Bema Gold Corporation: 2005 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 (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :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) )(AMEX AMEX See: American Stock Exchange :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) ) ("Bema" or the "Company") reports the results from its operations for the third quarter ended September September: see month. 30, 2005. Highlights from the third quarter included: a significant increase in gold revenue, the recommencement Re`com`mence´ment n. 1. A commencement made anew. Noun 1. recommencement - beginning again resumption of production at the Refugio Mine, the continued financing and development of the Kupol project and further positive exploration results from Kupol and the Julietta Mine. 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 Bema reported a loss of $24.9 million or $0.062 per share for the third quarter of 2005, which included an unrealized derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. loss for the period of $10.9 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 on the Company's non-hedge derivative financial instruments relating mainly to the contingent gold forward contracts assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. to the Petrex Mines. Also contributing to the loss was $3 million of Refugio Mine re-start Verb 1. re-start - start an engine again, for example restart start up, start - get going or set in motion; "We simply could not start the engine"; "start up the computer" 2. costs, which are expensed prior to and during the scheduled recommencement of mine operations. Adjusting for the Refugio Mine re-start costs and the unrealized derivative loss resulted in a loss for the period of $10.9 million or $0.027 per share. For the quarter ended September 30, 2004, the loss of $21.6 million included $25.5 million of unrealized non-hedge derivative losses, partially offset by a realized non-hedge derivative gain of $14.4 million. For the first nine months of 2005, the Company reported a loss of $52 million ($0.130 per share) on revenue of $71 million compared with a loss of $35 million ($0.097 per share) on revenue of $65.7 million during the same period last year. The loss for the first nine months of 2005 included $14.1 million of unrealized derivative losses, $10.3 million of Refugio Mine re-start costs, and a $3 million 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. of the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of the Company's net smelter royalty interest royalty interest The proportional ownership interest by the owner of oil and gas rights in income produced by the asset. See also overriding royalty interest. in the Lo Increible property in Venezuela Venezuela (vĕnəzwā`lə, Span. vānāswā`lä), officially the Bolivarian Republic of Venezuela, republic (2005 est. pop. 25,375,000), 352,143 sq mi (912,050 sq km), N South America. during the first quarter of 2005 (see press release dated May 16, 2005). Gold Revenue Gold revenue in the third quarter improved by 21% over the second quarter of 2005 to $27.1 million on sales of 62,753 ounces at an average realized price of $432 per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. . The increase in revenue over the second quarter was due to a 17% increase in the number of ounces of gold sold and also to a 4% increase in the average price realized. The Julietta Mine contributed $11.3 million from the sale of 26,485 ounces of gold at an average price of $428 per ounce while $15.8 million was contributed by the Petrex Mines from 36,268 ounces sold at an average price of $436 per ounce. In the third quarter of 2004, gold revenue totaled $24.9 million on sales of 63,223 ounces at an average realized price of $393 per ounce. For the nine months ended September 30, 2005, the average price realized was $422 per ounce on revenue of $71 million from 168,049 ounces sold compared to an average price of $392 per ounce on revenue of $65.7 million from 167,251 ounces sold during the first nine months of 2004. The spot price of gold averaged $431 and $401 per ounce for the nine months ended September 30, 2005 and 2004, respectively. Operations Consolidated gold production for the quarter was 59,654 ounces at an operating cash cost of $341 per ounce(i) and a total cash cost of $360 ounce(i). Consolidated cash costs continue to be negatively affected by 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 versus the U.S. dollar. For the same period in 2004, Bema reported consolidated production of 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 first nine months of 2005, Bema produced 174,064 ounces of gold at an operating cash cost of $325 per ounce(i) and a total cash cost of $344 per ounce(i). (i)Operating and total cash costs are adjusted to reflect cash gains from the exercise of South African rand denominated gold put options. The gains for the various periods referred to in this news release are as follows: Consolidated production Q-3 2005: $16 per ounce (Q-3 2004 :$61 per ounce ), Petrex production for Q-3 2005: $27 per ounce (Q-3 2004: $93 per ounce ), Consolidated production for nine months ended September 30, 2005: $34 per ounce (nine months 2004: $44 per ounce), Petrex production for nine months ended September 30, 2005: $55 per ounce (nine months ended September 30, 2004: $73 per ounce). For further details see "Gold Forward and Options Contracts" section. Liquidity, Capital Resources and Financing Activities The Company ended the quarter with $13 million in cash and cash equivalents and a working capital deficiency A shortage or insufficiency. The amount by which federal Income Tax due exceeds the amount reported by the taxpayer on his or her return; also, the amount owed by a taxpayer who has not filed a return. of $817,000 compared to cash and cash equivalents of $15.1 million and working capital of $19.7 million in the prior quarter. Subsequent to the quarter end, Bema closed a "bought deal" equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. with a syndicate Syndicate organized crime unit throughout major cities of the United States. [Am. Hist.: NCE, 2018] See : Gangsterism of underwriters whereby Bema issued approximately 50.1 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. $2.85 per common share for gross proceeds of CDN$142.7 million. During the quarter, Bema announced that it had received conditional commitment letters from its Mandated Lead Arrangers Lead arranger The senior tier of arranger , Bayerische Hypo- und Vereinsbank AG ("HVB HVB Hervey Bay, Queensland, Australia (Airport Code) HVB Hawaii Visitors Bureau HVB Central-European International Bank (Hungary) HVB High Volume Breeder (puppy mill) ") and Societe Generale Commercial and Investment Banking ("SG CIB CIB abbr. Latin cibus (food) ") for a fully underwritten commercial tranche Tranche One of several related securities offered at the same time. Tranches from the same offering usually have different risk, reward, and/or maturity characteristics. tranche A class of bonds. project loan of $250 million for the construction and development of a mine at its Kupol property. The HVB/SG CIB commercial tranche loan, which is subject to regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approval, final documentation and customary closing conditions, is expected to have a six and a half year term from draw down and be guaranteed by Bema until economic completion. The annual interest rate is expected to be LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). plus 2% prior to economic completion, and LIBOR plus 2.5% for two years after economic completion, and then LIBOR plus 3% for the remaining term (each rate is net of political risk insurance). Subsequent to the end of the third quarter, Bema received conditional commitment letters from various financial and multilateral mul·ti·lat·er·al adj. 1. Having many sides. 2. Involving more than two nations or parties: multilateral trade agreements. institutions who will provide the second tranche of the project loan financing in the amount of $150 million. The second tranche which is also subject to regulatory approval, final documentation and customary closing conditions, is expected to have terms and conditions similar to the commercial tranche loan but is expected to have a term of seven and a half years from draw down and will be drawn down 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. with the commercial tranche. Both tranches Tranches A piece, portion or slice of a deal or structured financing. This portion is one of several related securities that are offered at the same time but have different risks, rewards and/or maturities. "Tranche" is the French word for "slice". of the project loan financing will be administered by HVB, as documentation and facility agent, and SG CIB as technical agent. The Company expects to complete documentation and sign the loan agreements in the fourth quarter of 2005. Julietta Mine, Russia Russia, officially the Russian Federation, Rus. Rossiya, republic (2005 est. pop. 143,420,000), 6,591,100 sq mi (17,070,949 sq km). (Bema 79%) During the third quarter, the Julietta Mine surpassed budget targets for gold and silver production and operating cash costs per ounce. Production from the underground operations Underground Operations is a Toronto-based independent punk rock record label. Operated by Mark Spicoluk, former Closet Monster member, this label is one of the most cutting edge independent labels in Canada. exceeded budget during the quarter which allowed the mill to process higher grade ore from underground in lieu of Instead of; in place of; in substitution of. It does not mean in addition to. lower grade surface stockpiles resulting in mill head grades also exceeding budget. Underground productivity has increased primarily due to additional equipment being received and placed in operation during the second quarter of 2005 and to improved equipment availability resulting from additional supervision added to the underground and maintenance departments. In addition, increased experience in narrow vein mining methods has also resulted in improved production. In the third quarter of 2005, 43,067 tonnes of ore were milled at Julietta at an average gold grade of 19.06 grams per tonne tonne measure of weight or mass; 1 tonne=1000 kg. See also ton. producing 24,177 ounces of gold at an operating cash cost of $183 per ounce and a total cash cost of $228 per ounce. The Julietta Mine reported positive operating cash flows Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. , before changes in non-cash working capital, of approximately $5.6 million for the quarter ended September 30, 2005. During the same period last year, Julietta produced 20,689 ounces of gold at an operating cash cost of $186 per ounce and a total cash cost of $221 per ounce. For the first nine months of 2005, Julietta milled 125,646 tonnes of ore at an average grade of 18.73 grams per tonne producing 67,417 ounces of gold at an operating cost of $199 per ounce and a total cash cost of $247 per ounce. Julietta reported positive operating cash flows, before changes in non-cash working capital, of approximately $10.6 million for the nine months ended September 30, 2005. Bema accounts for silver production as a credit against operating costs operating costs npl → gastos mpl operacionales . Also during the third quarter, the remaining $1.5 million principal amount of the Julietta 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. project loan was repaid. Bema has now repaid all of the Julietta project loans. Julietta Exploration A total of 61,000 metres in 407 holes have been completed in both surface exploration and underground drilling in 2005 at Julietta up to the end of October October: see month. . The drilling has been successful in extending 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. on the V-4 and V-5 veins system and has lead to the discovery of 3 new veins. Two of these, V-20 and V-21 are narrow veins intersected over 50 metres of strike length on the west side of Julietta hill. The most exciting of the discoveries is the 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. of a new vein system in the Engteri area, 7.5 kilometres by road northwest of the mine area. Hole C-5014 intersected 36.90 g/t gold