Homestake Reports Record Gold Production And Second Quarter Results.SAN FRANCISCO--(BUSINESS WIRE)--July 31, 1996--Homestake Mining Company (NYSE NYSE See: New York Stock Exchange : HM), today reported net income in the second quarter of 1996 of $6.8 million or 5 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 net income of $11.2 million or 8 cents per share in the second quarter of 1995. The decline in earnings from the second quarter of the previous year was due to a 56 percent increase in exploration spending, lower returns from Main Pass 299 sulphur Sulphur, city, United States Sulphur, city (1990 pop. 20,125), Calcasieu parish, SW La.; inc. 1914. It is a trade center for an area producing natural gas, oil, and timber as well as sorghum, soybeans, cattle, and crawfish. operations and higher production costs. Gold production in the latest quarter rose to a record 505,900 ounces, 9,200 ounces higher than the previous record set in the second quarter of 1995. The largest production gains occurred at the Round Mountain, David Bell David Bell may refer to:
British jazz guitarist best known for his virtuosic playing and for his affinity for flamenco and Eastern music. and El Hueso mines and the absence of production from the Santa Fe Santa Fe, city, Argentina Santa Fe, city (1991 pop. 341,000), capital of Santa Fe prov., NE Argentina, a river port near the Paraná, with which it is connected by canal. mine which is now in the final stages of 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. . Homestake sold 512,100 ounces of gold in the second quarter of this year at an average price of $389 per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. compared to sales of 495,600 ounces in the second quarter of 1995 at an average price of $388 per ounce. Total cash costs for the quarter were $246 per ounce, an increase of $7 or three percent over the $239 per ounce recorded in the second quarter of 1995. The largest cost increases occurred at the Kalgoorlie Kalgoorlie (kălg  r`lē), town (1991 pop. 25,016), Western Australia, SW Australia. It is the chief mining town of the state and the center of the East Coolgardie Goldfield. ,
Snip and McLaughlin mines with smaller increases at the Homestake and
Williams mines. Reductions in total cash costs were achieved at the
David Bell, Nickel nickel, metallic chemical element; symbol Ni; at. no. 28; at. wt. 58.69; m.p. about 1,453°C;; b.p. about 2,732°C;; sp. gr. 8.902 at 25°C;; valence 0, +1, +2, +3, or +4. Plate, Round Mountain and Eskay Creek mines.Net income for the first six months of 1996 was $20.4 million or 14 cents per share compared to net income of $17.7 million or 13 cents per share in the preceding year. Earnings in the first half of the current year include an after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. gain of $4.9 million or 3 cents per share from a litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. recovery. Cash generated from operations for the first six months increased to $109.3 million from $85.9 million in 1995. As of June June: see month. 30,1995, cash and 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. investments amounted to $208.3 million, a decline of $4 million since the beginning of the year. At the end of April, Prime Resources Group Inc. (50.6 percent owned by Homestake) purchased Cominco's 60 percent interest in the Snip mine for $39.3 million. In June, the Company paid $51.4 million to Gold Mines of Kalgoorlie to purchase all rights and entitlements under the Disproportionate dis·pro·por·tion·ate adj. Out of proportion, as in size, shape, or amount. dis  pro·por Sharing Arrangement covering gold production from a
portion of the Super Pit operation in Kalgoorlie, Western Australia
OPERATIONS 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. At the Homestake mine Homestake Mine is the name for several mines in the United States:
The McLaughlin mine produced 60,700 ounces during the latest quarter compared to 63,700 ounces in the prior year's quarter. Although total cash costs rose to $200 per ounce compared to $174 per ounce during the second quarter of last year, the increase was substantially less than expected due to a higher than anticipated recovery rate. Mining operations ceased on June 27 and the autoclaves at McLaughlin were decommissioned on June 28 as the orebody has been exhausted. For the next seven years, lower-grade stockpiled ore will be processed by a conventional carbon-in-pulp circuit. Gold production is projected at 120,000 ounces for 1997 compared to an estimated 180,000 ounces for the current year. Production from Round Mountain increased to 