Cambior Announces Its First Quarter Financial Results.Business Editors LONGUEUIL Longueuil, city (1991 pop. 129,874), S Que., Canada, on the St. Lawrence River opposite Montreal. It is a residential and industrial suburb of Montreal. It annexed Montreal South in 1961, and merged with the city of Jacques-Cartier in 1969. , Quebec--(BUSINESS WIRE)--May 7, 2002 Cambior Cambior Inc. was a Canadian based international gold producer with operations, development projects and exploration activities in the Americas. Cambior’s shares traded on the Toronto (TSX) and American (AMEX) stock exchanges under the symbol “CBJ”. (AMEX AMEX See: American Stock Exchange :CBJ CBJ Columbus Blue Jackets (NHL team) CBJ Central Bank of Jordan CBJ Conflict-Directed Backjumping CBJ Circuit Board Jack CBJ Code-Breakers Journal CBJ Class Broker for Java CBJ Color Bubble Jet )(TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :CBJ):
-- Gold production level maintained and direct mining costs
lowered
-- Niobium production increased
-- Earnings of $1.5 million before non-hedge derivative losses
-- 15% decrease in total financial obligations
-- Completion of a $17.3 million special warrants issue
-- New Cdn$60 million unit offering on April 30, 2002
FIRST QUARTER FINANCIAL RESULTS For the first quarter ended March 31, 2002, revenues totaled $49.5 million, slightly higher than the corresponding quarter in 2001. The operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (1)) was $9.9 million (9 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. ), a 52% increase over the corresponding quarter last year. EBITDA and revenues were higher due to the strong operating performance of the Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. operations. Cash flows from operating activities were $9.2 million (9 cents per share). No cash flows were recognized for the delivery of gold under the terms of the Prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. Gold Forward Sale Agreement as the proceeds thereof
were received on January January: see month. 12, 2001. If the value of gold delivered was
included, adjusted cash flows from operating activities were $12.2
million (11 cents per share) compared to $12.4 million (14 cents per
share) for the corresponding quarter in 2001. The per share amount is
lower due to an increase in the weighted average number of common shares
outstanding following various private placements completed after the
first quarter of 2001 and the special warrants issue completed in
February February: see month. 2002. As at the end of the first quarter of 2002, the Company
had 126.2 million shares and 10.7 million listed warrants outstanding.Cambior is making steady progress towards returning to profitability. Earnings, prior to the non-cash adjustment in the valuation of non-hedge derivative instruments Derivative instruments Contracts such as options and futures whose price is derived from the price of an underlying financial asset. , were $1.5 million (1 cent per share) compared to a loss of $5.3 million (6 cents per share) for the corresponding quarter of 2001. Including this unrealized adjustment, the Company incurred a net loss of $10.4 million (10 cents per share) compared to a net loss of $0.9 million (1 cent per share) in the corresponding period of 2001. (1) EBITDA: Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. gains/losses. PRODUCTION HIGHLIGHTS Production maintained and unit costs lowered For the first quarter of 2002, gold production totaled 149,100 ounces at a direct mining cost of $207 per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. , a slight decrease over the unit cost of the corresponding quarter in 2001. Niobium niobium (nīō`bēəm), metallic chemical element; symbol Nb; at. no. 41; at. wt. 92.9064; m.p. about 2,468°C;; b.p. 4,742°C;; sp. gr. 8.57 at 20°C;; valence +2, +3, +4, or +5. production in the first quarter was 429 tonnes compared to 364 tonnes for the first quarter of 2001, representing an 18% increase. ---------------------------------------------------------------------- Production Highlights First Quarter ended March 31, Cambior's share 2002 2001 ---------------------------------------------------------------------- (Ounces @ direct mining costs $/oz) Omai 82,000 @ $206 88,600 @ $213 Doyon Division 58,100 @ $209 55,000 @ $229 Sleeping Giant 9,000 @ $204 8,300 @ $205 ---------------------------------------------------------------------- Total Gold Production (ounces) 149,100 @ $207 151,900 @ $219 ---------------------------------------------------------------------- ---------------------------------------------------------------------- Niobium production (tonnes Nb) 429 364 ---------------------------------------------------------------------- The decrease in the first quarter's gold production at Omai was anticipated in the mining plan and is due to a lower grade milled resulting from the processing of an increased tonnage TONNAGE, mar. law. The capacity of a ship or vessel. 2. The act of congress of March 2, 1799, s. 64, 1 Story's L. U. S. 630, directs that to ascertain the tonnage of any ship or vessel, the surveyor, &c. from the low-grade low-grade Of or relating to debt that has a credit rating of B or below. Low-grade debt offers an above-average yield but entails substantial risk because promised payments may not be made in a timely manner. stockpile stock·pile n. A supply stored for future use, usually carefully accrued and maintained. tr.v. stock·piled, stock·pil·ing, stock·piles To accumulate and maintain a supply of for future use. (0.7 g Au/t) and less tonnage from the higher grade ore ore, metal-bearing mineral mass that can be profitably mined. Nearly all rock deposits contain some metallic minerals, but in many cases the concentration of metal is too low to justify mining the ore. in the Wenot pit. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the mine plan, the Omai Mine is on target to produce 285,500 ounces of gold this year. For the next three years, Omai will be a significant generator generator, in electricity, machine used to change mechanical energy into electrical energy. It operates on the principle of electromagnetic induction, discovered (1831) by Michael Faraday. of free cash flows. The Doyon Division performed well in the first quarter to produce 58,100 ounces of gold at a direct mining cost of $209 per ounce, which represents 3,000 ounces more and $20 per ounce less than in the first quarter of 2001. This strong performance is explained by a higher tonnage extracted from the underground mines and a higher grade milled. Due to a higher tonnage milled and a higher grade, the Sleeping Giant Sleeping Giant may refer to: In geology:
Credit quality of AAA or AA. high-grade Of, relating to, or being a bond with little risk of default on the part of the issuer. High-grade is usually reserved for bonds rated AAA or AA by the rating services. gold lenses, in particular Zone 8. Some 15,000 metres of diamond drilling Diamond Drilling is a highly specialized industry used for mineral exploration around the world. Most commonly using wireline and core bits with diamond encrusted matrix. To drill holes to max depths of twelve thousand feet, for the recovery of core used in verifying mineral were completed during the first quarter, of which 7,000 metres were for exploration. Drilling from the 665 level has identified two ore structures located south west of Zone 8. Drilling below the 785-metre level confirmed the extension of Zone 8 at depth. FINANCIAL HIGHLIGHTS Rebuilding Value : Create financial capacity while reducing financial obligations As of March 31, 2002, Cambior has reduced its financial obligations to $88 million from $100 million at the beginning of the year, which is consistent with its objective to aggressively pursue the reduction of its financial obligations and improve the restrictions placed on it by its lenders. The reduction is due to the net cash flows from operations and the completion of the special warrant offering in February. ---------------------------------------------------------------------- (in millions of $) March 31, 2002 December 31, 2001 ---------------------------------------------------------------------- Long-term debt 42.5 51.1 Deferred revenue 45.8 48.9 ---------------------------------------------------------------------- Financial obligations 88.3 100.0 ---------------------------------------------------------------------- Capital expenditures for the first quarter of 2002 totaled $8.0 million compared to $5.9 million for the corresponding quarter in 2001. This increase is mainly due to a $3 million deposit on the $5 million initial instalment INSTALMENT, contracts. A part of a debt due by contract, and agreed to be paid at a time different from that fixed for the, payment of the other part. For example, if I engage to pay you one thousand dollars, in two payments, one on the first clay of January, and the other on the first required to acquire Golden Star Resources Ltd's interest in the Gross Rosebel project in Suriname Suriname (s  rĭnäm`, –năm`), officially Republic of Suriname, republic (2005 est. pop. 438,000), 63,037 sq mi (163,266 sq km), NE South America, on the Atlantic Ocean. . The Gross Rosebel
transaction is expected to close in the second quarter of 2002.
