Battle Mountain Gold Posts Losses on Non-Cash Charges Reflecting Lower Gold Prices, But Continues Strong Operating/Cash-Flow Performance.HOUSTON--(BUSINESS WIRE)--Feb. 2, 1999-- Announces Decisions to Dispose of To determine the fate of; to exercise the power of control over; to fix the condition, application, employment, etc. of; to direct or assign for a use. See also: Dispose Lihir Asset, Omit o·mit tr.v. o·mit·ted, o·mit·ting, o·mits 1. To fail to include or mention; leave out: omit a word. 2. a. To pass over; neglect. b. Dividend Battle Mountain Gold Co. (NYSE NYSE See: New York Stock Exchange :BMG BMG Bundesministerium für Gesundheit (Germand: Federal Ministry for Health) BMG Be My Girl BMG Blue Man Group BMG Bertelsmann Music Group BMG Be My Guest BMG Browning Machine Gun BMG Bulk Metallic Glass ) (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :BMC (BMC Software, Inc., Houston, TX, www.bmc.com) A leading supplier of software that supports and improves the availability, performance, and recovery of applications in complex computing environments. ) Wednesday Wednesday: see week. reported a fourth-quarter consolidated net loss of $224.6 million, or 98 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , which included non-cash write-downs and other charges necessitated by the low gold price environment totaling $216.8 million, or 94 cents per share. At the same time, the company announced a series of actions designed to help fund the future growth of the company, with the target of increasing gold production to more than 1 million ounces by the year 2002 and doubling its attributable reserve base by 2005. BMG President and Chief Executive Officer Ian D. Bayer said that the fourth-quarter loss largely resulted from the non-cash write-downs and other charges, as well as lower average realized gold prices. The fourth-quarter loss compares with a net loss of $20.8 million, or 9 cents per share, in the same period last year, which also included non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. amounting to $9 million. The write-downs consist of $90 million with respect to the company's investment in Lihir; $49.9 million at Kori Kollo; $40.3 million at Crown Jewel Crown jewel A particularly profitable or otherwise particularly valuable corporate unit or asset of a firm. Often used in risk arbitrage. The most desirable entities within a diversified corporation as measured by asset value, earning power, and business prospects; in takeover ; $10.8 million at Reona; and other amounts totaling $25.8 million. Bayer continued that investments in Lihir, Kori Kollo and Crown Jewel were made at a time of significantly higher gold prices, and the write-downs reflect the appropriate value of these assets in the current low gold price environment. The write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. at Crown Jewel also reflects the expense of the unexpectedly lengthy permitting process. The other write-downs primarily include increases in valuation allowances for U.S. and Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. deferred income taxes of $16.8 million; $4.7 million in reclamation Reclamation A claim for the right to return or the right to demand the return of a security that has been previously accepted as a result of bad delivery or other irregularities in the delivery and settlement process. costs at San Luis San Luis, city (1991 pop. 110,353), capital of San Luis prov., W central Argentina. The city is the commercial center of an area producing cattle, corn, and asparagus; the surrounding area has timber and mineral resources. San Luis is a popular resort. and the Battle Mountain Complex; and other impairments amounting to $4.3 million. For the year 1998, the consolidated net loss was $248.8 million, or $1.08 per share. The loss for the year compares with a consolidated net loss of $16.3 million, or 7 cents per share in the same period in 1997. Bayer added that in order to help fund the capital needed for its Phoenix and Crown Jewel development projects, the company has decided to pursue options to dispose of its 50.5 percent interest in Niugini Mining Limited (NML (language) nML - A specification language for instruction sets, based on attribute grammars, for back-end generators. ["The nML Machine Description Formalism", M. Freericks <mfx@cs.tu-berlin.de> TR TU Berlin, FB20, Bericht 1991/15]. ), through which it holds an 8.65 percent interest in Lihir Gold. As a result, the company will carry its investment in NML on its balance sheet as an asset held for disposal and will therefore deconsolidate NML in its financial and operating statements operating statement See income statement. . In another step to support its future investments, the company has also decided to omit the semi-annual 2.5 cent-per-share dividend on its common shares, which amounts to approximately $11.5 million annually. Bayer emphasized that Kori Kollo