Ivanhoe Mines Announces 2005 Year-End Financial Results.SINGAPORE Singapore (sĭng`gəpôr, sĭng`ə–, sĭng'gəpôr`), officially Republic of Singapore, republic (2005 est. pop. 4,426,000), 240 sq mi (625 sq km). -- Ivanhoe Ivanhoe disinherited by father, Cedric the Saxon. [Br. Lit.: Ivanhoe] See : Banishment Ivanhoe the epitome of chivalric novels. [Br. Lit.: Ivanhoe] See : Chivalry Mines Ltd. (NYSE NYSE See: New York Stock Exchange : IVN IVN Interactive Video Network IVN Intravenous IVN Internationale Vereniging voor Neerlandistiek IVN Intravenous Nutrition IVN Integrated Voice Network IVN Intervening Networks IVN in Vehicle Network )(NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : IVN)(TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension : IVN) today reported its financial results for the year ended December December: see month. 31, 2005. In 2005, the Company recorded a net loss of $89.8 million (or $0.29 per share), compared to a net loss of $94.5 million (or $0.34 per share) in 2004. The $4.7 million decrease in net loss between the years is mainly due to a $35.9 million increase in income and a gain on sale from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , less an increase of approximately $29.0 million in exploration expense. Ivanhoe is continuing to follow a conservative accounting policy of expensing its exploration, development and engineering costs. All currency is in US dollars unless otherwise noted. Highlights Oyu Tolgoi Project Integrated Development Plan - On September September: see month. 29, 2005, the Company announced the release of an independent Integrated Development Plan (IDP) for the Oyu Tolgoi Project in Mongolia Mongolia, country, Asia Mongolia (mŏn-gō`lēə, mŏng–), officially State of Mongolia, republic (2005 est. pop. 2,791,000), 604,247 sq mi (1,565,000 sq km), N central Asia; traditionally known as Outer Mongolia. . The IDP proposes the development of a combined open pit/underground block cave operation with a total mine life exceeding 40 years. Two phases are being proposed to produce a copper/gold concentrate. The first phase is expected to have a throughput rate Throughput rate is an obsolete term[1] in the terminology of automated chemical analysis. It may mean either:
1. ^ International Union of Pure and Applied Chemistry. "throughput rate". of 70,000 tonnes-per-day. In year three of phase one, a decision is envisaged to proceed to a second-phase expansion when underground ore becomes available and allows throughput The speed with which a computer processes data. It is a combination of internal processing speed, peripheral speeds (I/O) and the efficiency of the operating system and other system software all working together. 1. to rise to 140,000 tonnes-per-day. Total production from the project is expected to make the Oyu Tolgoi Project one of the world's next major copper and gold mines, with average production of more than one billion pounds of copper and 330,000 ounces of gold per day for at least 35 years. Peak annual production is estimated at more than 1.6 billion pounds of copper and 900,000 ounces of gold. Based on current estimates, the starting date for commercial production from the Oyu Tolgoi Project is anticipated in mid- mid- pref. Middle: midbrain. 2008. Phase one is expected to reach a full production capacity of 70,000 tonnes per day at the beginning of 2009. Full production capacity of 140,000 tonnes per day is expected seven years later. Accessing the deep potential of the Hugo HUGO - A bytecode-interpreted transaction handler from Geac. North deposit is currently viewed by the Company's management as being critical to the financial success of the development of the Oyu Tolgoi Project. Therefore, the construction of the headframe, hoisting plant, associated infrastructure and pre-sinking excavation excavation In archaeology, the exposure, recording, and recovery of buried material remains. The techniques employed vary by the type of site, but all forms of archaeological excavation require great skill and careful preparation. for 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. #1, a 6.7-metre-diameter exploration shaft, was undertaken in 2005 and completed at the beginning of Q1'06. Mine planning update - Recent drilling and mine planning initiatives suggest that alternative approaches to the mine schedule may yield higher returns and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. lower the risk associated with the IDP mine plan. Applying a sub-level cave mining method to a high-grade High-grade Credit quality of AAA or AA. high-grade Of, relating to, or being a bond with little risk of default on the part of the issuer. High-grade is usually reserved for bonds rated AAA or AA by the rating services. zone located in the shallowest part of the southern end of the Hugo North deposit, the Company's ongoing studies are analyzing the possibility of starting underground mining earlier than previously contemplated. Under the scenario being analyzed an·a·lyze tr.v. an·a·lyzed, an·a·lyz·ing, an·a·lyz·es 1. To examine methodically by separating into parts and studying their interrelations. 2. Chemistry To make a chemical analysis of. 3. , future production from this shallow zone would reach an estimated 15,000 tonnes per day in the third year of the project life and would extend for a minimum period of five years until the large, deep block cave begins on the Hugo North deposit. Additional studies planned for 2006 will focus on increasing the open-pit life, ultimate underground production and milling throughput tonnages beyond the 140,000 tonnes per day reported in the IDP. Management anticipates that production from an estimated 29-year mining life in the open pit, coupled with block-caving operations at Hugo North and Hugo South, could ultimately increase mill throughput into the 200,000 to 250,000 tonnes per day range. Reserve and resource estimates - On January 30, 2006, the Company announced reserve estimates for the open-pit southern part of the Oyu Tolgoi Project. The reserves, prepared by independent engineering consultants, GRD GRD Guard GRD Grenada (ISO Country code) GRD Greek Drachma (old currency code; replaced by EUR) GRD Gulf Region Division (US Army Corps of Engineers) Minproc Limited, were determined using $400 per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. for gold and $1.00 per pound for copper.