Investments were principally for underground exploration and development
at the Doyon Division ($2.1 million), Omai Mine ($1.4 million) and Gross
Rosebel Project ($3.4 million, including the $3.0 million deposit).Due to the successful completion of the special warrant issue in February 2002, Cambior's cash and cash equivalents increased to $23 million and shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. was $117 million or $0.93 (Cdn $1.48) per share at March 31, 2002. Unit offering announced on April 30, 2002 On April 30, 2002, the Company announced a unit offering of up to Cdn$60 million of which Cdn$40 million had been purchased by a syndicate Syndicate organized crime unit throughout major cities of the United States. [Am. Hist.: NCE, 2018] See : Gangsterism of underwriters on a bought deal basis. On May 3, 2002, the underwriters exercised their option to purchase an additional Cdn$20 million, bringing the total of the offering to Cdn$60 million (a total of 27,272,728 units at a price of Cdn$2.20 per unit). Each unit will consist of one common share and one-half of one common share purchase warrant. Each whole warrant will be exercisable at a price of Cdn$3.00 for a period of 18 months from the closing date. The offering is scheduled to close on or about May 24, 2002. A minimum of 50% of the gross proceeds of the unit offering has to be used by the Company to repay outstanding indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. and the balance will be added to the working capital for general corporate purposes. Revenue Protection Program and Gold Market The beginning of 2002 has shown significant improvement in the gold price, with the price reaching a high of $313 per ounce on May 3, 2002. This improvement is due to several factors, including the recent weakness in the US dollar, the consistent demand for physical gold in Japan, the economic revival revival n. 1) requesting a court to reinstate the force of an old judgment. 2) reinstating a contract or debt by a new agreement after the right to demand performance or collect has expired under the statute of limitations (the time to sue). of certain large gold-consuming countries and the geo-political tensions and recent conflicts in the Middle East During the 20th and 21st centuries, there have been a number of conflicts in the Middle East. Arab-Israeli conflict
In order to secure the net mine cash flows necessary to meet its financial obligations and satisfy bank covenants, the Company maintains a Revenue Protection Program for its gold operations. During the first quarter, the Company realized a price of $289 per ounce corresponding with the average market price for the quarter. The gold price at March 31, 2002 was $24 per ounce higher than at December December: see month. 31, 2001 resulting in a negative adjustment of $11.9 million to the mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. value for non-hedge derivative instruments which include call options and the variable volume forwards. This charge has no impact on cash flows and any future charges, either positive or negative, will decrease as these non-hedge derivative instruments either expire expire /ex·pire/ (ek-spi´er) 1. to exhale. 2. to die. ex·pire v. 1. To breathe one's last breath; die. 2. To exhale. or with the delivery of the ounces under these optionalities. At March 31, 2002, the Company had gold commitments of 874,000 ounces at an average price of $320 per ounce with minimum delivery obligation of 261,000 ounces at $339 per ounce under these optional instruments. In order to avoid these non-cash adjustments in future, the Company has decided to minimize In a graphical environment, to hide an application that is currently displayed on screen. For example, in Windows and Mac, the application's window is removed from the screen and represented by an icon on the Windows Taskbar. In the Mac, the icon is placed in the Dock. See Win Minimize windows. the use of these optionalities and the mark-to-market value of these instruments will become nil and have no further impact on the Company's earnings subsequent to 2004. During the first quarter of 2002, the quantity of gold included in the non-hedge derivative instruments declined by 6% and will continue to decline through 2002. Coincident co·in·ci·dent adj. 1. Occupying the same area in space or happening at the same time: a series of coincident events. See Synonyms at contemporary. 2. with the recently announced unit offering, Cambior shall use its reasonable best efforts to renegotiate re·ne·go·ti·ate tr.v. re·ne·go·ti·at·ed, re·ne·go·ti·at·ing, re·ne·go·ti·ates 1. To negotiate anew. 2. To revise the terms of (a contract) so as to limit or regain excess profits gained by the contractor. its mandatory Peremptory; obligatory; required; that which must be subscribed to or obeyed. Mandatory statutes are those that require, as opposed to permit, a particular course of action. hedging hedging, in commerce, method by which traders use two counterbalancing investment strategies so as to minimize any losses caused by price fluctuations. It is generally used by traders on the commodities market. convenants under its Credit Facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities in order to permit the Company to reduce the mandatory amount of its hedged hedge n. 1. A row of closely planted shrubs or low-growing trees forming a fence or boundary. 2. A line of people or objects forming a barrier: a hedge of spectators along the sidewalk. gold production from 70% to 35% of its projected production up to December 31, 2005. EXPLORATION AND RESERVE DEVELOPMENT Rosebel Gold Project - Suriname The Government of Suriname has agreed to modify certain terms of the 1994 Mineral Agreement governing gov·ern v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. the development and operation of the project. In addition, the Government of Suriname also agreed to sell power from the hydroelectric grid grid: see electron tube. (1) Any interconnected set of nodes such as the electric power network or a communications network. (2) "The Grid" is a nickname for Internet2. See Internet2. located some 18 kilometres from the project site. The preparation of the final 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 the revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. of the Environmental Impact Assessment continued with the completion of these studies expected during the third quarter. The Gross Rosebel project will benefit from a strong synergy The enhanced result of two or more people, groups or organizations working together. In other words, one and one equals three! It comes from the Greek "synergia," which means joint work and cooperative action. with the Omai mine operations in the Guiana Shield The Guiana[1] Shield (Spanish: Guayana) is one of the three cratons of the South American Plate. It is a 1.7 billion year old Precambrian geological formation in northeast South America that forms a portion of the northern coast. and the Company plans to further optimize optimize - optimisation capital expenditures through the transfer of available equipment from the Omai mine. The Gross Rosebel project fits the corporate investment strategy and the Company is looking to begin construction on the Gross Rosebel project by the end of the year following the securing of necessary financing. The average annual gold production is forecast at 177,000 ounces with an average direct mining cost of $168 per ounce. Cambior - Codelco Alliance In Peru On May 1, 2002, Cambior announced the signing of a letter of intent establishing