remains one of the company's flagship assets, with strong upside potential Upside potential The amount by which analysts or investors expect the price of a security may increase. upside potential The potential price or gain that may be expected in a security or in a security average, generally stated as the dollar at the nearby Llallagua resource and surrounding sur·round tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. exploration properties. Bayer also noted that the company is making excellent progress on the permitting of the Crown Jewel mine and has recently made significant progress in the appeals process. BMG anticipates concluding the permitting process in the near future, and is looking forward to a timely completion of the appeals process and start-up Start-up The earliest stage of a new business venture. of construction. Bayer said: "The company's strong operating performance in 1998 allowed it to generate approximately $20 million more 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 than in 1997, helping it to reinvest re·in·vest tr.v. re·in·vest·ed, re·in·vest·ing, re·in·vests To invest (capital or earnings) again, especially to invest (income from securities or funds) in additional shares. in such growth opportunities such as Phoenix, El Cairo Cairo, city, Egypt Cairo (kī`rō), Arab. Al Qahirah, city (1996 pop. 6,789,479), capital of Egypt and the Cairo governorate, NE Egypt, a port on the Nile River near the head of its delta, at the boundary of ancient Upper and and Tres Cruces cru·ces n. A plural of crux. ." Net cash flows from operations were $82.8 million in 1998, compared with $61.2 million in the same period of 1997, because of lower operating costs operating costs npl → gastos mpl operacionales and higher gold production, notwithstanding a $34 per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. reduction in average realized gold prices. Cash production costs declined by 18 percent during 1998, compared with the same period a year ago, averaging $161 per gold ounce sold. Attributable gold production was 889,000 ounces, or 24,000 ounces over target for 1998 and 13,000 ounces more than the same period last year. Bayer noted that the company's fundamentals remain sound: "We have worked hard to lower production costs, make our operations more efficient, maximize cash flow and improve our overall financial position. In 1999, our focus will be on sustaining those achievements while continuing to lay the groundwork for construction of our Phoenix and Crown Jewel development projects. "We are also striving to increase gold reserves by a net 4 million ounces by the year 2001 as an interim step toward our goal to double reserves by 2005; Battle Mountain currently has approximately 6.4 million ounces of 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. in its exploration/development pipeline which has the potential to be converted to reserves. "With low costs, quality reserves, good cash flow from operations and a strong balance sheet, BMG is in excellent shape to meet its anticipated capital expenditures for 1999 of approximately $47 million. "In addition, prospects for growth from current projects are gaining momentum, and further coordination of our exploration and corporate development efforts is enhancing our acquisition activities," Bayer added. Reserves Year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 1998 proven and probable reserves from continuing assets increased to 9.1 million attributable ounces, up about 3 percent compared with year-end 1997, after giving effect to the deconsolidation of NML. The increase came despite using a lower gold price assumption of $325 per ounce, compared with $350 per ounce in 1997, excludes NML ounces and reflects attributable recovered gold production of 889,000 in 1998. Reserve additions totaling approximately 1.3 million ounces at Phoenix and Vera/Nancy more than offset these changes. Using a $300 gold price assumption, rather than $325, would result in approximately a 5 percent decrease in year-end 1998 reserves, while a $350 gold price assumption would result in a 6 percent increase in year-end 1998 reserves. -0-
Proven & Probable Contained Gold Reserves (000s)
December 31, 1998 December 31, 1997
BMG Share ($325 Au) BMG Share ($350 Au)
Golden Giant 2,130 2,550
Kori Kollo/Llallagua 1,410 1,900
Holloway 825 965
Vera/Nancy 400 140
Phoenix 3,515 2,505
Crown Jewel 825 830
Total 9,105 8,890(a)
(a) Excludes NML.
Contained Silver
Reserves (000s oz) 31,220 24,515
Other mineralization increased to 6.4 million ounces, compared with
1.8 million ounces in 1997 (excluding NML), demonstrating the
company's strong pipeline of potential reserve growth and development
projects already in hand.
Additional Gold
Mineralization (000s oz)
Tres Cruces 2,000 -
El Cairo 1,250 -
Llallagua 1,230 1,230
Phoenix 1,000 -
Vera/Nancy 600 575
Holloway 300 -
Total 6,380 1,805(a)
(a) Excludes NML.
