. ge·ol·o·gies 1. The scientific study of the origin, history, and structure of the earth. 2. The structure of a specific region of the earth's crust. 3. A book on geology. mapping, geophysical surveys Geophysical survey refers to the systematic collection of geophysical data for spatial studies. Geophysical surveys may use a great variety of sensing instruments, and data may be collected from above or below the Earth's surface or from aerial or marine platforms. and data compilation Compiling a program. See compiler. , was carried out on selected Aur properties in Quebec Quebec, city, Canada Quebec, Fr. Québec, city (1991 pop. 167,517), provincial capital, S Que., Canada, at the confluence of the St. Lawrence and St. Charles rivers. , Manitoba Manitoba (mănĭtō`bə), province (2001 pop. 1,119,583), 250,934 sq mi (650,930 sq km), including 39,215 sq mi (101,580 sq km) of water surface, W central Canada. , Nevada Nevada (nəvăd`ə, –vä–), far western state of the United States. It is bordered by Utah (E), Arizona (SE), California (SW, W), and Oregon and Idaho (N). and Chile Chile (chĭl`ē, Span. chē`lā), officially Republic of Chile, republic (2005 est. pop. 15,981,000), 292,256 sq mi (756,945 sq km), S South America, west of the continental divide of the Andes Mts. during the third quarter of 1998. Drill testing of priority targets on four properties identified mineralization Mineralization The process by which the body uses minerals to build bone structure. Mentioned in: Rickets mineralization, n the bioprecipitation of an inorganic substance. of interest on the Auriac Auriac is the name or part of the name of several communes in France:
elder Any of about 20–30 species, mainly shrubs and small trees, that make up the genus Sambucus, in the honeysuckle family. Creek properties which will be followed up in 1999. Underground drilling to the east of the Louvicourt deposit, where significant low-grade low-grade Of or relating to debt that has a credit rating of B or below. Low-grade debt offers an above-average yield but entails substantial risk because promised payments may not be made in a timely manner. sulphides were intersected in early 1998, has not yet intersected economic mineralization. The best intersection intersection /in·ter·sec·tion/ (-sek´shun) a site at which one structure crosses another. intersection a site at which one structure crosses another. to date was 26 metres at an average grade of 0.59 percent Zn and 1.24 g/t Au. Property evaluations led to the acquisition of a new gold project in Nevada, a copper-gold project in Chile and a base metal-gold property to the east of the Louvicourt Mine in Quebec during the third quarter of this year. Exploration of these properties has been initiated. Efforts to identify and acquire producing and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. development stage projects continued aggressively during the past three months. A transaction with Inmet Mining The 'Inmet Mining Corporation is a Canadian mining corporation that currently holds an 18% stake in Ok Tedi Mining Limited. Corporation was discussed, however, terms could not be agreed upon Adj. 1. agreed upon - constituted or contracted by stipulation or agreement; "stipulatory obligations" stipulatory noncontroversial, uncontroversial - not likely to arouse controversy and Aur tendered its share position of approximately 5 percent to Inmet's share buyback Buyback The buying back of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may . Aur retains approximately a 5 percent ownership in Inmet as a long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. investment. Negotiations with respect to other copper and gold asset acquisitions continue and new opportunities presented to Aur are under evaluation. -0-
AUR RESOURCES INC.
PRODUCTION STATISTICS
3 Months ended 9 Months ended
Sept. 30, 1998 Sept. 30, 1998
--------------- --------------
Aur's Share
Copper (pounds) 17,934,000 51,576,000
Zinc (pounds) 3,203,000 8,917,000
Silver (ounces) 66,000 184,000
Gold (ounces) 2,400 6,700
Louvicourt Mine Andacollo Mine
(100 Percent) (100 Percent)
-------------------- ---------------------
3 Months 9 Months 3 Months 9 Months
Ended Sept. 30, 1998 Ended Sept. 30, 1998
-------------------- ---------------------
Ore processed (tonnes) 409,997 1,195,589 611,781 2,086,477
Grade Cu (percent) 3.7 3.6 0.91 0.90
Grade Zn (percent) 1.5 1.4 - -
Grade Au (oz/t) 0.03 0.03 - -
Grade Ag (oz/t) 0.82 0.77 - -
Operating cost per pound
of copper sold(x) US$0.46 US$0.48 US$0.52 US$0.54
(x) Costs include all smelting, refining, transportation and
marketing costs, settlement adjustments, provisional pricing
and are net of by-product credits.