the terms and conditions for the creation of an alliance with Codelco, the world largest copper producer, to carry out exploration and development in three areas of Northern Peru. Under this agreement, Codelco may earn a 50% interest in two groups of mineral property interests held by Cambior, one group located in the La Granja La Granja, Spain: see San Ildefonso. area of the Cajamarca Cajamarca (kähämär`kä), city (1993 pop. 123,195), capital of Cajamarca prov., N Peru. An important commercial center, Cajamarca is situated at an altitude of c.9,000 ft (2,740 m) and has a cool, dry climate. department and one located in the Huamachuco region of the La Libertad department It was made a department on January 28, 1865. The new population was founded on Ulliman Plains - place where rubber is harvested - (Nahuat). The city was called "Nueva Ciudad de San Salvador" (New City of San Salvador) and made the department's capital on the same date as the department , by spending $1.5 million and completing 3,000 metres of drilling over a three-year period on each group of properties. In addition, Cambior and Codelco will also participate in a gold and base metal generative gen·er·a·tive adj. 1. Having the ability to originate, produce, or procreate. 2. Of or relating to the production of offspring. generative pertaining to reproduction. exploration joint venture in a third region of Northern Peru. This alliance will allow Cambior to aggressively pursue its exploration programs on the land holdings it acquired over the last seven years in Peru and allow Codelco to initiate INITIATE. A right which is incomplete. By the birth of a child, the husband becomes tenant by the curtesy initiate, but his estate is not consummate until the death of the wife. 2 Bouv. Inst. n. 1725. its exploration activities in Peru. Outlook Louis Louis, titular duke of Burgundy Louis, 1682–1712, titular duke of Burgundy; grandson of King Louis XIV of France. He became heir to the throne on the death (1711) of his father, Louis the Great Dauphin. P. Gignac Gignac is the name or part of the name of several communes in France:
A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. . The recently announced Cdn$60 million unit offering indicates the confidence of the market in Cambior's future prospects. This offering is part of our strategy to strengthen our financial position, increase our exposure to the gold price and rebuild shareholder value." ? Cambior Inc. is an international gold producer with operations, development projects and exploration activities throughout the Americas A·mer·i·cas , the See America. . Cambior's shares trade on the Toronto Toronto (tərŏn`tō), city (1998 est pop. 2,400,000), provincial capital, S Ont., Canada, on Lake Ontario. Toronto is the largest city in Canada and since the 1970s has been one of the fastest-changing cities in North America, experiencing (TSE) and American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of (AMEX) stock exchanges under the symbol "CBJ". This press release contains certain "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. ", as defined in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Such risks and uncertainties are disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). under the heading "Risk Factors" in Cambior's 2000 Annual Report on Form 20-F filed as its Annual Information Form with the securities commissions of all provinces in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , and with the United States Securities and Exchange Commission, as well as the TSE and the Amex.
CAMBIOR INC.
HIGHLIGHTS
----------------------------------------------------------------------
First Quarter
(unaudited) ended March 31,
All amounts in US dollars 2002 2001
----------------------------------------------------------------------
RESULTS (in millions of $)
Total revenues 49.5 47.5
EBITDA(1) 9.9 6.5
Cash flows from operating activities 9.2 67.4
Adjusted cash flows from
operating activities(2) 12.2 12.4
Earnings (Loss) before the
undernoted items 1.5 (5.3)
Non-hedge derivative gains (losses) (11.9) 4.4
------------------------
Net loss (10.4) (0.9)
----------------------------------------------------------------------
PER SHARE ($)
EBITDA (1) 0.09 0.07
Cash flows from operating activities 0.09 0.76
Adjusted cash flows from
operating activities(2) 0.11 0.14
Earnings (Loss) before the
undernoted items 0.01 (0.06)
Non-hedge derivative gains (losses) (0.11) 0.05
------------------------
Net loss (0.10) (0.01)
Weighted average number of common
shares outstanding (in millions) 107.3 88.7
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GOLD PRODUCTION
Number of ounces produced (000) 149 152
Number of ounces sold (000) 156 169
Accounting realized price ($ per ounce) 289 281
Average market price ($ per ounce) 290 264
Direct mining cost ($ per ounce) 207 219
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FINANCIAL POSITION
(in millions of $) March 31, 2002 December 31, 2001
Cash and cash equivalents 23 15
Total assets 252 252
Total debt 43 51
Deferred revenue 46 49
Shareholders' equity 117 112
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(1) Earnings before interest, taxes, depreciation and amortization and
unrealized non-hedge derivative gain/losses. (Note 9 of the notes
to consolidated financial statements).
(2) Cash flows from operating activities are presented without the
deferred revenue.
CAMBIOR INC.
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GOLD PRODUCTION STATISTICS First Quarter
ended March 31,
(unaudited) 2002 2001
----------------------------------------------------------------------
Omai (100%)
Production (ounces) 82,000 88,600
Tonnage milled (t) 1,931,200 1,942,000
Grade milled (g Au/t) 1.42 1.53
Recovery (%) 93 93
Direct mining costs ($ per tonne milled) 8.77 9.74
Direct mining costs ($ per ounce) 206 213
Depreciation ($ per ounce) 39 53
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Doyon Division (1)
Production (ounces) 58,100 55,000
Tonnage milled (t)
Underground mines 311,400 291,700
Low grade stockpile 8,200 48,800
------------------------
Total 319,600 340,500
Grade milled (g Au/t)
Underground mines 6.0 6.0
Low grade stockpile 1.0 1.0
------------------------
Average 5.9 5.3
Recovery (%) 96 96
Direct mining costs ($ per tonne milled) 38 37
Direct mining costs ($ per ounce) 209 229
Depreciation ($ per ounce) 64 71
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Sleeping Giant (50%)
Production (ounces) 9,000 8,300
Tonnage milled (t) 28,100 27,600
Grade milled (g Au/t) 10.3 9.6
Recovery (%) 97 97
Direct mining costs ($ per tonne milled) 65 62
Direct mining costs ($ per ounce) 204 205
Depreciation ($ per ounce) 44 66
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TOTAL GOLD PRODUCTION (ounces) 149,100 151,900
DIRECT MINING COSTS ($ per ounce) 207 219
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CONSOLIDATED GOLD PRODUCTION COSTS
($ per ounce)
----------------------------------------------------------------------
Direct mining costs 207 219
Refining and transportation 2 2
By-product credits (2) (1)
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Operating costs 207 220
Royalties 9 8
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Total cash costs 216 228
Depreciation 49 60
Reclamation 3 3
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Total production costs 268 291
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METAL PRODUCTION
Niobec (50 %)
Production of Ferroniobium (tonnes Nb) 429 364
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(1) Includes the Doyon and Mouska mines.
