Bema Gold Corporation: 2004 Third Quarter Results.VANCOUVER Vancouver, city, Canada Vancouver, city (1991 pop. 471,844), SW British Columbia, Canada, on Burrard Inlet of the Strait of Georgia, opposite Vancouver Island and just N of the Wash. border. , British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography -- Bema Gold Bema Gold Corporation is a Vancouver, British Columbia based intermediate gold producer with operating mines and development projects in Russia, South Africa, Chile and Canada. Corporation (AMEX AMEX See: American Stock Exchange :BGO BGO Bismuth Germanate BGO Baguio City (Philippines) BGO Blinding Glimpse of the Obvious BGO Bergen, Norway - Flesland (Airport Code) BGO Blue and Gold Officer (United States Naval Academy) )(TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :BGO)(AIM:BAU BAU Business As Usual BAU Bangladesh Agricultural University BAU Beirut Arab University (Lebanon) BAU Behavioral Analysis Unit (FBI NCAVC) BAU Al-Balqa' Applied University (Jordan) ) reports the results from its operations for the third quarter ended September September: see month. 30, 2004. All dollar figures are in 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. dollars (USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) unless otherwise indicated. Financial Results The Company reported a net loss of $21.6 million or $0.059 per share for the third quarter of 2004 compared to a restated net loss of $14.3 million ($.043 per share) for the same period last year. The main reason for the net loss during the quarter is an unrealized, non-cash, derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. loss of $25.5 million resulting from the mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. adjustment of the Company's non-hedge derivative financial instruments based on the spot price of gold of $416 per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. at September 30, 2004. The unrealized derivative loss was partially offset by a realized derivative gain of $14.4 million. Before changes in non-cash working capital, Bema reported a significant improvement on a cash flow basis for the period, with 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 of $14.8 million compared to an operating cash outflow of $14.3 million in the second quarter of this year. The improvement is mainly related to the early close out of certain Rand Rand See Witwatersrand. rand 1 n. See Table at currency. [Afrikaans, after(Witwaters)rand. gold put options and the improved performance at the Petrex Mines (refer to "Petrex Mines" section for details). For the quarter ended September 30, 2003, the net loss of $14.3 million included a $13.7 million unrealized derivative loss (based on the gold spot price of $388 per ounce at September 30, 2003) and a $1.6 million realized derivative gain. For the first nine months of 2004, the Company reported a net loss of $35 million ($0.097 per share) on revenue of $65.7 million compared to restated net loss of $10.4 million ($0.033 per share) on revenue of $60.1 million in 2003. The loss for the first nine months of 2004 was mainly due to the write down of the Yarnell property (refer to Q-1 press release dated 05-14-04), mark-to-market, non-hedge derivative losses and the poor performance of the Petrex Mines in the first two quarters. Gold Revenue Gold revenue in the third quarter of 2004 was $24.9 million on sales of 63,223 ounces at an average realized price of $393 per ounce. The Julietta Mine generated $8.5 million from the sale of 22,670 ounces of gold at an average realized price of $375 per ounce, while $16.4 million was contributed by the Petrex Mines from 40,553 ounces sold at an average realized price of $403 per ounce. Gold revenue for the first nine months of 2004 was $65.7 million from 167,251 ounces sold at an average realized price of $392 per ounce. Operations Consolidated gold production for the quarter was 61,248 ounces at an operating cash cost of $283 per ounce(i) and a total cash cost of $295 per ounce(i). For the same period in 2003, Bema reported consolidated production of 70,217 ounces at an operating cash cost of $214 per ounce (i) and a total cash cost of $232 per ounce (i). The stronger results in 2003 reflect Julietta's best ever quarterly production as a very high grade section of the deposit was mined in the third quarter of 2003. For the first nine months of 2004, Bema produced 168,044 ounces of gold at an operating cash cost of $303 per ounce(i) and a total cash cost of $319 per ounce(i). The operating costs operating costs npl → gastos mpl operacionales during the first nine months were higher than the original production budget due mainly to the strength of the South African Rand “ZAR” redirects here. For