Coeur D'Alene Mines Reports First Quarter Results and Writedown of El Bronce Mine.COEUR D'ALENE Coeur d'Alene, city, United States Coeur d'Alene (kûrdəlān`), city (1990 pop. 24,563), seat of Kootenai co., N Idaho, near the Wash. line; inc. 1907. , Idaho--(BUSINESS WIRE)--May 13, 1998--Coeur d'Alene Mines Corporation (NYSE NYSE See: New York Stock Exchange :CDE (1) (Computer Desktop Encyclopedia) What you are reading at this very moment. See About this product. (2) (Common Desktop Environment) A user interface for desktop computing from The Open Group. ) today reported a first quarter 1998 net loss of $58.0 million, due primarily to a $54.5 million non-recurring charge related to its investment in its El Bronce property in Chile, including $8.3 million estimated to be the costs of remediation, reclamation Reclamation A claim for the right to return or the right to demand the return of a security that has been previously accepted as a result of bad delivery or other irregularities in the delivery and settlement process. and closure. This compares to a net loss of $1.7 million, during the same period a year ago. After quarterly dividends to preferred shareholders, the loss attributable to common shareholders in 1998's first quarter amounted to $60.6 million, or $2.77 per share, compared to a loss of $4.4 million, or $.20 per share, during the first quarter of 1997. Silver prices were $1.23 per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. higher than in the previous year's first three months, averaging $6.25 during this year's period compared to $5.02 in the prior year's period. Average gold prices during the quarter were approximately $57 per ounce lower than in the previous year's period, averaging $294.18 during the first quarter of 1998 compared to $351.17 during last year's comparable period. For the first three months of this year, Coeur coeur (ker) [Fr.] heart. coeur en sabot (on sa-bo´) a heart whose shape on a radiograph resembles that of a wooden shoe; seen in tetralogy of Fallot. realized increased production from its Rochester Rochester (rŏch`ĕstər, –ĭstər). 1 City (1990 pop. 70,745), seat of Olmsted co., SE Minn.; inc. 1858. and Yilgarn Star mines compared to the same period last year. Gold production in the first quarter of 1998 increased 7 percent, to 64,423 ounces, fr in the previous year's first quarter. After additional studies were completed in April 1998, the Company decided to suspend operations at its El Bronce mine in Chile. With gold prices remaining at low levels and exploratory efforts proving unsatisfactory, the Company concluded that it would be more prudent to cease investing its capital in that operation and employ that capital in more promising projects. Accordingly, the Company is proceeding to cease operations at the El Bronce mine and has written down its investment in the mine by taking a charge in the first quarter of 1998 of approximately $54.5 million. Due to the underperformance and planned closure of the El Bronce mine, the Company expects that its gold production for the remainder of 1998 will be approximately 35,000 gold ounces less than originally anticipated in the Company's 1998 budget. In Queen Uno Uno The symbol for the element unniloctium. UNO United Nations Organization UNO n abbr (= United Nations Organization) → ONU f et.al. v. Coeur d'Alene Mines Corporation et.al., a class action case filed on July July: see month. 2, 1997, the Court issued an order on April 16, 1998 dismissing the Company's auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together as a defendant but denied the Company's motion to dismiss, while cautioning the plaintiffs that they would be held liable for defendants' costs and attorney's fees attorney's fee n. the payment for legal services. It can take several forms: 1) hourly charge, 2) flat fee for the performance of a particular service (like $250 to write a will), 3) contingent fee (such as one-third of the gross recovery, and nothing if there is no if defendants were granted summary judgment after the close of discovery. In United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. v. ASARCO ASARCO American Smelting and Refining Company Inc. et.al., the Court, on March 31, 1998, rejected the government's contention that all or a portion of the natural resources damages case should be decided on the basis of the administrative record. The court denied without prejudice Without any loss or waiver of rights or privileges. When a lawsuit is dismissed, the court may enter a judgment against the plaintiff with or without prejudice. When a lawsuit is dismissed without prejudice defendants' motions for summary judgment pending further development of the factual record. A hearing is scheduled for June June: see month. 