Dayton Mining Corporation Announces Improved Financial Results.Business Editors VANCOUVER Vancouver, city, Canada Vancouver, city (1991 pop. 471,844), SW British Columbia, Canada, on Burrard Inlet of the Strait of Georgia, opposite Vancouver Island and just N of the Wash. border. , British Columbia--(BUSINESS WIRE)--Oct. 17, 2001 Dayton Dayton, city (1990 pop. 182,044), seat of Montgomery co., SW Ohio, on the Great Miami River where it is joined by the Stillwater River; inc. 1805. It is the trade center for a fertile farm area, but is best known for its involvement with industry, invention, and Mining Corporation ( "Dayton" or the "Company") (AMEX AMEX See: American Stock Exchange , TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). : DAY) announces today the results of operations for the quarter and nine months ending September September: see month. 30, 2001. All results are 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. dollars. Results Of Operations For the three months ending September 30, 2001 Dayton's This article is about the defunct chain of department stores. For the former parent company formed by the 1969 merger with Hudson's, see Target Corporation. Minneapolis-based Dayton's was among the nation's leading department stores for nearly a century. share of production from the Denton-Rawhide Mine totaled 11,887 ounces of gold, at a cash production cost of $241 per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. . Silver production for the period totaled 84,598 ounces. The Corporation's share of production from the Denton-Rawhide Mine for the third quarter of 2000 was 13,414 ounces of gold at a cash production cost of $208 per ounce. Silver production was 106,474 ounces. The lower gold production was a result of a scheduled reduction in contained gold placed on leach leach v. leached, leach·ing, leach·es v.tr. 1. To remove soluble or other constituents from by the action of a percolating liquid. 2. pads while silver production was adversely affected by recoveries below plan. Cash costs rose largely due to reduced by-product by·prod·uct or by-prod·uct n. 1. Something produced in the making of something else. 2. A secondary result; a side effect. by-product Noun 1. credits and a reduction in the ounces of gold and its related cost placed on the leach pads. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. gold production at Denton-Rawhide (49%) was 37,691 ounces at a cash production cost of $250 per ounce. Silver production totaled 272,018 ounce. For the prior year, which consists only of the results for the second and third quarters, gold production was 26,301 at a cash cost of $208 per ounce. Silver production was 205,499 ounces. Operating statistics for the Andacollo Andacollo is a city in the Coquimbo Region, Chile. It is located at around . Mine in Chile Chile (chĭl`ē, Span. chē`lā), officially Republic of Chile, republic (2005 est. pop. 15,981,000), 292,256 sq mi (756,945 sq km), S South America, west of the continental divide of the Andes Mts. , owned by Compaia Minera Minera (Welsh: Mwynglawdd) is a small village in the county borough of Wrexham in north-east Wales. It borders Coedpoeth to the east and Bwlchgwyn to the west. Dayton, are no longer reported by the Company because in December December: see month. of 2000 the Company permanently creased operations, wrote off its investment in the mine and deconsolidated Compaia Minera Dayton from its financial results. Financial Results For The Third Quarter For the three months ending September 30, 2001 the Company reported a loss of $643,000 or ($0.02) per share. This compares to a loss of $4,940,000 or $(0.16) per share for the third quarter of 2000. The improvement in earnings for 2001 as compared to 2000 was largely due to the Company's decision to close and deconsolidate the results of its subsidiary Compaia Minera Dayton which owns the Andacollo Mine. Other factors contributing to the improved financial results in the third quarter of 2001 as compared to the third quarter of 2000 include a reduction in exploration expenses of $728,000 as efforts at the Company's 100% owned El Dorado El Dorado, legendary country of South America El Dorado (ĕl`dərä`dō, –rā`–) [Span.,=the gilded man], legendary country of the Golden Man sought by adventurers in South America. gold and silver property in El Salvador El Salvador (ĕl sälväthōr`), officially Republic of El Salvador, republic (2005 est. pop. 6,705,000), 8,260 sq mi (21,393 sq km), Central America. concentrated on the preparation of a pre-feasibility study following the extensive drill program conducted in 2000. Also in 2001 the Company incurred a foreign exchange loss of $29,000 as the value of the Canadian Dollar Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents devalued de·val·ue also de·val·u·ate v. de·val·ued also de·valu·at·ed, de·val·u·ing also de·val·u·at·ing, de·val·ues also de·val·u·ates v.tr. 1. To lessen or cancel the value of. against the United States Dollar. In 2000 the Company reported a foreign exchange gain because a significant portion of the Company's monetary liabilities were in Chilean Pesos and the Chilean Peso devalued against the United States dollar. General and Administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. declined by $67,000 to $232,000 due to a reduction in staff and increased emphasis on cost controls. Interest expense was reduced to insignificant levels in the third quarter due to an adjustment of prior period accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. on the interest