the former republic, see South African Republic. The rand is the currency of South Africa. It takes its name from the Witwatersrand (White-waters-ridge and the effects of the February February: see month. warehouse fire at Julietta which destroyed the majority of spare parts Spare parts, also referred to as Service Parts is a term used to indicate extra parts available and in proximity to the mechanical item, such as a automobile, boat, engine, for which they might be used. Spare parts are also called “spares. inventory and resulted in mining and milling rates being temporarily reduced while the spare parts were replaced (refer to Q-1 press release dated 05-14-04). (i) Adjusting for gains from Rand gold put options (see "Gold Forward and Options Contracts" section) Liquidity and Capital Resources The Company ended the quarter with $34.5 million in cash and cash equivalents and working capital of $7.6 million compared to cash and cash equivalents of $44.7 million and working capital of $7.6 million in the prior quarter. Subsequent to the quarter end, Bema entered into an agreement for a "bought deal" financing with a syndicate Syndicate organized crime unit throughout major cities of the United States. [Am. Hist.: NCE, 2018] See : Gangsterism of underwriters. Bema will issue 27.4 million common shares at CDN (Content Delivery Network) A system of distributed content on a large intranet or the public Internet in which copies of content are replicated and cached throughout the network. $3.65 per common share for gross proceeds of CDN$100 million. The Company expects that underwriters will exercise an option to purchase an additional 6.85 million common shares at the offering price for gross proceeds of CDN$25 million. This financing is scheduled to close on November November: see month. 17th. Julietta Mine, Russia (Bema 79%) In the third quarter, 43,042 tonnes of ore were milled at Julietta at an average grade of 16.73 grams per tonne tonne measure of weight or mass; 1 tonne=1000 kg. See also ton. gold producing 20,689 ounces of gold, at an operating cash cost of $186 per ounce and a total cash cost of $221 per ounce. Julietta had operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $648,000 for the period. The higher operating costs for the period were the result of lower gold head grades and lower silver production than in the second quarter.(1) It is anticipated that silver production will improve during the fourth quarter which should result in lower operating costs. Mill throughput The speed with which a computer processes data. It is a combination of internal processing speed, peripheral speeds (I/O) and the efficiency of the operating system and other system software all working together. 1. and recoveries were over budget for both gold and silver during the quarter. Reconstruction of the warehouse and shop building were also completed, as was the tailings Tailings (also known as tailings pile, tails, leach residue, or slickens[1]) are the materials left over[2] after the process of separating the valuable fraction from the worthless fraction of an ore. pond expansion project. (1) The Company accounts for silver production as a credit against operating costs. For the same period last year, Julietta produced 32,928 ounces of gold at an operating cash cost of $58 per ounce and a total cash cost of $97 per ounce. For the first nine months of 2004, Julietta milled 121,281 tonnes of ore at an average grade of 18.70 grams per tonne producing 65,574 ounces of gold at an operating cost of $168 per ounce and a total cash cost of $209 per ounce. The number of ounces produced during the first nine months of the year was lower and the operating costs higher than budget mainly due to a warehouse fire in February 2004 (refer to Q-1 press release dated 05-14-04). During the quarter, the Company made the scheduled $5.6 million repayment of the Julietta project loans and also prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. an additional
$5.6 million of the Julietta project loans six months ahead of
schedule. The Company has now repaid in its entirety The whole, in contradistinction to a moiety or part only. When land is conveyed to Husband and Wife, they do not take by moieties, but both are seised of the entirety. the Julietta
project loans with the exception of the $1.5 million IFC (Internet Foundation Classes) A class library from Netscape that provides an application framework and graphical user interface (GUI) routines for Java programmers. IFC was later made part of the Java Foundation Classes (JFC). See JFC, AFC and AWT. See also ICF. C loan. This
loan can be extended beyond the March 31, 2005 maturity date at the