FIRST QUARTER 2002 MANAGEMENT'S DISCUSSION AND ANALYSIS Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial The following discussion and analysis should be read in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with Management's Discussion and Analysis (MD&A) for the year ended December 31, 2001, the Company's annual 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 notes relating thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. , supplementary financial information contained in the Company's Annual Report, and the quarterly financial statements and notes contained in this report. During the first quarter of 2002, the Company continued its efforts to rebuild shareholder value. Specific achievements included: -- A minimum of 50% of the gross proceeds of the Unit offering shall be used by the Company to repay outstanding indebtedness under its 2001 Credit facility and the balance will be added to the working capital of the Company for general corporate purposes; and -- Cambior shall use its reasonable best efforts to renegotiate its mandatory hedging convenants under its Credit Facilities in order to permit the Company to reduce the mandatory amount of its hedged gold production from 70% to 35% of its projected production up to December 31, 2005. CONSOLIDATED con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: OPERATIONS For the first quarter of 2002, gold production totalled 149,100 ounces compared to 151,900 ounces produced during the corresponding quarter in 2001. Cambior's share of production from the Niobec mine amounted to 429 tonnes of niobium, a 18 % increase over the same period last year and resulted in an increase of $1.1 million in profit. Revenues totalled $49.5 million as compared to $47.5 million for the corresponding quarter of 2001. EBITDA(1) was $9.9 million as compared to $6.5 million for the corresponding quarter of 2001. Higher realized gold price per ounce sold, higher niobium sales and lower mine operating costs operating costs npl → gastos mpl operacionales contributed to the revenue and EBITDA increase in 2002. The strong operating performance during the first quarter of 2002 has allowed Cambior to realize a profit, prior to adjustments for non-hedge derivative gains/losses, of $1.5 million compared to a loss of $5.3 million during the first quarter of 2001. Non-cash accounting adjustments due to unrealized loss Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. on non-hedge derivative instruments and others of $11.9 million resulted in a net loss of $10.4 million ($0.10 per share) (see Revenue Protection Program) compared to a net loss of $0.9 million ($0.01 per share) for the corresponding period in 2001. EXPENSES Mine operating costs in the first quarter of 2002 totalled $37.6 million, compared to $39.3 million incurred during the corresponding quarter of 2001. In terms of costs per ounce, direct mining costs were $207 per ounce in 2002, lower than the $219 per ounce of 2001. The operating statistics for the gold operations are as follows:
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First Quarter ended March 31,
2002 2001
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Ounces Direct mining cost Ounces Direct mining cost
($/ounce) ($/ounce)
----------------------------------------------------------------------
Omai mine 82,000 206 88,600 213
Doyon Division 58,100 209 55,000 229
Sleeping Giant
mine (50%) 9,000 204 8,300 205
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149,100 207 151,900 219
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(1) Earnings before interest, taxes, depreciation and amortization and
unrealized non-hedge derivative gains/losses. (Note 9 of the notes
to consolidated financial statements).
Depreciation, depletion depletion n. when a natural resource (particularly oil) is being used up. The annual amount of depletion may, ironically, provide a tax deduction for the company exploiting the resource because if the resource they are exploiting runs out, they will no longer be able and amortization amounted to $7.7 million for the first quarter of 2002 compared to $9.7 million in the corresponding quarter of 2001. The decrease in financial expenses from $2.2 million in the first quarter of 2001 to $0.7 million during the first quarter 2002 is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the debt reduction. Benefitting from significant tax pools and losses, the Company is not subject to tax on its earnings. The Company is, however, liable liable adj. responsible or obligated. Thus, a person or entity may be liable for damages due to negligence, liable to pay a debt, liable to perform an act for which he/she/it contracted to do, or liable to punishment for commission of a crime. for capital taxes and taxes on large corporations in Canada. REVENUE PROTECTION PROGRAM AND GOLD MARKET The Company is required to maintain a Revenue Protection Program under the terms of the 2001 Credit Facility. This program ensures that adequate cash flows are generated to meet the Company's financial obligations. During the first quarter of 2002, the Company realized a price of $289 per ounce of gold sold compared to a realized price of $281 per ounce in the same period last year. The gold market price during the period average $290 ($264 in 2001) per ounce. The Company obtains an independent valuation of its portfolio of gold commitments at each reporting period. The market value is dependent on the market price, the rate of interest, the gold lease rate and volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the . The transactions for which the quantity, price and timing of delivery are fixed (forwards and prepaid gold forwards), are accounted for under the hedge accounting Why is hedge accounting necessary? Many financial institutions and corporate businesses (entities) use derivative financial instruments to hedge their exposure to different risks (eg interest rate risk, foreign exchange risk, commodity risk, etc). method. Transactions in which there is no certainty CERTAINTY, UNCERTAINTY, contracts. In matters of obligation, a thing is certain, when its essence, quality, and quantity, are described, distinctly set forth, Dig. 12, 1, 6. It is uncertain, when the description is not that of one individual object, but designates only the kind. Louis. for one or more of its key components (price, delivery date, quantity) are treated as "non-hedge derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. " and the variation in the mark-to-market valuations is included in the Consolidated Statement of Operations See Income statement. . This valuation can cause a significant variation in the earnings from one end of period to the other. Because the Company has decided to minimize the use of optionalities, no accounting adjustments caused by the mark-to-market fluctuations of optionalities are expected to impact earnings after 2004. Due to an increase in the closing price of gold from $277 per ounce on December 31, 2001 to $301 per ounce on March 31, 2002, the mark-to-market value of these non-hedge derivatives has been reduced by $11.6 million. This charge has no impact on cash flows. At March 31, 2002, the Company had gold commitments of 874,000 ounces at an average price of $320 per ounce with minimum delivery obligations of 261,000 ounces at $339 per ounce under these optional instruments, which is higher than the $301 an ounce market price at March 31, 2002. As at March 31, 2002, optionalities declined by 6% from the beginning of the year. At March 31, 2002, the Company had minimum delivery obligations of 1,224,000 ounces at a price of $298 per ounce and total commitments of 1,837,000 ounces at a price of $303 per ounce. These commitments include the optionalities described above.