12, 1998 to consider the merits of defendants' trusteeship and statute of limitations A type of federal or state law that restricts the time within which legal proceedings may be brought. Statutes of limitations, which date back to early Roman Law, are a fundamental part of European and U.S. law. arguments in support of the summary judgment request. Rochester Mine - Nevada Nevada (nəvăd`ə, –vä–), far western state of the United States. It is bordered by Utah (E), Arizona (SE), California (SW, W), and Oregon and Idaho (N). Rochester production increased over thhe same period of 1997. Average cash costs atg the first quarter of 1998 due to the effects of El Nino. As a result, solution processed through the mil An Internet address domain name for a military agency. See Internet address. (networking) mil - The top-level domain for entities affiliated with US armed forces. , excessive precipitation precipitation, in chemistry precipitation, in chemistry, a process in which a solid is separated from a suspension, sol, or solution. In a suspension such as sand in water the solid spontaneously precipitates (settles out) on standing. also resulted in redarter shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. . By so doing, the Company ante of total mine production, were produced duriloration and development program, designed to substantially increase production within 2 years, is currently being considered. Exploration work is continuing at the Gaoeur Mine - Idaho Coeur mine production, representing the Company's 50% share of total mine production, decreased from the previous year's first quarter, with6,738 silver ounces produced during the first quon and resulting increase in average cash cost quarter, Fachinal produced 6,967 ounces of gold cost of $318.21 per ounce for the same quarter of 1997. Lower than budgeted production in gold and silver during the first quarter of 1998 was principally the resul necessary to gain access to the lower end of thon in May 1998. Due to continuing explorationam at Furioso fu·ri·o·so adv. & adj. Music In a tempestuous and vigorous manner. Used chiefly as a direction. [Italian, from Latin furi , an exploration tenement A comprehensive legal term for any type of property of a permanent nature—including land, houses, and other buildings as well as rights attaching thereto, such as the right to collect rent. upon which the Company holds an option. The property is situated appudy during April 1998 and submitted permit appvein systems resulting in dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. of ore gradee aware that facts and c ircumstances fundam entald through the Company's exploration efforts were unlikely to yield commercial production and did not warrant the additional capital investment; and (ii) management's decision to not exercise the Company's option to purchase the Boton de Oro property adjacent to the El Bronce Mine, which decision was based on the completion in late April 1998 of a feasibility study "A Feasibility Study" is an episode of the original The Outer Limits television show. It first aired on 13 April, 1964, during the first season. It was remade in 1997 as part of the revived The Outer Limits series with a minor title change. to evaluate the possible incorporation of Boton de Oro's mineralization Mineralization The process by which the body uses minerals to build bone structure. Mentioned in: Rickets mineralization, n the bioprecipitation of an inorganic substance. into El Bronce operations. A complete evaluation of operations at El Bronce was presented to the Company's Board of Directors for consideration at its regular meeting held on May 12, 1998. As a result of the evaluation, the Company determined that a write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. was required to properly reflect the estimated net realizable value Net realizable value (NRV) is a commonly used method of evaluating an asset's worth in the field of inventory accounting. NRV is part of GAAP rules that apply to valuing inventory, so as to not overstate or understate the value of inventory goods. of El Bronce's mining properties and assets 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 standards set forth in FASB Statement FASB Statement A standard set by the Financial Accounting Standards Board regarding a financial accounting and reporting method. Essentially, FASB statements determine the acceptable accounting practices that Certified Public Accountants use in reporting No. 121, "Accounting for the Impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of Long-lived Assets and for Long-lived Assets to be Disposed dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. Of." (FAS No. 121). Consequently, the