28,800 ounces in the second quarter compared to 20,100 ounces in the corresponding quarter of 1995. Higher production and the decline in total cash costs to $230 per ounce from $240 per ounce in the prior year's quarter resulted from the increase in leaching leaching, method of extraction in which a solvent is passed through a mixture to remove some desired substance from it. A simple example is the passage of boiling water through ground coffee to dissolve and carry out the chemicals necessary for producing the beverage. capacity at the dedicated 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. Homestake's share of revenues from Main Pass 299 declined to $7.4 million in the second quarter of 1996 from $10.2 million in the second quarter of the previous year. Oil revenues were better than expected due to higher prices, but weak sulphur markets have led to a substantial decline in shipments (from 107,300 tons (Transparent Optical Networking Services) A marketing term for providing dark fiber to a customer. The customer is responsible for generating the transmission signal and interpreting it at the other end. See dark fiber. to 71,500 tons) and lower prices. Quarterly operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before from Main Pass fell to $0.8 million from $1.3 million in the second quarter of 1995. 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 Production of gold equivalent ounces at the Eskay Creek mine amounted to 94,800 payable ounces at a total cash cost of $173 per ounce compared to 100,900 payable ounces at a total cash cost of $182 per ounce in the second quarter of last year. The gold grade returned to the reserve grade after being significantly higher in the preceding year. A recent drilling program consisting of 17 holes from surface totaling 8,900 feet has successfully intersected ore grade 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 gold and silver 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. in both the Northeast Extension (NEX NEX abbr. Navy exchange ) and Hanging Wall (HW) zones. Surface and underground drilling will continue to follow up these promising intersections. At the Snip mine, gold production was 21,200 ounces in the latest quarter compared to 13,800 ounces in the preceding year's quarter. Prime Resources became the sole owner of the Snip mine on of April 30, 1996 when it purchased Cominco's 60 percent interest for $39.3 million. Total cash costs rose from $170 per ounce in 1995 to $192 per ounce in the current quarter in response to a 9 percent decline in the ore grade, fewer tons milled and a higher proportion of ore mined from conventional stopes Stopes , Marie Carmichael 1880-1958. British social reformer who opened England's first birth control clinic (1924) in London and later promoted family planning in east Asia. as opposed to larger mechanized mech·a·nize tr.v. mech·a·nized, mech·a·niz·ing, mech·a·niz·es 1. To equip with machinery: mechanize a factory. 2. stopes. The Williams mine produced 51,400 ounces of gold in the most recent quarter at a total cash cost of $225 per ounce compared to 52,900 ounces at a total cash cost of $220 per ounce in the second quarter of 1995. Production is expected to increase in the second half of 1996 with a corresponding drop in total cash costs when mining shifts to higher-grade stopes as scheduled. Gold production from the David Bell mine (including the Quarter Claim) was sharply higher in the second quarter at 32,500 ounces compared to 22,800 ounces in 1995. Last year, ground stability problems near the adjacent Golden Giant shaft shaft (shaft) a long slender part, such as the diaphysis of a long bone. shaft n. 1. An elongated rodlike structure, such as the midsection of a long bone. 2. confined con·fine v. con·fined, con·fin·ing, con·fines v.tr. 1. To keep within bounds; restrict: Please confine your remarks to the issues at hand. See Synonyms at limit. mining operations to lower-grade stopes. Mining has since resumed in the higher-grade stopes resulting in higher production and a substantial decline in total cash costs from $199 per ounce in second quarter of 1995 to $134 per ounce in the latest quarter. The Nickel Plate mine produced 25,100 ounces during the quarter, up from 22,400 ounces in the comparable quarter of last year. Tons milled declined slightly but this was more than offset by a 17 percent increase in the ore grade. The higher grade also led to lower total cash costs that declined to $329 per ounce in the second quarter from $367 per ounce in the second quarter of 1995. AUSTRALIA Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. Second