and 21.90 g/t silver over 0.4 metres, plus 8.24 g/t gold and 12.20 g/t silver over 4.1 metres plus 43.30 g/t gold and 65.68 g/t silver over 1.60 metres plus 16.42 g/t gold and 9.26 g/t silver over 1 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, underneath a trench trench: see ocean. of strongly altered volcanics. A second ongoing hole drilled 80 metres to the northeast has intersected a 2.2 metre wide (down-hole) vein containing 20.3 g/t gold and 22.9 g/t silver. These two holes in this new zone represent the first economic grade intersection at Engteri and could represent the source of high grade glacially gla·cial adj. 1. a. Of, relating to, or derived from a glacier. b. Suggesting the extreme slowness of a glacier: Work proceeded at a glacial pace. 2. a. derived boulders and float previously found in the Engteri area. This structure is open for 750 metres along strike length. Drilling for 2005 will be completed in November November: see month. . 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 35,477 ounces of gold at a total cash cost of $449 per ounce(i) from 546,004 tonnes of ore milled at an average grade of 2.23 grams per tonne. Adjusting for gains from the South African rand denominated gold put options(i), the Petrex Mines had negative operating cash flows, before changes in non-cash working capital, of approximately $1.2 million for the three months ended September 30, 2005. Operations during the period were negatively affected by the strength of the South African rand versus the U.S. dollar and the poor performance of one of the underground mining contractors who has subsequently been replaced. For the same period in 2004 Petrex produced 40,559 ounces of gold at total cash cost of $332 per ounce(i). For the nine months ended September 30, 2005, the Petrex Mines produced 106,647 ounces of gold at a total cash cost of $406 per ounce(i) from 1,569,621 tonnes of ore milled at an average grade of 2.27 grams per tonne. Adjusting for gains from the South African rand denominated gold put options(i), Petrex reported positive operating cash flows, before changes in non-cash working capital, of approximately $0.8 million for the nine months of 2005. In October, the Petrex operations improved significantly, due primarily to improved underground mining productivity with monthly production of approximately 14,600 ounces of gold. This improvement if sustained, combined with the recently improved price of gold in the South African rand, should result in improved financial results for Petrex in the fourth quarter. Bema is actively pursuing alternatives to improve the Petrex project through consolidation with neighboring neigh·bor n. 1. One who lives near or next to another. 2. A person, place, or thing adjacent to or located near another. 3. A fellow human. 4. Used as a form of familiar address. v. gold properties in the East Rand district or joint ventures with other South African mining companies and Black Empowerment em·pow·er tr.v. em·pow·ered, em·pow·er·ing, em·pow·ers 1. To invest with power, especially legal power or official authority. See Synonyms at authorize. 2. groups. (i)Operating and total cash costs are adjusted to reflect cash gains from the exercise of South African rand denominated gold put options. The gains for the various periods referred to in this news release are as follows: Consolidated production Q-3 2005: $16 per ounce (Q-3 2004:$61 per ounce), Petrex production for Q-3 2005: $27 per ounce (Q-3 2004: $93 per ounce), Consolidated production for nine months ended September 30, 2005: $34 per ounce (nine months 2004: $44 per ounce), Petrex production for nine months ended September 30, 2005: $55 per ounce (nine months 2004: $73 per ounce). For further details see "Gold Forward and Options Contracts" section. Refugio Mine, Chile (Bema 50%) At the Refugio Mine, mining, processing and gold production continued to ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale , during the quarter, along with construction activities and commissioning. It is projected that the operation will achieve the expanded full scale production rate of an average of 40,000 tonnes of ore per day by year end. On a number of days the plant has processed well in excess of 40,000 tonnes. Once commissioning is complete, Bema's share of gold production at Refugio is estimated at 125,000 ounces per year for at least 10 years with life of mine total operating costs averaging $250 per ounce. The total capital cost of the expansion remains at $100 million plus a $34 million lease for the new mining fleet (Bema's share is 50%). Kupol Project, Russia (Bema 75%) Development and Procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. Activity during the third quarter at the Kupol project consisted primarily of continued exploration and development work at the site as well as mobilization mobilization Organization of a nation's armed forces for active military service in time of war or other national emergency. It includes recruiting and training, building military bases and training camps, and procuring and distributing weapons, ammunition, uniforms, of materials and supplies for the 2006 season to the East Siberian Siberian a handsome breed of rabbits with distinctive rollback or blanket fur which looks as though it has been shorn. Its color can be black, blue or brown; its weight is about 6 lb. seaport of Pevek Pevek (Russian: Певек) is a town in Chukotka Autonomous Okrug, Russia, situated by the coast of the Chaunskaya Inlet of the East Siberian Sea. Pevek is the northernmost town in Russia. , Russia. Construction work at the site included completion of the excavation excavation In archaeology, the exposure, recording, and recovery of buried material remains. The techniques employed vary by the type of site, but all forms of archaeological excavation require great skill and careful preparation. of the permanent man camp site, site road work and the continuation of excavation activities at the airstrip. All scheduled work has been completed or is ahead of schedule. Orocon Inc., the construction contractor, has completed the erection erection /erec·tion/ (e-rek´shun) the condition of being rigid