The estimated mark-to-market position of the Company's total
commitments is summarized as follows:
----------------------------------------------------------------------
March 31, December 31, March 31, December 31,
2002 2001 2001 2000
----------------------------------------------------------------------
Closing gold market
price ($/oz) 301 277 258 273
----------------------------------------------------------------------
Mark-to-market value of hedge
derivatives and Prepaid Gold
Forward instruments (M$) (23.5) (1.0) 6.4 0.7
Mark-to-market value of
non-hedge derivative
instruments recognized in the
balance sheet (M$) (6.3) 5.3 10.5 6.1
----------------------------------------------------------------------
Estimated mark-to-market
value - Revenue protection
program (M$) (29.8) 4.3 16.9 6.8
----------------------------------------------------------------------
First Quarter
ended March 31,
2002 2001
----------------------------------------------------------------------
Impact on earnings of non-hedge
derivative instruments (M$)
Mark-to-market value at the
end of period (6.3) 10.5
Mark-to-market value at the
beginning of period 5.3 6.1
----------------------------------------------------------------------
Non-hedge derivative
gains (losses) (11.6) 4.4
----------------------------------------------------------------------
The negative $6.3 million mark-to-market value recognized on the
balance sheet will fluctuate in accordance with market conditions for
the price of gold, volatility, interest rates and expiring at each end
of period. The Company has indicated that it will minimize the will
use of these instruments in the future and that the effect on earnings
will be completed at the end of 2004. The expiry schedule of the
variable volume forwards and the call options is as follows:
2002 59.2%
2003 21.2%
2004 19.6%
------
100.0%
------
------
CASH FLOWS FROM OPERATING ACTIVITIES For the first quarter of 2002, cash flows from operating activities were $9.2 million (9 cents per share) compared to $67.4 million (76 cents per share) in the same period of 2001. The difference is mainly due to the receipt of the $55.0 million proceeds from the prepaid gold forward agreement (deferred revenue) in 2001, and the non-cash delivery of $3.1 million in gold in 2002. INVESTMENTS Investing activities for the first quarter of 2002 totalled $8.0 million compared to $5.9 million for the same period last year. Investments were principally for underground development at the Doyon Division ($2.1 million), deferred stripping costs at Omai ($1.4 million) and the initial partial payment ($3.0 million) for the acquisition of an additional 50% interest in the Gross Rosebel project. Gross Rosebel project During the first quarter, the Company continued to secure necessary authorisations and fulfill ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. the conditions necessary to complete the acquisition of the remaining 50% interest in Gross Rosebel. The transaction is expected to close in the second quarter and Cambior will be required to disburse dis·burse tr.v. dis·bursed, dis·burs·ing, dis·burs·es To pay out, as from a fund; expend. See Synonyms at spend. [Obsolete French desbourser, from Old French desborser the $2 million balance on the initial acquisition price payment. In addition, contracts were concluded to perform engineering and design work to complete the Project feasibility fea·si·ble adj. 1. Capable of being accomplished or brought about; possible: a feasible plan. See Synonyms at possible. 2. by the end of July July: see month. . The Company is also negotiating for the funding of the Project, which is expected to be entering the development and construction phase during the fourth quarter of 2002. FINANCING ACTIVITIES Benefitting from improved market conditions and a higher share price, Cambior completed a private placement for gross proceeds of $17.3 million (Cdn$27.8 million). The financing include the sale of 21,346,154 units which consisted of one common share and one half warrant. Each whole warrant entitles the holder to acquire one common share of Cambior at a price of Cdn$1.70 until February 27, 2003. In connection with the financing, the Company granted compensation options to the underwriters valued at approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $0.3 million to purchase 1,067,308 additional units (each being comprised of one share and one-half warrant) at Cdn$1.30. Cambior reduced its financial obligations by delivering ounces of gold against its prepaid gold forward sale agreement and reducing the term loan by $1.25 million 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 its terms. Benefitting from adequate cash reserves Cash reserves See: Cash investments cash reserves Investment funds that are held in short-term assets such as Treasury bills and certificates of deposit until more permanent investment opportunities are available. on hand, the Company reimbursed $7.3 million under its revolving loan facility. At quarter end, the Company had $10 million available under its revolving facility which is due at December 31, 2005. SUBSEQUENT EVENTS Unit offering of Cdn$60 million On April 30, 2002, Cambior announced that it has entered into an agreement with a syndicate of underwriters, pursuant to which the underwriters have agreed to purchase 18,181,819 units ("Units") on a bought deal basis, at a price of Cdn$2.20 per Unit for gross proceeds to Cambior of Cdn$40 million. On May 3, 2002, the underwriters exercised their option to purchase an additional 9,090,909 Units at Cdn$2.20 per Unit for additional gross proceeds of Cdn$20 million. Each Unit will consist of one common share and one-half of one common share purchase warrant. Each whole warrant will be exercisable at a price of Cdn$3.00 for a period of 18 months from the closing date. Under the terms of the Underwriting Agreement Underwriting agreement The contract between a corporation issuing new publicly offered securities and the managing underwriter as agent for the underwriting group. Compare to agreement among underwriters. : -- A minimum of 50% of the gross proceeds of the Unit offering shall be used by the Company to repay outstanding indebtedness under its 2001 Credit facility and the balance will be added to the working capital of the Company for general corporate purposes; and -- Cambior shall use its reasonable best efforts to renegotiate its mandatory hedging convenants under its Credit Facilities in order to permit the Company to reduce the mandatory amount of its hedged gold production from 70% to 35% of its projected production up to December 31, 2005. The offering is scheduled to close on or about May 24, 2002. RISKS By the very nature of its activities, the Company is subject to various financial, operational and political risks in the normal course of business. While the Company assesses and minimizes these risks by applying high operating standards, including the careful managing and planning of its facilities, hiring qualified personnel and developing their skills through training and development programs, establishing and maintaining internationally-recognized standards, independent audits and the purchase of insurance policies, these risks cannot be eliminated. Thus, readers are urged to read and consider the risk factors more particularly described in the Company's Annual Report and its Annual Information Form.
CAMBIOR INC.
----------------------------------------------------------------------
CONSOLIDATED OPERATIONS First Quarter
(in thousands of US dollars) ended March 31,
2002 2001
(unaudited) $ $
---------------------------------------------------------------------
REVENUES
Mining operations 49,394 47,298
Investments and other income 63 221
----------------------------------------------------------------------
49,457 47,519
----------------------------------------------------------------------
EXPENSES
Mining operations 37,582 39,262
Depreciation, depletion and amortization 7,680 9,674
Exploration and business development 728 402
General and administrative 1,258 1,370
Financial expenses 655 2,151
----------------------------------------------------------------------
47,903 52,859
----------------------------------------------------------------------
Earnings (Loss) before the
undernoted items 1,554 (5,340 )
Non-hedge derivative gains (losses)
and other (11,929) 4,430
Income and mining taxes (57) (15)
----------------------------------------------------------------------
Net loss (10,432) (925)
----------------------------------------------------------------------
Basic and diluted loss per share
(in dollars) (0.10) (0.01)
----------------------------------------------------------------------
Weighted average number of common
shares outstanding (in thousands) 107,276 88,730
----------------------------------------------------------------------
----------------------------------------------------------------------
CONSOLIDATED DEFICIT First Quarter
(in thousands of US dollars) ended March 31,
2002 2001
(unaudited) $ $
----------------------------------------------------------------------
DEFICIT
Balance, beginning (117,876) (109,374)
Net loss (10,432) (925)
Share and warrants issue expenses,
net of income taxes (1,679) (77)
----------------------------------------------------------------------
Balance, ending (129,987) (110,376)
----------------------------------------------------------------------
CAMBIOR INC.