Company recorded a charge in the first quarter of 1998 totaling $54.5 million relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc its investment in the El Bronce mine. The charge included approximately $8.3 million necessary to increase the Company's recorded remediation and reclamation liabilities at El Bronce and to provide for estimated termination costs on the basis that the Company is proceeding to close the mine. Yilgarn Star Mine - Australia The Company's share of Yilgarn Star gold production during the first quarter of 1997 was 12,569 ounces at an average cash cost of $204.21 per ounce compared to 7,445 ounces produced in 1997's first quarter at an average cash cost of $243.58. The increase in gold ounces shown is principally a result of the Company's increased ownership interest in Yilgarn Star's gold production in May 1997. Yilgarn Star has in place a forward sales forward sales npl → ventas fpl a término program for 167,500 ounces of future production through 2003 at average realized U.S. dollar-equivalent prices of $401 per ounce. The Joint Venture is presently carrying out a planned regional exploration program designed to increase short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. and 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. reserves at the Yilgarn Star mine. Golden Cross Mine - New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. In accordance with plan, the Company discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: mining and milling operations at the Golden Cross Mine in New Zealand on April 28, 1998. Gold production at Golden Cross was 8,914 ounces at an average cash cost of $221.20 per ounce compared to 17,281 ounces produced during the first quarter of 1997 at an average cash cost of $299.50. The decrease in production and average cash cost per ounce is primarily attributable to the fact the Company was winding down operations during the first quarter of 1998. Decommissioning Decommissioning is a general term for a formal process to remove something from operational status. Some specific instances include:
Kensington project - Alaska The Company has obtained all significant permits necessary to proceed with development of the Kensington property, a wholly-owned development gold property located 45 miles north of Juneau, Alaska “Juneau” redirects here. For other uses, see Juneau (disambiguation). The City and Borough of Juneau (pronounced [ˈdʒu. . On April 14, 1998, the Company received the Environmental Protection Agency's (EPA EPA eicosapentaenoic acid. EPA abbr. eicosapentaenoic acid EPA, n.pr See acid, eicosapentaenoic. EPA, n. ) National Pollution Discharge Elimination System (NPDES NPDES National Pollutant Discharge Elimination System (US EPA) ) permit for the Kensington property. The State of Alaska has also reviewed and certified See certification. that the NPDES complies with state standards. A production decision at the Kensington property is subject to satisfactory completion of an ongoing optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. study designed to reduce capital and operating costs operating costs npl → gastos mpl operacionales , satisfactory results from a development program designed to increase the current gold reserves and approval by the Company's Board of Directors. This document contains numerous 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. relating to the Company's gold and silver mining business. The United States 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 1955 provides a "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " for certain forward looking statements. Operating, exploration and financial data, and other statements in this document are based on information the company believes reasonable, but involve significant uncertainties as to future gold prices, costs, ore grades Ore grade is a measure that describes the concentration of a valuable natural material (such as metals or minerals) in its surrounding ore. Ore grade is used to assess the economic feasibility of a mining operation: the cost of extracting a natural material from its ore is directly , 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 gold and silver reserves, mining and processing conditions, changes that could result from the Company's future acquisition of new mining properties or businesses, the risks and hazards inherent in the mining business (including environmental hazards 'Environmental hazard' is a generic term for any situation or state of events which poses a threat to the surrounding environment. This term incorporates topics like pollution and Natural Hazards such as storms and earthquakes. , industrial accidents, weather or geologically 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. related conditions), regulatory and permitting matters, and risks inherent in the ownership and operation of, or investment in, mining properties or businesses in foreign countries. Actual results and timetables could vary significantly from the estimates presented. Readers are cautioned not to put undue reliance on forward-looking statements. The Company disclaims any intent or obligation to update publicly these forward-looking statements, whether as a result of new information, future events or otherwise. -0-
