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FIRSTMISS GOLD INC. FINANCIAL RESULTS

ENGLEWOOD, Colo., May 9 /PRNewswire/ -- FirstMiss Gold Inc. (Nasdaq: FRMG; Toronto: FSM) today announced a loss of $1.7 million, or $0.07 per share, for the first quarter ended March 31, 1996, versus a loss of $0.5 million, or $0.03 per share, in the same three month period a year ago. Continued use of lower grade stockpile ores to meet mill feed requirements, along with increased costs associated with conversion from open-pit to underground mining, were responsible for the less favorable results in the current period. Low grade stockpile ores will continue to be needed until the Turquoise Ridge mine comes on stream no earlier than the end of 1997.

Sales of $14.7 million were down 7 percent from $15.8 million in the same three month period last year, reflecting lower production from the Heap Leach operation. Market gold price improved during the quarter, to average $403 per ounce. While the Company received full cash benefit of the gold price improvement, decreases in the book value of certain hedge positions upon which non-cash hedge gains had been recognized in earlier periods yielded a realized price of $394 per ounce. Gold output totaled 37,217 ounces for the quarter compared to 40,496 ounces in the same quarter of the prior year. Cost of Sales was $16.6 million, up $2.4 million from the same period a year earlier, reflecting higher operating costs associated with an increased percentage of underground ore.

OPERATING RESULTS

The mill processed 268,225 tons of ore during the quarter at an average grade of 0.146 ounces per ton, compared to 306,614 tons at an average grade of 0.166 ounces per ton a year earlier. Mill feed continues to consist of a mix of approximately one third Getchell Underground ore and two thirds lower-grade stockpile ore. Cash cost per ounce rose to $398 per ounce from $303 per ounce a year ago, the result of increased costs and lower mill feed grades. Underground mining costs were $55 per ton mined during the quarter, down from $61 per ton in the preceding six month period ended December 31, 1995, due to improvements in underground mining conditions and efficiencies.

Underground ore production averaged slightly under 1,000 tons per day, up from 832 tons per day in the three months ended December 31, 1995. Underground ore grade averaged 0.286 ounces per ton during the quarter, down from 0.328 ounces per ton in the prior quarter, due to what the Company believes to be temporary mining of lower grade areas. A new 2,000 ton per day backfill plant began commercial operation during the quarter. This plant replaced a smaller outdated backfill facility which was not able to keep up with backfill requirements and was limiting production rates. The second portal into the Getchell Underground mine is anticipated to be completed during the second quarter. The second portal and new backfill plant are intended to contribute to increased mine output. Development of a new higher grade mining area on the north end of the Getchell Underground ore body was completed during the quarter.

Cash costs and gold production continue to be adversely affected by the fact that, although the mill runs at a rated capacity of 3,200 tons per day, the Getchell underground mine is producing at an average rate of approximately 1,000 tons per day. The balance of the mill feed is derived from low grade stockpiles which are currently averaging 0.087 ounces per ton gold. The Company is seeking to increase production at the Getchell Underground mine to an average rate of 1,500 tons per day by the fourth quarter of 1996; however, substantial mill throughput from the low grade stockpiles will continue to be required until potential production from Turquoise Ridge mine comes on stream no earlier than the end of 1997.

Heap Leach output contributed 1,038 ounces to sale volumes during the quarter, down from 4,293 in the same period a year ago. Current period Heap Leach production consisted of residual recoveries from ores stacked prior to July 1995 and as such is down significantly from the same period a year ago when oxide mining was underway. Heap Leach output may increase in the immediate future as ore from the new Valmy Hill oxide pit is stacked and leached. The Valmy Hill oxide orebody contains approximately 834,000 tons of ore grading 0.020 ounces per ton. Mining on the Valmy Hill ore body is expected to be completed by late 1996.

TURQUOISE RIDGE

Construction and development of the Turquoise Ridge mine is proceeding on schedule. At the end of March the ventilation shaft had been collared and excavated to 110 feet. Head frame erection and hoist installation are underway. Shaft sinking at the ventilation shaft is expected to resume in the second quarter once hoist installation is complete. Collaring of the Production shaft is also currently underway.