----------------------------------------------------------------------
CONSOLIDATED CASH FLOWS First Quarter
(in thousands of US dollars) ended March 31,
2002 2001
(unaudited) $ $
----------------------------------------------------------------------
OPERATING ACTIVITIES
Net loss (10,432) (925)
Deferred revenue (Note 4) - 55,000
Non-cash items:
Depreciation, depletion and amortization 7,680 9,674
Deferred gains (170) 2,284
Deferred revenue - Delivery of gold on
the prepaid forward (Note 4) (3,056) -
Future income and mining taxes - (84)
Non-hedge derivative gains (losses)
and other 11,929 (4,430)
Provision for environmental obligations 467 451
Other 48 108
----------------------------------------------------------------------
6,466 62,078
Changes in non-cash working capital items 2,710 5,292
----------------------------------------------------------------------
Cash flows from operating activities 9,176 67,370
----------------------------------------------------------------------
INVESTING ACTIVITIES
Investments 11 36
Property, plant and equipment (8,043) (5,545)
Discontinued operations - (368)
----------------------------------------------------------------------
Cash flows used in investing activities (8,032) (5,877)
----------------------------------------------------------------------
FINANCING ACTIVITIES
Long-term debt - Borrowings - 63,523
Long-term debt - Repayments (8,561) (118,575)
Deferred charges - (2,085)
Shares and warrants issued net of
issue expenses 15,933 (77)
----------------------------------------------------------------------
Cash flows from (used in) financing
activities 7,372 (57,214)
----------------------------------------------------------------------
Foreign exchange gain on cash held in
foreign currency 160 191
----------------------------------------------------------------------
Net increase in cash and cash equivalents 8,676 4,470
Cash and cash equivalents, beginning
of period 14,586 3,548
----------------------------------------------------------------------
Cash and cash equivalents, end of period 23,262 8,018
----------------------------------------------------------------------
CAMBIOR INC.
----------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS March 31, December 31,
(in thousands of US dollars) 2002 2001
$ $
(unaudited) (audited)
----------------------------------------------------------------------
ASSETS
Current assets
Cash and cash equivalents 23,262 14,586
Accounts receivable 2,710 3,134
Settlements receivable 2,687 2,471
Production inventories 5,420 8,001
Supplies inventory and prepaid expenses 18,773 19,185
----------------------------------------------------------------------
52,852 47,377
Investments 1,921 1,934
Property, plant and equipment 195,091 194,683
Deferred charges 2,294 2,448
Fair-value of non-hedge
derivatives (Note 5) - 5,330
----------------------------------------------------------------------
252,158 251,772
----------------------------------------------------------------------
LIABILITIES
Current liabilities
Accounts payable and accrued
liabilities 22,283 22,609
Current portion of long-term debt 8,897 5,147
Current portion of deferred revenue 12,222 12,222
Current portion of deferred gains 3,581 3,661
----------------------------------------------------------------------
46,983 43,639
Long-term debt (Note 3) 33,619 45,930
Deferred revenue (Note 4) 33,611 36,667
Deferred gains 408 498
Provision for environmental obligations
and other 13,995 13,505
Fair-value of non-hedge derivatives
(Note 5) 6,271 -
----------------------------------------------------------------------
134,887 140,239
----------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Capital stock 244,339 226,727
Contributed surplus 23,047 23,047
Deficit (129,987) (117,876)
Cumulative translation adjustment (20,128) (20,365)
----------------------------------------------------------------------
117,271 111,533
----------------------------------------------------------------------
252,158 251,772
----------------------------------------------------------------------
Subsequent events (Note 11).
NOTES AND COMMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES The accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. consolidated financial statements are prepared in accordance with Canadian generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting and do not include all the information required for complete financial statements. They are consistent with the policies outlined in the Company's audited consolidated financial statements and should be read in conjunction with the Company's audited consolidated financial statements for the year ended December 31, 2001. When necessary, the financial statements include amounts based on informed estimates and best judgements of management. 2. CHANGE IN ACCOUNTING POLICY On January 1, 2002, the Company adopted retroactively ret·ro·ac·tive adj. Influencing or applying to a period prior to enactment: a retroactive pay increase. [French rétroactif, from Latin the recommendations of the Canadian Institute of Chartered Accountants The Canadian Institute of Chartered Accountants (CICA) is the umbrella body for the Chartered Accountant profession in Canada and Bermuda. Membership of the CICA totals 70,000 Chartered Accountants and 8,500 students. Handbook
This article is about reference works. For the subnotebook computer, see .
The phrase pro forma disclosures of net earnings and earnings per share as if the fair value method of accounting had been applied. The Company has adopted the latter alternative treatment. The supplementary information required by this new Section is presented in note 6. 3. LONG-TERM DEBT Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. The long-term debt position is summarized as follows:
----------------------------------------------------------------------
March 31, 2002 December 31, 2001
$000 $000
----------------------------------------------------------------------
2001 Credit facility
Term loan 41,745 42,994
Revolving loan - 7,275
----------------------------------------------------------------------
41,745 50,269
Obligations under capital lease 771 808
----------------------------------------------------------------------
42,516 51,077
Current portion 8,897 5,147
----------------------------------------------------------------------
Long-term portion 33,619 45,930
----------------------------------------------------------------------
The 2001 Credit facility consists of a $55,000,000 non-revolving term loan with a maturity date of December 31, 2005 and a $10,000,000 revolving loan due on December 31, 2005. The 2001 Credit facility interest rate is at LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). rate + 2% to 3% based on the quarterly calculation of the Loan Life Protection Ratio (4.25 % at March 31, 2002 and 4.99% at December 31, 2001). Under the 2001 Credit facility, the Company is required to establish a revised Mandatory Hedging Program (the "Program") whereby it must ensure that: i) total gold delivery commitments do not exceed 90% of its proven and probable PROBABLE. That which has the appearance of truth; that which appears to be founded in reason. mineral reserves, ii) total gold delivery commitments do not exceed 100% of its estimated production (net of royalties Not to be confused with Royal family. Royalties (sometimes, running royalties) are usage-based payments made by one party (the "licensee") to another (the "licensor") for ongoing use of an asset, most typically an intellectual property (IP) right. ) during the loan period; and iii) sufficient hedges are in place to cover a minimum of 70% of its estimated net future gold production during the loan period at a minimum average hedged gold price of $290 per ounce. The 2001 Credit facility is secured by a first-ranking fixed charge hypothec Hy`poth´ec n. 1. (Scot. Law) A landlord's right, independently of stipulation, over the stocking (cattle, implements, etc.), and crops of his tenant, as security for payment of rent. on the Doyon and Mouska mines and the Company's 50% interest in each of the Sleeping Giant and Niobec mines, a specific pledge A Bailment or delivery of Personal Property to a creditor as security for a debt or for the performance of an act. Sometimes called bailment, pledges are a form of security to assure that a person will repay a debt or perform an act under contract. on shares of Omai Gold Mines Limited held by Cambior and shares in the Company's US subsidiaries, and a general security on all other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. of the Company. At March 31, 2002, the minimum reimbursements on the long-term debt for the coming years are as follows:
----------------------------------------------------------------------
Year of Term loan Obligations under capital leases Total
Repayment $000 $000 $000
----------------------------------------------------------------------
2002 (9 months) 3,750 110 3,860
2003 20,000 147 20,147
2004 17,995 147 18,142
2005 - 147 147
2006 - 147 147
2007 - 73 73
----------------------------------------------------------------------
