Cambior Reports Profitable Fourth Quarter.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)--Feb. 25, 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”. 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 )(TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :CBJ.) All amounts are expressed in US dollars -- have agreed to purchase 13,846,154 special warrants on an underwritten private placement basis, at a price of Cdn$1.30 (approximately $0.81) per special warrant for gross proceeds to Cambior of Cdn$18,000,000 (approximately $11,250,000), and -- have the option to purchase an additional 9,230,769 special warrants at Cdn$1.30 (approximately $0.81) each at any time prior to the closing date, for additional gross proceeds of Cdn$12,000,000 (approximately $7,500,000). STRONG FOURTH QUARTER FINANCIAL RESULTS For the fourth quarter ended December December: see month. 31, 2001, revenues totaled $52.4 million, similar to the corresponding quarter in 2000. 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 $13.7 million (14 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. ) compared to $10.9 million (14 cents per share) for the corresponding quarter of 2000. Despite a lower realized gold price of $294 per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. compared to $312 per ounce in the corresponding quarter of 2000, the EBITDA was higher due to the strong operating performance of the Omai and Niobec mines. The direct mining cost decreased to $197 per ounce for the fourth quarter compared to $221 per ounce for the corresponding quarter in 2000. Cash flows from operating activities were $5.2 million (5 cents per share) compared to $3.7 million (5 cents per share) in the fourth quarter in 2000. After adjustments for the value of gold deliveries under 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, cash flows from operating
activities were $8.3 million (8 cents per share) compared to $3.7
million (5 cents per share) for the corresponding quarter in 2000.
Higher cash flows are mainly due to lower production costs and financial
expenses.During the fourth quarter, despite a $5.4 million writedown writedown A reduction in the value of an asset carried on a firm's financial statements. For example, the firm's accountants, believing the inventory is overvalued, may decide to take a writedown by reducing inventory valuation. related to the Omai mine, Cambior achieved strong operational and financial performance and returned to profitability with net earnings of $12.1 million (12 cents per share) compared to a loss of $101.7 million ($1.35 per share) for the corresponding quarter in 2000. (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.
Contracts such as options and futures whose price is derived from the price of an underlying financial asset. and writedown of mining assets and investments (Note 12 of the notes to 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 ). FULL YEAR 2001 Revenues and EBITDA amounted to $198.2 million and $39.4 million respectively, slightly lower than last year due to a lower realized gold price ($289 per ounce compared to $321 per ounce in 2000). Cash flows from operating activities were $81.3 million (88 cents per share) compared to $25.7 million (35 cents per share) in 2000. Adjusted cash flows from operating activities without the deferred revenue were $32.4 million (35 cents per share) compared to $25.7 million (35 cents per share) in 2000. The loss before unusual items was only $1.2 million (1 cents per share) compared to a loss of $29.1 million (40 cents per share) for 2000. In 2001, a $5.4 million writedown of the Omai mine resulted in a net loss of $8.2 million (9 cents per share). This compares to a net loss of $81.6 million ($1.12 per share) in 2000, when writedowns totaled $94.3 million. PRODUCTION AND RESERVES HIGHLIGHTS Higher production levels and lower production costs For the fourth quarter of 2001, gold production totaled 160,700 ounces at a direct mining cost of $197 per ounce, representing an 11% improvement over the direct mining cost of the corresponding quarter in 2000. 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 fourth quarter was 430 tonnes compared to 278 tonnes during the fourth quarter of 2000. For 2001, gold production totaled 614,900 ounces at a direct mining cost of $212 per ounce and niobium production was 1,503 tonnes, representing increases over the production 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. in 2000. Increase in mineral reserves Proven and probable PROBABLE. That which has the appearance of truth; that which appears to be founded in reason. mineral reserves have increased by almost one million ounces of gold contained since last year, after production 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 in 2001. This increase is mainly due to the inclusion of the Gross Rosebel project following the upgrade of its mineral resources Noun 1. mineral resources - natural resources in the form of minerals natural resource, natural resources - resources (actual and potential) supplied by nature into the probable reserves category and the agreement with Golden Star Resources Ltd. to acquire its 50% interest in the project, subject to closing, as well as the 31% increase in mineral reserves at Sleeping Giant Sleeping Giant may refer to: In geology:
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 at the Doyon Division, the proven and probable reserves were almost replaced with 1.4 million ounces of gold contained at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. . Omai added only 50,000 ounces to its mineral reserves, primarily as a result of the complete definition of the two deposits currently being mined. It is expected that the two deposits at the Omai mine will be depleted de·plete tr.v. de·plet·ed, de·plet·ing, de·pletes To decrease the fullness of; use up or empty out. [Latin d in 2005 and the renewal of reserves is dependent on the current exploration program finding a new gold deposit near the mine site. The attached table details Cambior's share of mineral reserves and resources as at December 31, 2001, estimated at a gold price of $300 per ounce. Cambior's share of mineral reserves at Niobec increased by nearly 60% to stand at 9.1 million tonnes at a grade of 0.68% of Nb2O5 at year end. More than 90% of the aggregate mineral reserves are located above level 1450 and can be mined using the current underground infrastructure, thereby reducing the development expenditures required for their extraction extraction /ex·trac·tion/ (eks-trak´shun) 1. the process or act of pulling or drawing out. 2. the preparation of an extract. . Since it began operating 25 years ago, the Niobec mine has had an excellent history of mineral reserve renewal. Both partners are pleased with this significant increase in reserves and its positive impact on the mine life, which is at least 16 years at the current mining rate. FINANCIAL HIGHLIGHTS A 30% reduction in financial obligations As of December 31, 2001, Cambior had financial obligations(2) of $100 million, a significant reduction from the $130 million at the beginning of the year. The reduction is mainly due to the sale of the interest in the El Pachon copper project, net cash flows from operations and the completion of private placements with Jipangu Inc. The Company intends to further reduce its financial obligations during 2002. As part of its strategy to strengthen its financial position, Cambior announced on February February: see month. 11, 2002, a special warrant offering of up to Cdn$30 million ($18.8 million). A syndicate Syndicate organized crime unit throughout major cities of the United States. [Am. Hist.: NCE, 2018] See : Gangsterism of underwriters have agreed to purchase 13,846,134 special warrants at a price of Cdn$1.30 ($0.81) per special warrant for gross proceeds to Cambior of Cdn$18 million ($11.3 million). The underwriters have the option, prior to the closing which is expected at the end of this month, to purchase an additional 9,230,769 special warrants at the same terms for additional gross proceeds of Cdn$12 million ($7.5 million). Capital expenditures in 2001 totaled $19.7 million compared to $22.6 million in 2000, representing a 13% decrease. Investments were principally for underground exploration and development at the Doyon Division ($7.6 million) and deferred stripping costs at Omai ($6.2 million). At December 31, 2001, cash and cash equivalents were $15 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 $112 million or $1.06 (Cdn$1.69) per share. 2002 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:
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. (2) Defined as 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. and gold delivery obligations under the prepaid gold forward sale agreement (deferred revenue).
HIGHLIGHTS
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All amounts in US dollars Three months,
ended Year ended
December 31 December 31,
(unaudited)
2001 2000 2001 2000
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RESULTS (in millions of $)
Total revenues 52.4 52.9 198.2 210.6
EBITDA(1) 13.7 10.9 39.4 51.2
Cash flows from operating
activities 5.2 3.7 81.3 25.7
Adjusted cash flows from
operating activities(2) 8.3 3.7 32.4 25.7
Earnings (loss) before the
undernoted items 5.9 (12.6) (1.2) (29.1)
Unrealized gain (loss) on
derivative instruments 12.5 5.2 (0.7) 41.8
Writedown of mining assets
and investments (5.4) (94.3) (5.4) (94.3)
Loss on foreign exchange
from reduction in net
investment (0.9) - (0.9) -
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Net earnings (loss) 12.1 (101.7) (8.2) (81.6)
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PER SHARE ($)
EBITDA (1) 0.14 0.14 0.42 0.70
Cash flows from operating
activities 0.05 0.05 0.88 0.35
Adjusted cash flows from
operating activities(2) 0.08 0.05 0.35 0.35
Earnings (Loss) before the
undernoted items 0.06 (0.17) (0.01) (0.40)
Unrealized gain (loss) on
derivative instruments 0.12 0.07 (0.01) 0.57
Writedown of mining assets
and investments (0.05) (1.25) (0.06) (1.29)
Loss on foreign exchange
from reduction in net
investment (0.01) - (0.01) -
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Net earnings (loss) 0.12 (1.35) (0.09) (1.12)
Weighted average number of
common shares outstanding
(in millions) 100.3 75.6 92.8 73.1
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GOLD PRODUCTION
Number of ounces produced
(000) 161 155 615 613
Number of ounces sold
(000) 157 143 627 628
Accounting realized price
($ per ounce) 294 312 289 321
Average market price
($ per ounce) 279 269 271 279
Direct mining cost
($ per ounce) 197 221 212 217
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FINANCIAL POSITION
(in millions of $) December 31, 2001 December 31, 2000
Cash and cash equivalents 15 4
Total assets 252 283
Total debt 51 130
Deferred revenue 49 -
Shareholders' equity 112 108
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This data concerns continuing operations only except for the net
earnings (loss) and gold production statistics.