option of the IFC.The 2004 exploration program is ongoing with four surface drills rigs and one underground rig. The drill program includes infill in·fill n. 1. The use of vacant land and property within a built-up area for further construction or development, especially as part of a neighborhood preservation or limited growth program. 2. drilling focused on the V-6, VIII, II-1, II-2 veins and exploration of new targets near the Julietta Creek area. Drilling and trenching is scheduled to commence early next year on the Engteri zones, located approximately six kilometres north-west of the main Julietta vein. Petrex Mines, South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. (Bema 100%) During the third quarter, Petrex produced 40,559 ounces of gold at a total cash cost of $332 per ounce(i) from 453,291 tonnes of ore milled at an average grade of 3.02 grams per tonne resulting in an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $3.0 million for the period. However, applying the cash gain from the Rand gold put options that matured during the quarter of $3.7 million, resulted in an operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of $700,000 for the period. This is a significant improvement over the second quarter of this year when Petrex recorded an operating loss of $8.2 million (the operating net loss was $5.8 million net of a $2.4 million Rand gold put gains in the second quarter of this year). Operating costs will remain high if the Rand retains its strength versus the US dollar, however, Bema is continuing to improve production efficiencies at Petrex. For example, changes designed to cut costs during the second quarter have resulted in improved performance from the mine. Tonnes milled, recoveries, operating costs and capital expenditures were all better than budgeted, while ounces produced were on budget. Emphasis will remain on improving the 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. Call Factors at all of the shafts to improve the ore grade Ore grade is a measure that describes the concentration of a valuable natural material (such as metals or minerals) in its surrounding ore. Ore grade is used to assess the economic feasibility of a mining operation: the cost of extracting a natural material from its ore is directly delivered to the plant. Some of the improvements being implemented are improved blasting techniques, better control of water (and associated mud), mechanical supports at the face and the use of trackless mining equipment where appropriate. Bema has drilled approximately 30,000 meters in South Africa this year which has identified several new zones conducive con·du·cive adj. Tending to cause or bring about; contributive: working conditions not conducive to productivity. See Synonyms at favorable. for underground mining. Drilling for the remainder of the year will follow up on a 180 metre metre In poetry, the rhythmic pattern of a poetic line. Various principles have been devised to organize poetic lines into rhythmic units. Quantitative verse, the metre of Classical Greek and Latin poetry, measures the length of time required to pronounce syllables, long by 20 metre wide high grade zone in the west pit 3 area with grades up to 24 grams per tonne (g/t) gold in hole 134 and 200g/t gold over 1.7 meters in hole 81. The zone remains open along strike. For the same period in 2003 Petrex produced 37,289 ounces of gold at total cash cost of $350 per ounce.(i) During the quarter, Petrex continued to advance discussions with its lenders with regard to the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of its debt facilities. The Petrex debt facilities are non-recourse to Bema. Petrex has requested that the lenders defer de·fer 1 v. de·ferred, de·fer·ring, de·fers v.tr. 1. To put off; postpone. 2. To postpone the induction of (one eligible for the military draft). v.intr. loan payments scheduled for September 2004 -$1.0 million (Lenders have agreed to defer) and December 2004, $1.5 million and for all of 2005, $5.5 million. The Company has also requested that all required waivers be provided so that the debt outstanding of $31.9 million can be classified as 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. , rather than current as reflected in the September 30, 2004 balance sheet. In return, the Company would agree to fund operating cash shortfalls to a maximum of $5 million and guarantee all debt interest payments to the end of 2005. During the quarter Petrex closed out all of its Rand gold put options maturing between October 2005 and December 2008 for total cash consideration of $15.1 million. Of this amount, $3.4 million was applied against a deferred premium owed relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the original purchase of the puts. The remaining amount of $11.7 