AUR RESOURCES INC.
Consolidated Statements of Operations
(in thousands of Canadian dollars
except earnings per share and number of shares)
Three months ended Nine months ended
September 30 September 30
(unaudited) 1998 1997 1998 1997
----------------------------------------------------------------
----------------------------------------------------------------
$ $ $ $
Revenues
Mining 24,785 23,643 67,858 82,231
Interest 983 1,261 3,436 3,483
Management fees,
custom milling
and other 318 304 1,178 2,857
----------------------------------------------------------------
26,086 25,208 72,472 88,571
----------------------------------------------------------------
Expenses
Mining 18,096 15,752 49,346 47,496
Custom milling and
other (18) 157 837 2,372
Administration 1,256 1,038 3,852 3,489
Capital and business
taxes 97 65 528 331
Depreciation and
amortization 3,843 4,291 11,184 11,790
Provision for
marketable securities 959 224 1,661 158
Foreign exchange and
financing 2,512 1,277 3,965 3,583
Mineral property and
exploration costs
written-off 655 253 655 253
----------------------------------------------------------------
27,400 23,057 72,028 69,472
----------------------------------------------------------------
Earnings (loss) before
taxes (1,314) 2,151 444 19,099
Provision for taxes (508) 892 385 6,942
----------------------------------------------------------------
Net earnings (loss) for
the period (806) 1,259 59 12,157
----------------------------------------------------------------
----------------------------------------------------------------
Earnings (loss) per
share (0.01) 0.02 0.00 0.16
----------------------------------------------------------------
----------------------------------------------------------------
Weighted number of
shares for the
period (000's) 75,293 76,704 75,293 76,704
Number of shares
outstanding - end of
period (000's) 75,170 76,751 75,170 76,751
----------------------------------------------------------------
----------------------------------------------------------------
Consolidated Statements of Retained Earnings
(in thousands of Canadian dollars)
Three months ended Nine months ended
September 30 September 30
(unaudited) 1998 1997 1998 1997
----------------------------------------------------------------
----------------------------------------------------------------
$ $ $ $
Retained earnings -
beginning of period 7,781 18,543 10,685 7,645
Net earnings (loss) for
the period (806) 1,259 59 12,157
----------------------------------------------------------------
6,975 19,802 10,744 19,802
Dividends - - (3,769) -
----------------------------------------------------------------
Retained earnings - end
of period 6,975 19,802 6,975 19,802
----------------------------------------------------------------
----------------------------------------------------------------
AUR RESOURCES INC.
Consolidated Balance Sheets
As at
(in thousands of Canadian dollars)
September 30 December 31
(unaudited) 1998 1997
----------------------------------------------------------------
----------------------------------------------------------------
$ $
Assets
Current
Cash 124,391 74,720
Smelter settlements receivable 11,024 12,250
Other receivables 1,228 1,943
Due from joint venture partner 3,445 3,219
Marketable securities (quoted market
value $1,472; 1997 - $2,135) 1,472 2,135
Inventories and prepaid expenses 3,695 3,435
----------------------------------------------------------------
145,255 97,702
Due from joint venture partner 15,504 16,093
Investments 10,684 3,089
Capital assets 169,673 166,245
----------------------------------------------------------------
341,116 283,129
----------------------------------------------------------------
----------------------------------------------------------------
Liabilities and Shareholders' Equity
Current
Accounts payable and accrued
liabilities 7,425 9,382
Bank debt 52,061 -
----------------------------------------------------------------
59,486 9,382
Long-term
Obligation on acquisition of
Andacollo 2,156 1,920
Future removal and site restoration
liabilities 873 643
Deferred taxes 1,436 1,163
Minority interest 4,650 4,650
----------------------------------------------------------------
68,601 17,758
----------------------------------------------------------------
Shareholders' equity
Share capital 250,738 250,323
Contributed surplus 4,388 4,363
Cumulative translation adjustment 10,414 -
Retained earnings 6,975 10,685
----------------------------------------------------------------
272,515 265,371
----------------------------------------------------------------
341,116 283,129
----------------------------------------------------------------
----------------------------------------------------------------
AUR RESOURCES INC.