and elevated, as erectile tissue when filled with blood. e·rec·tion n. 1. of six 3,000 m3 fuel storage tanks and has poured 3,200 m3 of concrete at the mill and services building. The permanent man camp, mill and services building and the grinding grinding, process by which surface material is removed from an object, usually metal, by the abrasive action of a rotating wheel or a moving belt that contains abrasive grains. and crushing crushing deaths of newborn animals, especially those in litters, caused by the mother lying on them accidentally. Contributed to by weakness of the neonate or awkward accommodation. A problem in piglets and puppies. Called also overlying. equipment have all been delivered to Pevek and will be transported to Kupol over the winter road in early 2006. Erection and installation work will begin in the spring when the supplies reach the site. Logistically, a total of 16,000 tonnes of equipment, materials and supplies have been shipped on four vessels from the port of Everett, Washington  This page is currently protected from editing to deal with vandalism. Protection is not an endorsement of the current [ version] , on two vessels from the Russian Russianassociated in some way with Russia. Russian blue a breed of cats with short, dense, silver-tipped blue-colored coat and vivid green eyes. seaport of Vostochniy and on one ship from the Russian seaport of Vanino. Also, 4,500 tonnes of supplies have been shipped on river barges down the Lena River Lena River River, east-central Russia, one of the longest rivers in the world. From its source in a Siberian mountain lake west of Lake Baikal, it flows 2,734 mi (4,400 km) north across Russia to enter the Arctic Ocean. from Ust Kut to Zelenyi Mys, a port on the Kolyma River Kolyma River River, northeastern Siberia, eastern Russia. Rising in the Kolyma Mountains and emptying in the East Siberian Sea, it is 1,323 mi (2,129 km) long. It is navigable upstream to Verkhne-Kolymsk but is ice-free only from June to September. which is approximately 400 kilometres west of Kupol. Road construction to allow transportation of all these supplies to Kupol will begin in the fourth quarter of 2005. In addition to the above freight, the Company will be purchasing approximately 20,000 tonnes of fuel for use during the winter months and for storage at the site for the remainder of the work to be completed in 2006. Other developments at Kupol include the receipt of the final 35% interest in the Kupol property as per the agreement with the Government of Chukotka Chukotka may refer to:
Exploration The 2005 drill program has been completed for the season with a total of 46,147 metres drilled in 194 holes. Exploration drilling continues to intersect In a relational database, to match two files and produce a third file with records that are common in both. For example, intersecting an American file and a programmer file would yield American programmers. high gold and silver grades along the main Kupol vein structure. The 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. Kupol vein system is now known to have a strike length in excess of 3.7 kilometres and remains open along strike and at depth. Furthermore the 2005 program has shown that high grade veining vein·ing n. Distribution or arrangement of veins or veinlike markings. exists outside of the main Kupol structure opening up the rest of the property and region for further exploration. The highlights of the recent results include hole 614 which intersected 3 veins containing 24.34 g/t gold and 126.15 g/t silver over 1.6 metres, 94.4 g/t gold and 997.21 g/t silver over 6.8 metres and 20.05 g/t gold and 258.07 g/t silver over 16.3 metres from within inferred material at the junction between South Zone and 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. . Vtoryi II Vein The Vtoryi II vein was discovered in 2005 (see press releases dated 07/12/05 and 09/06/05) and is situated beneath the planned 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. dam, 300 metres west of the South Extension zone of the main Kupol vein. 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 continues to show that narrow but high grade gold and silver values are present in this polymetallic vein. The economic mineralization starts approximately 50 metres below the base of the tailings dam and should not effect its planned location. Highlights of the recent drilling include intersections of 69.36 g/t gold and 78.10 g/t silver over 0.80 metres in hole KP05-585 and 57.58 g/t gold and 491.75 g/t silver over 1.10 metres in hole KP05-605. True widths are approximately 75% to 90% of intersected widths. The new drilling has increased the extent of high grade mineralization and indicates that there is potential to define additional high grade shoots within the drill defined 700 metres strike length and 225 metres depth extent of the vein. The vein remains open in all directions. The mineralization does not extend to surface and therefore will not affect the location of the tailings dam.
Selected results are as follows:
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HOLE # FROM TO LENGTH GOLD SILVER
(m) (m) (m) (g/t) (g/t)
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KP05-585 65.10 65.90 0.80 69.36 78.10
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KP05-589 182.60 183.15 0.55 17.70 54.20
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KP05-605 65.60 66.70 1.10 57.58 491.75
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KP05-613 17.40 17.70 0.30 13.50 697.70
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KP05-627 149.75 150.20 0.45 67.58 138.90
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Big Bend Zone One hole, KP05-614, was drilled in the Big Bend to upgrade a block of inferred resources to the indicated category. This hole intersected three veins which graded the following; 24.34 g/t gold and 126.15 g/t silver over 1.60 metres, 94.44 g/t gold and 997.21 g/t silver over 6.80 metres and 20.05 g/t gold and 258.07 g/t silver over 16.30 metres. Results from this hole indicate the potential to extend the Big Bend high grade indicated resource zone at depth into the South zone.