quarter production at Kalgoorlie declined slightly to 77,200 ounces of gold as compared to 77,800 ounces in the prior year. Total cash costs, however, were substantially higher at $344 per ounce compared to $293 per ounce in the second quarter of the previous year. Costs increased due to a number of factors including an 11 percent decline in the ore grade and a stronger Australian dollar Noun 1. Australian dollar - the basic unit of money in Australia and Nauru dollar - the basic monetary unit in many countries; equal to 100 cents . DEVELOPMENT AND EXPLORATION At Homestake's Ruby ruby, precious stone, the transparent red variety of corundum, found chiefly in Myanmar, Thailand, and Sri Lanka and classified among the most valuable of gems. The Myanmarese stones are blood red, the most valued tint being the "pigeon's blood. Hill property near Eureka, Nevada Eureka is a city located in Eureka County, Nevada, in the United States. As of the 1990 census, the city had a total population of 650. Eureka is the only city in Eureka County and is the county seat. , the final engineering design of the production facilities is nearly complete. A draft Environmental Impact Statement is scheduled for publication in the Federal Register in early August. Construction is expected to begin in March of 1997 with mining operations to commence by the end of the year. During the quarter, Homestake and Franc-Or Resources entered into an agreement whereby Homestake can earn up to a 70 percent interest in the St-Pierre project in French Guiana French Guiana (gēăn`ə, –än`–), Fr. La Guyane française, officially Department of Guiana, French overseas department (2005 est. pop. . The property covers an area of approximately 10 square miles A square mil is a unit of area, equal to the area of a square with sides of length one mil. A mil is one thousandth of an international inch. This unit of area is usually used in specifying the area of the cross section of a wire or cable. . Homestake also plans to extend its activities to neighboring neigh·bor n. 1. One who lives near or next to another. 2. A person, place, or thing adjacent to or located near another. 3. A fellow human. 4. Used as a form of familiar address. v. 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. .In Chile, Homestake and Corporacion Nacional Nacional is the Spanish and Portuguese word for national. It can refer to: Sports
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. material containing approximately 1.3 million ounces of gold has been outlined at the Jeronimo discovery and drilling is continuing. Homestake has substantially increased its land holdings in the region. Regional exploration programs are under way throughout South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. , Canada, the United States, Australia and the Pacific Rim Pacific Rim, term used to describe the nations bordering the Pacific Ocean and the island countries situated in it. In the post–World War II era, the Pacific Rim has become an increasingly important and interconnected economic region. . Homestake Mining Company is an international gold mining company with substantial gold mining operations and exploration primarily in the United States, Canada and Australia. The Company expects to produce 1.8 million ounces of gold in 1996. -0-
Homestake Mining Company
Statements of Consolidated Income
(in thousands, except per share amounts)
Three Months Six Months
Ended June 30 Ended June 30
1996 1995 1996 1995
Revenues
Gold and ore sales $186,723 $178,216 $370,223 $338,125
Sulphur and oil sales 7,370 10,213 15,793 22,367
Interest 3,833 4,338 7,929 8,601
Equity earnings 360 541 747 461
Other 3,206 2,282 9,608 5,968
201,492 195,590 404,300 375,522
Costs and expenses Production costs 122,704 117,835 247,956 236,269 Deprec.& depl. 29,032 25,623 55,361 48,626 Admin. & general 9,249 10,760 18,963 20,051 Exploration 11,535 7,412 17,576 12,166 Interest expense 2,645 3,141 5,292 5,773 Other 786 1,054 1,019 1,751
175,951 165,825 346,167 324,636
Income before taxes and minority int. 25,541 29,765 58,133 50,886 Income & mining taxes (14,745) (13,815) (28,605) (25,208) Minority interests (4,020) (4,771) (9,099) (7,939) Net income $ 6,776 $11,179 $20,429 $17,739 Net income per share $0.05 $0.08 $0.14 $0.13 Average shares outstanding 146,662 137,909 145,949 137,862
Homestake Mining Company
Consolidated Balance Sheets
(in thousands)
June 30 Dec. 31
1996 1995