Operations For 1999, BMG expects to maintain its position as one of the low-cost leaders in the industry. Aggregate cash production costs are targeted to average approximately $175 per gold ounce sold. The company expects to produce approximately 720,000 ounces of gold in 1999 from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the , or about 12 percent less than in 1998, after adjusting for the deconsolidation of NML. The 12 percent reduction primarily reflects the return to target production levels at Golden Giant; lower production at Kori Kollo; and the decision to place the Reona residual heap leach leach v. leached, leach·ing, leach·es v.tr. 1. To remove soluble or other constituents from by the action of a percolating liquid. 2. operation on a month-to-month month-to-month adj. referring to a tenancy in which the tenant pays monthly rent and has no lease, and the tenancy can be terminated by the landlord at any time on thirty-days notice. (See: tenancy, landlord and tenant) status based on profitability. Production is expected to climb sharply to about 1.1 million ounces in 2002, assuming Crown Jewel and Phoenix achieve full production by that time. At the Golden Giant mine The Golden Giant Mine was an underground gold mine in the Hemlo mining camp in Canada, located north of Lake Superior, midway between Sault Ste. Marie and Thunder Bay, Ontario near the town of Marathon. , production exceeded target by about 35,000 ounces in 1998 as a result of changes to the mining sequence and higher than expected grades. For 1999, the average grade mined is expected to be 0.286 ounces per ton and will yield approximately 330,000 ounces of gold at a cash cost of about $145 per gold ounce sold. At Kori Kollo in Bolivia Bolivia (bōlĭv`ēə, Span. bōlē`vyä), officially Republic of Bolivia, republic (2005 est. pop. 8,858,000), 424,162 sq mi (1,098,581 sq km), W South America. , where Battle Mountain holds an 88 percent interest, BMG's attributable gold production will decline approximately 15 percent to about 250,000 in 1999. This decrease is primarily attributable to lower anticipated head grades. Cash production costs are targeted to average about $205 per ounce in 1999, an increase proportional proportional values expressed as a proportion of the total number of values in a series. proportional dwarf the patient is a miniature without disproportionate reductions or enlargements of body parts. with projected lower gold production. At the nearby Llallagua sulfide sulfide, chemical compound containing sulfur and one other element or sulfur and a radical. Sulfides may be salts or esters of hydrogen sulfide, H2S, or may be formed directly, e.g., by heating a metal with sulfur. resource, a year-long 200,000-ton pilot-plant test of the bio-oxidation heap leach project is scheduled to begin in the near future. The test is designed to determine the feasibility and economics of a full operation. Smaller scale tests in 1998 consistently returned recoveries exceeding 65 percent. At the 84.65 percent owned Holloway Holloway may refer to: Place names:
At the 50 percent owned Vera/Nancy mine in Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. , attributable gold production is expected to increase approximately 10 percent to more than 50,000 ounces in 1999. The increase is due to higher ore grades and an 8 percent increase in the mining rate. Cash production costs are targeted at about $140 per gold ounce sold. Normandy Normandy (nôr`məndē), Fr. Normandie (nôrmäNdē`), region and former province, NW France, bordering on the English Channel. Mining, the Pajingo joint venture operator, has prepared a mine optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. plan which is expected to result in a doubling of the mine's production capacity by the year 2001. At the Battle Mountain Complex in 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). , work on the Phoenix project advanced significantly in 1998 with improving economics, scope and reserves. A new plan of operations has been submitted to the Bureau of Land Management to reinitiate the permitting process. The new plan envisions a much larger footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. for the mine than before and is designed to include best-case best-case adj. Most favorable; optimum: "the best-case scenario of a mild recession" Business Week. scenarios in order to minimize the need for repermitting in the future. While permitting timetables are not easily predicted, BMG's goal is to have the draft Environmental Impact Statement issued in the mid- mid- pref. Middle: midbrain. 