million is intended to be applied against the outstanding loan, although no formal decision or agreement has been reached. If this amount is applied against the project loan it will be reduced to approximately $22.3 million. The decision to close out the Rand gold puts was based on the Company's desire to reduce the debt and on management's belief that the Rand should weaken the future which would greatly reduce the benefit of the Rand denominated put options. For example at $420 gold and a Rand conversion rate of 7.4 to the dollar, the Rand put options would have little value. It is anticipated that a formal agreement will be reached with the banks prior to the end of this year. (i) Adjusting for gains from Rand gold put options (see "Gold Forward and Options Contracts" section) Refugio Mine, Chile (Bema 50%) Bema and joint venture partner Kinross Gold Kinross Gold Corporation (TSX: K, NYSE: KGC) is a Canadian gold mining company. It is the seventh largest primary gold producer in the world.[1] See also
1. ^ Kinross Gold. Corporation are completing a major upgrade of the Refugio mine facilities which will result in the restart To resume computer operation after a planned or unplanned termination. See boot, warm boot and checkpoint/restart. of mining in the first quarter of 2005. Commercial production is expected to be achieved by the second quarter of 2005. Based on an average daily throughput rate Throughput rate is an obsolete term[1] in the terminology of automated chemical analysis. It may mean either:
1. ^ International Union of Pure and Applied Chemistry. "throughput rate". of 40,000 tonnes of ore per day, annual gold production is expected to average 250,000 ounces at a total cash cost of approximately $225 per ounce over a minimum ten year mine life. The total estimated capital cost (100%) at Refugio, originally budgeted at $70 million with an additional $30 million for a capital lease of a new mining fleet, has increased by roughly 10%. Bema is funding its share of the capital expenditure for the upgrade from a portion of the proceeds from the convertible note offering completed during the first quarter (please refer to Q-1 press release dated 05-14-04 for details). As a result, Bema's share of production from Refugio will have no project debt. Since the Refugio Mine is a "restart" operation, the costs are required to be expensed (rather than capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. as would be done for a new mine) as a charge to operations and totaled $2 million during the third quarter and $3.2 million for the first nine months of 2004, and is reflected in operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before . Kupol Project, Russia (Bema 75%) During the third quarter, Bema released additional high grade drill results from the Kupol project and continued to advance the development of the mine. The highlights of the recent drilling program were: the extension of high grade 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. 250 metres to the North at depth; the discovery of a new wide high grade vein in the recently discovered multiple veins in the North Zone; the discovery of a new high grade sub-parallel or offset vein in the South; the discovery of a new high grade ore shoot in the Central Zone; and ongoing detail drilling in the Big Bend Big Bend A region of southwest Texas on the Mexican border in a triangle formed by a bend in the Rio Grande. The area includes deep river canyons, desert wilderness, mountains rising to 2,386. Zone continues to demonstrate strong continuity of the high grade zone. Drilling continues at Kupol and it is expected that at least one more series of drill results will be released in the fourth quarter. Development work at Kupol during the quarter included earthworks earthworks: see land art. , road construction, geotechnical drilling for foundations and site facilities and procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. of equipment for the 2005 exploration and development program. A new resource calculation is currently being prepared and a feasibility study "A Feasibility Study" is an episode of the original The Outer Limits television show. It first aired on 13 April, 1964, during the first season. It was remade in 1997 as part of the revived The Outer Limits series with a minor title change. will be complete by April 2005. Cerro Casale, Chile (Bema 24%) During the quarter, Placer Dome Placer Dome was a large mining company specializing in gold and other precious metals, with corporate headquarters in Vancouver, British Columbia, Canada. Barrick has acquired 100% of the Placer Dome shares on January 20, 2006, and has integrated the company into its own. Inc. (51%), Bema (24%) and Arizona Arizona (âr'əzō`nə), state in the southwestern United States. It is bordered by Utah (N), New Mexico (E), Mexico (S), and, across the Colorado R., Nevada and California (W). Star Resource Corp.