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HOLE # FROM TO LENGTH GOLD SILVER
(m) (m) (m) (g/t) (g/t)
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KP05-614 159.30 160.90 1.60 24.34 126.15
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and 185.80 192.60 6.80 94.44 997.21
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incl. 187.80 191.10 3.30 181.81 1,831.77
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and 194.80 211.10 16.30 20.05 258.07
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incl 197.30 199.70 2.40 74.13 759.57
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Central Zone Thirty nine holes totaling 10,058.1 metres were drilled in the Central zone in 2005. Recent drilling included infill drilling to provide additional vein definition in the upper levels of the inferred resource and to further define shoots in the indicated resource, as an aid in mine planning and continued resource definition. Results confirm the mineralized shoots previously defined and indicate potential to expand the shoots to depth. Selected results are as follows:
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HOLE # FROM TO LENGTH GOLD SILVER
(m) (m) (m) (g/t) (g/t)
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KP05-573 125.50 131.20 5.70 10.39 178.44
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KP05-576 150.75 154.00 3.25 10.08 87.73
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KP05-587 229.50 234.65 5.15 8.21 104.51
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KP05-606 29.20 34.65 5.45 83.24 534.27
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KP05-617 196.80 204.90 8.10 17.54 227.74
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incl. 197.60 198.50 0.90 62.20 1,649.50
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South Zone Twenty nine holes totaling 9,162.10 metres were drilled in the South zone in 2005. Highlights of the final holes include 6.0 metres grading 17.09 g/t gold and 195.51 g/t silver in hole KP05-596 and 2.90 metres grading 155.31 g/t gold and 1,862.28 g/t silver in hole KP05-608. Results continue to show the presence of high grade mineralization in multiple veins within the zone. Two holes, KP05-628 and 632, followed up on the deep high grade drill intersection in hole KP05-599 (1.30 metres grading 14.70 g/t gold and 185.31 g/t silver; see press release 9/6/05). Wide vein and stockwork Stock´work` n. 1. (Mining) A system of working in ore, etc., when it lies not in strata or veins, but in solid masses, so as to be worked in chambers or stories. 2. (Geol. zones (15.70 and 18.40 metres respectively - true width approximately 70% of intersected width) were intersected in these holes, demonstrating the continuity of the main vein system to depth, the two holes contained anomalous a·nom·a·lous adj. 1. Deviating from the normal or common order, form, or rule. 2. Equivocal, as in classification or nature. gold confirming the potential for further gold mineralization at depth.
Selected results of the remaining 2005 holes at the South
zone are tabulated
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HOLE # FROM TO LENGTH GOLD SILVER
(m) (m) (m) (g/t) (g/t)
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KP05-596 134.40 142.10 7.70 5.86 36.82
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and 216.10 222.10 6.00 17.09 195.51
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KP05-603 147.60 151.60 4.00 6.83 44.12
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and 200.05 203.55 3.50 5.62 121.56
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KP05-608 239.25 242.15 2.90 155.31 1,862.28
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Incl. 239.25 239.75 0.50 755.34 2,133.20
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Stripping, mapping and channel sampling of the South zone was halted in mid September with the onset of winter. Highlights of the channel sampling completed included 4.26 metres grading 22.09 g/t gold and 99.46 g/t silver in channel TP90315 and 1.76 metres grading 33.72 g/t gold with 104.18 g/t silver and 4.25 metres grading 10.85 g/t gold with 275.90 g/t silver in channel TP90335. North Extension Zone Two holes were drilled in the North Extension zone to provide additional information on grade continuity and mineralization limits. The first hole, KP05-594, intersected 13.50 g/t gold and 201.45 g/t silver over 1.20 metres in the second of several veins and confirmed the interpretation of the start of the main precious metal zone. The second hole, KP05-602, intersected high grade veining which assayed up to 22.66 g/t gold and 364.69 g/t silver over 3.05 metres within the main mineralized vein system.
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HOLE # FROM TO LENGTH GOLD SILVER
(m) (m) (m) (g/t) (g/t)
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KP05-594 329.60 330.80 1.20 13.50 201.45
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KP05-602 388.70 391.10 2.40 21.67 157.14
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Incl. 389.70 390.30 0.60 78.24 618.86
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and 495.35 498.40 3.05 22.66 364.69
--------------------------------------------------------------
Additional new veins Three holes (KP05-553, 577 and 621) tested a new vein 300 metres east of the main Kupol vein. Although a wide veined zone (greater than 15 metres) was intersected in hole KP05-553 this zone only returned assays of up to 3.0 g/t gold with 22.60 g/t silver over 0.95 metres. These values do not match those of the high grade float which occurs above the vein trace. Three holes (KP05-612, 629 and 631) tested the Vtoryi I vein northward north·ward adv. & adj. Toward, to, or in the north. n. A northern direction, point, or region. north from the discovery drilling earlier in the season (see press release 7/12/05), extending the vein strike to approximately 775 metres. Like the Vtoryi II vein the Vtoryi I vein is polymetallic, anomalous in silver but contains only minor gold values. The best new result from drilling of this vein was hole KP05-631 which intersected 0.60 metres grading 0.68 g/t gold and 433.70 g/t silver. Two holes followed up on the vein intersection in the 2003 hole KP03-102 (102.94 g/t gold and 636 g/t silver over 1.0 metre), that occurs approximately 100 metres east of the main Kupol vein in the Central zone. New results from this vein are as follows; intersections of 0.40 metres grading 14.42 g/t gold and 146.00 g/t silver in hole KP05-597 and 0.4 metres grading 10.18 g/t gold and 10.90 g/t silver and 1.10 metres grading 3.70 g/t gold and 32.40 g/t silver in hole KP05-554.