(1) Earnings before interest, taxes, depreciation and amortization,
unrealized loss/gain on derivative instruments and writedown of
mining assets and investments (Note 12 of the notes to
consolidated financial statements).
(2) Cash flows from operating activities in 2001 are presented without
the deferred revenue.
CAMBIOR INC.
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GOLD PRODUCTION STATISTICS Three months Year
ended ended
December 31, December 31,
(unaudited)
2001 2000 2001 2000
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Omai (100%)
Production (ounces) 91,100 86,800 354,300 330,000
Tonnage milled (t) 2,013,200 2,009,800 7,902,600 7,875,100
Grade milled (g Au/t) 1.52 1.45 1.50 1.40
Recovery (%) 93 92 93 93
Direct mining costs
($ per tonne milled) 8.98 9.97 9.58 9.46
Direct mining costs
($ per ounce) 198 231 214 226
Depreciation
($ per ounce) 26 76 46 83
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Doyon Division (1)
Production (ounces) 62,000 58,700 228,700 231,700
Tonnage milled (t)
Underground mines 305,000 315,000 1,177,500 1,250,100
Low grade stockpile 29,700 18,000 161,200 87,100
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Total 334,700 333,000 1,338,700 1,337,200
Grade milled (g Au/t)
Underground mines 6.5 5.9 6.2 5.9
Low grade stockpile 1.0 1.6 1.0 1.6
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Average 6.0 5.7 5.6 5.6
Recovery (%) 96 96 96 96
Direct mining costs
($ per tonne milled) 35 37 36 37
Direct mining costs
($ per ounce) 188 211 209 214
Depreciation
($ per ounce) 64 149 67 98
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Sleeping Giant (50%)
Production (ounces) 7,600 9,100 31,900 39,000
Tonnage milled (t) 27,200 28,800 107,000 110,600
Grade milled (g Au/t) 9.0 9.6 9.6 11.1
Recovery (%) 96 103 97 98
Direct mining costs
($ per tonne milled) 69 63 66 63
Direct mining costs
($ per ounce) 247 198 221 179
Depreciation
($ per ounce) 43 62 43 54
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Bouchard-Hebert/Langlois
(ounces)(2) - - - 12,200
Direct mining costs
($ per ounce) - - - 127
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TOTAL GOLD PRODUCTION
(ounces) 160,700 154,600 614,900 612,900
DIRECT MINING COSTS
($ per ounce) 197 221 212 217
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CONSOLIDATED GOLD
PRODUCTION COSTS
($ per ounce)
---------------------------------------------------------------------
Direct mining costs 197 221 212 217
Refining and
transportation 1 2 2 3
By-product credits (2) (1) (2) (2)
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Operating costs 196 222 212 218
Royalties 7 8 8 8
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Total cash costs 203 230 220 226
Depreciation 42 103 54 86
Reclamation 3 2 3 3
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Total production costs 248 335 277 315
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METAL PRODUCTION
Niobec (50 %)
Production of Ferroniobium
(tonnes Nb) 430 278 1,503 1,085
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(1) Includes the Doyon and Mouska mines.
(2) Gold and silver produced at the Bouchard-Hebert and Langlois mines
are reported in gold equivalent. Amounts shown reflect results to
April 30, 2000. The Bouchard-Hebert and Langlois mines were sold
as of May 1, 2000.
FOURTH QUARTER 2001 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 the Company's annual audited consolidated financial statements, 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. and supplementary financial information contained in the Company's Annual Report. During 2001, the Company continued its efforts to reduce debt and return to profitability. Highlights for the year were: -- have agreed to purchase 13,846,154 special warrants on an underwritten private placement basis, at a price of Cdn$1.30 (approximately $0.81) per special warrant for gross proceeds to Cambior of Cdn$18,000,000 (approximately $11,250,000), and -- have the option to purchase an additional 9,230,769 special warrants at Cdn$1.30 (approximately $0.81) each at any time prior to the closing date, for additional gross proceeds of Cdn$12,000,000 (approximately $7,500,000). 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 year ended December 31, 2001, gold production totalled 614,900 ounces compared to 612,900 ounces produced in 2000. Cambior's share of production from the Niobec mine amounted to 1,503 tonnes of niobium, a 39% increase over last year due to the successful completion of the Niobec mine expansion in late 2000. Revenues from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the totalled $198.2 million as compared to $210.6 million for last year. EBITDA(1) was $39.4 million as compared to $51.2 million for 2000. Lower realized gold price per ounce sold contributed to the revenue and EBITDA decline in 2001. These amounts exclude the base metals assets, which are accounted for as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Gold production for the fourth quarter of 2001 totalled 160,700 ounces compared to 154,600 ounces during the corresponding quarter of 2000. Cambior also produced 430 tonnes of niobium, a 55% increase over the corresponding quarter in 2000. Revenues from continuing operations totalled $52.4 million in the fourth quarter of 2001 as compared to $52.9 million for the same quarter last year. The EBITDA was $13.7 million as compared to $10.9 million for the corresponding quarter of 2000; this increase is mainly due to lower direct mining operations costs of $197 per ounce compared to $221 per ounce in 2000. Cambior is making steady progress towards returning to profitability as its loss for the year 2001, prior to the non-cash adjustment in the valuation of non-hedge derivative instruments, the writedown of mining assets and the loss on foreign exchange from reduction in net investment was $1.2 million compared to a loss of $29.1 million in 2000. Including these adjustments, the Company incurred a net loss of $8.2 million (9 cents per share) for the year 2001 compared to net loss of $81.6 million ($1.12 per share) for 2000, including a $7.2 million loss from discontinued operations. (1) EBITDA: Earnings before interest, taxes, depreciation and amortization, unrealized loss/gain on derivative instruments and writedown of mining assets and investments (Note 12 of the notes to the consolidated financial statements). The net earnings was $12.1 million ($0.12 per share) for the fourth quarter of 2001 compared to a net loss $101.7 million ($1.35 per share), for the corresponding period in 2000. The net earnings before the non-cash adjustment on derivative instruments, the writedown of mining assets and the loss on foreign exchange from reduction in net investment was $5.9 million for the fourth quarter of 2001 compared to a loss of $12.6 million in 2000. EXPENSES Mine operating costs operating costs npl → gastos mpl operacionales in the year 2001 totalled $151.5 million lower than the $152.4 million incurred in 2000. In terms of cost per ounce, direct mining costs were $212 per ounce in 2001, lower than the $217 per ounce of 2000. Mine operating costs for the fourth quarter of 2001 totalled $36.1 million and direct mining costs were $197 per ounce. The operating statistics for the gold operations are as follows:
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Three months ended December 31,
2001 2000
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Ounces Direct Ounces Direct
mining cost mining cost
($/ounce) ($/ounce)
---------------------------------------------------------------------
Omai mine 91,100 198 86,800 231
Doyon Division 62,000 188 58,700 211
Sleeping Giant mine (50%) 7,600 247 9,100 198
Bouchard-Hebert/
Langlois mines (1) - - - -
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160,700 197 154,600 221
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Year ended December 31,
2001 2000
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Ounces Direct Ounces Direct
mining cost mining cost
($/ounce) ($/ounce)
---------------------------------------------------------------------
Omai mine 354,300 214 330,000 226
Doyon Division 228,700 209 231,700 214
Sleeping Giant mine (50%) 31,900 221 39,000 179
Bouchard-Hebert/
Langlois mines (1) - - 12,200 127
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614,900 212 612,900 217
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(1) The Bouchard-Hebert and Langlois mines were sold on May 1st 2000.