(25%) reached an agreement on certain amendments to the Compania Minera Casale (CMC (Common Messaging Calls) A programming interface specified by the XAPIA as the standard messaging API for X.400 and other messaging systems. CMC is intended to provide a common API for applications that want to become mail enabled. 1. ) shareholders' agreement shareholders' agreement n. an employment agreement among the shareholders of a small corporation permitting a shareholder to take a management position with the corporation without any claim of conflict of interest or self-dealing against the shareholder/manager. . Placer Dome has issued a certificate (Certificate B) under the shareholders' agreement indicating it has commenced or is continuing to use reasonable commercial efforts to arrange financing for the Cerro Casale project on commercially reasonable and customary reasonable and customary (R&C) plan, n a dental benefits plan that determines benefits based only on “reasonable and customary” fee criteria. See also usual fee; customary fee; reasonable fee. terms in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the financing requirements of the shareholders' agreement. Subject to the terms of the shareholders' agreement, Placer Dome has up to 15 months to arrange such financing. Placer Dome is required to arrange $1.3-billion in financing, including $200-million in equity on behalf of all partners. In addition, Placer Dome is required to provide a pre-completion guarantee for an amount not greater than $1.1-billion in senior loans. The senior loans are required to be an amount that is not less than 50 per cent of the initial project capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. . Any capital requirements exceeding $1.3-billion of the financing provided or arranged by Placer Dome would be financed pro rata [Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share. In a Bankruptcy case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. by the partners. The Cerro Casale project is one of the world's largest undeveloped gold and copper deposits, which hosts measured and indicated mineral resources Noun 1. mineral resources - natural resources in the form of minerals natural resource, natural resources - resources (actual and potential) supplied by nature estimated at 25.4 million ounces of gold and 6.4 billion pounds of copper. The updated Placer Dome 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. contemplates a large-scale open pit mine that could produce approximately 975,000 ounces of gold and 130,000 tonnes of copper per year over an 18-year mine life. Assuming a copper price of 95 cents per pound, Cerro Casale's cash costs are projected at approximately $115 per ounce (net of copper credits). Total costs, including amortization and depreciation of capital, are projected at approximately $225 per ounce. Capital costs for the project are estimated at $1.65-billion Gold Forward and Option Contracts In the third quarter, the Company reduced the number of outstanding gold forward and contingent forward contracts by 15,750 bringing, the total reduction for the first nine months of 2004 to 65,625 ounces. Bema intends to deliver into all of the outstanding Julietta forward contracts on the designated maturity dates out to 2006. Bema's entire committed gold contracts represent approximately 1.9% of the Company's proven and probable reserves and measured, indicated and inferred resources.
2004 2005 2006 2007-2012
--------------------------------------------------------------------
Gold
Forward contracts
(ounces) 18,450 33,550 43,350 -
Average price per
ounce $ 312 $ 325 $ 319 $ -
Dollar denominated -
Put options purchased
$290 strike price
(ounces) 6,849 26,364 23,790 59,988
$390 to $422 strike
price (ounces) - 45,000 50,000 77,500
Rand (ZAR) denominated -
Put options purchased
(ounces) 24,062 103,914 - -
Average price per
ounce (ZAR) 3,050 3,100 - -
Average price per
ounce (US)(i) $ 477 $ 485 - -
Call options sold
(ounces) 10,000 45,000 50,000 77,500
Average price per
ounce $ 500 $ 459 $ 462 $ 463
Contingent forwards
(maximum)
$320 strike price
(ounces) 5,000 10,000 - -
$350 strike price
(ounces) 8,250 34,500 36,000 168,000
Silver
Forward contracts
(ounces) 200,000 - - -
Average price per
ounce $ 6.1914 $ - $ - $ -
Put options purchased
(ounces) - 550,000 550,000 -
Average price per
ounce $ 6.3314 $ 6.3314 $ -
Call options sold
(ounces) - 550,000 550,000 -
Average price per
ounce $ - $ 7.6454 $ 7.6454 $ -
(i) Based on 6.3967 Rand to 1 USD, being the closing rate at
September 30, 2004.