EXPLORATION

Core drilling between the Powder Hill hole and Turquoise Ridge has encountered a significant new zone of gold mineralization approximately 1,000 feet due south of the Turquoise Ridge ore body. The mineralized zone identified to date appears to cover an area approximately 500 feet by 700 feet and is located between 1,200 and 2,500 feet below the surface. The inferred resource around this new discovery stands at approximately 750,000 ounces of gold, or 1.6 million tons at an average grade of 0.465 ounces per ton, using a 0.250 ounce per ton cut-off and is open in all directions.

The Company intends to expand the 1996 drilling program by approximately $2.0 million to allow additional drilling in areas surrounding the known Turquoise Ridge ore body. This new program is intended to provide a better understanding of the overall structure and mineralization extending outward from the Turquoise Ridge ore body as well as provide information for both short and medium term mine planning purposes. All other drilling projects planned for the Getchell Property during 1996 are scheduled to proceed as originally budgeted.

SHAREHOLDERS' MEETING

The annual shareholders' meeting will be held Thursday, June 13, 1996 at 10:00 A.M. at the Embassy Suites Hotel, 10250 E. Costilla Ave., Englewood, Colorado 80112. All shareholders are cordially invited to attend.

FirstMiss Gold Inc. is a gold mining and exploration company with operations at its Getchell property in north central Nevada and corporate offices in Englewood, Colorado.
 FirstMiss Gold Inc. and Subsidiary


Consolidated Statement of Operations

(Unaudited, In Thousands, Except Per Share Amounts)
 Three months ended
 March 31
 1996 1995
 Net sales $14,655 $15,786*
 Cost of sales 16,578 14,149
 Gross margin/(loss) (1,923) 1,637


Selling, general and administrative
 expenses 1,218 494
 Exploration expenses 852 797
 Earnings/(loss) from operations (3,993) 346
 Interest and other income/(expense) 1,623 (1)
 Interest expense 233 384
 Loss before income taxes (2,603) (39)
 Income tax expense/(benefit) (870) 415
 Net loss ($1,733) ($454)
 Total loss per common share ($0.07) ($0.03)


Average shares and equivalents
 outstanding 25,679 18,190


Operating Highlights
 Three months ended
 March 31
 1996 1995
 Ounces of gold sold 37,217 40,469*
 Average realized price per ounce $394 $390
 Average cash cost per ounce $398 $303


Mill operations
 Production (ounces) 36,179 36,176*
 Ore milled (dry tons) 268,225 306,614
 Average grade (ounces per ton) 0.146 0.166
 Cash costs per ounce produced $405 $297
 Total costs per ounce produced $454 $349


Heap Leach
 Production (ounces) 1,038 4,293
 Ore processed (dry tons) 0 221,219
 Average grade (ounces per ton) N/A 0.03
 Cash costs per ounce produced $127 $349
 Total costs per ounce produced $151 $357


* - Excludes 6,996 ounces produced during underground development.
 FirstMiss Gold Inc. and Subsidiary


Consolidated Condensed Balance Sheets
 (Unaudited, In Thousands)
 Mar. 31, Dec. 31,
 1996 1995
 Current assets 119,395 130,649
 Other assets 86,941 79,844
 Total assets $206,336 $210,493
 Current liabilities 4,691 6,499
 Notes payable to First Mississippi 23,771 23,771
 Other long-term liabilities 15,023 15,959
 Stockholders' equity 162,851 164,264


Total liabilities and stockholders'
 equity $206,336 $210,493


Consolidated Condensed Statements of Cash Flows
 (Unaudited, In Thousands)
 Three months ended
 March 31


Cash flows from operating
 activities: 1996 1995
 Net loss ($1,733) ($454)


Depreciation, depletion and
 amortization 1,720 2,799
 Other operating activities (2,136) 1,460


Net cash provided by (used in)
 operating activities (2,149) 3,805
 Capital expenditures (8,812) (5,335)
 Reduction of lease obligations (139) 0


Other investing and financing
 activities 351 2,537


Net increase (decrease) in cash and
 cash equivalents (10,749) (1,007)


Cash and cash equivalents at
 end of period $103,884 $1,641
 -0- 5/9/96


/CONTACT: Donald S. Robson, Vice President & Chief Financial Officer of FirstMiss Gold, 303-771-9000/

(FRMG)

CO: FirstMiss Gold, Inc. ST: Colorado IN: MNG SU: ERN

DM-TT -- LATH075 -- 2019 05/09/96 19:23 EDT
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