Dayton Mining Corporation First Quarter 1999 Results -- Earnings of US$410,000.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)--May 26, 1999-- 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 (AMEX AMEX See: American Stock Exchange :DAY)(TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :DAY) announces today its results for the three months ended March 31, 1999. On March 31, 1999 the company's shareholders and debenture debenture (dəbĕn`chər), document acknowledging indebtedness. In Great Britain a debenture is practically the same as a bond, and debenture stock is similar to preferred stock. holders approved the exchange of all its debentures into shares. Effective on that date under 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. accounting practice known as "fresh start" accounting, all Dayton's assets and liabilities were revalued. Under fresh start accounting, financial results prior to March 31, 1999 are not required to be disclosed. However, Dayton is reporting the results for the three months ended March 31, 1999, on the basis of prior accounting, to facilitate comparison to previous periods. Effective January 1, 1999 Dayton has changed its reporting currency Reporting Currency The currency used in published reports and financial documents. Notes: All annual and quarterly reports state the currency in which their results are listed. from Canadian dollars 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 to U.S. dollars. All amounts unless otherwise stated, are in U.S. dollars. The 1998 comparative information reported herewith here·with adv. 1. Along with this. 2. By this means; hereby. herewith Adverb Formal together with this: has been translated from the originally reported Canadian dollar amounts at the exchange rate at the end of 1998, 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 accounting principles generally accepted in Canada. Realized gold prices and cash operating costs operating costs npl → gastos mpl operacionales reported here for 1998 are based upon the actual U.S. dollars received or expended ex·pend tr.v. ex·pend·ed, ex·pend·ing, ex·pends 1. To lay out; spend: expending tax revenues on government operations. See Synonyms at spend. 2. . Financial Review Don MacDonald, chief financial officer is pleased to report that for the three months ended March 31, 1999 Dayton had earnings of $410,000 compared with a loss of $2,212,000 for the same period in 1998. Loss per share, after recognizing the effect of equity accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the on the convertible debentures Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. , was $0.02 for the three months ended March 31, 1999 compared with a loss of $0.08 for the same period in 1998. 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 was $2,713,000 during the quarter compared with an outflow of $362,000 for the same period in 1998. Gold production at the Andacollo Gold Mine for the first quarter was 32,882 ounces at a cash operating cost of $196 per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. , compared with 18,109 ounces at a cash cost of $284 per ounce in the first quarter of 1998. During the quarter 1.53 million tonnes of ore grading 0.97 grams of gold per tonne tonne measure of weight or mass; 1 tonne=1000 kg. See also ton. (gpt) were crushed and stacked Stacked is an American television sitcom that premiered on Fox on April 13, 2005. On May 18, 2006, Stacked was cancelled, leaving five episodes unaired in the United States. The last episode aired on January 11, 2006. on the 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. pad compared with 1.40 million tonnes grading 0.78 gpt for the same period in 1998. Revenues were $10,192,000 for the first quarter of 1999 compared with $6,658,000 for the same period in 1998. The average price realized for gold sold during the first quarter of 1999 was $310 per ounce compared with $403 per ounce for the same period in 1998. As a result of fresh start accounting, the company's remaining gold hedges, which consisted of 63,000 ounces of puts at $340 per ounce, have been shown on the March 31, 1999 balance sheet at their estimated market value of $3.4 million. Although the hedges relate to future production and the company will receive cash proceeds from those hedges in future periods, under fresh start accounting the $3.4 million gain will not be included in future revenues or income. In 1997 the company issued a $69 million 7% convertible debenture, the proceeds from which have been used primarily to service the bank debt, support capital expenditures at the mine and service interest on the debentures of approximately $4.8 million per annum Per annum Yearly. . Due to the low gold price environment the company's directors proposed to its debenture holders and shareholders a transaction to convert all of the $69 million of debentures into 310,500,000 common shares of the company. This transaction was approved on March 31, 1999 and all of the debentures have been deemed to be exchanged for common shares. This transaction has been treated for Canadian accounting purposes as a financial reorganization resulting in the comprehensive revaluation Revaluation A calculated adjustment to a country's official exchange rate relative to a chosen baseline. The baseline can be anything from wage rates to the price of gold to a foreign currency. In a fixed exchange rate regime, only a decision by a country's government (i.e. of all of the assets and liabilities of the company. The property, plant and equipment figures at March 31, 1999 and December 31, 1998 are each based on 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. gold price of $300 per ounce, but the March 31, 1999 amount is discounted at 8% compared with an undiscounted amount as at December 31, 1998. Dayton Mining Corporation holds a 100% interest in the Andacollo Gold Mine located in central Chile, and trades on both the American Stock Exchange American Stock Exchange (AMEX) Stock exchange in the U.S. Originally known as “the Curb,” it began as an outdoor marketplace in New York City c. 1850. It moved indoors to its present location in the Wall Street area in 1921. (AMEX) and Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. (TSE) under the trading symbol Trading symbol See: Ticker symbol DAY. "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. -0-
Consolidated Balance Sheets
in thousands of US dollars
March 31, December 31,
1999 1998
----------- -----------
(unaudited) (note 1)
Assets
Current assets
Cash and short term investments 6,562 7,794