charged on the debt owed to an affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. company. In 2000 the interest expense included interest charged to Andacollo on its operating line of credit and interest obligations for the lease of the pit equipment, also at Andacollo. Interest income has fallen by $109,000 to $57,000 because of lower cash balances and an overall decline in interest received on invested cash as the US and Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. governments have undertaken a sustained program of interest rate reductions in 2001. As at September 30, 2001, Dayton Mining Corporation had $2,426,000 in freely available cash and $2,983,000 in restricted cash (at cost). The restricted cash is dedicated for closure and final 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. spending at Denton-Rawhide. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses during the quarter was $136,000 or nil per share compared with a negative cash flow of $3,242,000 or ($0.10) per share in 2000. The improvement in cash flow was due to the closure and deconsolidation of the Andacollo Mine in December of 2000. Overall, the Company consumed con·sume v. con·sumed, con·sum·ing, con·sumes v.tr. 1. To take in as food; eat or drink up. See Synonyms at eat. 2. a. only $235,000 of cash during the third quarter of 2001 compared to a reduction in cash of $1,396,000 during the third quarter of 2000. Year To Date Financial Results For the nine months ending September 30, 2001, the Company lost $2,763,000 or ($0.09) per share. This was a substantial improvement over the loss of $7,470,000 or ($0.29) per share reported during the third quarter of 2000. The operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. from mining activities in 2001 was $1,606,000 largely driven by non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $2,267,000. For the comparable period in 2000, the operating loss was $4,505,000 with non-cash charges totaling $5,358,000. The improvement in 2001 was due to the 2000 decision to permanently close the Andacollo Mine. Exploration expenses in 2001 as compared to 2000 declined from $1,102,000 to $569,000. This reflects a significant reduction in costs at the El Dorado property and by the end of the third quarter of this year the exploration program at the Denton-Rawhide Mine was completed. During the third quarter a foreign exchange loss of $45,000 was recorded by Dayton Mining Corporation, reflecting the depreciation of the Canadian dollar against the United States dollar. General and Administrative costs declined by $476,000 due to an overall reduction in corporate spending and because the Company recovered approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $140,000 in costs incurred in closing of the Andacollo Mine. Interest expenses declined by $659,000, due mainly to the elimination of any interest charges incurred by Andacollo. Finally, interest income fell by over 50% to $160,000 due to generally lower interest rates and lower amounts of cash available for investment. Cash flow from operations in the first nine months of 2001 was a negative $471,000 or ($0.02) per share compared to a negative cash flow from operations during the first nine months of 2000 of $2,061,000 or ($0.08) per share. In 2001, total usage of cash was $1,970,000. This includes $468,000 for exploration in El Salvador; $ 672,000 incurred to reflect the closure at Andacollo, which amount may ultimately be recovered from payments pursuant to the Creditors' Plan; $78,000 in cash was generated by operations at Denton-Rawhide offset by $156,000 in principal paid to the reclamation trust; and corporate General and Administrative spending of $752,000. In 2001 the Company has not undertaken any financing activities. For the nine months ending September 30, 2000 the Company had a net increase in cash of $2,823,000. This was a direct result of issuance of special warrants in June June: see month. of 2000 which raised $5,805,000. Management Update Dayton also announces that Mr. Scott Brunsdon, Senior Vice President and Chief Financial Officer will be leaving the Company on October October: see month. 31, 2001 to pursue other opportunities. Dayton's Board of Directors thank Mr. Brunsdon for his valued contribution to the Company the last two years and wish him well in his future endeavours. "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. " Statement: The statements, which are not historical facts contained in this release, are 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. that involve risks and uncertainties that could cause actual results to differ materially from targeted results. These risks and uncertainties include but are not limited to significant declines in precious metals Precious Metals Valuable metals such as gold, iridium, palladium, platinum, and silver. Notes: Investing in precious metals can be done either by purchasing the physical asset, or by purchasing futures contracts for the particular metal. prices; currency fluctuations; increases in production costs; differences in 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 , recovery rates, and tonnes mined from those expected; changes in mining, or heap leaching Heap leaching is an industrial mining process to extract precious metals and copper compounds from ore. Process The mined ore is crushed into small chunks and heaped on an impermeable plastic and/or clay lined leach pad where it can be irrigated with a leach solution to rates from currently planned rates; the results of current exploration activities and new opportunities; and other factors detailed in the Company's filings with the U.S. Securities and Exchange Commission. For further information contact Bill Myckatyn, Chairman, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. at (604) 662-8383 DAYTON MINING CORPORATION Consolidated Balance Sheets consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. in thousands of US dollars