Depreciation, depletion and amortization amounted to $34.9 million in the year 2001 compared to $54.0 million in 2000. The decrease in 2001 resulted from the writedown of mining assets at the end of 2000. Depreciation, depletion and amortization amounted to $6.9 million for the fourth quarter of 2001 compared to $16.7 million in the corresponding quarter of 2000. Financial expenses for the year 2001 amounted to $5.6 million compared to $18.7 million in 2000, and $0.9 million for the fourth quarter of 2001 versus $6.4 million in the fourth quarter of 2000. The lower charges are mainly attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the debt reduction ensuing en·sue intr.v. en·sued, en·su·ing, en·sues 1. To follow as a consequence or result. See Synonyms at follow. 2. To take place subsequently. from the proceeds of the Prepaid Gold Forward Sale Agreement ($55.0 million), the sale of the El Pachon Project in 2001, the disposal of the La Granja La Granja, Spain: see San Ildefonso. Project in December 2000 ($35.0 million) and lower interest rates. 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 corporation in Canada. REVENUE PROTECTION PROGRAM AND GOLD MARKET In order to secure the cash operating margins at its mines and to reduce unfavourable exposure to the 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 of the gold price, the Company maintains a revenue protection program for its gold operations. The effectiveness of this program can be measured through the comparison of the average realized price with the average market price over time. During the year 2001, the Company realized a price of $289 per ounce compared to a realized price of $321 per ounce in 2000. For the fourth quarter of 2001, the realized price was $294 per ounce compared to $312 per ounce during the same period last year. The Company calculates the mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. value of all instruments used in the establishment of its revenue protection program. The valuation is calculated independently, based on the market conditions at the end of the period, of which the gold price is a major component. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the accounting principle in Canada adopted in 2000, the Company records in the operations statement the change in the valuation of its variable volume forward and call options ("optionalities"). Due to a gold market price increase from $273 to $277 an ounce during the year, the mark-to-market value of these optionalities has been reduced by $0.7 million. This charge has no impact on cash flows and will decrease as these instruments 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. with the eventual delivery of the ounces under these optionalities. At December 31, 2001, the Company had gold commitments of 932,000 ounces at an average price $327 per ounce with minimum delivery obligations of 297,000 ounces at $338 per ounce under these optional instruments, which is higher than the $277 an ounce market price at December 31, 2001. During the fourth quarter of 2001, the gold market price decrease from $293 an ounce on September September: see month. 30, 2001 to $277 per ounce on December 31, 2001 resulted in an unrealized gain Unrealized Gain A profit that results from holding on to an asset rather than cashing it in and using the funds. Notes: Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. on non-hedge derivative instruments of $12.5 million. 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 optional instruments and the mark-to-market value thereof will become nil and have no further impact on the Company's earnings subsequent to 2004. As at December 31, 2001, optionalities declined by 35% from the beginning of the year. At December 31, 2001, the Company had minimum delivery obligations of 1,252,000 ounces at a price of $298 per ounce and total commitments of 1,887,000 ounces at a price of $306 per ounce. These commitments include the optionalities described above. The estimated mark-to-market position of the total commitments is summarized as follows:
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December September December September December
31, 30, 31, 30, 31,
2001 2001 2000 2000 1999
---------------------------------------------------------------------
Closing gold market
price ($/oz) 277 293 273 274 290
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Mark-to-market value
of hedge derivatives
and Prepaid Gold
Forward instruments
(M$) (1.0) (14.3) 0.7 (0.6) (19.7)
Mark-to-market value
of non-hedge derivative
instruments recognized
in the balance sheet
(M$) 5.3 (7.2) 6.1 0.8 (35.7)
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Estimated mark-to-market
value - Revenue
protection program
(M$) 4.3 (21.5) 6.8 0.2 (55.4)
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Three months Year
ended ended
December 31, December 31,
2001 2000 2001 2000
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Impact on earnings of non-hedge
derivative instruments (M$)
Mark-to-market value at the end
of period 5.3 6.1 5.3 6.1
Mark-to-market value at the
beginning of period (7.2) 0.8 6.1 (35.7)
---------------------------------------------------------------------
Unrealized gain (loss) on
derivative instruments 12.5 5.3 (0.7) 41.8
---------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES Cash flows from operating activities were $81.3 million (88 cents per share) in 2001 compared to $25.7 million (35 cents per share) for 2000. The difference is mainly due to the receipt of the $55.0 million prepaid gold forward agreement (deferred revenue) and to lower financial expenses. For the fourth quarter of 2001, cash flows from operating activities were $5.2 million (5 cents per share) compared to $3.7 million (5 cents per share) in the same period of 2000. The variation is mainly due to lower financial expenses and lower mining operations costs partially offset by the delivery of prepaid gold ounces (deferred revenue) and changes in non-cash working capital items. INVESTMENTS Investments related to continuing mining operations for the year 2001 totalled $19.7 million compared to $22.6 million in 2000, representing a 13% decrease. Investments were principally for underground development at the Doyon Division ($7.6 million) and deferred stripping costs at Omai ($6.2 million). Investments relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc continuing mining operations for the fourth quarter of 2001 totalled $3.4 million compared to $7.1 million for the same period last year. SALE OF ASSETS During 2001, the Company sold its interest in the El Pachon Project for a total consideration of $15.0 million, with $13.0 million paid in September and $2.0 million at the time the purchaser makes a production decision but not later than September 2005. The proceeds from that sale were used mainly to reduce 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. . FINANCING ACTIVITIES During 2001, the Company reimbursed $65.3 million under the 1999 Credit Facility with proceeds received from the sale of assets and from the prepaid gold forward sale agreement. The mortgage loans of $13.0 million were also reimbursed. During that period, the Company issued 29.3 million common shares for a total of $16.3 million of which 28.5 million shares were issued to Jipangu Inc., its largest shareholder, and 0.8 million flow through shares issued to fund exploration projects. SUBSEQUENT EVENTS Transactions 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. On October October: see month. 31, 2001, Cambior announced that it has reached an agreement with Golden Star Resources Ltd. ("Golden Star") which was accepted by the Government of 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. on January January: see month. 10, 2002,
concerning the acquisition of the 50% interest in the Gross Rosebel
Project held by Golden Star for a cash consideration of $8,000,000 and a
price participation right of 10% on the excess in the quarterly market
price of gold above $300 per ounce after commencement of commercial
production.Cambior will also acquire Golden Star's interest in other exploration properties in Suriname and in the share capital of OMAI Gold Mines Limited, and will transfer to Golden Star its interest in exploration properties located in French Guiana French Guiana (gēăn`ə, –än`–), Fr. La Guyane française, officially Department of Guiana, French overseas department (2005 est. pop. . The Government of Suriname has also agreed to certain modifications to the 1994 Mineral Agreement in respect of the Gross Rosebel Project as well as certain business conditions, including favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. terms for power supply to the Project. In addition, the Government agreed to cause state-owned state-owned adj → estatal, del estado state-owned adj → étatisé(e) state-owned state adj → mining company Grasshopper grasshopper, name applied to almost 9,000 different species of singing, jumping insects in two families of the order Orthoptera. Grasshoppers are long, slender, winged insects with powerful hind legs and strong mandibles, or mouthparts, adapted for chewing. Aluminum Company N.V. to relinquish its two options to purchase up to a 40% participation in the Gross Rosebel Project principally in return for a 5% carried interest in the Operating Company's equity. Jipangu Inc. committed to use its best efforts to provide directly or indirectly, non recourse The right of an individual who is holding a Commercial Paper, such as a check or promissory note, to receive payment on it from anyone who has signed it if the individual who originally made it is unable, or refuses, to tender payment. financing of $50,000,000 to Cambior, to be used for the construction and development of the Gross Rosebel Property. Special Warrant offering of up to Cdn$30,000,000 (approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $18,750,000). On February 11, 2002, Cambior announced that it has entered into an agreement with a syndicate of underwriters pursuant to which the underwriters: -- have agreed to purchase 13,846,154 special warrants on an underwritten private placement basis, at a price of Cdn$1.30 (approximately $0.81) per special warrant for gross proceeds to Cambior of Cdn$18,000,000 (approximately $11,250,000), and -- have the option to purchase an additional 9,230,769 special warrants at Cdn$1.30 (approximately $0.81) each at any time prior to the closing date, for additional gross proceeds of Cdn$12,000,000 (approximately $7,500,000). Each special warrant will entitle en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: its holder to receive, without payment of any further consideration, one common share and one-half of one common share purchase warrant. Each whole warrant will be exercisable at a price of Cdn$1.70 (approximately $1.06) for a period of 12 months from the closing date. In the event that Cambior does not obtain receipts for a final prospectus Final Prospectus A legal document stating the price of a newly issued security, the delivery date, and other facts that are important for investors. Notes: The final prospectus must be given to every investor who purchases a new issue of registered securities. within 45 days of the closing date, each special warrant will entitle its holder to acquire 1.04 common shares and 0.52 warrant. The closing of the offering is scheduled for February 27, 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 on Form 20-F filed with the regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities of Canada (as its Annual Information Form) and of the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, .