41,745 771 42,516
----------------------------------------------------------------------
4. DEFERRED REVENUE On January 12, 2001, Cambior entered into a $55,000,000 prepaid gold forward sale agreement (the "agreement") with a financial institution, whereby Cambior is committed to deliver an aggregate of 233,637 ounces of gold in equal monthly deliveries commencing July 2001 to December 2005. The cash proceeds from this prepaid sale was accounted for as deferred revenue. The deliveries of gold under the prepaid gold forward agreement for the coming years are as follows:
----------------------------------------------------------------------
Number of ounces $
----------------------------------------------------------------------
2002 (9 months) 38,939 9,167
2003 51,919 12,222
2004 51,919 12,222
2005 51,919 12,222
----------------------------------------------------------------------
194,696 45,833
Current portion 51,919 12,222
----------------------------------------------------------------------
Long-term portion 142,777 33,611
----------------------------------------------------------------------
As at December 31, 2001, the estimated mark-to-market value of the agreement is negative $9,028,000, which is not accounted for in the balance sheet. 5. REVENUE PROTECTION PROGRAM a) Gold sales and deliveries The Company's gold sales and delivery commitments, with the financial counter-parties, as at March 31, 2002 are as follows:
----------------------------------------------------------------------
2002 2003 2004 2005 2006 2007 Total
(9 months)
----------------------------------------------------------------------
FORWARDS
Quantity (000 ozs) 74 307 143 86 102 56 768
Average price ($/oz) 289 286 303 303 323 350 301
PREPAID GOLD
FORWARDS (Note 4)
Quantity (000 ozs) 39 52 52 52 - - 195
Average price ($/oz) 235 235 235 235 - - 235
VARIABLE VOLUME
FORWARDS(1)(3)
Minimum
quantity (000 ozs) 46 68 51 68 28 - 261
Average price ($/oz) 332 336 338 342 346 - 339
----------------------------------------------------------------------
MINIMUM DELIVERY OBLIGATIONS
Quantity (000 ozs) 159 427 246 206 130 56 1,224
Average price ($/oz) 288 288 296 299 328 350 299
CALL OPTIONS SOLD(2)
Quantity (000 ozs) 273 10 96 - - - 379
Average price ($/oz) 296 300 300 - - - 297
VARIABLE VOLUME
FORWARDS(1)(3)
Variable
quantity (000 ozs) 44 60 45 60 25 - 234
Average price ($/oz) 332 336 338 342 346 - 338
----------------------------------------------------------------------
TOTAL DELIVERY COMMITMENTS
Quantity (000 ozs) 476 497 387 266 155 56 1,837
Average price ($/oz) 297 294 302 308 331 350 303
----------------------------------------------------------------------
(1) The Variable Volume Forward (VVF) position is for a nominal
quantity of 328,297 ounces maturing at fixed delivery dates from
April 2002 to May 2006. The delivery dates and strike prices are
fixed, but the quantity to be delivered during any specific month
may vary from a minimum of 80% (shown as minimum quantity in the
table) up to a maximum of 150% of the nominal quantity based on a
spot gold price ranging from $276 per ounce to $360 per ounce.
Monthly test dates are set between April 2002 and May 2004.
Each increase of $1 per ounce in gold price above $276, at each
monthly test date, will increase by 59 ounces per fixed period the
minimum quantity of the VVF positions up to 5,000 ounces per
period and has been recognized as a delivery commitment on the
table.
(2) The Company's contingent delivery obligations under the call
options sold contracts will only take effect if the gold price is
above the strike price of the relevant contract at its maturity
date.
(3) Certain call options sold, forwards and VVF positions, totalling
936,386 ounces, include a swap of the gold lease rate for the
duration of the contracts. Pursuant to the swap agreements, the
Company pays the floating gold lease rate and the counter-parties
pay a fixed rate of 1.25% to 1.75% per annum.
(4) At March 31, 2002, the estimated mark-to-market value of Cambior's
gold sales and deliveries commitments calculated at a spot price
of $301 per ounce ($277 per ounce at December 31, 2001) is the
following:
----------------------------------------------------------------------
March 31, December 31,
2002 2001
$000 $000
----------------------------------------------------------------------
Forwards and prepaid gold forward (23,500) (1,016)
VVF and call options sold (accounted for in
the balance sheet as fair value of
non- hedge derivatives) (6,271) 5,330
----------------------------------------------------------------------
(29,771) 4,314
----------------------------------------------------------------------
As part of the Program, Cambior can roll forward its contracts up to the final maturity date of the 2001 Credit facility and is not subject to margin calls. 5. REVENUE PROTECTION PROGRAM (continued) b) Foreign exchange contracts The Company's Canadian dollar Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents hedging commitments as at March 31, 2002 are as follows:
2002 2003 2004 2005 Total
(9 months)
----------------------------------------------------------------------
Spot Deferred
US dollars ($000) 10,668 - - - 10,668
Exchange rate 1.4383 - - - 1.4383
Fixed Forwards
US dollars ($000) 42,034 58,208 36,422 16,039 152,703
Exchange rate 1.5621 1.5564 1.5654 1.5571 1.5602
----------------------------------------------------------------------
Total
US dollars ($000) 52,702 58,208 36,422 16,039 163,371
Exchange Rate 1.5371 1.5564 1.5654 1.5571 1.5522
----------------------------------------------------------------------
The Company is committed through foreign exchange contracts to deliver US$163,371,000 at an average exchange rate of Cdn$1.5522. The foreign exchange spot deferred contracts have a delivery date that may be deferred up to July 2003, at the Company's discretion, and their value varies based on time and interest rates. As at March 31, 2002, the fair value loss of the foreign exchange contracts is $5,118,000. This amount was not accounted for in the consolidated statement of operations as the commitments of the Company to deliver US dollars are treated as a hedge instrument. 6. ACCOUNTING FOR COMPENSATION PLANS The Company measures compensation costs related to awards of stock options using the intrinsic value Intrinsic Value 1. The value of a company or an asset based on an underlying perception of the value. 2. For call options, this is the difference between the underlying stock's price and the strike price. based method of accounting. The Company is required to make pro forma disclosures of net earnings (loss), earnings (loss) per share and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. earnings (loss) per share as if the fair value based method of accounting had been applied. The fair value of options granted was estimated using the Black-Scholes option-pricing model Black-Scholes option-pricing model A model for pricing call options based on arbitrage arguments. Uses the stock price, the exercise price, the risk-free interest rate, the time to expiration, and the expected standard deviation of the stock return. , taking into account an expected life of 5 years, a semi-annual risk-free interest rate Risk-Free Interest Rate Describes return available to an investor in a security somehow guaranteed to produce that return. The risk-free interest rate compensataes the investor for the temporary sacrifice of consumption. of 5.06% in 2001 and a volatility of 95% in 2001. A compensation charge is amortized over the vested vested adj. referring to having an absolute right or title, when previously the holder of the right or title only had an expectation. Examples: after 20 years of employment Larry Loyal's pension rights are now vested. (See: vest, vested remainder) period. The Company has not granted any options during the first quarter ended March 31, 2002. Accordingly the Company's net loss and basic and diluted net loss per share would have been increased on a pro forma basis as follows:
----------------------------------------------------------------------
First quarter ended March 31,
2002 2001
Actual Pro forma Actual Pro forma
----------------------------------------------------------------------
Net loss (10,432) (10,539) (925) (1,189)
Basic and diluted net
loss per share ($) (0.10) (0.10) (0.01) (0.01)
----------------------------------------------------------------------
The weighted average fair value of options granted in 2001 was $0.25. 7. SEGMENTED INFORMATION The Company operates four gold mines: Omai, located in Guyana Guyana (gīăn`ə, –än`–), officially Co-operative Republic of Guyana, republic (2005 est. pop. 765,000), 83,000 sq mi (214,969 sq km), NE South America. ; Doyon, which includes the Mouska mine, and Sleeping Giant (50% ownership through a joint venture), located in Quebec Quebec, city, Canada Quebec, Fr. Québec, city (1991 pop. 167,517), provincial capital, S Que., Canada, at the confluence of the St. Lawrence and St. Charles rivers. , Canada. The Company is also a 50% owner, through a joint venture, of the Niobec mine, a niobium operation located in Quebec, Canada.