1999 time frame and the Record of Decision approximately a year later. Work at Phoenix this year will include continued development drilling with the target of delineating an additional 1 million ounces of reserves, further metallurgical met·al·lur·gy n. 1. The science that deals with procedures used in extracting metals from their ores, purifying and alloying metals, and creating useful objects from metals. 2. drilling, and additional geotechnical studies. A revised feasibility study The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. is anticipated to be completed by the third quarter of this year. At the Crown Jewel project in Washington Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. state, where BMG is earning a 54 percent interest, the company is making excellent progress and expects to obtain all remaining permits in the near future. The company is also making progress on the appeals front, having recently received several significant court decisions, including a major victory in the U.S. District Court which affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the Environmental Impact Statement and Record of Decision issued by the U.S. Forest Service. Though several permits and a number of outstanding appeals by special interest groups remain, BMG is currently targeting initial start up of operation in the second half of 2001. Exploration In 1999, BMG will again invest approximately $25 million in exploration. More than $16 million of this will be focused on North and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. , with an additional $4.8 million set aside to fund new opportunities and follow-up follow-up, n the process of monitoring the progress of a patient after a period of active treatment. follow-up subsequent. follow-up plan on encouraging results. The key objective for the company over the next three years will be to add 8 million gross ounces of new reserves/mineralization by year-end 2001. Areas of focus for this objective will include Tres Cruces, El Cairo, Phoenix and Vera/Nancy, as well as a continuing effort to identify and acquire new properties with the potential to add significantly to the reserve base in the near term. In the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , work at the Battle Mountain Complex focused on the Phoenix development project, where more than 145,000 feet of exploration, development and metallurgical drilling were completed, adding approximately 1 million ounces of gold to the reserve base. In 1999, exploration will continue to emphasize reserve development at the Complex, with 150,000 feet of development, metallurgical and exploration drilling planned. At the nearby Copper Basin project, drilling in 1998 identified high-grade High-grade Credit quality of AAA or AA. high-grade Of, relating to, or being a bond with little risk of default on the part of the issuer. High-grade is usually reserved for bonds rated AAA or AA by the rating services. gold-copper-silver mineralization beneath the east highwall of the old Surprise pit. Work in 1999 will attempt to confirm the viability of the high-grade East Surprise target as well as developing other targets in the area. In Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. , the 1998 exploration program focused on the 2,500 square kilometer kilometer one thousand (103) meters; 3280.83 feet; five-eighths of a mile; abbreviated km. (sq km) El Cairo property. Drilling there advanced the El Castillo El Castillo ("the castle" in Spanish) may refer to:
basic - pertaining to or constituting a base or basis; "a basic fact"; "the basic ingredients"; "basic changes in public opinion occur because of changes in priorities" 2. discovery to resource status and outlined a preliminary 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. oxide/sulfide resource of about 62.3 million tonnes grading 0.63 grams per tonne tonne measure of weight or mass; 1 tonne=1000 kg. See also ton. (g/t), or about 1.25 million ounces of contained gold. This mineralization includes 34 million tonnes of oxide oxide, chemical compound containing oxygen and one other chemical element. Oxides are widely and abundantly distributed in nature. Water is the oxide of hydrogen. Silicon dioxide is the major component of sand and quartz. material grading 0.81 g/t gold (Au), or approximately 880,000 ounces of contained gold. The deposit remains open to the southwest. Depending on the results, drilling in 1999 could move El Castillo from mineralization to reserve status, and see metallurgical testing continued and environmental/feasibility-type studies initiated. Recent drilling a few hundred meters south of El Castillo has returned intercepts of 1.42 g/t Au over 51 meters (m); 1.66 g/t over 52.5m; 0.72 g/t over 28.5m ; 1.73 g/t over 19.5m and 1.10 g/t over 12m. At present it is not known whether this mineralized min·er·al·ize v. min·er·al·ized, min·er·al·iz·ing, min·er·al·iz·es v.tr. 1. To convert to a mineral substance; petrify. 