COEUR D'ALENE MINES CORPORATION
(Unaudited)
(In thousands except
per share data) Three Months Ended
March 31
1998 1997
--------- -------
Total revenues $ 24,755 $ 32,275
Total income $ 5,031 $ 5,313
Net loss $(57,961) $ (1,721)
Net loss attributable
Common Shareholders $(60,594) $ (4,353)
Basic and Diluted Loss Per Share:
Net loss attributable
to Common Shareholders $ (2.77) $ (0.20)
Weighted average shares
outstanding 21,899 21,889
OPERATING HIGHLIGHTS Three Months Ended
March 31
1998 1997
---------- ---------
ROCHESTER MINE
Gold ozs. 25,194 15,823
Silver ozs. 1,582,960 1,531,129
Cash costs per oz./silver $ 4.71 $ 4.01
Full costs per oz./silver $ 5.27 $ 4.68
GALENA MINE
Silver ozs. 379,610 N/A
Cash costs per oz./silver $ 4.44 N/A
Full costs per oz./silver $ 5.53 N/A
COEUR MINE
Silver ozs. 79,336 316,738
Cash costs per oz./silver $ 4.89 $ 2.76
Full costs per oz./silver $ 5.81 $ 3.90
FACHINAL MINE
Gold ozs. 6,967 8,120
Silver ozs. 468,420 600,206
Cash costs per oz./gold $324.27 $318.21
Full costs per oz./gold $509.59 $483.89
EL BRONCE MINE
Gold ozs. 10,779 11,294
Silver ozs. 20,170 22,270
Cash costs per oz./gold $381.18 $363.99
Full costs per oz./gold $480.45 $427.04
YILGARN STAR MINE
Gold ozs. 12,569 7,445
Cash costs per oz./gold $204.21 $243.58
Full costs per oz./gold $416.56 $260.83
GOLDEN CROSS MINE
Gold ozs. 8,914 17,281
Silver ozs. 27,412 71,930
Cash costs per oz./gold $221.20 $299.50
Full costs per oz./gold $221.20 $369.82
CONSOLIDATED TOTALS
Gold ozs. 64,423 59,963
Silver ozs. 2,557,908 2,542,273
REALIZED METALS PRICES
Gold ozs. $326.63 $359.21
Silver ozs. $ 6.41 $ 5.03
UNAUDITED
COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Mar 31, Dec 31,
1998 1997
ASSETS (In Thousands)
CURRENT ASSETS
Cash and cash equivalents $139,243 $114,204
Short-term investments 59,820 98,437
Receivables 9,197 11,503
Inventories 44,608 35,927
--------- ---------
TOTAL CURRENT ASSETS 252,868 260,071
PROPERTY, PLANT, AND EQUIPMENT
Property, plant and equipment 115,329 119,808
Less accumulated depreciation 63,779 58,097
--------- ---------
51,550 61,711
MINING PROPERTIES
Operational mining properties 126,925 169,969
Less accumulated depletion 52,607 61,477
--------- ---------
74,318 108,492
Developmental properties 134,908 134,236
--------- ---------
209,226 242,728
OTHER ASSETS
Investment in unconsolidated
subsidiaries 71,952 76,010
Notes receivable 3,099 8,498
Debt issuance costs, net of accumulated
amortization 8,626 8,809
Other 2,616 875
--------- ---------
86,293 94,192
--------- ---------
$599,937 $658,702
========= =========
UNAUDITED
CONSOLIDATED BALANCE SHEETS
COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES
Mar 31, Dec 31,
1998 1997
(In Thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 4,699 $ 5,983
Accrued liabilities 4,044 6,345
Accrued interest payable 8,526 6,631
Accrued salaries and wages 4,667 7,553
Bank loans 3,610 4,406
Current portion of remediation costs 7,300 7,300
Current portion of obligations under
capital leases 247 243
---------- ---------
TOTAL CURRENT LIABILITIES 33,093 38,461
LONG-TERM LIABILITIES
6% subordinated convertible debentures
due 2002 49,840 49,840
6 3/8% subordinated convertible
debentures due 2004 95,000 95,000
7 1/4% subordinated convertible
debentures due 2005 143,750 143,750
Other long-term liabilities 16,554 8,403
Long-term borrowings 1,159
--------- ---------
TOTAL LONG-TERM LIABILITIES 305,144 298,152
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Mandatory Adjustable Redeemable
Convertible Securities (MARCS),
par value $1.00 per share,
(a class of preferred stock) -
authorized 7,500,000 shares, 7,077,833
issued and outstanding 7,078 7,078
Common Stock, par value $1.00 per
share- authorized 60,000,000
shares, issued 22,957,825 and
22,949,779 shares in 1998 and 1997
(including 1,059,211 shares held
in treasury) 22,958 22,950
Capital surplus 387,079 389,648
Accumulated deficit (142,502) (84,542)
Other comprehensive accumulated
income:
Unrealized gains on short-term
investments 277 145
Repurchased and nonvested shares (13,190) (13,190)
---------- ---------
261,700 322,089
---------- --------
$599,937 $658,702
========== ========
See notes to consolidated financial statements.