Selected results are as follows:
---------------------------------------------------------------------
HOLE # FROM TO LENGTH GOLD SILVER COMMENTS
(m) (m) (m) (g/t) (g/t)
---------------------------------------------------------------------
KP05-553 205.0 205.95 0.95 3.00 22.80
---------------------------------------------------------------------
KP05-554 198.0 198.4 0.40 10.18 10.90
---------------------------------------------------------------------
and 199.30 2004 1.10 3.70 32.40
---------------------------------------------------------------------
KP05-597 232.40 232.80 0.40 14.42 146.00
---------------------------------------------------------------------
KP05-612 109.25 109.75 0.50 0.10 145.40 Vtoryi I
---------------------------------------------------------------------
KP05-629 83.90 84.10 0.20 0.10 40.50 Vtoryi I
---------------------------------------------------------------------
KP05-631 194.20 194.8 0.60 0.68 433.70 Vtoryi I
---------------------------------------------------------------------
Cerro Casale Casale, Italian for a house (or group of houses) in the countryside, may refer to:
During the third 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. (Placer Dome) informed Bema that Placer Dome had concluded that the Cerro Casale Project was not then financially viable and determined that the Project was not then financeable under the terms of the 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. . Bema disagreed with Placer Dome's determination believing that Cerro Casale is financeable in today's metal market environment. Under the terms of the Shareholders' Agreement if the project is financeable, Placer Dome must use reasonable commercial efforts to arrange project financing Project financing A form of asset-based financing in which a firm finances a discrete set of assets on a stand-alone basis. . If the Project is financeable and yet Placer Dome does not arrange financing on the terms and within the time provided for in the Agreement, Placer must transfer its interest to Bema 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. ("Arizona Star"). As a result of Bema's disagreement with Placer Dome's determination that the Project was not financeable, Bema and Arizona Star issued to Placer Dome a notice of default under the Shareholders' Agreement. Subsequent to the third quarter, Bema, Arizona Star and Placer Dome agreed in principle that Placer will sell its interest in Compania Minera Minera (Welsh: Mwynglawdd) is a small village in the county borough of Wrexham in north-east Wales. It borders Coedpoeth to the east and Bwlchgwyn to the west. Casale, to Bema and Arizona Star in return for contingent payments. Bema and Arizona Star have agreed in principle to jointly pay Placer Dome US$10 million upon a decision to construct a mine at Cerro Casale and either (a) a gold payment beginning 12 months after commencement of production consisting of 10,000 ounces of gold per year for five years and 20,000 ounces of gold per year for a subsequent seven years; or (b) a cash payment of US$70 million payable when a construction decision is made, at the election of Bema and Arizona Star. The transaction is expected to close by the end of 2005 and is subject to certain conditions including settlement of definitive agreements. Subject to the completion of this transaction, Bema and Arizona Star intend to update the Cerro Casale 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. and pursue potential partnerships with senior mining companies for the development of the project. Gold Forward and Option Contracts In the third quarter, the Company closed out its remaining South African rand denominated gold put options consisting of 32,892 ounces at an average price of ZAR ZAR In currencies, this is the abbreviation for the South African Rand. 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. 3,100 per ounce. Bema's entire committed gold contracts represent approximately 4.4% of the Company's proven and probable reserves and measured, and indicated resources. The Company has entered into gold and silver forward/option contracts, maturing in the following years, to protect against a decline in future metal prices. The following is a summary of the Company's outstanding gold and silver derivative contracts at September 30, 2005. 