2. To transform a metal into a mineral by oxidation. 3. body is an extension of El Castillo or a new deposit, but it has the potential to significantly increase the El Castillo oxide resource. In Peru, as previously reported, BMG obtained the right to acquire the Tres Cruces property in late 1998. A 10-hole drill program was completed before year end which was successful in twinning previous core and reverse circulation holes and confirming previous results. Approximately 20,000m of drilling is planned for 1999, along with extensive metallurgical work. The property is currently estimated to contain approximately 31 million tonnes of oxide/sulfide material grading 2 g/t Au, or about 2 million ounces of gold. The potential to add significantly to the existing resources is excellent, with the deposit being open in most directions. In addition, the property contains a number of prospective, untested exploration targets. In Australia, development drilling at Vera/Nancy increased reserves by almost 600,000 ounces, adding approximately 280,000 ounces to BMG's attributable position. Interpretation and modeling of the entire Vera/Nancy structural domain is continuing and potential for new discoveries remains high. For 1999, the Pajingo joint-venture exploration objective is to explore and expand the resource base for the Pajingo operation. The program is balanced between resource expansion/delineation drilling at Vera South and Vera Deeps; phased exploration and preliminary resource definition drilling of advanced exploration targets; phased exploration of other selected targets; and regional exploration of the JV's 800 sq km exploration permit area. Significant drilling results received from Vera South during the fourth quarter of 1998 include: 13.02 g/t over 4.8m; 6.24 g/t over 11.1m; and 27.52 g/t over 7.2m; 9.54 g/t over 4.5m; 38.63 g/t over 2.7m; and 45 g/t over 11.3m. In Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , 1998 diamond drilling Diamond Drilling is a highly specialized industry used for mineral exploration around the world. Most commonly using wireline and core bits with diamond encrusted matrix. To drill holes to max depths of twelve thousand feet, for the recovery of core used in verifying mineral on the Teddy Bear teddy bear cuddly commodity named after President Theodore Roosevelt. [Am. Hist.: Frank, 46] See : Cuteness property returned positive results with the best intercept intercept in mathematical terms the points at which a curve cuts the two axes of a graph. of 13.27 g/t over 4.2m, located 500m west of the Holloway shaft shaft (shaft) a long slender part, such as the diaphysis of a long bone. shaft n. 1. An elongated rodlike structure, such as the midsection of a long bone. 2. . Several other holes drilled to the east and west of the Holloway deposit intersected a gold-bearing alteration Modification; changing a thing without obliterating it. An alteration is a variation made in the language or terms of a legal document that affects the rights and obligations of the parties to it. package of greater magnitude than the package hosting the main deposit. Although initial gold values were sub-economic, this extensive alteration system remains open in all directions and will be explored from both the surface and underground in 1999. At the Stoughton property, 12 kilometers east of the Holloway mine, 1998 drilling identified a new gold-bearing alteration system similar to the Lightning Zone at Holloway. The best intercepts returned 8.5 g/t over 4.7m and 3.7 g/t over 11.2m. At this point, drilling has traced the altered zone over a strike length of about 1.3km over widths of up to 30m. Follow-up drilling is planned for 1999. The United States Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 provides a "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " for certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Operating, exploration and financial data, and other statements in this document, are based on information that the company believes reasonable, but involve significant uncertainties as to future gold prices, costs, ore grades, mining and processing conditions, and regulatory and permitting matters. Actual results and timetables could vary significantly from the estimates presented. Also refer to the cautionary statement contained in the company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and 10-Q for the most recent reporting periods. -0-
