Cambior Reports Its 2003 Production and 2004 Targets and the Reduction of Its Gold Hedging Program.Business Editors LONGUEUIL, Quebec--(BUSINESS WIRE)--Jan. 14, 2004 All amounts are expressed in US dollars (unaudited) -- Gold production of 521,500 ounces for the year 2003 -- Gold hedging program cut by 42% PRODUCTION RESULTS For the year 2003, Cambior produced 521,500 ounces of gold, in line with its budget. This compares to production of 568,800 ounces of gold in 2002. For the fourth quarter of 2003, gold production totalled 143,100 ounces, representing an 8% increase over the corresponding quarter of 2002. The decrease in gold production for 2003 is a result of a planned reduction at the Omai mine due to the 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 of soft ore feed to the mill and reduced mill throughput The speed with which a computer processes data. It is a combination of internal processing speed, peripheral speeds (I/O) and the efficiency of the operating system and other system software all working together. 1. . Cambior's gold production target for 2004 is 705,000 ounces at an estimated mine operating cost of $221 per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. . The increase in the 2004 budgeted production is the result of the start-up Start-up The earliest stage of a new business venture. of the Rosebel mine in February, which will more than offset the planned decrease at Omai and the temporary shut-down of the Mouska mine. OPERATIONS Production at the Omai mine for 2003 was 271,000 ounces of gold, in line with the 2003 original mine plan. For the fourth quarter of 2003, gold production totalled 77,200 ounces compared to 74,000 ounces for the corresponding quarter of 2002. The production target for 2004 is 234,000 ounces of gold at an estimated mine operating cost of $222 per ounce, including a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $17 per ounce for deferred stripping capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. in previous years. In 2004, Omai expects to process 5,719,000 tonnes of ore at an average grade of 1.4 g Au/t as compared to 5,748,000 tonnes milled at an average grade of 1.6 g Au/t in 2003. The lower gold production anticipated for 2004 is caused mainly by a lower head grade following the depletion of the Fennell Pit in the third quarter. Subsequent mill feed in the fourth quarter will come 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. ore stockpiles accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. during the initial years of production and averaging 0.9 g Au/t. For 2003, the Doyon Division produced 217,200 ounces of gold, similar to the 2002 gold production. Fourth quarter production totalled 55,900 ounces compared to 50,900 ounces in the corresponding quarter of 2002. This increase in production is due to a higher head grade at the Mouska mine. The 2004 production target is 192,000 ounces of gold at an estimated mine operating cost of $263 per ounce. The decrease in production and higher operating costs operating costs npl → gastos mpl operacionales are related to the previously-announced 10-month shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down of the Mouska mine caused by the deepening deep·en tr. & intr.v. deep·ened, deep·en·ing, deep·ens To make or become deep or deeper. Noun 1. deepening - a process of becoming deeper and more profound of the internal shaft shaft (shaft) a long slender part, such as the diaphysis of a long bone. shaft n. 1. An elongated rodlike structure, such as the midsection of a long bone. 2. from January to October 2004, and the strength of the Canadian dollar Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents relative to the US currency. Capital expenditures for 2004 are estimated at $17.8 million, mainly for the shaft deepening expenditures at Mouska ($6.5 million) and for underground exploration and the development of the mineral reserves in the extensions of 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. zones and the new J Zone at Doyon ($7.7 million). Cambior's share of production from the Sleeping Giant Sleeping Giant may refer to: In geology:
REVENUE PROTECTION PROGRAM 42% reduction in the gold hedging program Cambior reduced its gold hedging commitments by 42% or 540,500 ounces in 2003 through the delivery of gold production against the existing hedging positions and the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of positions. The Company successfully negotiated the elimination of the hedging covenant in its credit facility following the closing of its Cdn $100 million 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. in August 2003. As at December 31, 2003, the Company had total commitments of 746,000 ounces at an average price of $306 per ounce, including 103,800 ounces in call options sold at an average price of $301 per ounce. Cambior reiterates its objective to eliminate all hedging commitments through accelerated deliveries or buyback Buyback The buying back of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may by the end of 2004, except for the residual 52,000 ounces remaining under its prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. gold forward