Restricted cash 2,000 12,863
Investments in marketable securities 402 348
Bullion settlements receivable 1,934 1,700
Other receivables 1,115 1,741
Hedging program 3,400 -
Inventories 9,600 8,988
----------- -----------
25,013 33,434
Plant, property and equipment 32,000 45,016
Other assets 58 2,913
----------- -----------
57,071 81,363
=========== ===========
Liabilities
Current liabilities
Accounts payable 9,623 7,063
Bank loan - current 6,000 16,190
Capital lease obligation - current 1,495 3,376
Convertible debentures - liability
- current - 2,415
----------- -----------
17,118 29,044
----------- -----------
Bank loan - 1,667
Capital lease obligation 6,355 5,319
Convertible debentures - liability - 12,404
Accrued closure costs 1,774 1,363
----------- -----------
8,129 20,753
----------- -----------
Shareholders' Equity
Share capital 31,824 59,251
Convertible debentures - equity - 48,210
Retained earnings (deficit) - (75,895)
----------- -----------
31,824 31,566
----------- -----------
57,071 81,363
=========== ===========
Consolidated Income Statements
in thousands of US dollars
Three months ended
March 31
---------------------
1999 1998
---------- ----------
(unaudited - see note 1)
Revenues
Sales 10,192 6,658
---------- ----------
Cost of sales
Operating costs 6,458 4,663
Depreciation, depletion and amortization 2,180 1,487
---------- ----------
8,638 6,150
---------- ----------
1,554 508
---------- ----------
Expenses
Amortization of deferred financing costs 115 114
Exploration 66 78
Foreign exchange (109) 424
General and administrative 560 1,497
Interest expense 608 1,184
Interest income (96) (577)
---------- ----------
1,144 2,720
---------- ----------
Net income (loss) for the period 410 (2,212)
========== ==========
Per share:
Loss per share, after effect of equity
accretion on the convertible debentures $ (0.02) $ (0.08)
Consolidated Statement of Shareholders' Equity in thousands of US
dollars (unaudited - see note 1)
Convertible Retained
debentures- earnings
Share capital equity (deficit) Total
------------- ----------- --------- ------
At December 31, 1998 59,251 48,210 (75,895) 31,566
Debenture equity
accretion during period - 1,029 (1,029) -
Net income for the period - - 410 410
Restructuring costs (950) - - (950)
Reallocated to share
capital for
"fresh start" (76,514) - 76,514 -
Revaluation adjustment
for "fresh start" 50,037 (49,239) - 798
------------- ----------- --------- ------
At March 31, 1999 31,824 - - 31,824
============= =========== ========= ======
Consolidated Statements of Cash Flow
in thousands of US dollars
Three months ended
March 31
-------------------
1999 1998
--------- ---------
(unaudited - see note 1)
Net income (loss) for the period 410 (2,212)
Adjustment to reconcile net income (loss) to
cash provided by operations:
Depletion, depreciation and amortization 2,180 1,487
Amortization of deferred financing costs 115 114
Amortization of deferred foreign exchange - 242
Amortization of other assets 8 7
--------- ---------
Cash flow from operations 2,713 (362)
Bullion settlements receivable (234) (12)
Other receivables 114 (88)
Inventories (4) (1,190)
Accounts payable (341) (1,382)
--------- ---------
Cash flow provided by (used for) operating
activities 2,248 (3,034)
INVESTING ACTIVITIES
Purchases of property, plant and equipment (339) (1,701)
Deferred stripping (1,400) (1,110)
Other assets 50 (44)
Accrued liabilities 53 52
--------- ---------
Cash flow used for investing activities (1,636) (2,803)
FINANCING ACTIVITIES
Restricted cash 10,857 10,056
Principal repayments of bank loan (11,857) (13,444)
Principal repayments of capital lease (844) (646)
--------- ---------
Cash flow used for financing activities (1,844) (4,034)
Net decrease in cash (1,232) (9,871)
Cash, beginning of period 7,794 47,523
--------- ---------
Cash, end of period 6,562 37,652
========= =========
Per share:
Cash flow from operations - basic $ 0.07 $ (0.01)
Cash flow from operations - fully diluted $ 0.01 $ (0.01)
-0- 1. Basis of presentation The 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 have been prepared in accordance with 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 applicable in Canada. a. Change in reporting currency The consolidated financial statements have historically been expressed in Canadian dollars. As a result of sales revenues and a significant portion of expenses, assets and debt being denominated in, or determined with reference to, 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, the US dollar has become the principal currency of the company's business. Accordingly, the US dollar has been adopted as the reporting currency and the currency of measurement effective January 1, 1999. The comparative financial statements for prior periods have been translated into United States dollars using a translation of convenience at the January 1, 1999 rate of US$1.00 to Cdn$1.5310. b. Reorganization of the company's debt and "fresh start" accounting On March 31, 1999 the company completed a financial 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). in which all of the convertible debentures of the company were converted into 310,500,000 common shares of the company. This has been reflected in the financial statements as a financial reorganization in accordance with generally accepted accounting principles. As a result of this restructuring, the company's assets and liabilities have been subject to a comprehensive revaluation and the balance sheet has been prepared on a "fresh start" basis as at March 31, 1999. Under this basis of presentation the only statement required is a balance sheet at March 31, 1999. However, a balance sheet at December 31, 1998, a statement of 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. at March 31, 1999, a comparative income statement, a comparative statement of cash flow, and segmented information for the three month period ended March 31, 1999 have been presented to facilitate the assessment of certain elements of operating performance. These additional statements do not reflect any of the adjustments required to record the "fresh start". 2. Segmented information The company operates in one business segment, gold mining. -0-
Canada Chile Total
------ ----- -----
Total assets $11,558 $45,513 $57,071
Capital assets - 32,000 32,000
Purchases of property, plant and equipment - 339 339
Depreciation, depletion and amortization - 2,180 2,180
Gold sales revenue 1,068 9,124 10,192
Interest income 79 17 96
Interest expense 284 324 608
Net income (loss) 298 112 410
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