BATTLE MOUNTAIN GOLD COMPANY
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
US$ millions, except per share amounts
Three months ended Twelve months ended
December 31 December 31
1998 1997 1998 1997
Sales $ 59.4 $ 87.0 $276.6 $344.9
Costs and expenses
Production costs 40.7 65.7 163.3 234.3
Depreciation, depletion
and amortization 17.2 16.8 79.6 72.8
Asset write-downs 194.9 - 194.9 -
Exploration,
evaluation & other
lease costs, net 8.5 7.5 24.8 24.8
General and
administrative
expenses 3.0 2.7 14.1 13.6
Merger expense - 0.4 - 2.7
Total costs and
expenses 264.3 93.1 476.7 348.2
Operating loss (204.9) (6.1) (200.1) (3.3)
Interest expense (3.9) (4.9) (17.8) (13.9)
Interest income 2.0 1.9 10.7 6.0
Equity in income
(losses) of equity
investee (3.4) 0.2 (7.9) 0.2
Foreign currency
exchange gain (loss) 0.2 (7.4) (12.4) (7.8)
Other income, net 0.3 0.1 0.5 5.3
Loss before income
taxes and minority
interest (209.7) (16.2) (227.0) (13.5)
Income tax expense
(benefit) 13.2 0.2 7.8 (17.4)
Mining taxes 0.6 2.1 6.0 6.7
Minority interest
in net loss (income) 0.8 (0.4) (0.5) (2.3)
Loss before cumulative
effect of accounting
change (222.7) (18.9) (241.3) (5.1)
Cumulative effect
of accounting
change - - - (3.7)
Net loss (222.7) (18.9) (241.3) (8.8)
Preferred
dividends 1.9 1.9 7.5 7.5
Net loss to common
shares $(224.6) $ (20.8) $(248.8) $ (16.3)
Loss per common share
Basic and diluted $ (.98) $ (.09) $ (1.08) $ (.07)
Dividends per common
share $ - $ - $ .05 $ .05
Average common shares
outstanding for loss
per share purposes
Basic and diluted 229.8 229.8 229.8 229.7
BATTLE MOUNTAIN GOLD COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET
US$ millions
December 31, December 31,
1998 1997
(Unaudited)
Assets
Current assets
Cash and cash equivalents $ 147.6 $ 185.0
Restricted cash 7.7 17.7
Accounts and notes receivable 13.8 33.0
Inventories 12.5 8.3
Materials and supplies 23.4 25.4
Assets held for sale 108.3 42.5
Other current assets 2.0 12.1
Total current assets 315.3 324.0
Investments 19.4 255.2
Property, plant and equipment, net 339.0 489.3
Other assets 20.4 24.7
Total assets $ 694.1 $1,093.2
Liabilities and Shareholders' Equity
Current liabilities
Short-term borrowings $ 14.9 $ 4.9
Current maturities of long-term debt 37.0 44.0
Accounts payable 14.3 24.0
Income and mining taxes payable 23.9 10.1
Other current liabilities 12.9 23.1
Total current liabilities 103.0 106.1
Long-term debt 203.6 241.0
Deferred income and mining taxes 72.1 84.1
Other liabilities 50.0 48.3
Total liabilities 428.7 479.5
Minority interest 17.7 107.7
Shareholders' equity 247.7 506.0
Total liabilities and shareholders'
equity $ 694.1 $1,093.2
BATTLE MOUNTAIN GOLD COMPANY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
US$ millions
Twelve months ended
December 31
1998 1997
Cash flows from operating
activities
Net loss $(241.3) $ (8.8)
Adjustments to reconcile net
loss to cash flows from
operating activities:
Depreciation, depletion
and amortization 79.6 72.8
Deferred income taxes (7.1) (33.8)
Asset write-downs 194.9 -
Foreign currency exchange
losses 12.4 7.8
Equity in losses (income)
of Lihir 7.9 (0.2)
Minority interest in net
income 0.5 2.3
Cumulative effect of
accounting change - 3.7
Increase in accrued
reclamation costs 0.6 4.6
Change in working capital
accounts, net 21.4 7.6
Other, net 13.9 5.2
Net cash flows provided by
operating activities 82.8 61.2
Cash flows from investing
activities
Capital expenditures (46.5) (62.4)
Investment in Lihir (11.5) -
New World settlement, net 34.9 -
Proceeds from sales of assets 2.0 4.7
Deconsolidation of Niugini
Mining Limited cash (49.6) -
Other, net (3.4) (5.3)
Net cash flows used in investing
activities (74.1) (63.0)
Cash flows from financing
activities
Cash proceeds from borrowings - 156.7
Debt repayments (44.3) (24.5)
Cash proceeds from stock
issuances 0.3 0.7
Increase (decrease) in
short-term borrowings 9.9 (16.9)
Cash dividend payments (19.0) (18.9)
Decrease (increase) in
restricted cash 10.2 (3.3)
Other, net (0.8) -
Net cash flows provided by
(used in) financing activities (43.7) 93.8
Effect of exchange rate changes
on cash (2.4) (1.0)
Net increase (decrease) in
cash and cash equivalents (37.4) 91.0
Cash and cash equivalents
at beginning of year 185.0 94.0
Cash and cash equivalents
at end of year $ 147.6 $ 185.0
BATTLE MOUNTAIN GOLD CO.