Sep 30 Dec 31
2001 2000
----------- ----------
(unaudited) (audited)
Assets
Current assets
Cash and short term investments 2,426 4,396
Investments in marketable securities 175 175
Other receivables 66 196
Inventories 8,060 7,676
----------- ----------
10,727 12,443
Property, plant and equipment 11,164 13,341
Closure fund (note 3) 2,983 2,769
Other assets - 10
----------- ----------
24,874 28,563
=========== ==========
Liabilities
Current liabilities
Accounts payable and
accrued liabilities 1,746 2,578
Loan payable to a related party 1,849 1,849
Accrued closure costs 3,673 3,767
---------- ----------
7,268 8,194
---------- ----------
Shareholders' Equity
Share capital 53,810 53,810
Deficit (36,204) (33,441)
---------- ----------
17,606 20,369
---------- ----------
24,874 28,563
========== ==========
DAYTON MINING CORPORATION
Consolidated Statement of Shareholders' Equity
in thousands of US dollars
(unaudited)
Retained
Common Special earnings
shares warrants (deficit) Total
------- -------- --------- ------
At December 31, 1999 31,932 - (2,053) 29,879
Net loss for nine months
ended September 30, 2000 - - (7,470) (7,470)
Issuance of special
warrants 5,821 5,821
Issuance of share
capital
In lieu of payment for
administrative costs 21 - - 21
Acquisition of Mirage
Resource Corp. 3,761 - - 3,761
Acquisition of 49% of
Denton-Rawhide Mine 12,275 - - 12,275
Conversion of special
warrants 5,821 (5,821) -
------- -------- -------- --------
At September 30, 2000 53,810 - (9,523) 44,287
Net loss for the last
quarter of 2000 - - (23,918) (23,918)
------- -------- -------- --------
At December 31, 2000 53,810 - (33,441) 20,369
Net loss for the first
nine months of 2001 - - (2,763) (2,763)
------- -------- -------- --------
At September 30, 2001 53,810 - (36,204) 17,606
======= ======== ======== ========
DAYTON MINING CORPORATION
Consolidated Income Statements
in thousands of US dollars
(unaudited)
Three Months Nine Months
Ended Ended
September 30 September 30
2001 2000 2001 2000
------ ------ ------ ------
Revenues (note 1& 4) 3,894 9,697 11,204 28,784
------ ------ ------ ------
Cost of sales
Operating costs 3,410 11,672 10,543 27,931
Depreciation, depletion
and amortization 765 1,901 2,267 5,358
------ ------ ------ ------
4,175 13,573 12,810 33,289
------ ------ ------ ------
Operating loss (note 1) (281) (3,876) (1,606) (4,505)
------ ------ ------ ------
Expenses
Exploration 158 886 569 1,671
Foreign exchange 29 (235) 45 (207)
General and administrative 232 299 712 1,188
Interest expense - 280 (9) 650
Interest income (57) (166) (160) (337)
------ ------ ------ ------
362 1,064 1,157 2,965
------ ------ ------ ------
Net income (loss) for
the period (643) (4,940) (2,763) (7,470)
====== ======= ======= =======
Per share:
Net loss per share (note 2) (0.02) (0.16) (0.09) (0.29)
Shares outstanding (000) 31,124 31,124 31,124 25,700
DAYTON MINING CORPORATION
Consolidated Statements of Cash Flow
in thousands of US dollars
(unaudited)
Three Months Nine Months
Ended Ended
September 30 September 30
2001 2000 2001 2000
----- ----- ----- -----
Net income (loss)
for the period (643) (4,940) (2,763) (7,470)
Depletion, depreciation
and amortization 765 1,901 2,267 5,358
Accrued closure costs - 32 - 237
Foreign exchange loss(gain) 29 (235) 45 (207)
Net interest earned
on sinking fund (15) - (77) -
Closure fund valuation
adjustment - - 57 -
Administrative expenses
settled by issuance
of capital stock - - - 21
----- ------- ------ -------
Cash flow from operations 136 (3,242) (471) (2,061)
Bullion settlements receivable - 362 - 1,400
Other receivables 44 (250) 130 (41)
Inventories (381) 991 (384) (1,998)
Accounts payable 55 653 (754) 1,208
Closure cost expenditures (21) - (94) -
Deferred revenue - (2) - 264
----- ------- ------ -------
Cash flow provided by
operating activities (167) (1,488) (1,573) (1,228)
----- ------- ------ -------
INVESTING ACTIVITIES
Purchases of property,
plant and equipment - 197 (90) (383)
Deferred stripping - (250) - (750)
Closure Fund contributions (39) (316) (272) (306)
Other assets - - 10 -
----- ------ ------ -------
Cash flow used for investing
activities (39) (369) (352) (1,439)
----- ------ ------ -------
FINANCING ACTIVITIES
Drawdown of operating
line of credit - 600 - 600
Issuance of special warrants - - - 5,805
Restricted cash - - - 1,667
Principal repayments
of bank loan - - - (1,667)
Principal repayments
of capital lease - (374) - (1,122)
----- ------ ------ -------
Cash flow used for
financing activities - 226 - 5,283
----- ------ ------ --------
FOREIGN EXCHANGE (29) 235 (45) 207
----- ------ ------ --------
Net decrease in cash (235) (1,396) (1,970) 2,823
Cash and cash equivalents,
beginning of period 2,661 7,888 4,396 3,669
------ ------- ------- --------
Cash and cash equivalents,
end of period 2,426 6,492 2,426 6,492
====== ======= ======= ========
DAYTON MINING CORPORATION
Notes to the Interim Consolidated Financial Statements at
September 30, 2001 all financial figures stated in thousands of US
Dollars
1. Nature of Operations and Basis of Presentation
The Company is involved in the exploration, development and
operation of gold properties.