Consolidated Statements of Changes in Financial Position
(in thousands of Canadian dollars)
Three months ended Nine months ended
September 30 September 30
(unaudited) 1998 1997 1998 1997
----------------------------------------------------------------
----------------------------------------------------------------
$ $ $ $
Operating activities
Net earnings (loss) for
the period (806) 1,259 59 12,157
Non-cash items -
Depreciation and
amortization 3,843 4,291 11,184 11,790
Deferred income taxes (528) 900 272 6,850
Future removal and site
restoration 91 31 231 108
Provision for marketable
securities 959 224 1,661 158
Gain on sale of marketable
securities - (3) - (9)
Loss (gain) on disposal
of capital assets 7 (9) 27 29
Mineral property and
exploration
costs written-off 655 253 655 253
----------------------------------------------------------------
4,221 6,946 14,089 31,336
Net change in non-cash
working capital items,
exclusive of financing
and investing
activities 2,642 (652) 900 (6,104)
----------------------------------------------------------------
6,863 6,294 14,989 25,232
----------------------------------------------------------------
Financing activities
Bank debt 2,156 209 52,061 4,637
Common shares issued
for cash 51 34 1,291 732
Common shares purchased
and cancelled (683) - (850) -
Dividends - - (3,769) -
----------------------------------------------------------------
1,524 243 48,733 5,369
----------------------------------------------------------------
Investing activities
Purchase of
investments (25,297) - (25,781) (722)
Due from joint venture
partner (870) - 363 -
Purchase of marketable
securities - - (26,296) (225)
Reclassification of
marketable securities
to long-term
investments 225,29 - 25,297 -
Mineral property and
exploration costs (2,904) (2,117) (4,576) (5,896)
Cumulative translation
adjustment 4,118 - 10,414 -
Mining development and
fixed asset
acquisitions (4,338) (1,133) (11,665) (6,314)
Proceeds on sale of
investments 18,186 - 18,186 -
Proceeds on sale of
marketable securities - 35 - 49
Proceeds on disposal of
capital assets 7 14 7 33
----------------------------------------------------------------
14,199 (3,201) (14,051) (13,075)
----------------------------------------------------------------
Increase in cash for
the period 22,586 3,336 49,671 17,526
Cash - beginning of
period 101,805 141,806 74,720 127,616
----------------------------------------------------------------
Cash - end of period 124,391 145,142 124,391 145,142
----------------------------------------------------------------
----------------------------------------------------------------
AUR RESOURCES INC.
Segmented Information
For the three months ended September 30
(in thousands of Canadian dollars)
(unaudited)
1998
Louvicourt Andacollo Exploration Corporate Other Total
----------------------------------------------------------------
----------------------------------------------------------------
$ $ $ $ $ $
Revenues
External 15,050 9,814 - 1,222 - 26,086
----------------------------------------------------------------
Expenses
Depreciation
and
amortization 1,326 2,409 88 20 - 3,843
Interest - - - - - -
Other 11,625 6,490 686 4,592 164 23,557
----------------------------------------------------------------
12,951 8,899 774 4,612 164 27,400
----------------------------------------------------------------
Earnings (loss)
before taxes 2,099 915 (774) (3,390) (164) (1,314)
Tax expense
(benefit) 804 138 (101) (1,286) (63) (508)
----------------------------------------------------------------
Net earnings
(loss) 1,295 777 (673) (2,104) (101) (806)
----------------------------------------------------------------
----------------------------------------------------------------
Capital assets (898) 1,467(x) 1,229 (11) - 1,787
----------------------------------------------------------------
----------------------------------------------------------------
Capital
expenditures 448 3,916(x) 2,862 16 - 7,242
----------------------------------------------------------------
----------------------------------------------------------------
(x) Includes a $4.1 million cumulative translation adjustment
as the Andacollo copper mine became self-sustaining
effective January 1, 1998.