SUPPLEMENTAL INFORMATION
OPERATING DATA (Unaudited) (1)
(US$, all production data reflects BMG attributable interests)
3 months ended 12 months ended
Dec. 31, Dec. 31,
1998 1997 1998 1997
GOLDEN GIANT
Gold recovered (000s oz) 72 100 366 362
Silver recovered (000s oz) 3 4 26 15
Cost per Gold Ounce Sold
Cash production costs $151 $118 $122 $134
Depreciation, depletion and
amortization 63 58 66 63
Reclamation and mine-closure costs 4 4 4 4
Total production costs $218 $180 $192 $201
KORI KOLLO (88% Interest)
Gold recovered (000s oz) 75 73 295 280
Silver recovered (000s oz) 202 223 852 784
Cost per Gold Ounce Sold (2)
Cash production costs $162 $186 $175 $193
Depreciation, depletion and
amortization 95 117 121 121
Reclamation and mine-closure costs 11 9 11 8
Total production costs $268 $312 $307 $322
HOLLOWAY (84.65% Interest)
Gold recovered (000s oz) 21 11 80 53
Cost per Gold Ounce Sold
Cash production costs $201 $415 $222 $341
Depreciation, depletion and
amortization 124 195 116 128
Reclamation and mine-closure costs 2 2 2 2
Total production costs $327 $612 $340 $471
BATTLE MOUNTAIN COMPLEX
Gold recovered (000s oz) 5 19 37 78
Silver recovered (000s oz) 14 23 80 129
Cost per Gold Ounce Sold
Cash production costs $598 $265 $282 $272
Depreciation, depletion and
amortization 104 40 48 38
Reclamation and mine-closure costs - 42 - 44
Total production costs $702 $347 $330 $354
LIHIR (8.65%) Interest (3)
Gold recovered (000s oz) 11 12 45 12
Cost per Gold Ounce Sold Not Available Not Available
VERA/NANCY (50% Interest) (4)
Gold recovered (000s oz) 12 11 47 19
Silver recovered (000s oz) 11 10 40 20
Cost per Gold Ounce Sold
Cash production costs $ 130 $ 185 135 $183
Depreciation, depletion and
amortization 37 30 31 29
Reclamation and mine-closure
costs 1 2 1 2
Total production costs $ 168 $217 $167 $214
SAN CRISTOBAL (50.5% Interest)
Gold recovered (000s oz) 3 10 19 37
Silver recovered (000s oz) 7 20 37 78
Cost per Gold Ounce Sold
Cash production costs (5) $ 163 $ 459 $159 $421
Depreciation, depletion and
amortization - 94 63 66
Reclamation and mine-closure
costs - - - 5
Total production costs $ 163 $ 553 $222 $492
RED DOME (50.5% Interest) (6)
Gold recovered (000s oz) 1 25
Silver recovered (000s oz) 16 177
Copper recovered (000s lb) 423 4,124
Cost per Gold Ounce Sold
Cash production costs $ 285 $245
Depreciation, depletion and
amortization - 18
Reclamation and mine-closure
costs 17 13
Total production costs $ 302 $276
SILIDOR (55% Interest) (6)
Gold recovered (000s oz) 10
Cost Per Gold Ounce Sold
Cash production costs $319
Depreciation, depletion and
amortization 39
Reclamation and mine-closure costs 5
Total production costs $363
AGGREGATE DATA
Gold recovered BMG share (000s oz) 199 237 889 876
Gold sold BMG share (000s oz) 195 238 884 875
Gold recovered (000s oz) 223 258 992 975
Gold sold (000s oz) 218 262 987 976
Average price per oz realized $ 305 $ 324 $306 $340
Silver recovered BMG share (000s oz) 236 296 1,034 1,204
Silver sold BMG share (000s oz) 232 366 1,032 1,214
Silver recovered (000s oz) 270 362 1,187 1,562
Silver sold (000s oz) 266 494 1,186 1,581
Average price per oz realized $ 4.64 $ 5.18 $5.50 $4.88
Weighted Average Cost per Gold
Ounce Sold
Cash production costs $ 171 $ 185 $161 $197
Depreciation, depletion and
amortization 91 84 93 82
Reclamation and mine-closure costs 6 8 5 9
Total production costs $ 268 $ 277 $259 $288
(1) Cash production costs are presented in accordance with guidelines
established by The Gold Institute. In addition to mining, milling
and plant level general and administrative expenses, cash
production costs include royalties, freight, smelting costs and
allowances, and production taxes. Credits for by-product silver
and copper are offset against these cash production costs. This
standard also provides for reporting on a cost per gold ounce
basis, rather than cost per equivalent gold ounce.
(2) Royalties paid to the Bolivian government for the Kori Kollo
mine are treated as income tax for per ounce cost purposes and
therefore are not included in these cost calculations.
(3) Lihir results to be released by Lihir Gold in Papua New Guinea on
a later date.
(4) Production started at Vera/Nancy and at Lihir during the third
and fourth quarters of 1997, respectively.
(5) Includes net deferred stripping costs of $163 and $53 per ounce
for the three- and 12-month periods ended Dec. 31, 1997,
respectively, and deferred stripping costs of $36 per ounce for
the 12 months ended Dec. 31, 1998.
(6) Production ceased at Silidor and at Red Dome during the third and
fourth quarters of 1997, respectively.
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion