Cambior Reports Operating and Financial Results; Record Gold Production With Reduced Costs -- Part 3 of 3, Financial Tables.MONTREAL--(BUSINESS WIRE)--Jan. 27, 1999--Cambior Inc. (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 ) (ME:CBJ.) (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :CBJ.) reports improved operating and financial performance for the year ended Dec. 31, 1998, despite the weakness in the gold markets. -0-
CAMBIOR INC.
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CONSOLIDATED CHANGES Fourth Quarter Twelve months
IN CASH RESOURCES ended period ended
(in thousands of US dollars) December 31, December 31,
1998 1997 1998 1997
$ $ $ $
(unaudited) (audited)
---------------------------------------------------------------
OPERATING ACTIVITIES
Net earnings (Net loss) (23,565) 161 (11,456) 7,070
Non-cash items
Depreciation, depletion
and amortization 14,158 15,652 63,191 50,443
Write-down of mining
assets 23,995 - 23,995 -
Income tax benefit,
deferred income taxes
and deferred mining
duties (1,959) 845 3,864 5,224
Minority interests 221 619 1,801 3,200
Other 1,411 (585) 2,788 2,391
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Cash flow from
operations 14,261 16,692 84,183 68,328
Changes in working
capital items 4,376 7,952 (1,724) 7,748
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Cash provided by
operating activities 18,637 24,644 82,459 76,076
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INVESTMENT ACTIVITIES
Investments (2,727) (947) (6,190) (2,901)
Property, plant
and equipment (15,785) (24,906) (83,090) (98,764)
Accrued liabilities -
construction in progress - 750 - 54
Acquisition of a
Joint Venture 206 - (98,855) -
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Cash used in investment
activities (18,306) (25,103)(188,135) (101,611)
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FINANCING ACTIVITIES
Long-term debt
Borrowings 24,993 172,654 390,156 428,164
Repayments (523) (211,026)(365,086) (486,213)
Deferred gain (3,554) 35,595 4,797 32,759
Minority interests (221) (619) (1,801) (3,200)
Purchase price balance (20,000) - - -
Common share issue - - 51,984 212
Dividends (1,756) (3,128) (3,520) (6,256)
Other - 3 (50) (81)
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Cash provided by (used in)
financing activities (1,061) (6,521) 76,480 (34,615)
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Increase (Decrease)
in cash (730) (6,980) (29,196) (60,150)
Cash, beginning of period 22,748 58,194 51,214 111,364
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Cash, end of period 22,018 51,214 22,018 51,214
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Cash flow from operations
per share (in dollars) 0.20 0.28 1.21 1.14
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Weighted average number
of common shares outstanding
(in thousands) 70,563 60,156 69,627 60,150
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CAMBIOR INC.
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CONSOLIDATED BALANCE SHEETS December 31, December 31,
(in thousands of US dollars) 1998 1997
(audited) $ $
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ASSETS
Current assets
Cash 22,018 51,214
Settlements receivable
and other receivables 25,511 24,466
Supplies inventory 26,176 28,175
Prepaid expenses 2,491 3,795
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76,196 107,650
Investments 5,353 5,743
Property, plant and equipment 726,927 647,674
Income tax benefit 412 3,725
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808,888 764,792
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LIABILITIES
Current liabilities
Accounts payable and
accrued liabilities 35,553 36,346
Current portion of
long-term debt 572 15,669
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36,125 52,015
Long-term debt 165,895 125,728
Deferred gain 37,556 32,759
Provision for environmental
obligations 7,343 4,833
Deferred mining duties
and deferred income taxes 10,775 11,519
Minority interests 1,659 1,659
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259,353 228,513
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SHAREHOLDERS' EQUITY
Capital stock 204,961 176,270
Contributed surplus 361,542 335,913
Retained earnings 21,112 37,536
Cumulative translation
adjustment (38,080) (13,440)
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549,535 536,279
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808,888 764,792
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NOTES AND COMMENTS TO FINANCIAL STATEMENTS
1. GENERAL
The accompanying audited consolidated financial statements do not
include all the disclosure required by generally accepted accounting
principles for annual statements and should be read in conjunction
with the notes to the company's audited consolidated financial
statements for the year ended Dec. 31, 1998.
2. EXCHANGE RATES
The average exchange rate for fourth quarter of 1998 was 1.5422
and the closing rate on Dec. 31, 1998, was 1.5333. These rates were
1.4084 and 1.4305 respectively in 1997.
3. WRITE-DOWN OF MINING ASSETS
In 1998, within the context of the company's periodic evaluation
of the value of its assets, the company determined that a write-down
of certain of its assets was necessary. Cambior's long-term price
assumptions take into account the weakness of the metal markets. The
gold price used reduced from $350 per ounce at Dec. 31, 1997 to $325
per ounce at Dec. 31, 1998, while the zinc price reduced from $0.60/lb
to $0.55/lb for the same period. The copper price was maintained at
$1.00/lb.