CAMBIOR INC.
---------------------------------------------------------------------
CONSOLIDATED OPERATIONS Three months Year
(in thousands of US dollars) ended ended
December 31, December 31,
2001 2000 2001 2000
(unaudited) (audited)
$ $ $ $
---------------------------------------------------------------------
REVENUES
Mining operations 52,361 52,815 197,520 209,921
Investments and other
income 44 117 727 720
---------------------------------------------------------------------
52,405 52,932 198,247 210,641
---------------------------------------------------------------------
EXPENSES
Mining operations 36,121 40,017 151,450 152,420
Depreciation, depletion
and amortization 6,916 16,656 34,944 53,984
Exploration and business
development 1,852 693 3,409 2,441
General and administrative 760 1,339 3,939 4,572
Financial expenses 925 6,414 5,565 18,712
Writedown of mining assets
and investments (Note 5) 5,419 94,321 5,419 94,321
Restructuring charge - 518 - 518
Loss on foreign exchange
from reduction in net
investment 914 - 914 -
---------------------------------------------------------------------
52,907 159,958 205,640 326,968
---------------------------------------------------------------------
Loss before the undernoted
items (502) 107,026) (7,393) 16,327)
Unrealized gain (loss) on
derivative instruments
(Note 2) 12,488 5,212 (731) 41,761
Income and mining taxes 80 32 (115) 148
---------------------------------------------------------------------
Earnings (Loss) from
continuing operations 12,066 (101,782) (8,239) 74,418)
Results of discontinued
operations - 83 - (7,192)
---------------------------------------------------------------------
Net earnings (loss) 12,066 (101,699) (8,239)(81,610)
---------------------------------------------------------------------
Basic and diluted earnings
(loss) per share (in dollars)
Continuing operations 0.12 (1.35) (0.09) (1.02)
Discontinued operations - - - (0.10)
---------------------------------------------------------------------
0.12 (1.35) (0.09) (1.12)
---------------------------------------------------------------------
Weighted average number of
common shares outstanding
(in thousands) 100,345 75,563 92,834 73,104
---------------------------------------------------------------------
CAMBIOR INC.
---------------------------------------------------------------------
CONSOLIDATED CONTRIBUTED Three months Year
SURPLUS AND DEFICIT ended ended
(in thousands of US dollars) December 31, December 31,
2001 2000 2001 2000
(unaudited) (audited)
$ $ $ $
---------------------------------------------------------------------
CONTRIBUTED SURPLUS
Balance, beginning 23,047 22,922 23,047 361,542
Transfer to deficit - - - (338,620)
Expiry of share purchase
warrants - 125 - 125
---------------------------------------------------------------------
Balance, ending 23,047 23,047 23,047 23,047
---------------------------------------------------------------------
DEFICIT
Balance, beginning as
previously reported (129,825) (10,377) (109,374) (338,620)
Cumulative adjustment to
the opening balance (Note
2) - 2,723 - (27,674)
---------------------------------------------------------------------
Restated balance,
beginning (129,825) (7,654) (109,374) (366,294)
Net earnings (loss) 12,066 (101,699) (8,239) (81,610)
Transfer from contributed
surplus - - - 338,620
Share issue expenses, net
of income taxes (117) (21) (263) (90)
---------------------------------------------------------------------
Balance, ending (117,876)(109,374) (117,876) (109,374)
---------------------------------------------------------------------
CAMBIOR INC.
---------------------------------------------------------------------
CONSOLIDATED CASH FLOWS Three months Year
(in thousands of US dollars) ended ended
December 31, December 31,
2001 2000 2001 2000
(unaudited) (audited)
$ $ $ $
---------------------------------------------------------------------
OPERATING ACTIVITIES
Net earnings (loss) 12,066 (101,699) (8,239) (81,610)
Deferred gains 4,159 2,449 4,159 2,449
Deferred revenue (Note 7) - - 55,000 -
Non-cash items:
Depreciation, depletion
and amortization 6,916 16,656 34,944 55,560
Discontinued operations - 201 - 8,782
Amortization of deferred
gains (6,946) (5,762) (8,108) (16,120)
Deferred revenue -
Delivery of gold on the
prepaid forward (Note 7) (3,056) - (6,111) -
Writedown of mining assets
and investments 5,419 94,321 5,419 94,321
Loss on foreign exchange
from reduction in net
investment 914 - 914 -
Future income and mining
taxes - (261) - -
Unrealized loss (gain) on
derivative instruments (12,488) (5,212) 731 (41,761)
Provision for
environmental obligations 514 293 1,749 1,800
Other (112) (5) 263 456
---------------------------------------------------------------------
7,386 981 80,721 23,877
Changes in non-cash
working capital items (2,130) 2,710 611 1,846
---------------------------------------------------------------------
Cash flows from operating
activities 5,256 3,691 81,332 25,723
---------------------------------------------------------------------
INVESTING ACTIVITIES
Investments - (48) 841 (297)
Property, plant and
equipment (3,359) (7,087) (19,690) (22,647)
Assets disposal - (1,907) - 9,314
Discontinued operations (223) 35,140 12,386 64,869
---------------------------------------------------------------------
Cash flows from (used in)
investing activities (3,582) 26,098 (6,463) 51,239
---------------------------------------------------------------------
FINANCING ACTIVITIES
Long-term debt -
Borrowings - - 63,575 13,000
Long-term debt -
Repayments (36) (35,043)(132,043) (97,824)
Deferred charges - (550) (2,085) (550)
Shares and warrants issued 5,693 (21) 6,067 5,035
---------------------------------------------------------------------
Cash flows from (used in)
financing activities 5,657 (35,614) (64,486) (80,339)
---------------------------------------------------------------------
Foreign exchange gain
(loss) on cash held in
foreign currency 91 (52) 655 994
---------------------------------------------------------------------
Net increase (decrease) in
cash and cash equivalents 7,422 (5,877) 11,038 (2,383)
Cash and cash equivalents,
beginning of period 7,164 9,425 3,548 5,931
---------------------------------------------------------------------
Cash and cash equivalents,
end of period 14,586 3,548 14,586 3,548
---------------------------------------------------------------------
Cash flows from operating
activities per share (in
dollars) 0.05 0.05 0.88 0.35
---------------------------------------------------------------------
Weighted average number of
common shares outstanding
(in thousands) 100,345 75,563 92,834 73,104
---------------------------------------------------------------------
CAMBIOR INC.