2005 2006 2007 2008-2012 --------------------------------------------------------------------- Gold Forward contracts (ounces) 15,050 43,350 - 162,500 Average price per ounce $ 327 $ 319 $ - $ 509 Dollar denominated - Put options purchased $290 strike price (ounces) 6,504 23,790 21,342 38,646 $390 to $422 strike price (ounces) 14,500 68,000 68,000 38,500 $470 strike price (ounces) - - - 130,750 Call options sold (ounces) 23,500 57,750 59,000 166,000 Average price per ounce $ 478 $ 462 $ 462 $ 516 Contingent forwards (maximum) $350 strike price (ounces) 9,000 36,000 36,000 132,000 Silver Forward contracts (ounces) 200,000 - - - Average price per ounce $ 6.34 $ - $ - $ - Put options purchased (ounces) 150,000 600,000 - 2,700,000 Average price per ounce $ 6.34 $ 6.34 $ - 7.00 Call options sold (ounces) 150,000 600,000 - 2,700,000 Average price per ounce $ 7.65 $ 7.65 $ - $ 9.50 In addition to the contracts included in the table above, the Company has silver floating lease rate swaps totaling 1.8 million ounces of silver at a fixed rate of 2%, expiring ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. throughout the years from 2009 to 2011. During the third quarter of 2005, as part of the hedge program required for the expected Kupol project construction financing, the Company entered into 130,750 ounces of one-to-one one-to-one adj. 1. Allowing the pairing of each member of a class uniquely with a member of another class. 2. Mathematics gold collars Gold collar may refer to
Outlook The recommencement of production at the Refugio Mine and the continued advancement of the Kupol project have Bema on track to become a low cost million ounce per year gold producer. The Refugio Mine is projected to reach full production in the fourth quarter and the Kupol project financing, development and procurement programs are on schedule for the commencement of production in mid 2008. In addition, with the recent positive developments regarding the Cerro Casale project, Bema intends to pursue a partnership with a major mining company to ensure the financing and development of the project in the current robust metals markets. In addition to the focus on the advancement of its development projects, a high priority for the Company is to optimize optimize - optimisation and rationalize ra·tion·al·ize v. 1. To make rational. 2. To devise self-satisfying but false or inconsistent reasons for one's behavior, especially as an unconscious defense mechanism through which irrational acts or feelings are made to appear production from existing operating properties to improve Bema's financial performance in the near term. All results contained in this news release have been validated val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. by a Quality Control Program ("QC"), which has been designed in concert with an independent consultant to meet or exceed the requirements of NI 43-101. This QC program includes the use of certified See certification. standard reference samples, coarse field blank material and duplicate DUPLICATE. The double of anything. 2. It is usually applied to agreements, letters, receipts, and the like, when two originals are made of either of them. Each copy has the same effect. sampling as described at length in earlier news releases and in the recently released technical reports for the Kupol project on April 4, 2005 and July July: see month. 5, 2005. This QC program also contains material referenced from the Julietta Mine technical report which was reported March 1, 2002 and prepared by SRK SRK Shah Rukh Khan (Indian actor) SRK Shoryuken (fighting games) SRK Soave-Redlich-Kwong (thermodynamic model) SRK Syk-Related Tyrosine Kinase Consulting. Tom Garagan, Vice President of Exploration for Bema Gold Corporation, is the Qualified Person for this exploration project. 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 London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. 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 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 relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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 December: see month. 31, 2004, which has been filed with the Securities and Exchange Commission, and the Company's Renewal Annual Information Form for the year ended December 31, 2004, 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
2005 2004 2005 2004
--------- --------- --------- ---------
GOLD REVENUE $ 27,146 $ 24,852 $ 70,981 $ 65,688
--------- --------- --------- ---------
EXPENSES
Operating costs 23,466 22,093 64,678 61,514
Depreciation and
depletion 5,927 4,842 14,859 13,321
Refugio re-start of
operations 3,044 2,007 10,255 3,196
Julietta warehouse
fire loss - - 267 1,800
Other 531 469 1,741 1,371
--------- --------- --------- ---------
32,968 29,411 91,800 81,202
--------- --------- --------- ---------
MINE OPERATING LOSS 5,822 4,559 20,819 15,514
--------- --------- --------- ---------
OTHER EXPENSES
(INCOME)
General and
administrative 2,279 1,629 7,323 6,898
Interest and financing
costs 1,336 3,103 3,961 7,506
General exploration 185 308 835 678
Stock-based
compensation 600 763 3,173 3,795
Foreign exchange
losses 794 12 814 1,221
Other 219 31 276 (315)
--------- --------- --------- ---------
5,413 5,846 16,382 19,783
--------- --------- --------- ---------
LOSS BEFORE TAXES AND
OTHER ITEMS 11,235 10,405 37,201 35,297
Write-down of net
smelter royalty - - 3,099 -
Write-down of Yarnell
mineral property - - - 8,527
Realized derivative
losses/(gains) 1,604 (14,393) (225) (15,965)
Unrealized derivative
losses 10,921 25,478 14,170 6,747
Equity in losses of
associated companies 17 52 70 232
Investment losses/
(gains) - 1 (756) (398)