Details of the write-down follow:
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$000
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Metates Project 13,914
Investments 6,110
Other assets items 4,471
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Total 24,495
Income taxes and mining duties (2,007)
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Net impact on results 22,488
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4. INCOME TAXES AND MINING DUTIES
Fourth Quarter Twelve months
1998 1998
$000 $000
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Income taxes (1,513) 5,282
Mining duties (162) (299)
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Total (1,675) 4,983
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5. GOLD HEDGING PROGRAM
Fourth Quarter Twelve months
1998 1997 1998 1997
$ $ $ $
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Cambior's selling
price 345 408 389 424
Market price 294 308 294 331
Cambior's premium 51 100 95 93
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As at December 31, 1998, the company held the following gold
hedging positions:
1999 2000 Total
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Forward position (ounces of gold) 633,357 168,287 801,644
Average price ($/oz) 330 314 326
Deferred gain ($/oz)(i) 28 22 27
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Total ($/oz) 358 336 353
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(i) Gains were realized by the conversion of the gold loans into
dollar loans during 1997 and 1998. An amount of $3.5 million has
been recorded in the results of 1998 fourth quarter and the
balance of $37.6 million will be included in the results as
follows: $17.8 million in 1999, $14.1 million in 2000 and $5.7
million in 2001. For the year 2000, the table reflects the average
deferred gain amortized over the forecasted ounces. Besides these
commitments, the amounts of $10.4M in 2000 and $5.7M in 2001
remain available.
In addition, a total of 4.0 million ounces were subject to calls
option sold at an average price of $348/oz over a period of four
years. If exercised, these options can be rolled over and/or converted
into spot deferred contracts.
6. INVESTMENT
Fourth Quarter Twelve months
1998 1998
$000 $000
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Operations
Doyon 5,387 26,252
Omai 4,195 19,729
Bouchard-Hebert 1,069 4,785
Langlois 972 4,179
Niobec 726 3,055
Sleeping Giant, Other 1,059 3,450
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13,408 61,450
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Acquisition - Doyon
(see note 8) (206) 98,855
Mining projects(i) 2,377 21,640
Investments 2,727 6,190
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18,306 188,135
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(i) Mining projects
Cumulative to
Fourth Quarter Twelve months December 31,
1998 1998 1998
$000 $000 $000
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Cerro San Pedro 2,107 12,538 14,880
La Arena 189 3,805 6,585
Gross Rosebel 170 674 17,133
Yaou Dorlin 349 1,278 13,386
Carlota (814) 414 60,663
El Pachon 102 539 20,155
La Granja (127) 72 72
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Total of mining projects 2,377 21,640 186,645
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At Dec. 31, 1998, the economic value of the Metates project no
longer justified the capitalization of its costs and the project was
written off.
7. SEGMENTED INFORMATION
Fourth Quarter 1998 Gold(i) Metals(ii) Total
$000 $000 $000
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Gross revenues 59,306 17,579 76,885
Less: Smelting, refining
and transportation 620 8,095 8,715
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Net revenues 58,686 86 9,484 14 68,170
percent percent
Mining expenses 39,045 7,635 46,680
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Mine cash flow 19,641 91 1,849 9 21,490
percent percent
Expenses net of
non-cash items 6,962 267 7,229
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Cash flow from operations 12,679 89 1,582 11 14,261
percent percent
per share ($) 0.18 0.02 0.20
Investment 15,972 2,334 18,306
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Twelve months of 1998 Gold(i) Metals(ii) Total
$000 $000 $000
---------------------------------------------------------------
Gross revenues 250,942 92,651 343,593
Less: Smelting,
refining and
transportation 2,226 43,466 45,692
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Net revenues 248,716 83 49,185 17 297,901
percent percent
Mining expenses 151,852 35,836 187,688
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Mine cash flow 96,864 88 13,349 12 110,213
percent percent
Expenses net of
non-cash items 23,506 2,524 26,030
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Cash flow from
operations 73,358 87 10,825 13 84,183
percent percent
per share ($) 1.05 0.16 1.21
Investment 173,413(iii) 14,722 188,135
Property, plant
and equipment
Productive assets 393,424 146,858 540,282
Projects 52,056 134,589 186,645
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445,480 281,447 726,927
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(i) Gold includes silver converted to gold equivalent (10,146 ounces
or 1.6 percent - 1998).
(ii) Metals include zinc (60 percent NSR - 1998), copper (8 percent
NSR - 1998) and ferroniobium (32 percent NSR - 1998). For the
Bouchard-Hebert and Langlois mines, the revenues and mining
expenses are calculated on a pro rata of Net Smelter Return
basis (NSR).
(iii) Includes the acquisition of the 50 percent interest of the Doyon
mine for $98.9 million.