The Rand denominated put options, as shown in the table above, provide the Company with some protection against a strong South African Rand, without limiting the Company's leverage to a rising gold price or a declining Rand. The Rand denominated put options and all contingent forward contracts are treated as non-hedge transactions and are marked to market on a quarterly basis, with the resulting unrealized derivative gain or loss reflected in the statement of operations See Income statement. . Outlook During the last quarter of 2004 and beyond, Bema will maintain its commitment to optimizing production and increasing reserves at the Petrex Mines and the Julietta Mine. Bema's three key development projects continue to be advanced towards production. The Refugio Mine is slated to recommence Re`com`mence´ v. i. 1. To commence or begin again. 2. To begin anew to be; to act again as. He seems desirous enough of recommencing courtier. - Johnson. v. t. 1. To commence again or anew. production early in 2005. A new resource calculation is currently being prepared for the Kupol project with a feasibility study scheduled to be completed by April 2005. At Cerro Casale, joint venture partner, Placer Dome is currently pursuing financing opportunities and advancing discussions on key commercial contracts and long-term marketing off-take arrangements. The Company's goal is to increase annual gold production to over 1,000,000 ounces from the development of these existing assets. On Behalf of BEMA GOLD CORPORATION Clive CLIVE Computer-aided Learning in Veterinary Education. A consortium of six veterinary schools in the United Kingdom providing computer based learning in veterinary undergraduates courses. T. Johnson, Chairman, C.E.O., & President Bema Gold Corporation trades on The Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. and the American Stock Exchange American Stock Exchange (AMEX) Stock exchange in the U.S. Originally known as “the Curb,” it began as an outdoor marketplace in New York City c. 1850. It moved indoors to its present location in the Wall Street area in 1921. . Symbol: BGO. Bema also trades on the London Stock Exchange's Alternative Investments Market. Symbol: BAU. Some of the statements contained in this release are "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. " within the meaning of Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements in this release include statements regarding: the Company's projections regarding annual gold production in future periods. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties such as: risks relating to estimates of reserves, mineral deposits and production costs; mining and development risks; the risk of commodity price fluctuations; political and regulatory risks; and other risks and uncertainties detailed in the Company's Form 40-F Annual Report for the year ended December 31, 2003, which has been filed with the Securities and Exchange Commission, and the Company's Renewal Annual Information Form for the year ended December 31, 2003, which is an exhibit to the Company's Form 40-F and is available under the Company's name at www.sedar.com. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
BEMA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
For the periods ended September 30
(Unaudited)
(in thousands of United States dollars, except shares and per share
amounts)
Third Quarter Nine Months
2004 2003 2004 2003
-------- -------- -------- --------
(Restated) (Restated)
note 1) note 1)
GOLD REVENUE $ 24,852 $ 23,997 $ 65,688 $ 60,101
-------- -------- -------- --------
EXPENSES
Operating costs 22,093 16,844 61,514 46,818
Depreciation and
depletion 4,842 4,831 13,321 12,295
Other 2,476 971 4,567 2,044
-------- -------- -------- --------
29,411 22,646 79,402 61,157