sales forward sales npl → ventas fpl a término agreement at the end of 2004. In August 2003, the Board of
Directors approved a policy that will allow gold hedging only when
required for project financing Project financingA form of asset-based financing in which a firm finances a discrete set of assets on a stand-alone basis. . ROSEBEL GOLD PROJECT Construction of the Rosebel project attained at·tain v. at·tained, at·tain·ing, at·tains v.tr. 1. To gain as an objective; achieve: attain a diploma by hard work. 2. the final construction phase in the fourth quarter of 2003, with the commissioning period beginning in January 2004. The Rosebel project is on track with the Company's schedule and budget, with commercial production scheduled to begin in February 2004. As of the end of the fourth quarter of 2003, approximately $89 million had been spent on the development and construction of the project. From February to December 2004, Rosebel is expected to process 4.6 million tonnes of ore at an average grade of 1.8 g Au/t and a gold process recovery of 92.5%, for a production of 245,000 ounces of gold. This production excludes a permanent gold circuit inventory of 4,000 ounces that will be retained in the carbon-in-leach (CIL (Common Intermediate Language) The ECMA version of the Microsoft Intermediate Language (MSIL). See CLI. 1. (project) CIL - Component Integration Laboratories. 2. (language) CIL - Common Intermediate Language. ) circuit for the duration of the operations. There is no plan to mill hard rock material in 2004. The primary source of mill feed will be the Pay Caro and East Pay Caro deposits, located in the north limb of the Rosebel property. The waste-to-ore ratio for 2004 is estimated at 1.9:1. The mine operating cost for 2004 is estimated at $184 per ounce. The increase in cost relative to the August 2002 feasibility study The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. is primarily attributable to higher power Higher power is a term used in a 12-step program, such as Alcoholics Anonymous, to describe "a power greater than yourself." Although many participants equate their higher power with God, a belief in God or in formal religion is not mandatory; the higher power is intended as a costs as a result of the indexation to the gold price. Capital expenditures for 2004 are estimated at $18.8 million, and include amounts to complete construction program ($6.0 million), acquire mine equipment ($4.3 million) and carry out exploration and development drilling ($4.0 million). A total of 34,000 meters 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 will be executed between March and December 2004 to expand reserves at known deposits and to find new deposits. BUSINESS DEVELOPMENT AND EXPLORATION Camp Caiman caiman: see alligator. caiman Any member of several species of Central and South American reptiles of the alligator family. Like the rest of the crocodile order, caimans are amphibious, lizardlike carnivores. The Company merged with Ariane Gold Corp. on November 29, 2003. Ariane's principal asset is the Camp Caiman gold project, located approximately 45 km southeast of Cayenne Cayenne (kīĕn`, kāĕn`), city and district (1990 pop. 41,659), capital of French Guiana, on Cayenne island at the mouth of the Cayenne River. The city has a shallow harbor, and deep-draft ships must anchor some distance out. in French Guiana French Guiana (gēăn`ə, –än`–), Fr. La Guyane française, officially Department of Guiana, French overseas department (2005 est. pop. . As per Ariane's preliminary assessment study completed on August 7, 2003, the Camp Caiman gold project contains 1.2 million ounces of gold resources. Management is confident that the Camp Caiman property has the potential for the discovery of additional resources. Capital expenditures for 2004 are estimated at $5.2 million to increase Camp Caiman's mineral resources Noun 1. mineral resources - natural resources in the form of minerals natural resource, natural resources - resources (actual and potential) supplied by nature and prepare a final feasibility study and environmental impact assessment by the end of 2004. Assuming all permits have been obtained from the relevant French authorities, the Camp Caiman gold project is expected to enter the construction phase in 2005 and commence production in 2007. Exploration For 2004, exploration will remain focused on or near the Company's mine sites and advanced projects. Given its improved financial condition and the favourable gold market, Cambior has more than doubled its 2004 exploration budget from last year. The 2004 exploration budget is estimated at $25 million, of which approximately $16.5 million will be capitalized. On the Westwood property, Cambior will continue drilling to test the Westwood area at depth, and will initiate a major underground exploration program on the eastern portion of the Doyon property; an exploration drift of 2.6 km will be started from the 14th level to the eastern edge of the Doyon property to reach the Westwood area by the end of 2006. A major drilling program is planned to test the Warrenmac and Westwood areas to a vertical depth of 2,000 meters, and will be carried out between mid- mid- pref. Middle: midbrain. 2004 and the end of 2007. Cambior will continue exploring in the Abitibi area, the Huamachuco region of Peru near the Alto alto, singing voice the range of which is lower than the soprano by the interval of a fifth. More generally, the term refers to the register in which this voice sings, i.e. Chicama gold discovery and on its exploration properties in the French Guiana and in Guyana, as well it will initiate exploration programs on the adjacent properties to the Rosebel concession. The Company is also continuing to evaluate various investment opportunities in the Americas to build on its current operating base. OUTLOOK Louis P. Gignac, Cambior's President and Chief Executive Officer, stated: "We are pleased with the performance of our operations in 2003, which was in line with our original 2003 mining plan. We look forward to a record year of production in 2004, with gold output targeted at 705 000 ounces and to an aggressive exploration program of $25 million to grow our resource and reserve base. We believe these efforts will enhance shareholder value." Fourth Quarter and Year-end 2003 Financial Results Conference Call Cambior will host a conference call on February 18, 2004 at 4:00 p.m., local time, to discuss its fourth quarter results and year-end audited 2003 financial results. Financial analysts are invited to participate in the call by dialing 1-800-428-5596 in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . Outside of North America, please dial (416) 620-2414. Media and all other interested individuals are invited to listen to the live webcast on the Cambior website at www.cambior.com or through CCNMatthews at www.ccnmatthews.com/cambior. The conference call will be available for replay for a period of 48 hours by calling (416) 626-4100, reservation #21181241. The webcast will also be archived on the Company's website. Cambior Inc. is an international gold producer with operations, development projects and exploration activities throughout the Americas. Cambior's shares trade on the Toronto (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension ) and American (AMEX AMEX See: American Stock Exchange ) stock exchanges under the symbol "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 ". Cambior's warrants, "CBJ.WT.C", trade on the TSX. Gold Rush Investment Forum Presentation On Wednesday, January 14, 2004, Louis P. Gignac, Cambior's President and Chief Executive Officer, will make a presentation at Sprott Securities Inc.'s Gold Rush Investment Forum 2004 in Toronto. The presentation will be archived on the Company's website at www.cambior.com. Caution Concerning 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. This press release contains certain "forward-looking statements", including, but not limited to, the statements regarding the Company's strategic plans, the reduction of hedging, future commercial production and financial results, production targets and timetables, evolution of mineral reserves, mine operating costs, capital expenditures, work programs, development plans and exploration budgets. Forward-looking statements express, as at the date of this press release, the Company's plans, estimates, forecasts, projections, expectations or beliefs as to future events or results. Forward-looking statements involve a number of risks and uncertainties, and there can be no assurance that such statements will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements. Risks and uncertainties that could cause results or future events to differ materially from current expectations expressed or implied by the forward-looking statements include, but are not limited to, factors associated with fluctuations in the market price of precious metals Precious Metals Valuable metals such as gold, iridium, palladium, platinum, and silver. Notes: Investing in precious metals can be done either by purchasing the physical asset, or by purchasing futures contracts for the particular metal. , mining industry risks, risks associated with foreign operations, environmental risks and hazards, uncertainty as to calculation of mineral reserves, requirement of additional financing or additional permits, authorizations or licences, risks of hedging strategies, risks of delays in construction and other risks referred to in Cambior's 2002 Annual Information Form filed with the Securities Commissions of all provinces in Canada, and with 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. Securities and Exchange Commission (under Form 40-F), as well as 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. .