8. ACQUISITION OF THE 50 PERCENT INTEREST IN THE DOYON MINE
The company has bought effective on Jan. 1, 1998, the remaining
interest in the Doyon Mine.
The acquisition cost is as follows:
In millions of $
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Cash consideration and
purchase price balance(i) 95.0
El Coco property transfer 4.2
Net working capital (0.3)
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98.9
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(i) A public issue of 10.2 million common shares at a price of $5.17
per share (Cdn $7.50) for a net consideration of approximately
$50M was used to pay the cash portion at the closing of the
acquisition. An amount of $25M was paid on June 30, 1998, and the
balance of $20M was paid on Dec. 31, 1998.
CAMBIOR INC.
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GOLD PRODUCTION STATISTICS
Fourth Quarter Twelve months
ended period ended
December 31, December 31,
1998 1997 1998 1997
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Omai (100 percent)
(ounces) 89,125 83,066 327,546 338,496
Tonnage milled (t) 2,011,071 1,857,262 7,705,622 7,348,652
Tonnes per day
(tpd) 21,859 20,188 21,111 20,133
Grade milled
(g Au/t) 1.51 1.51 1.44 1.54
Recovery (percent) 92 92 92 93
Hard Rock (percent) 77 65 73 63
Direct mining costs
($ per tonne milled) 10.09 10.59 10.18 11.29
Direct mining costs
($ per ounce) 228 237 239 245
Depreciation
($ per ounce) 73 119 94 91
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Doyon (100 percent)
(ounces)(i) 61,480 39,152 239,620 110,486
Tonnage milled (t) 341,444 192,279 1,327,188 694,787
Tonnes per day (tpd) 3,711 3,789 3,636 3,619
Grade milled (g Au/t) 5.8 9.4 5.8 4.8
Recovery (percent) 96 95 96 95
Direct mining costs
($ per tonne milled) 40 48 41 46
Direct mining costs
($ per ounce) 223 237 226 291
Depreciation
($ per ounce) 76 55 76 65
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Sleeping Giant (50
percent) (ounces) 10,772 8,167 35,681 24,760
Direct mining costs
($ per ounce) 175 224 187 254
Depreciation
($ per ounce) 6 36 34 49
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Bouchard-Hebert/
Langlois (ounces)(ii) 8,214 13,450 34,978 36,513
Direct mining costs
($ per ounce) 244 232 262 227
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Chimo and Silidor
(ounces)(iii) - - - 9,776
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TOTAL GOLD PRODUCTION
(ounces) 169,591 143,835 637,825 520,031
DIRECT MINING COSTS
($ per ounce) 223 231 233 255
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(i) Includes the acquisition of the interest of Barrick in the Doyon
Mine for 1998 and the consolidation of the Mouska mine
operations.
(ii) Gold and silver produced at Bouchard-Hebert and Langlois mines
are reported in gold equivalent.
(iii) The Chimo and Silidor mines ceased activities in 1997.
CAMBIOR INC.
CONSOLIDATED GOLD PRODUCTION COSTS PER OUNCE
Fourth Quarter Twelve months
ended period ended
December 31, December 31,
1998 1997 1998 1997
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$000 $000 $000 $000
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Direct mining costs ($) 223 231 233 255
Smelting, refining and
transportation ($) 4 5 3 5
By-products credits ($) (1) (1) (1) (1)
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Cash operating cost ($) 226 235 235(iv) 259
Royalties ($) 8 10 8 11
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Total cash cost ($) 234 245 243(iv) 270
Depreciation ($) 70 91 83 82
Reclamation ($) 2 3 2 3
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Total phe mine cash flow for the base metals provided $.
-------------------------------------------ntrate 1,412 1,989
5,841 7,868
NSR Revenue ($ per tonne) 26 35 31 39
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Direct mining costs
($ per tonne) 20 22 22 23
Depreciation ($ per tonne) 6 5 6 5
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Total production costs 26 27 28 28
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Langlois(v)
Tonnage milled (t) 50,592 129,590 414,742 261,068
Tonnes per day (tpd) 1,795 1,994 2,100 2,024
Grade - Zinc (percent) 5.90 6.73 6.54 6.36
Zinc (tonnes) in
concentrate 2,712 8,121 25,281 15,382
Copper (tonnes) in
concentrate 115 372 1,009 709
NSR Revenue ($ per tonne) 27 29 35 36
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Direct mining costs
($ per tonne) 38 33 31 30
Depreciation ($ per tonne) 14 13 12 12
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Total production costs 52 46 43 42
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Niobec (50 percent)
Ferroniobium (kg Nb) 265,520 265,552 1,091,354 1,095,394
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(v) The production of the Langlois mine was suspended in December 1996
due to the necessity of modifying the underground mining method in
certain sectors of the deposit and the weakness of the zinc
market. Production restarted as scheduled on July 1, 1997. The
operations were temporarily interrupted in Nov. 1998.
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