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Tonnes Copper Gold
Class (Million) (%) (g/t)(a)
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Proven 127 0.58 0.93
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Probable 803 0.48 0.27
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Total 930 0.50 0.36
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(a) g/t grams per tonne
On February 1, 2006, the Company released an updated resource estimate, which incorporated drilling results from the Ivanhoe-Entree property up to January 13, 2006. The new estimate, based on eight months of drilling results, added the following resources to the northern-most portions of the Hugo North Deposit: Additional Inferred Resources at Hugo North and Shivee Tolgoi properties- February, 2006
Additional Inferred Resources at Hugo North and
Shivee Tolgoi properties- February, 2006
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Tonnes Copper Gold
Class (Million) (%) (g/t)
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Additional inferred resources
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Using 0.6% copper equivalent cut-off grade(1) 281 1.49% 0.51
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Using 2.0% copper equivalent cut-off grade(1) 87 2.62% 1.19
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(1) Copper equivalent has been calculated using assumed metal prices
($0.80/pound for copper and $350/ounces gold); % Copper equivalent
equals % copper + gold (gpt) x (11.25/17.64).
Stability Agreement - In March 2006, a delegation of Ivanhoe Mines' senior management met with leaders and senior officials of the Government of Mongolia and presented a series of well-received investment-related initiatives aimed at facilitating the completion of the Special Stability Agreement. These meetings coincided with a recent series of encouraging statements from Mongolia's political leadership reaffirming a commitment to the early conclusion of a stability agreement with Ivanhoe Mines and to maintaining a positive environment for foreign investment. The Mongolian Mon·go·li·an or mon·go·li·an adj. Relating to Down syndrome. No longer in technical use. Now considered offensive. Government also announced that its cabinet had instructed the Minister of Finance and the Minister of Industry and Trade to form a new working group to conclude the negotiations with Ivanhoe Mines on the Special Stability Agreement and to negotiate a parallel agreement to give effect to the new investment-related initiatives proposed by Ivanhoe Mines. Based on these recent developments, Ivanhoe Mines' senior management is optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that the Special Stability Agreement can be concluded successfully within a timeframe that will not unduly delay the development of the Oyu Tolgoi Project. Other Projects Sale of Savage River Savage River may refer to: Rivers
n. 1. A small pill; a pilule. 2. A small rod-shaped or ovoid mass, as of compressed steroid hormones, intended for subcutaneous implantation in body tissues to provide timed release over an extended period of time. prices. To date, the Company has received the $21.5 million guaranteed cash payments and the confirmation that the first contingent annual payment, due on March 31, 2006, will be approximately $28.0 million. Jinshan Gold Mines - On December 2, 2005, various interests held jointly by Ivanhoe Mines and Jinshan were restructured in a transaction in which Jinshan issued approximately 48.6 million common shares to Ivanhoe Mines and, in exchange, received from Ivanhoe Mines a cash payment of approximately $3.4 million and acquired Ivanhoe Mines' entire share of mineral interests and mineral-option rights in Jinshan's various projects, including the CSH csh - C shell 217 Project. Following completion of this transaction and the closing on December 9, 2005, of a Cdn$15.0 million ($12.8 million) private placement by Jinshan, Ivanhoe Mines' percentage ownership in Jinshan increased from 38.5% to approximately 53%. Mongolia Coal - The Company has announced its plans to separate its coal assets from the Company's core copper and gold assets with a view to creating a separate, self-financing coal company. In Q1'06, the Company also announced the results of an updated resource estimate for the Nariin Sukhait Coal Project located in southern Mongolia. The estimate was prepared by Norwest Corporation, an independent consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a , and included results from drilling up to the end of October 2005. Total coal resources contained in two separate fields, the South-East field and the West field, were estimated at 124.0 million tonnes of Measured plus Indicated resources (79.5 million tonnes of Measured resources and 44.5 million tonnes of Indicated resources) and an additional Inferred resource of approximately 33.8 million tonnes. Financings - On March 29, 2006, Ivanhoe Mines announced that it had entered into a financing that consists of 16 million common