Operating figures for the nine months ended September 30, 2001
present results only for the Company's 49% joint venture interest
in the Denton-Rawhide Mine which was acquired on April 1, 2000.
Operating figures for the nine months ended September 30, 2000
present the Company's 49% joint venture interest in six months
operating results of the Denton-Rawhide Mine and nine months
operating results of the Andacollo Gold Mine which was
permanently closed and deconsolidated in December 2000.
Basis of Presentation
The accompanying interim consolidated financial statements have
been prepared following the same accounting policies and their
method of application as those used for the annual financial
statements contained in the Company's December 31, 2000 annual
report with the following exceptions: a) Disclosure:
Full and complete disclosure of accounting policies and
their method of application are not included in these
notes.
Reference should be made to the audited consolidated financial
statements contained in the Company's December 31, 2000 annual
report for full and complete disclosure.
b) Revenue Recognition
The Company, effective January 1, 2001 has changed its
revenue recognition policy from recognizing sales revenue based
on the spot prices existing when metals are available for sale to
recognizing sales revenue when the price has been fixed and title
to the metal has transferred to a buyer. This change in
accounting policy has resulted in a small deferral of sales
revenues and bullion receivables to closing inventories.
2. Loss per Share
Prior year per share figures have been restated for comparative
purposes to conform to post consolidated shares outstanding.
3. Closure Fund
The value of the closure trust fund held as collateral for future
estimated reclamation and severance obligations is recorded at
the lower of cost or net realizable value.
4. Segmented Information
The Company operates in one business segment, namely; gold mining
with its sole producing asset being a 49% joint venture interest
in a gold mine in Nevada, USA(acquired April 1, 2000),
exploration activities in El Salvador(commencing April 6, 2000)
and administrative offices in Canada. There has been no material
change in segmented assets from those disclosed in the Company's
annual consolidated financial statements contained in the
Company's December 31, 2000 annual report.
Three months Nine months
ended ended
September 30 September 30
2001 2000 2001 2000
----- ----- ----- -----
Revenue, excluding interest
income - US$(000)
USA $ 3,894 4,307 11,204 8,419
El Salvador - - - -
Canada - - - 416
Chile - 5,390 - 19,949
------ ------ ------ ------
Total 3,894 9,697 11,204 28,784
====== ====== ====== ======
Net (loss) for the
period - US$(000)
USA (314) (60) (1,735) (219)
El Salvador (108) (389) (468) (623)
Canada (221) (272) (560) (737)
Chile - (4,219) - (5,891)
------- ------- ------ -------
Total $ (643) (4,940) (2,763) (7,470)
======= ======= ======= =======
5. Management Discussion and Analysis of Financial Condition and
Results of Operations Management's discussion and analysis of the
Company's results as reported in the attached interim financial
statements are contained in the Company's October 17, 2001 Press
Release reporting on the results for the quarter ending September
30, 2001.
Dayton Mining Corporation Suite 2393 - \three Bentall Centre 595 Burrard Street Burrard Street is a major thoroughfare in Vancouver, British Columbia, Canada. It is the central street of Downtown Vancouver and the Financial District. The street is named for Burrard Inlet, located at its northern terminus, which in turn is named for Sir Harry Burrard. PO Box 49186 Vancouver BC 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 V7X 1K8 Tel: 604 662-8383 Fax: 604 684 1329 email: dmining@dayton-mining.com www.dayton-mining.com |
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