TABLE 1
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CAMBIOR PRODUCTION
(unaudited)
Fourth Quarter
(Cambior's share) 2003 2002
(Actual) (Actual)
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GOLD
Omai
Production (ounces) 77,200 74,000
Tonnage milled (t) 1,408,300 1,936,300
Grade milled (g Au/t) 1.85 1.33
Recovery (%) 92.5 89.6
Division Doyon (1)
Production (ounces) 55,900 50,900
Tonnage milled (t)
Underground mines 299,800 306,800
Low grade stockpile 10,800 -
Total 310,600 306,800
Grade milled (g Au/t)
Underground mines 6.1 5.4
Low grade stockpile 1.0 -
Average 5.9 5.4
Recovery (%) 95.3 96.1
Sleeping Giant (50%)
Production (ounces) 10,000 8,100
Tonnage milled (t) 24,900 24,100
Grade milled (g Au/t) 12.8 10.8
Recovery (%) 97.4 97.0
Rosebel(2)
Production (ounces) - -
Tonnage milled (t) - -
Grade milled (g Au/t) - -
Recovery (%) - -
Total production (ounces of gold) 143,100 133,000
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--------------------
Year
2003 2003 2002 2004
(Actual) (Budget) (Actual) Target
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GOLD
Omai
Production (ounces) 271,000 272,800 319,600 234,000
Tonnage milled (t) 5,748,400 5,907,000 7,727,300 5,719,400
Grade milled (g Au/t) 1.61 1.56 1.40 1.4
Recovery (%) 91.6 93.0 91.6 91.1
Division Doyon (1)
Production (ounces) 217,200 217,900 216,200 192,000
Tonnage milled (t)
Underground mines 1,122,700 1,228,400 1,248,100 1,138,600
Low grade stockpile 155,600 84,200 38,500 181,400
Total 1,278,300 1,312,600 1,286,600 1,320,000
Grade milled (g Au/t)
Underground mines 6.2 5.7 5.6 5.3
Low grade stockpile 1.0 1.0 1.0 1.2
Average 5.6 5.4 5.5 4.7
Recovery (%) 94.9 95.5 95.5 96.1
Sleeping Giant (50%)
Production (ounces) 33,300 30,400 33,000 34,000
Tonnage milled (t) 88,200 80,700 101,400 97,600
Grade milled (g Au/t) 12.1 12.1 10.5 11.4
Recovery (%) 97.1 97.2 97.0 97.2
Rosebel(2)
Production (ounces) - - 245,000
Tonnage milled (t) - - 4,564,200
Grade milled (g Au/t) - - 1.84
Recovery (%) - - 92.5
Total production (ounces
of gold) 521,500 521,100 568,800 705,000
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(1) Includes the Doyon and Mouska mines.
(2) Anticipated commercial production in the first quarter of 2004.
TABLE 2
REVENUE PROTECTION PROGRAM AS OF DECEMBER 31, 2003 (unaudited)
Gold sales and deliveries commitments
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2004 2005 2006 2007 Total
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FORWARDS(2)
Quantity (000 oz) 252 155 130 56 593
Average price ($/oz) 315 327 326 350 324
PREPAID GOLD FORWARDS
Quantity (000 oz) 52 52 - - 104
Price ($/oz) 235 235 - - 235
GOLD PURCHASE
Quantity (000 oz) (55) - - - (55)
Average price ($/oz) 360 - - - 360
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MINIMUM DELIVERY OBLIGATIONS
Quantity (000 oz) 249 207 130 56 642
Average price ($/oz) 288 304 326 350 306
CALL OPTIONS SOLD (1) (2)
Quantity (000 oz) 104 - - - 104
Average price ($/oz) 301 - - - 301
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TOTAL DELIVERY COMMITMENTS
Quantity (000 oz) 353 207 130 56 746
Average price ($/oz) 292 304 326 350 306
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(1) Certain call options sold and forward positions, totalling
335 000, 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% per annum.
(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.
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