----------------------------------------------------------------------
Sleeping
Omai Doyon Giant Niobec
$000 $000 $000 $000
----------------------------------------------------------------------
First Quarter ended
March 31, 2002
Revenues - Mining operations 24,178 16,625 2,627 5,964
Investments and other income - - - -
Financial expenses 718 - (9) -
Depreciation, depletion and
amortization 3,206 3,712 398 218
Divisional earnings (loss) 1,486 595 395 1,434
Capital expenditures 1,417 2,147 325 360
Property, plant and equipment 56,371 88,136 4,175 12,136
Divisional assets 72,709 92,009 4,745 18,676
----------------------------------------------------------------------
First Quarter ended
March 31, 2001
Revenues - Mining operations 25,440 15,038 2,289 4,531
Investments and other income 11 77 - -
Financial expenses 1,697 - - -
Depreciation, depletion
and amortization 4,717 3,889 544 359
Divisional earnings (loss) (1,570) (1,475) 39 320
Capital expenditures 2,284 2,220 383 222
Property, plant and equipment 69,181 96,784 4,493 12,095
Divisional assets 91,544 99,757 4,945 18,416
----------------------------------------------------------------------
----------------------------------------------------------------------
Discontinued Corporate
Operations and others Total
$000 $000 $000
----------------------------------------------------------------------
First Quarter ended
March 31, 2002
Revenues - Mining operations - - 49,394
Investments and other income - 63 63
Financial expenses - (54) 655
Depreciation, depletion and
amortization - 146 7,680
Divisional earnings (loss) - (2,356) 1,554
Capital expenditures - 3,783 8,032
Property, plant and equipment - 34,273 195,091
Divisional assets - 64,019 252,158
----------------------------------------------------------------------
First Quarter ended
March 31, 2001
Revenues - Mining operations - - 47,298
Investments and other income - 133 221
Financial expenses - 454 2,151
Depreciation, depletion
and amortization - 165 9,674
Divisional earnings (loss) - (2,654) (5,340)
Capital expenditures 368 400 5,877
Property, plant and equipment 14,379 29,359 226,291
Divisional assets 14,379 51,409 280,450
----------------------------------------------------------------------
Reconciliation of reportable operating divisional earnings (loss)
to net loss is as follows:
----------------------------------------------------------------------
First Quarter
ended March 31,
2002 2001
$000 $000
----------------------------------------------------------------------
Divisional earnings (loss) 3,910 (2,686)
Corporate and others (2,356) (2,654)
----------------------------------------------------------------------
1,554 (5,340)
Non-hedge derivative gains (losses)
and other (11,929) 4,430
Income and mining taxes (57) (15)
----------------------------------------------------------------------
Net loss (10,432) (925)
----------------------------------------------------------------------
8. EARNINGS PER SHARE
The following number of equity instruments was not included in the
computation of diluted earnings per share because to do so would have
been anti-dilutive for the periods presented.
----------------------------------------------------------------------
March 31, 2002 March 31, 2001
Number of Number of
instruments instruments
(000) (000)
----------------------------------------------------------------------
Options 4,750 5,087
Warrants 18,524 6,300
----------------------------------------------------------------------
23,274 11,387
----------------------------------------------------------------------
----------------------------------------------------------------------
9. EBITDA
Earnings before interest, taxes, depreciation and amortization,
non-hedge derivative gains (losses) and other are summarized as
follows:
----------------------------------------------------------------------
First Quarter
ended March 31,
2002 2001
$000 $000
----------------------------------------------------------------------
Net loss (10,432) (925)
Add (Deduct):
Non-hedge derivative gains
(losses) and other 11,929 (4,430)
----------------------------------------------------------------------
1,497 (5,355)
Depreciation, depletion and
amortization 7,680 9,674
Financial expenses 655 2,151
Income and mining taxes 57 15
----------------------------------------------------------------------
EBITDA 9,889 6,485
----------------------------------------------------------------------
10. ADJUSTED CASH FLOWS FROM OPERATING ACTIVITIES
----------------------------------------------------------------------
First Quarter
ended March 31,
2002 2001
$000 $000
----------------------------------------------------------------------
Cash flows from operating
activities 9,176 67,370
Adjustments:
Deferred revenue - (55,000)
Deferred revenue - Delivery
of gold on the prepaid
forward 3,056 -
----------------------------------------------------------------------
3,056 (55,000)
----------------------------------------------------------------------
Adjusted cash flows from
operating activities 12,232 12,370
----------------------------------------------------------------------
11. SUBSEQUENT EVENTS Unit offering of Cdn$60,000,000 On April 30, 2002, Cambior announced that it has entered into an agreement with a syndicate of underwriters, pursuant to which the underwriters have agreed to purchase 18,181,819 units ("Units") on a bought deal basis, at a price of Cdn$2.20 per Unit for gross proceeds to Cambior of Cdn$40,000,000. On May 3, 2002, the underwriters exercised the option to purchase an additional 9,090,909 Units at Cdn$2.20 per Unit for additional gross proceeds of Cdn$20,000,000. Each Unit will consist of one common share and one- half of one common share purchase warrant. Each whole warrant will be exercisable at a price of Cdn$3.00 for a period of 18 months from the closing date. The offering is scheduled to close on or about May 24, 2002. Issuance of securities During April 2002, 754,000 common shares were issued following the exercise of warrants outstanding at the end of March 2002, for total proceeds of $350,000 (Cdn$570,000). 12. ADDITIONAL INFORMATION Foreign exchange rates were as follows:
----------------------------------------------------------------------
Cdn $/US $ 2002 2001
----------------------------------------------------------------------
March 31 (Closing) 1.5942 1.5763
December 31 (Closing) - 1.5928
First Quarter (Average) 1.5946 1.5280
----------------------------------------------------------------------
The number of common shares outstanding at the following dates
were:
----------------------------------------------------------------------
May 7, 2002 127,004,000 shares
March 31, 2002 126,250,000 shares
December 31, 2001 104,904,000 shares
----------------------------------------------------------------------
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