--------- --------- --------- ---------
LOSS BEFORE INCOME
TAXES 23,777 21,543 53,559 34,440
Current income taxes 7 7 7 492
Future income taxes
(recovery)/expense 1,091 - (1,530) 34
--------- --------- --------- ---------
LOSS FOR THE PERIOD $ 24,875 $ 21,550 $ 52,036 $ 34,966
--------- --------- --------- ---------
--------- --------- --------- ---------
LOSS PER COMMON SHARE -
basic and diluted $ 0.062 $ 0.059 $ 0.130 $ 0.097
--------- --------- --------- ---------
--------- --------- --------- ---------
Weighted average
number of common
shares outstanding
(in thousands) 401,177 362,273 400,790 358,711
--------- --------- --------- ---------
--------- --------- --------- ---------
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
2005 2004 2005 2004
--------- --------- --------- ---------
OPERATING ACTIVITIES
Loss for the period $ (24,875) $ (21,550) $ (52,036) $ (34,966)
Non-cash charges
(credits)
Depreciation and
depletion 5,927 4,842 14,859 13,321
Amortization of
deferred financing
costs 17 1,044 177 2,051
Equity in losses of
associated companies 17 52 70 232
Derivative instruments 12,677 26,983 15,557 7,166
Investment gains - 1 (756) (398)
Future income taxes
(recovery)/expense 1,091 - (1,530) 34
Stock-based
compensation 600 763 3,173 3,795
Write-down of net
smelter royalty - - 3,099 -
Write-down of Yarnell
mineral property - - - 8,527
Other 454 2,627 3,022 2,292
Change in non-cash
working capital 1,989 (1,126) (3,718) (3,727)
--------- --------- --------- ---------
(2,103) 13,636 (18,083) (1,673)
--------- --------- --------- ---------
FINANCING ACTIVITIES
Common shares issued,
net of issue costs 156 1,265 687 9,277
Kupol bridge financing 67,500 38,000 104,000 38,000
Refugio working
capital loans 5,050 - 11,050 -
Julietta project loan
repayments (1,500) (11,167) (1,500) (16,750)
Capital lease
repayments - (230) (1,709) (230)
Financing costs (587) (1,725) (3,842) (1,677)
Convertible loan, net
of issue costs - (271) - 66,603
Share subscription
received - 990 - 990
Petrex project loan
repayments - - - (3,000)
--------- --------- --------- ---------
70,619 26,862 108,686 93,213
--------- --------- --------- ---------
INVESTING ACTIVITIES
Kupol development (55,826) (20,434) (113,534) (32,254)
Kupol exploration (7,309) (11,268) (15,728) (17,963)
Refugio construction (1,559) (6,815) (14,918) (13,728)
Julietta Mine (720) (954) (2,499) (1,484)
Julietta exploration (1,963) (2,609) (5,372) (5,059)
Petrex Mines (1,540) (2,350) (4,272) (6,069)
Petrex exploration (326) (497) (1,102) (1,476)
Acquisition,
exploration and
development (1,479) (1,785) (4,937) (5,566)
Investment purchases - (3,059) (902) (3,059)
Other (35) (769) (1,453) (1,176)
--------- --------- --------- ---------
(70,757) (50,540) (164,717) (87,834)
--------- --------- --------- ---------
Effect of exchange
rate changes on cash
and cash equivalents 98 (158) 9 (26)
--------- --------- --------- ---------
Increase (decrease) in
cash and cash
equivalents (2,143) (10,200) (74,105) 3,680
Cash and cash
equivalents, beginning
of period 15,149 44,653 87,111 30,773
--------- --------- --------- ---------
Cash and cash
equivalents, end of
period $ 13,006 $ 34,453 $ 13,006 $ 34,453
--------- --------- --------- ---------
--------- --------- --------- ---------
BEMA GOLD CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of United States dollars)
As at As at
September 30 December 31
2005 2004
ASSETS
Current
Cash and cash equivalents $ 13,006 $ 87,111
Accounts receivable 8,377 8,019
Marketable securities, at cost
(Market value - $13.8 million;
December 31, 2004 - $13.8 million) 3,554 3,554
Inventories 24,515 16,113
Other 5,363 6,827
------------ ------------
54,815 121,624
Investments 7,066 5,593
Property, plant and equipment 581,261 418,883
Unrealized fair value of derivatives 3,182 13,761
Deferred derivative losses 4,896 6,718
Future income tax assets 5,100 5,100
Other assets 24,628 21,374
------------ ------------
$ 680,948 $ 593,053
------------ ------------
------------ ------------
LIABILITIES
Current
Accounts payable $ 45,840 $ 32,250
Current portion of long-term debt 9,792 3,730
------------ ------------
55,632 35,980
Unrealized fair value of derivatives 52,455 49,299
Long-term debt 238,976 129,937
Future income tax liabilities 29,509 24,321
Asset retirement obligations 17,202 17,418
Other liabilities 1,035 664
Non-controlling interest 2,352 2,587
------------ ------------
397,161 260,206
------------ ------------
SHAREHOLDERS' EQUITY
Capital stock
Issued - 401,217,951 common
shares (December 31, 2004 -
400,498,902) 557,117 557,365
Value assigned to share purchase
warrants and stock options 22,284 19,060
Convertible notes 18,849 18,849
Deficit (314,463) (262,427)
------------ ------------
283,787 332,847
------------ ------------
$ 680,948 $ 593,053
------------ ------------
------------ ------------
Approved by the Directors
Clive T. Johnson Robert J. Gayton
Bema Gold Corporation (TSX:BGO) (AMEX:BGO) (AIM:BAU) |
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