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
COEUR D'ALENE MINES
CORPORATION AND SUBSIDIARIES
Three Months Ended March 31, 1998 and 1997
1998 1997
--------- ---------
(In thousands except per share amounts)
INCOME
Sale of concentrates and dore' $ 21,166 $ 24,470
Less cost of mine operations 19,724 26,962
--------- ---------
Gross Profits (Losses) 1,442 (2,492)
Other income - interest, dividends
and other 3,589 7,805
--------- ---------
Total Income 5,031 5,313
EXPENSES
Administration 1,021 1,067
Accounting and legal 471 422
General corporate 1,372 1,783
Mining exploration 1,816 1,500
Interest 3,815 2,262
Write down of mining properties 54,506
-------- --------
Total expenses 63,001 7,034
--------- --------
NET LOSS BEFORE INCOME TAXES (57,970) (1,721)
Benefit for income taxes (9)
--------- ---------
NET LOSS $(57,961) $ (1,721)
========= =========
NET LOSS ATTRIBUTABLE TO
COMMON SHAREHOLDERS $(60,594) $ (4,353)
========= =========
BASIC AND DILUTED LOSS PER SHARE DATA
Weighted average number of shares
of Common Stock and equivalents used
in calculation (in thousands) 21,899 21,889
========= =========
Net loss per share attributable to
common shareholders $ (2.77) $ (.20)
========= =========
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES
Three months ended March 31, 1998 and 1997
1998 1997
--------- --------
(In Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(57,961) $ (1,721)
Add (less) noncash items:
Depreciation, depletion and
amortization 8,854 7,031
Undistributed profits of
unconsolidated subsidiaries (846) (270)
Write down of mining properties 54,506
Other changes 87 81
Changes in operating assets and liabilities:
Receivables 559 3,066
Inventories (11,109) (4,817)
Accounts payable and accrued liabilities (6,336) (2,884)
Interest payable 1,894 (870)
--------- ---------
CASH USED IN OPERATING ACTIVITIES (10,352) (384)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of assets 7,599
Investment in unconsolidated affiliate (2,307) (20)
Purchase of property, plant, and equipment (916) (336)
Purchase of short-term investments and
marketable securities (10,570) (8,403)
Proceeds from sales of short-term
investments and marketable securities 49,294 34,856
Expenditures on developmental properties (3,378) (3,586)
Expenditures on operational mining properties (1,053) (4,851)
Other assets (334) (228)
--------- ---------
NET CASH PROVIDED BY
INVESTING ACTIVITIES 38,335 17,432
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of cash dividends (2,633) (2,633)
Other (311) (237)
--------- ---------
NET CASH USED IN FINANCING ACTIVITIES (2,944) (2,870)
--------- ---------
INCREASE IN CASH AND CASH EQUIVALENTS 25,039 14,178
Cash and cash equivalents at beginning
of year 114,204 43,455
--------- ---------
CASH AND CASH EQUIVALENTS AT
MARCH 31, 1998 AND 1997 $ 139,243 $ 57,633
========= =========
CONTACT: Coeur d'Alene Mines Corp. Kevin L. Packard Vice President, Chief Financial Officer and Treasurer |
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