-------- -------- -------- --------
OPERATING EARNINGS
(LOSS) (4,559) 1,351 (13,714) (1,056)
-------- -------- -------- --------
OTHER EXPENSES
(INCOME)
General and
administrative 1,629 1,923 6,898 5,688
Interest and
financing costs 3,103 1,567 7,506 4,553
General exploration 308 38 678 203
Stock-based
compensation 763 157 3,795 1,959
Foreign exchange
loss (gains) 12 1,584 1,221 416
Other 31 197 1,485 48
-------- -------- -------- --------
5,846 5,466 21,583 12,867
-------- -------- -------- --------
LOSS BEFORE THE
UNDERNOTED ITEMS 10,405 4,115 35,297 13,923
Write-down of
Yarnell mineral
property - - 8,527 -
Realized derivative
(gains) (14,393) (1,614) (15,965) (2,190)
Unrealized
derivative losses
(gains) 25,478 13,686 6,747 (6,013)
Equity in losses of
associated companies 52 46 232 53
Investment losses
(gains) 1 105 (398) 99
-------- -------- -------- --------
LOSS BEFORE INCOME
TAXES 21,543 16,338 34,440 5,872
Current income taxes 7 565 492 809
Future income taxes
(recovery) - (2,623) 34 3,743
-------- -------- -------- --------
LOSS FOR THE PERIOD $ 21,550 $ 14,280 $ 34,966 $ 10,424
-------- -------- -------- --------
-------- -------- -------- --------
LOSS PER COMMON
SHARE - basic and
diluted $ 0.059 $ 0.043 $ 0.097 $ 0.033
-------- -------- -------- --------
-------- -------- -------- --------
Weighted average
number of common
shares
outstanding (in
thousands) 362,273 331,399 358,711 313,308
-------- -------- -------- --------
-------- -------- -------- --------
BEMA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the periods ended September 30
(Unaudited)
(in thousands of United States dollars)
Third Quarter Nine Months
2004 2003 2004 2003
-------- -------- -------- --------
(Restated) (Restated)
note 1) note 1)
OPERATING ACTIVITIES
Loss for the period $(21,550) $(14,280) $(34,966) $(10,424)
Non-cash charges
(credits)
Depreciation and
depletion 4,842 4,831 13,321 12,295
Amortization of
deferred financing
costs 1,044 427 2,051 1,280
Equity in losses of
associated companies 52 46 232 53
Derivative
instruments 26,983 14,473 7,166 (3,604)
Investment losses
(gains) 1 105 (398) 99
Future income tax
expense (recovery) - (2,623) 34 3,743
Stock-based
compensation 763 157 3,795 1,959
Write-down of
Yarnell mineral
property - - 8,527 -
Other 2,627 2,088 2,292 1,953
Change in non-cash
working capital (1,126) 2,984 (3,727) 2,774
-------- -------- -------- --------
13,636 8,208 (1,673) 10,128
-------- -------- -------- --------
FINANCING ACTIVITIES
Convertible loan,
net of issue costs (271) - 66,603 -
Kupol bridge
financing 38,000 - 38,000 -
Common shares
issued, net of issue
costs 1,265 55,403 9,277 55,677
Share subscription
received 990 - 990 -
Julietta project
loan repayment (11,167) (5,584) (16,750) (11,167)
Petrex loan
repayments - (1,500) (3,000) (6,500)
Capital lease
repayments (230) - (230) -
Other (1,725) (102) (1,677) (232)
-------- -------- -------- --------
26,862 48,217 93,213 37,778
-------- -------- -------- --------
INVESTING ACTIVITIES
Julietta Mine (954) (105) (1,484) (826)
Julietta Mine
exploration (2,609) (564) (5,059) (1,332)
Petrex Mines (2,350) (2,353) (6,069) (5,467)
Petrex Mines
exploration (497) (6) (1,476) (203)
Refugio exploration
and construction (6,815) (655) (13,728) (2,534)
Kupol exploration
and development (31,702) (3,092) (50,217) (7,924)
Acquisition,
exploration and
development (1,785) (1,736) (5,566) (5,241)
Investment purchases (3,059) - (3,059) -
Acquisition of EAGC
Ventures Corp., net
cash acquired - - - 6,742
Sale of EAGC special
warrants - - - 16,935
Other (769) (141) (1,176) (368)
-------- -------- -------- --------
(50,540) (8,652) (87,834) (218)
-------- -------- -------- --------
Effect of exchange
rate changes on cash
and cash equivalents (158) (244) (26) 694
-------- -------- -------- --------
Increase (decrease)