1997 Louvicourt Andacollo Exploration Corporate Other Total
----------------------------------------------------------------
----------------------------------------------------------------
$ $ $ $ $ $
Revenues
External 14,811 8,884 - 1,248 - 24,943
----------------------------------------------------------------
Expenses
Depreciation
and
amortization 1,796 2,359 86 50 - 4,291
Interest - 1,130 - - - 1,130
Other 10,418 5,326 (109) 1,585 151 17,371
----------------------------------------------------------------
12,214 8,815 (23) 1,635 151 22,792
----------------------------------------------------------------
Earnings (loss)
before taxes 2,597 69 23 (387) (151) 2,151
Tax expense
(benefit) 1,038 10 (42) (243) 129 892
----------------------------------------------------------------
Net earnings
(loss) 1,559 59 65 (144) (280) 1,259
----------------------------------------------------------------
----------------------------------------------------------------
Capital assets (1,382) (1,644) 1,753 25 - (1,248)
----------------------------------------------------------------
----------------------------------------------------------------
Capital
expenditures 420 634 2,117 115 - 3,286
----------------------------------------------------------------
----------------------------------------------------------------
AUR RESOURCES INC.
Segmented Information
For the nine months ended September 30
(in thousands of Canadian dollars)
(unaudited)
1998 Louvicourt Andacollo Exploration Corporate Other Total
----------------------------------------------------------------
----------------------------------------------------------------
$ $ $ $ $ $
Revenues
External 41,271 26,822 - 4,379 - 72,472
----------------------------------------------------------------
Expenses
Depreciation
and
amortization 3,833 7,020 270 61 - 11,184
Interest - - - - - -
Other 30,810 18,715 1,291 9,492 536 60,844
----------------------------------------------------------------
34,643 25,735 1,561 9,553 536 72,028
----------------------------------------------------------------
Earnings (loss)
before taxes 6,628 1,087 (1,561) (5,174) (536) 444
Tax expense
(benefit) 2,537 163 (252) (1,858) (205) 385
----------------------------------------------------------------
Net earnings
(loss) 4,091 924 (1,309) (3,316) (331) 59
----------------------------------------------------------------
----------------------------------------------------------------
Capital assets 29,058 88,851(x)49,587 330 1,847 169,673
----------------------------------------------------------------
----------------------------------------------------------------
Capital
expenditures 1,204 10,320(x) 4,534 183 - 16,241
----------------------------------------------------------------
----------------------------------------------------------------
(x) Includes a $10.4 million cumulative translation adjustment
as the Andacollo copper mine became self-sustaining
effective January 1, 1998.
1997
Louvicourt Andacollo Exploration Corporate Other Total
----------------------------------------------------------------
----------------------------------------------------------------
$ $ $ $ $ $
Revenues
External 52,456 29,960 - 4,161 1,729 88,306
----------------------------------------------------------------
Expenses
Depreciation
and
amortization 4,950 6,438 251 151 - 11,790
Interest - 3,539 - - - 3,539
Other 31,085 16,440 31 4,193 2,129 53,878
----------------------------------------------------------------
36,035 26,417 282 4,344 2,129 69,207
----------------------------------------------------------------
Earnings (loss)
before taxes 16,421 3,543 (282) (183) (400) 19,099
Tax expense
(benefit) 6,568 531 (26) (160) 29 6,942
----------------------------------------------------------------
Net earnings
(loss) 9,853 3,012 (256) (23) (429) 12,157
----------------------------------------------------------------
----------------------------------------------------------------
Capital assets 33,101 88,552 51,381 261 3,700 176,995
----------------------------------------------------------------
----------------------------------------------------------------
Capital
expenditures 1,346 4,770 5,896 198 - 12,210
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----------------------------------------------------------------
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