---------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
(in thousands of US dollars) December 31, December 31,
(audited) 2001 2000
$ $
---------------------------------------------------------------------
ASSETS
Current assets
Cash and cash equivalents 14,586 3,548
Accounts receivable 3,134 4,032
Settlements receivable 2,471 1,542
Production inventories 8,001 10,874
Supplies inventory and
prepaid expenses 19,185 19,008
---------------------------------------------------------------------
47,377 39,004
Investments 1,934 1,213
Property, plant and equipment 194,683 235,872
Deferred charges 2,448 550
Fair-value of non-hedge
derivatives (Note 8) 5,330 6,061
---------------------------------------------------------------------
251,772 282,700
---------------------------------------------------------------------
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 22,609 24,652
Current portion of long-term debt 5,147 118,457
Current portion of deferred revenue 12,222 -
Current portion of deferred gains 3,661 8,108
---------------------------------------------------------------------
43,639 151,217
Long-term debt (Note 6) 45,930 11,089
Deferred revenue (Note 7) 36,667 -
Deferred gains 498 -
Provision for environmental obligations
and other 13,505 12,181
---------------------------------------------------------------------
140,239 174,487
---------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Capital stock 226,727 209,961
Contributed surplus 23,047 23,047
Deficit (117,876) (109,374)
Cumulative translation adjustment (20,365) (15,421)
---------------------------------------------------------------------
111,533 108,213
---------------------------------------------------------------------
251,772 282,700
---------------------------------------------------------------------
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. UNREALIZED LOSS/GAIN ON DERIVATIVE INSTRUMENTS On October 24, 2000, the Emerging Issues Committee ("EIC EIC Editor-In-Chief EIC Euro Info Centre (DIN) EIC Earned Income Credit EIC Excellence in Cities (UK) EIC Enterprise Interaction Center (Interactive Intelligence) ") 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. issued EIC-113 "Accounting by Commodity Producers for Written Call Options". Under EIC-113, unmatched written call options are required to be marked-to- market with any resulting change in value recognized in the current operating period. The Company has applied EIC-113 retroactively ret·ro·ac·tive adj. Influencing or applying to a period prior to enactment: a retroactive pay increase. [French rétroactif, from Latin in 2000 with restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of prior periods. 3. RESTRUCTURING restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). PROGRAM Following the sudden rise in gold prices at the end of the third quarter of 1999, Cambior had had to make arrangements with its hedge counter-parties and its lenders for an orderly orderly /or·der·ly/ (or´der-le) an attendant in a hospital who works under the direction of a nurse. or·der·ly n. An attendant in a hospital. fulfillment 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. of its gold delivery obligations and its debt reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. . The reimbursement of the debt had been accelerated as a result of defaults under the Credit facility. These events forced Cambior to develop and implement a restructuring program, which resulted in the Company entering into a number of agreements with its lenders and hedge providers including: -- have agreed to purchase 13,846,154 special warrants on an underwritten private placement basis, at a price of Cdn$1.30 (approximately $0.81) per special warrant for gross proceeds to Cambior of Cdn$18,000,000 (approximately $11,250,000), and -- have the option to purchase an additional 9,230,769 special warrants at Cdn$1.30 (approximately $0.81) each at any time prior to the closing date, for additional gross proceeds of Cdn$12,000,000 (approximately $7,500,000). As part of its restructuring program, the Company also entered into agreements throughout 2000 and 2001 to sell non-core assets. The principal transactions are:
---------------------------------------------------------------------
2001 2000
$000 $000
---------------------------------------------------------------------
Gross proceeds
Sale of Bouchard-Hebert and Langlois
polymetallic mines - 42,168
Sale of the La Granja Project - 35,000
Sale of subsidiary (Cerro San Pedro Project) - 9,676
Jipangu Inc. private placement - 5,000
First-rank mortgage loan with Jipangu Inc.
which was converted into equity in 2001 - 10,000
First-rank mortgage loan with a financial institution - 3,000
2001 Credit facility - Term loan 55,000 -
2001 Credit facility - Revolving loan 8,575 -
Prepaid gold forward sale agreement 55,000 -
Sale of the El Pachon Project 13,000 -
Sale of other assets 1,619 -
---------------------------------------------------------------------
133,194 104,844
---------------------------------------------------------------------
Applied to
Reimbursement of the 1999 Credit facility 115,575 96,625
Reimbursement of the 2001 Credit facility 13,306 -
Payment to secure obligations to the hedge
counter-parties and restructure hedges - 8,000
Reimbursement of the first-rank mortgage
loan with a financial institution 3,000 -
---------------------------------------------------------------------
131,881 104,625
---------------------------------------------------------------------
Furthermore, the Company incurred additional amounts for financial expenses, restructuring fees and other related charges. 4. DISCONTINUED OPERATIONS In 2000, the Company started to present results from its base metal sector as discontinued operations, in accordance with generally accepted accounting principles in Canada. During 2000, the Bouchard-Hebert and Langlois Langlois is a surname, and may refer to:
During 2001, the El Pachon Project was sold for a total consideration of $15,000,000, with $13,000,000 paid in September 30, 2001 and $2,000,000 at the time the purchaser makes a production decision but not later than September 30, 2005. The El Pachon sale concluded the financial restructuring program. The Company decided not to consider its Carlota Car·lo·ta 1840-1927. Belgian-born empress of Mexico (1864-1867) as the wife of Archduke Maximilian of Austria. Project as part of the discontinued operations anymore. As per generally accepted accounting principles in Canada, the results of the Carlota Project have been reclassified as continuing operations. This reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. had no impact on net loss. 5. WRITEDOWN OF MINING ASSETS AND INVESTMENTS At the end of 2001 and 2000, the Company elected e·lect v. e·lect·ed, e·lect·ing, e·lects v.tr. 1. To select by vote for an office or for membership. 2. To pick out; select: elect an art course. to use a long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. price of gold of $300/oz to calculate its mining reserves and to evaluate the book value of its property, plant and equipment and determined that a writedown of certain assets was necessary. Details of the writedown are as follows:
2001 2000
$000 $000
---------------------------------------------------------------------
Omai Mine 5,419 42,388
Doyon Division - 46,899
Mining projects - 4,641
---------------------------------------------------------------------
Writedown of mining assets 5,419 93,928
Writedown of investments - 393
---------------------------------------------------------------------
Total 5,419 94,321
---------------------------------------------------------------------
Based on the future cash flow method, the writedown of the Omai mine in 2001 is due to lower estimated future gold prices from the 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. program required under the 2001 Credit facility. 6. LONG-TERM DEBT The long-term debt position is summarized as follows:
---------------------------------------------------------------------
December December
31, 31,
2001 2000
$000 $000
---------------------------------------------------------------------
2001 Credit facility 50,269 -
1999 Credit facility - 115,575
Mortgage - 13,000
Obligations under capital lease 808 971
---------------------------------------------------------------------
51,077 129,546
Current portion 5,147 118,457
---------------------------------------------------------------------
Long-term portion 45,930 11,089
---------------------------------------------------------------------
The 2001 Credit facility consist 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 was at LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). rate + 3% until March 31, 2001 and, thereafter, the interest spread varies from 2% to 3% based on the quarterly calculation of the Loan Life Protection Ratio (4.99% at December 31, 2001). Under the 2001 Credit facility, the Company is required to establish a revised 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 Program (the "Program") whereby it must ensure that: -- have agreed to purchase 13,846,154 special warrants on an underwritten private placement basis, at a price of Cdn$1.30 (approximately $0.81) per special warrant for gross proceeds to Cambior of Cdn$18,000,000 (approximately $11,250,000), and -- have the option to purchase an additional 9,230,769 special warrants at Cdn$1.30 (approximately $0.81) each at any time prior to the closing date, for additional gross proceeds of Cdn$12,000,000 (approximately $7,500,000). 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. The Company must also comply with various other covenants and financial ratios. 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 December 31, 2001, the minimum reimbursements on the long-term debt for the coming years are as follows:
---------------------------------------------------------------------
Obligations
Year of Term loan Revolving loan under capital leases Total
repayment $000 $000 $000 $000
---------------------------------------------------------------------
2002 5,000 - 147 5,147
2003 20,000 - 147 20,147
2004 17,994 - 147 18,141
2005 - 7,275 147 7,422
2006 - - 147 147
2007 - - 73 73
---------------------------------------------------------------------
42,994 7,275 808 51,077
---------------------------------------------------------------------
7. 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 July: see month. 2001 to December 2005. The cash proceeds from this prepaid sale was accounted for as deferred revenue. Under the agreement, the Company must comply with the terms of the Mandatory Hedging Program and various other covenants and financial ratios under the terms of the 2001 Credit facility (Note 6). During 2001, Cambior delivered 25,960 ounces of gold valued at $235 per ounce for a total amount of $6,111,000. As at December 31, 2001, the estimated mark-to-market value of the agreement is negative $4,526,000, which is not accounted for in the balance sheet. 8. REVENUE PROTECTION PROGRAM (a) Selling price
---------------------------------------------------------------------
Three months Year
ended December 31, ended December 31,
2001 2000 2001 2000
($ per ounce) $ $ $ $
---------------------------------------------------------------------
Market price 279 269 271 279
Cambior's premium 15 43 18 42
---------------------------------------------------------------------
Accounting realized price 294 312 289 321
---------------------------------------------------------------------
The average market price during 2001 was $271 per ounce. In 2001, the gold hedging program generated net additional revenues of $11,174,000 ($18 per ounce) giving an accounting realized price of $289 per ounce compared to $321 per ounce in 2000. During the fourth quarter of 2001, the gold hedging program generated net additional revenues of $2,618,000 ($15 per ounce) giving an accounting realized price of $294 per ounce compared to $312 per ounce during the fourth quarter of 2000. (b) Gold sales and deliveries The Company's gold sales and deliveries commitments as at December 31, 2001 are as follows:
--------------------------------------------------------------------
2002 2003 2004 2005 2006 2007 Total
--------------------------------------------------------------------
FORWARDS
Quantity (000 ozs) 167 242 94 86 102 56 747
Average price($/oz) 286 286 300 303 323 350 299
PREPAID GOLD FORWARDS
(Note 7)
Quantity (000 ozs) 52 52 52 52 - - 208
Average price($/oz) 235 235 235 235 - - 235
VARIABLE VOLUME
FORWARDS(1)(3)
Minimum quantity
(000 ozs) 65 68 68 68 28 - 297
Average price
($/oz) 332 336 338 342 346 - 338
--------------------------------------------------------------------
MINIMUM DELIVERY
OBLIGATIONS
Quantity(000 ozs) 284 362 214 206 130 56 1,252
Average price($/oz) 287 288 296 299 328 350 298
CALL OPTIONS SOLD(2)
Quantity(000 ozs) 264 53 53 - - - 370
Average price($/oz) 315 300 300 - - - 311
VARIABLE VOLUME
FORWARDS(1) (3)
Variable quantity
(000 ozs) 60 60 60 60 25 - 265
Average price($/oz) 332 336 338 342 346 - 338
--------------------------------------------------------------------
TOTAL DELIVERY
COMMITMENTS
Quantity(000 ozs) 608 475 327 266 155 56 1,887
Average price($/oz) 304 295 305 308 331 350 306
--------------------------------------------------------------------
(1) The Variable Volume Forward (VVF) position is for a nominal
quantity of 373,716 ounces maturing at fixed delivery dates from
January 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 January 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 call options sold are detailed as follows:
---------------------------------------------------------------------
Expiry date Quantity (000 ozs) $/oz
---------------------------------------------------------------------
2002 47 285
98 300
119 340
---------------------------------------------------------------------
264 315
2003 53 300
2004 53 300
---------------------------------------------------------------------
370 311
---------------------------------------------------------------------
---------------------------------------------------------------------
The Company's contingent delivery obligations under such 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
971,260 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 December 31, 2001, the estimated mark-to-market value of
Cambior's gold sales and deliveries commitments calculated at a
spot price of $277 per ounce ($273 per ounce in 2000) is the
following:
---------------------------------------------------------------------
2001 2000
$000 $000
---------------------------------------------------------------------
Forwards and prepaid gold forward (1,016) 705
VVF and call options sold (accounted for
in the balance sheet as fair value of
non hedge derivative instruments) 5,330 6,061
---------------------------------------------------------------------
4,314 6,766
---------------------------------------------------------------------
c) Foreign exchange contracts
The Company's Canadian dollar hedging commitments as at December
31, 2001 are as follows:
2002 2003 2004 2005 Total
---------------------------------------------------------------------
Spot Deferred
US dollars ($000) 24,257 - - - 24,257
Exchange rate 1.4376 - - - 1.4376
Fixed Forwards
US dollars ($000) 44,659 58,208 34,422 16,039 153,328
Exchange rate 1.5596 1.5564 1.5637 1.5571 1.5591
---------------------------------------------------------------------
Total
US dollars ($000) 68,916 58,208 34,422 16,039 177,585
Exchange Rate 1.5167 1.5564 1.5637 1.5571 1.5425
---------------------------------------------------------------------
-0-
The Company is committed through foreign exchange contracts to deliver US $177,585,000 at an average exchange rate of Cdn $1.5425. 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 December 31, 2001, the fair value loss of the foreign exchange contracts is $4,811,000 ($4,637,000 as at December 31, 2000). This amount was not accounted for in the consolidated statement of operations See Income statement. as the commitments of the Company to deliver US dollars are treated as a hedge instrument. 9.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.
---------------------------------------------------------------------
Omai Doyon Sleeping
Giant Niobec
$000 $000 $000 $000
---------------------------------------------------------------------
Three months ended
December 31, 2001
Revenues - Mining operations 28,027 17,444 2,106 4,784
Investments and other income 91 - - -
Financial expenses 743 (9) - -
Depreciation, depletion and
amortization 2,403 3,984 325 57
Writedown of mining assets and
investments 5,419 - - -
Divisional earnings (loss) (636) 1,668 (102) 2,075
Capital expenditures (disposals) 1,036 1,806 234 283
---------------------------------------------------------------------
Three months ended
December 31, 2000
Revenues - Mining operations 28,535 17,166 2,673 4,441
Investments and other income 17 - - -
Financial expenses 5,211 - - -
Depreciation, depletion and
amortization 6,565 8,733 569 310
Writedown of mining assets
and investments 42,388 46,899 - -
Divisional earnings (loss) (47,315) (50,981) 295 781
Capital expenditures (disposals) 2,573 2,516 501 620
---------------------------------------------------------------------
Year ended December 31, 2001
Revenues - Mining operations 106,793 63,198 8,811 18,718
Investments and other income 119 - - -
Financial expenses 4,800 (95) - -
Depreciation, depletion and
amortization 16,449 15,356 1,388 1,144
Writedown of mining assets
and investments 5,419 - - -
Divisional earnings (loss) (2,335) (473) 353 4,706
Capital expenditures (disposals) 8,303 7,553 1,032 1,038
Property, plant and equipment 58,133 89,781 4,251 12,004
Divisional assets 77,969 93,449 4,827 19,156
---------------------------------------------------------------------
Year ended December 31, 2000
Revenues - Mining operations 111,923 70,122 11,794 16,082
Investments and other income 60 - - -
Financial expenses 16,583 - - -
Depreciation, depletion and
amortization 27,440 22,718 2,123 1,123
Writedown of mining assets
and investments 42,388 46,899 - -
Divisional earnings (loss) (55,447) (49,828) 2,646 2,616
Capital expenditures (disposals) 8,816 10,663 1,135 3,076
Property, plant and equipment 71,587 103,446 4,886 12,854
Divisional assets 91,452 106,461 5,319 17,873
---------------------------------------------------------------------
---------------------------------------------------------------------
Corporate
Discontinued and
Operations others Total
$000 $000 $000
---------------------------------------------------------------------
Three months ended December 31, 2001
Revenues - Mining operations - - 52,361
Investments and other income - (47) 44
Financial expenses - 191 925
Depreciation, depletion and amortization - 147 6,916
Writedown of mining assets and investments - - 5,419
Divisional earnings (loss) - (2,593) 412
Capital expenditures (disposals) (248) 471 3,582
---------------------------------------------------------------------
Three months ended December 31, 2000
Revenues - Mining operations - - 52,815
Investments and other income - 100 117
Financial expenses - 1,203 6,414
Depreciation, depletion and amortization - 479 16,656
Writedown of mining assets and investments - 5,034 94,321
Divisional earnings (loss) 83 (9,288)(106,425)
Capital expenditures (disposals) (35,140) 2,832 (26,098)
---------------------------------------------------------------------
Year ended December 31, 2001
Revenues - Mining operations - - 197,520
Investments and other income - 608 727
Financial expenses - 860 5,565
Depreciation, depletion and amortization - 607 34,944
Writedown of mining assets and investments - - 5,419
Divisional earnings (loss) - (8,730) (6,479)
Capital expenditures (disposals) (12,386) 923 6,463
Property, plant and equipment - 30,514 194,683
Divisional assets - 56,371 251,772
---------------------------------------------------------------------
Year ended December 31, 2000
Revenues - Mining operations - - 209,921
Investments and other income - 660 720
Financial expenses - 2,129 18,712
Depreciation, depletion and amortization - 580 53,984
Writedown of mining assets and investments - 5,034 94,321
Divisional earnings (loss) (7,192) (15,796)(123,001)
Capital expenditures (disposals) (64,869) (10,060) (51,239)
Property, plant and equipment 13,906 29,193 235,872
Divisional assets 13,906 47,689 282,700
---------------------------------------------------------------------
Reconciliation of reportable operating divisional earnings (loss)
to net earnings (loss) is as follows:
---------------------------------------------------------------------
Three months Year
ended December 31, ended December 31,
2001 2000 2001 2000
$000 $000 $000 $000
---------------------------------------------------------------------
Divisional earnings (loss) 3,005 (97,220) 2,251 (100,013)
Results of discontinued
operations - 83 - (7,192)
Corporate and others (2,593) (9,288) (8,730) (15,796)
---------------------------------------------------------------------
412 (106,425) (6,479) (123,001)
Unrealized gain (loss) on
derivative instruments 12,488 5,212 (731) 41,761
Restructuring charge - (518) - (518)
Loss on foreign exchange from
reduction in net investment (914) - (914) -
Income and mining taxes 80 32 (115) 148
---------------------------------------------------------------------
Net earnings (loss) 12,066 (101,699) (8,239) (81,610)
---------------------------------------------------------------------
10. FLOW-THROUGH SHARES ISSUE On July 25, 2001, Cambior concluded private placements of 800,000 flow-through shares at $0.65 (Cdn$1.00) per share for proceeds of $520,000 (Cdn$800,000) used to incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. Canadian Exploration Expenses (as defined in the applicable tax legislation) on some of the Company's properties located in Quebec, Canada. 11. EARNINGS PER SHARE The following number of shares as at December 31 were not included in the computation Computation is a general term for any type of information processing that can be represented mathematically. This includes phenomena ranging from simple calculations to human thinking. of diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of because to do so would have been anti-dilutive for the periods presented.
---------------------------------------------------------------------
2001 2000
Number of Number of
shares shares
(000) (000)
---------------------------------------------------------------------
Options 4,855 3,549
Warrants 6,250 5,000
---------------------------------------------------------------------
---------------------------------------------------------------------
11,105 8,549
---------------------------------------------------------------------
---------------------------------------------------------------------
12. EBITDA Earnings before interest, taxes, depreciation and amortization, unrealized loss/gain on derivative instruments, loss on foreign exchange from reduction in net investment and writedown of mining assets and investments are summarized as follows:
---------------------------------------------------------------------
Three months Year
ended December 31, ended December 31,
2001 2000 2001 2000
$000 $000 $000 $000
---------------------------------------------------------------------
Net earnings (loss) 12,066 (101,699) (8,239) (81,610)
Add (Deduct):
Unrealized loss (gain) on
derivative instruments (12,488) (5,212) 731 (41,761)
Loss on foreign exchange
from reduction in net
investment 914 - 914 -
Writedown of mining assets
and investments 5,419 94,321 5,419 94,321
---------------------------------------------------------------------
5,911 (12,590) (1,175) (29,050)
Results of discontinued
operations - (83) - 7,192
Depreciation, depletion
and amortization 6,916 16,656 34,944 53,984
Financial expenses 925 6,414 5,565 18,712
Restructuring charge - 518 - 518
Income and mining taxes (80) (32) 115 (148)
---------------------------------------------------------------------
EBITDA 13,672 10,883 39,449 51,208
---------------------------------------------------------------------
13. SUBSEQUENT EVENTS Transactions in Guiana Shield On October 31, 2001, Cambior announced that it has reached an agreement with Golden Star Resources Ltd. ("Golden Star") which was accepted by the Government of Suriname on January 10, 2002, concerning the acquisition of the 50% interest in the Gross Rosebel Project held by Golden Star for a cash consideration of $8,000,000 and a price participation right of 10% on excess in the quarterly market price of gold above $300 per ounce after commencement of commercial production. Cambior will also acquire Golden Star's interest in other exploration properties in Suriname and in the share capital of OMAI Gold Mines Limited, and will transfer to Golden Star its interest in exploration properties located in French Guiana. The Government of Suriname has also agreed to certain modifications to the 1994 Mineral Agreement in respect of the Gross Rosebel Project as well as certain business conditions, including favorable terms for power supply at the Project. In addition, the Government agreed to cause state-owned mining company Grasshopper Aluminum Company N.V. to relinquish its two options to purchase up to a 40% participation in the Gross Rosebel Project principally in return for a 5% carried interest in the Operating Company's equity. Jipangu Inc. committed to use its best efforts to provide directly or indirectly, non recourse financing of $50,000,000 to Cambior, to be used for the construction and development of the Gross Rosebel Property. Special Warrant offering of up to Cdn $30,000,000 (approximately $18,750,000). On February 11, 2002, Cambior announced that it has entered into an agreement with a syndicate of underwriters pursuant to which the underwriters: -- have agreed to purchase 13,846,154 special warrants on an underwritten private placement basis, at a price of Cdn$1.30 (approximately $0.81) per special warrant for gross proceeds to Cambior of Cdn$18,000,000 (approximately $11,250,000), and -- have the option to purchase an additional 9,230,769 special warrants at Cdn$1.30 (approximately $0.81) each at any time prior to the closing date, for additional gross proceeds of Cdn$12,000,000 (approximately $7,500,000). Each special warrant will entitle its holder to receive, without payment of any further consideration, one common share and one-half of one common share purchase warrant. Each whole warrant will be exercisable at a price of Cdn$1.70 (approximately $1.06) for a period of 12 months from the closing date. In the event that Cambior does not obtain receipts for a final prospectus within 45 days of the closing date, each special warrant will entitle its holder to acquire 1.04 common shares and 0.52 warrant. The offering is scheduled to close on February 27, 2002. 14. ADDITIONAL INFORMATION Foreign exchange rates were as follows: --------------------------------------------------------------------- Cdn $/US $ 2001 2000 --------------------------------------------------------------------- December 31 (Closing) 1.5928 1.4995 September 30 (Closing) 1.5785 1.5035 Fourth Quarter (Average) 1.5803 1.5257 Year (Average) 1.5484 1.4854 --------------------------------------------------------------------- The number of common shares outstanding at the following dates were: --------------------------------------------------------------------- February 22, 2002 104,904,000 shares December 31, 2001 104,904,000 shares September 30, 2001 97,854,000 shares December 31, 2000 75,563,000 shares --------------------------------------------------------------------- During 2001, a total of 28,541,000 common shares were issued to Jipangu Inc. and 800,000 flow-through common shares were also issued. At December 31, 2001, Jipangu Inc. held approximately 37.8% of the outstanding common shares. Assuming the exercise of all warrants issued to Jipangu Inc., it would hold approximately 40.6% of Cambior's outstanding common shares.
---------------------------------------------------------------------
MINERAL RESERVES AND RESOURCES(1)
CAMBIOR'S SHARE
---------------------------------------------------------------------
December 31, 2001 @ $300/oz
---------------------------------------------------------------------
GOLD OPERATIONS Tonnes Grade Ounces
(000) (g Au/t) Contained(oz)
---------------------------------------------------------------------
Omai (100%)
Proven Reserves 22,644 1.3 944,000
Probable Reserves 69 1.4 3,000
---------------------------------------------------------------------
Doyon Division (100%)(2)
Proven Reserves 3,864 5.2 644,400
Probable Reserves 4,331 5.6 786,500
Measured Resources 170 3.6 19,900
Indicated Resources 760 4.4 107,400
Inferred Resources 5,244 5.6 946,600
---------------------------------------------------------------------
Sleeping Giant (50%)
Proven Reserves 63 10.7 21,500
Probable Reserves 145 12.3 57,600
Indicated Resources - - -
Inferred Resources 112 10.8 38,700
---------------------------------------------------------------------
GOLD PROJECTS
Gross Rosebel (3)
Probable Reserves (100%)
Indicated Resources (50%) 25,166 1.7 1,350,000
- - -
---------------------------------------------------------------------
La Arena (100%)
Indicated Resources 13,400 1.0 414,000
---------------------------------------------------------------------
TOTAL GOLD
Proven and Probable Reserves
Measured and Indicated Resources
Inferred Resources 3,807,000
541,300
985,300
---------------------------------------------------------------------
---------------------------------------------------------------------
MINERAL RESERVES AND RESOURCES(1)
CAMBIOR'S SHARE
---------------------------------------------------------------------
December 31, 2000 @ $300/oz
---------------------------------------------------------------------
GOLD OPERATIONS Tonnes Grade Ounces
(000) (g Au/t) Contained(oz)
---------------------------------------------------------------------
Omai (100%)
Proven Reserves 29,406 1.3 1,273,000
Probable Reserves 120 1.3 5,000
---------------------------------------------------------------------
Doyon Division (100%)(2)
Proven Reserves 2,557 5.5 456,500
Probable Reserves 4,954 6.3 1,003,400
Measured Resources 166 3.9 20,800
Indicated Resources 969 4.2 131,000
Inferred Resources 5,983 5.5 1,066,300
---------------------------------------------------------------------
Sleeping Giant (50%)
Proven Reserves 96 10.3 31,900
Probable Reserves 74 12.0 28,500
Indicated Resources 46 9.6 14,300
Inferred Resources 142 9.0 41,200
---------------------------------------------------------------------
GOLD PROJECTS
Gross Rosebel (3)
Probable Reserves (100%) - - -
Indicated Resources (50%) 12,583 1.7 675,000
---------------------------------------------------------------------
La Arena (100%)
Indicated Resources 13,400 1.0 414,000
---------------------------------------------------------------------
TOTAL GOLD
Proven and Probable Reserves 2,798,300
Measured and Indicated Resources 1,255,100
Inferred Resources 1,107,500
---------------------------------------------------------------------
---------------------------------------------------------------------
NIOBIUM OPERATION Tonnes Grade Contained Tonnes Grade
(000) Nb2O5(%) tonnes (000) Nb2O5(%)
(000)
Nb2O5
---------------------------------------------------------------------
Niobec (50%)
Proven Reserves 5,833 0.65 38 2,278 0.69
Probable Reserves 3,245 0.72 23 3,463 0.76
Measured Resources 730 0.60 4 - -
Indicated Resources 155 0.55 1 1,431 0.74
Inferred Resources 900 0.69 6 1,001 0.77
---------------------------------------------------------------------
1. Reported mineral reserves and resources were calculated in accordance with definitions and guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. adopted by the Canadian Institute of Mining, Metallurgy metallurgy (mĕt`əlûr'jē), science and technology of metals and their alloys. Modern metallurgical research is concerned with the preparation of radioactive metals, with obtaining metals economically from low-grade ores, with and Petroleum in August 2000. Mineral reserves and resources were estimated using a long-term gold price assumption of $300/oz for 2001 and 2000. The Pachon copper project and the Yaou Dorlin gold project were sold in 2001. Consequently, this table excludes reserves and resources from these projects. Unlike proven and probable mineral reserves, mineral resources (of all categories) do not demonstrate economic viability. 2. Includes mineral reserves and resources from the Doyon and Mouska mines. 3. Mineral reserve and resource calculations at Gross Rosebel are based only on the soft rock portion of the deposits. Following the completion of a technical report in 2001, the year-end 2000 mineral resources were upgraded to probable mineral reserves in 2001. Mineral reserves and resources at Gross Rosebel are reported as a 50% share in 2000 and as 100% in 2001, subject to the closing of the transaction to acquire Golden Star Resources Ltd. interest in the project. MINERAL RESERVES AND MINERAL RESOURCES Mineral reserve and mineral resource estimates have been calculated by Cambior's technical personnel for each property in accordance with definitions and guidelines adopted by the Canadian Institute of Mining, Metallurgy, and Petroleum (CIM (1) (Computer-Integrated Manufacturing) Integrating office/accounting functions with automated factory systems. Point of sale, billing, machine tool scheduling and supply ordering are part of CIM. "Standards on Mineral Resources and Reserves") in August 2000. There are numerous uncertainties inherent in estimating proven and probable mineral reserves, including many factors beyond the Company's control. The estimation estimation In mathematics, use of a function or formula to derive a solution or make a prediction. Unlike approximation, it has precise connotations. In statistics, for example, it connotes the careful selection and testing of a function called an estimator. of reserves is a subjective subjective /sub·jec·tive/ (sub-jek´tiv) pertaining to or perceived only by the affected individual; not perceptible to the senses of another person. sub·jec·tive adj. 1. process, and the accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological ge·ol·o·gy n. pl. ge·ol·o·gies 1. The scientific study of the origin, history, and structure of the earth. 2. The structure of a specific region of the earth's crust. 3. A book on geology. interpretation and judgement. Results from drilling, testing and production, as well as material changes in metal prices subsequent to the date of an estimate, may justify revision (programming) revision - A release of a piece of software which is not a major release or a bugfix, but only introduces small changes or new features. of such estimates. Cambior's qualified persons(1) responsible for the mineral reserve and resource calculations for each mine or project are as follows:
Mine Name Title
---------------------------------------------------------------------
Omai (Guyana) Y. Michaud Geology Superintendent
P. Johnson Mine Manager
Doyon (Quebec, Canada) D. Doucet Chief Geologist
A. Grenier Chief Engineer
Mouska (Quebec, Canada) R. Asselin Chief Geologist
P. Godin General Superintendent
Sleeping Giant
(Quebec, Canada) C. Gobeil Chief Geologist
C. Bourcier Chief Engineer
Gold Projects
Gross Rosebel (Suriname) K. Atherton Engineering
Superintendant,
Omai Mine
La Arena (Peru) F. Clouston Project Assessment
Engineer
Copper Projects
Carlota (Arizona, USA) Independent Mining Consultants, Inc.
Industrial Minerals
Niobec (Quebec, Canada) D. Villeneuve Geologist
S. Thivierge Engineering
Superintendent
(1) Qualified person: an individual who is an engineer or geoscientist
with at least five years of experience in mineral exploration, mine
development or operation, mineral project assessment, or any
combination of these; has experience relevant to the subject matter
of the mineral project and the technical report, and is a member in
good standing of a professional association.
Cautionary Note to U.S. Investors - The United States Securities and Exchange Commission permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically ec·o·nom·i·cal adj. 1. Prudent and thrifty in management; not wasteful or extravagant. See Synonyms at sparing. 2. Intended to save money, as by efficient operation or elimination of unnecessary features; economic: and legally extract To decompress. WinZip and other decompression utilities use the term to mean "pulling out" the original files from the compressed archive. See WinZip and data compression. or produce. We use certain terms in this document, such as "mineral resources," that the SEC guidelines strictly prohibit pro·hib·it tr.v. pro·hib·it·ed, pro·hib·it·ing, pro·hib·its 1. To forbid by authority: Smoking is prohibited in most theaters. See Synonyms at forbid. 2. us from including in our filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Annual Report on Form 20-F. A copy of this form is available to shareholders, free of charge, upon written request addressed to the Investor Relations Investor relations The process by which the corporation communicates with its investors. Department. The following table indicates the cut-off cut-off Anesthesiology The point at which elongation of the carbon chain of the 1-alkanol family of anesthetics results in a precipitous drop in the anesthetic potential of these agents–eg, at > 12 carbons in length, there is little anesthetic activity, grade calculations and the average metallurgical met·al·lur·gy n. 1. The science that deals with procedures used in extracting metals from their ores, purifying and alloying metals, and creating useful objects from metals. 2. recoveries at Cambior's gold mining operations for the proven and probable mineral reserves.
---------------------------------------------------------------------
Average Metallurgical Cut-off grades
Recovery (1)
---------------------------------------------------------------------
Mine Gold % g Au /t
---------------------------------------------------------------------
Omai 93 0.70
Doyon 96 4.1
Mouska 94 11.8 to 12.1(2)
Sleeping Giant 97 8.3 to 8.9 (2)
---------------------------------------------------------------------
(1) Recovery rates vary depending on the metallurgical properties of
each deposit and the production process used;
(2) Varies depending on the mining method used.
SENSITIVITY ANALYSIS To establish the 2001 and 2000 year-end mineral reserves, the Company used a long-term gold price of $300 per ounce. For the Canadian operations, a long-term exchange rate of Cdn$1.50 was used in 2002. Proven and probable mineral reserves for the gold operations at December 31, 2001 were 2.5 million ounces. A sensitivity analysis using a gold price of $275 per ounce indicates that mineral reserves would fall 6% to 2.3 million ounces. The impact of a $275 gold price on the Doyon Division would be a reduction in the order of 8%, while the impact on the Omai mine would be a reduction of 3%. The Doyon Division and Omai mine together represent 97% of Cambior's proven and probable mineral reserves from its gold operations, calculated at the end of 2001. |
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