in cash and cash
equivalents (10,200) 47,529 3,680 48,382
Cash and cash
equivalents,
beginning of period 44,653 17,511 30,773 16,658
-------- -------- -------- --------
Cash and cash
equivalents, end of
period $ 34,453 $ 65,040 $ 34,453 $ 65,040
-------- -------- -------- --------
-------- -------- -------- --------
BEMA GOLD CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of United States dollars)
As at As at
September 30 December 31
2004 2003
ASSETS
Current
Cash and cash equivalents $ 34,453 $ 30,773
Accounts receivable 10,187 5,754
Marketable securities
(Market value - $12.5 million;
December 31, 2003 - $12.1 million) 3,554 3,567
Inventories 15,227 14,932
Other 6,675 4,845
--------- ---------
70,096 59,871
Investments 5,631 2,706
Property, plant and equipment 355,861 290,822
Goodwill 27,344 27,344
Unrealized fair value of
derivatives 7,095 20,792
Deferred losses 1,909 3,965
Other assets 23,869 14,206
--------- ---------
$ 491,805 $ 419,706
--------- ---------
--------- ---------
LIABILITIES
Current
Accounts payable $ 28,830 $ 23,292
Current portion of long-term debt 33,652 45,864
--------- ---------
62,482 69,156
Unrealized fair value of
derivatives 39,795 48,382
Long-term debt 94,725 7,084
Future income tax liabilities 2,132 2,098
Asset retirement obligations 16,488 15,380
Other liabilities 3,005 3,465
Non-controlling interest 942 830
--------- ---------
219,569 146,395
--------- ---------
SHAREHOLDERS' EQUITY
Capital stock
Issued - 362,912,258 common shares
(December 31, 2003 - 355,688,190) 450,957 441,309
Share subscription received 990 -
Value assigned to share purchase
warrants and stock options 18,238 14,814
Convertible debt 19,829 -
Deficit (217,778) (182,812)
--------- ---------
272,236 273,311
--------- ---------
$ 491,805 $ 419,706
--------- ---------
--------- ---------
Approved by the Directors
Clive T. Johnson Robert J. Gayton
BEMA GOLD CORPORATION
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
For the Nine Months ended September 30, 2004
(Unaudited)
1) Changes in Accounting policies Asset retirement obligations Asset Retirement Obligations provide for future disposal of assets as required by SFAS 143 [1]. Firms must recognize the ARO liability in the period it was acquired, generally acquisition. As described in Note 2(i) to the 2003 audited consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge , the Company has applied retroactive Having reference to things that happened in the past, prior to the occurrence of the act in question. A retroactive or retrospective law is one that takes away or impairs vested rights acquired under existing laws, creates new obligations, imposes new duties, or attaches a adoption of the new accounting standard CICA CICA Competition In Contracting Act of 1984 (USA) CICA Canadian Institute of Chartered Accountants CICA Competition In Contracting Act CICA Criminal Injuries Compensation Authority (UK) 3110 "Asset retirement obligations", effective January 1, 2003. The effect of this change on the balance sheet as at December 31, 2002 resulted in a $1.9 million increase to asset retirement obligations, a $2.2 million increase to property, plant and equipment and a decrease in deficit by $321,000. The effect of this change on earnings, net of taxes, for the three and nine months ended September 30, 2003 was a reduction of $378,000 and $529,000, respectively. Stock-based compensation Effective January 1, 2003, the Company also adopted CICA 3870 "Stock-based Compensation and Other Stock-based Payments" as described in Note 2(iii) to the audited consolidated financial statements. The effect of this change on earnings for the three and nine months ended September 30, 2003 was a reduction of $157,000 and $1.96 million, respectively. |
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