Assets Cash and short-term investments $ 208,344 $ 212,373 Other current assets 152,358 156,344 Property, plant and equipment-net 1,032,104 846,776 Other assets 96,348 106,140 Total $1,489,154 $1,321,633 Liabilities and Shareholders' Equity Current liabilities $ 103,499 $ 98,421 Long-term debt 185,000 185,000 Other long-term liabilities 109,836 120,418 Deferred income and mining taxes 242,953 189,925 Minority interests 84,463 92,012 Shareholders' equity 763,403 635,857 Total $1,489,154 $1,321,633
Homestake Mining Company
Statements of Consolidated Cash Flow
(in thousands)
Six months ended
June 30
1996 1995
Net Income $ 20,429 $ 17,739
Reconciliation to net cash provided
by operations:
Depreciation, depletion and
amortization 55,361 48,626
Deferred taxes, minority interests and
other 23,799 27,179
Gains on disposals of assets (2,750) (4,823)
Effect of changes in operating
working capital items 12,481 (2,806)
Net cash provided by operations 109,320 85,915 Capital additions (69,475) (39,487) Proceeds from asset sales 13,572 10,163 Decrease in short-term investments 2,557 61 Purchase of HGAL minority interests (6,435) Purchase of interest in Snip mine (39,279) Other 1,692 324 Total investment activities (97,368) (28,939)
Dividends paid (14,674) (13,787)
Common stock issued 2,349 1,914
Dividends paid by Prime to minority
shareholders (1,099)
Total financing activities (13,424) (11,873) Net increase (decrease) in cash and equivalents $ (1,472) $45,103
Homestake Mining Company
Gold Production (including Minority Interests)
Ounces in Thousands
Ownership Percentage in (parenthesis)
Three Months Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
UNITED STATES
Homestake (100) 103.2 102.4 208.5 201.1
McLaughlin (100) 60.7 63.7 114.8 115.9
Round Mountain (25) 28.8 20.1 48.7 43.1
Marigold (33) 5.9 6.0 12.8 10.7
Pinson (26) 2.6 2.9 4.8 5.3
Santa Fe (100) - 6.6 - 11.9
CANADA
Eskay Creek (100)(a) 94.8 100.9 194.2 166.1
Williams (50) 51.4 52.9 95.0 101.0
David Bell (50) 29.7 20.1 52.5 36.5
Quarter Claim (25) 2.8 2.7 5.6 3.7
Nickel Plate (100) 25.1 22.4 51.8 43.9
Snip (100) (b) 21.2 13.8 33.0 26.4
AUSTRALIA
Kalgoorlie (50) 77.2 77.8 167.4 166.7
CHILE
El Hueso (100) 2.5 4.4 4.9 13.2
TOTAL PRODUCTION 505.9 496.7 994.0 945.5 Minority Interests (57.3) (71.1) (112.2) (126.0) HOMESTAKE'S SHARE 448.6 425.6 881.8 819.5
(a) Ounces produced are expressed on a gold equivalent basis and
include 51,700 (60,800 in 1995) payable ounces of gold and
3.2 million (2.9 million in 1995) million payable ounces of
silver contained in ore sold to smelters in the second
quarter, and 111,700 (103,800 in 1995) payable ounces of gold
and 6.0 million (4.7 million in 1995) payable ounces of
silver contained in ore sold to smelters in the year-to-date
period.
(b) Includes ounces of gold contained in dore and concentrates.
Prime's ownership percentage in the Snip mine increased from
40% to 100% effective April 30, 1996.
Homestake Mining Company
Cash Operating Costs (a)
(Dollars per Ounce)
Three Months Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
UNITED STATES
Homestake $289 $279 $283 $286
McLaughlin 191 166 229 216
Round Mountain 207 216 229 228
Marigold 254 224 228 240
Pinson 348 312 398 356
Santa Fe - 95 - 114
CANADA
Eskay Creek (b) 170 179 164 181
Williams 218 212 238 219
David Bell 122 187 146 212
Quarter Claim 156 111 156 147
Nickel Plate 329 367 329 354
Snip (b) 192 170 190 166
AUSTRALIA
Kalgoorlie 344 293 322 274
CHILE
El Hueso 222 448 231 412
TOTAL HOMESTAKE $238 $232 $244 $243
(a) Effective January 1, 1996 Homestake adopted the "Gold
Institute Production Cost Standard" for reporting per
ounce production costs.
(b) For comparison purposes, cash operating costs per ounce
include estimated third-party costs incurred by smelter
owners and others to produce marketable gold and silver.
Homestake Mining Company
Total Cash Costs (a)
(Dollars per Ounce)
Three Months Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
UNITED STATES
Homestake $300 $291 $296 $297
McLaughlin 200 174 237 224
Round Mountain 230 240 254 251
Marigold 288 256 263 271
Pinson 370 320 419 363
Santa Fe - 116 - 136
CANADA
Eskay Creek (b) 173 182 167 183
Williams 225 220 246 227
David Bell 134 199 158 223
Quarter Claim 167 123 167 158
Nickel Plate 329 367 329 354
Snip (b) 192 170 190 166
AUSTRALIA
Kalgoorlie 344 293 322 274
CHILE
El Hueso 222 448 231 412
TOTAL HOMESTAKE $246 $239 $252 $250
(a) Effective January 1, 1996 Homestake adopted the "Gold
Institute Production Cost Standard" for reporting per
ounce production costs.
(b) For comparison purposes, cash operating costs per ounce
include estimated third-party costs incurred by smelter
owners and others to produce marketable gold and silver.
CONTACT: Homestake Mining Company Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. A. Steeves, 415/983-8169 |
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