shares at a price of $8.77 per common share (Cdn$10.28), representing an aggregate amount of $140.3 (Cdn$164.5 million). Ivanhoe Mines has granted the underwriters an option, exercisable at the issue price for a period of 30 days following the closing of this offering, to purchase up to an additional 15% of the issue size, representing 2,400,000 common shares. Closing is expected on or about April 25, 2006. On June 1, 2005, the Company closed an equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. involving the issuance of 19.75 million common shares for gross proceeds of $125.9 million (Cdn$158.0 million). In 2005, in two separate transactions, the Company increased its holding in Entree Gold Inc. ("Entree") to a cumulative 10.4 million common shares (15.0%)
SELECTED FINANCIAL INFORMATION
($ in millions of U.S. dollars, except per share information)
Years ended December 31,
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2005 2004 2003
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Exploration expenses 127.2 98.2 68.0
General and administrative costs 23.8 22.2 16.4
Share of income from Joint venture 23.0 21.4 1.1
Foreign exchange gain 7.8 4.6 12.6
Net (loss) from continuing operations (125.7) (99.0) (78.6)
Net income (loss) from discontinued
operations 35.9 4.5 (9.1)
Net (loss) (89.8) (94.5) (87.7)
Net income (loss) per share
Continuing operations ($0.41) ($0.35) ($0.32)
Discontinued operations $0.12 $0.01 ($0.04)
Total assets 396.8 376.3 371.6
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Exploration Division
Capital expenditures 29.8 6.0 8.5
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Joint venture operations
Copper cathode - 50% share
Units sold - tonnes 17,485 15,730 13,808
Units produced - tonnes 17,239 15,878 13,935
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Average sale price
Copper cathode - US$/pound $1.83 $1.33 $0.79
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SELECTED QUARTERLY DATA
($ in millions of U.S. dollars, except per share
information)
----------------------------------------
Year
QUARTER ENDED Ended
Mar-31 Jun-30 Sep-30 Dec-31 Dec.31
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2005
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Exploration expenses (24.4) (33.8) (28.9) (40.1) (127.2)
General and administrative (4.8) (5.9) (7.3) (5.8) (23.8)
Share of income from joint
venture 7.7 7.8 8.0 (0.5) 23.0
Gain (loss) on foreign exchange (0.6) 1.7 7.1 (0.4) 7.8
Net (loss) from continuing
operations (24.2) (31.1) (20.6) (49.8) (125.7)
Net income (loss) from
discontinued operations 15.7 5.9 6.4 7.9 35.9
Net (loss) (8.5) (25.2) (14.3) (41.8) (89.8)
Net income (loss) per share
Continuing operations ($0.08) ($0.10) ($0.07) ($0.16) ($0.41)
Discontinued operations $0.05 $0.02 $0.02 $0.03 $0.12
Total ($0.03) ($0.08) ($0.05) ($0.13) ($0.29)
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2004
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Exploration expenses (20.7) (24.8) (28.5) (24.2) (98.2)
General and administrative (5.2) (4.8) (6.0) (6.2) (22.2)
Share of income from joint
venture 4.2 6.1 4.6 6.5 21.4
Gain (loss) on foreign
exchange (1.7) (1.4) 4.2 3.5 4.6
Net (loss) from continuing
operations (23.8) (23.1) (25.5) (26.6) (99.0)
Net income (loss) from
discontinued operations (7.9) 2.2 0.7 9.5 4.5
Net (loss) (31.6) (21.0) (24.8) (17.1) (94.5)
Net income (loss) per share
Continuing operations ($0.09) ($0.09) ($0.09) ($0.08) ($0.35)
Discontinued operations ($0.03) $0.01 $0.00 $0.03 $0.01
Total ($0.12) ($0.08) ($0.09) ($0.05) ($0.34)
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Full details of Ivanhoe's 2005 financial results are contained in the 2005 audited 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 and Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations, available on the SEDAR SEDAR System for Electronic Document Analysis and Retrieval SEDAR Southeast Data, Assessment, and Review website at www.sedar.com and Ivanhoe's website at www.ivanhoemines.com. Ivanhoe's shares are listed on the Toronto, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and NASDAQ stock exchanges under the symbol IVN. 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. : This document includes forward-looking statements. Forward-looking statements include, but are not limited to, statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the continued advancement of Ivanhoe Mines' projects and other statements which are not historical facts. When used in this document, the words such as "could," "plan," "estimate," "expect," "intend," "may," "potential," "should," and similar expressions are forward-looking statements. Although Ivanhoe Mines believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements are disclosed under the heading "Risk Factors" and elsewhere in the corporation's periodic filings with 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. and US securities regulators. Ivanhoe Mines Ltd.(NYSE:IVN) (NASDAQ:IVN) (TSX:IVN) |
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