MK Gold Company Reports 2000 Year End Results.Business Editors SALT LAKE CITY--(BUSINESS WIRE)--March 30, 2001 MK Gold Company (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :MKAU) today reported results of operations for the year ended December 31, 2000. The Company reported net income of $1.0 million ($0.03 per share) for the year ended December 31, 2000 on revenues of $17.4 million, compared to a net loss of $1.5 million ($0.06 per share) for the year ended December 31, 1999 on revenues of $19.5 million. The improvement in profitability was primarily due to the Company's hedging program, which enabled the Company to sell gold at a higher average price. During 2000, the Company's efforts were focused on the Las Cruces Las Cruces (läs kr  `sĭs), city (1990 pop. 62,126), seat of Dona Ana co., SW N.Mex., on the Rio Grande, in a farm area irrigated by the Elephant Butte system; founded 1848, inc. 1907. Copper Project located in southwestern Spain. The project was
designed to a high standard of environmental care as demonstrated by an
environmental impact study produced by FRASA FRASA Frequency-Reconfigurable Annular Slot Antenna Ingenieros Consultores,
S.L. A state-of-the-art, environmentally friendly Environmentally friendly, also referred to as nature friendly, is a term used to refer to goods and services considered to inflict minimal harm on the environment.[1] , hydrometalurgical
facility was designed, based on a ferric ferric (fĕr`ĭk), iron in the +3 valence state. See ferrous. leaching process developed by Dynatec Corporation. A feasibility study "A Feasibility Study" is an episode of the original The Outer Limits television show. It first aired on 13 April, 1964, during the first season. It was remade in 1997 as part of the revived The Outer Limits series with a minor title change. of bankable bank·a·ble adj. 1. Acceptable to or at a bank: bankable funds. 2. Guaranteed to bring profit: a bankable movie star. quality for the Las Cruces Copper Project was completed by Bechtel International, Inc. in March 2001. The Study reports that the Project will produce annually an average of 63,000 metric tonnes of cathode copper of LME See London Metal Exchange. LME See London Metal Exchange (LME). Grade A quality during its 13.5 year life. The capital costs of the Project are estimated at $289 million including working capital, land purchases, and contingencies, but excluding interest and other financing costs. The cash operating costs operating costs npl → gastos mpl operacionales for the Project are estimated to average $0.33 per pound, which places it among the lowest cost copper producers. Gold mining operations continued at the Castle Mountain Venture during 2000. The Company's share of gold production for 2000 was 29,419 ounces compared to 23,315 ounces for 1999. As of December 31, 2000, the Company sold forward 900 ounces of gold for delivery in 2001, at an average price of $275 per ounce. Mining operations at the Castle Mountain Venture are expected to cease in mid-2001. Limited gold production will continue into 2002 as a result of continued leaching. The Company's contract mining operations, which consist of mining services for the Castle Mountain Venture, accounted for approximately $6.1 million of revenues, compared to $11.0 million in 1999. The volume of ore mined at the Castle Mountain Venture was significantly reduced during 2000. The Company's contract mining operations at the Castle Mountain Venture are expected to terminate in the second quarter of 2001. Exploration expenditures were $1.0 million for 2000 compared to $2.2 million for 1999. During the year, the Company drilled two properties in Mexico and one in Brazil, with negative results. In addition to its existing exploration programs in Nevada, Mexico and Brazil, the Company entered into a farm-in agreement with Riomin Iberica S.A. in February 2000, to explore ten properties in the Pyrite pyrite (pī`rīt) or iron pyrites (pīrī`tēz, pə–, pī`rīts), pale brass-yellow mineral, the bisulfide of iron, FeS2. Belt in southwestern Spain. Field work in 2000 included mapping, soil geochemistry geochemistry, study of the chemical changes on the earth. More specifically, it is the study of the absolute and relative abundances of chemical elements in the minerals, soils, ores, rocks, water, and atmosphere of the earth and the distribution and movement of and gravity surveys. Several anomalies have been identified which will be tested by further surveys and drilling. During 2000, the Company acquired 20 of 39 limited partnership units of Peru Exploration Venture LLLP LLLP Limited Liability Limited Partnership . The purpose of the Venture is to identify and acquire early stage gold and copper exploration projects, principally in Peru. During 2000, the Company expensed $.2 million as its share of the loss of the Venture. At December 31, 2000 the Company had available resources of cash and cash equivalents of $1.0 million and gold bullion Gold bullion Investment-grade, pure gold, which may be smelted into gold coins or gold bars. of $.6 million. At December 31, 2000, the outstanding loan balance under the Company's $30 million credit facility with Leucadia National Leucadia National Corporation (traded on the New York Stock Exchange as LUK) is a holding company that, through its subsidiaries, engages in mining & drilling services, telecommunications, healthcare services, manufacturing, banking and lending, real estate, and winery businesses Corporation was $23.3 million. MK Gold Company is engaged in the business of mining gold, contract mining, and exploring for and acquiring precious metal and other mineral properties. The Company is incorporated in Delaware and its executive offices are located at 60 East South Temple, suite 2100, Salt Lake City, Utah For ships of the United States Navy of the same name, see . Salt Lake City is the capital and the most populous city of the U.S. state of Utah. The name of the city is often shortened to Salt Lake, or its initials, S.L.C. 84111. For further information, contact John Farmer at 801-297-6900, or visit MK Gold Company's website at www.mkgold.com.
Selected Financial Data
(thousands of dollars, except per share data)
Twelve Months Ended
December 31
2000 1999
---- ----
INCOME STATEMENT
Total Revenue $17,402 $19,479
Total Operating Expenses 13,326 17,400
------ ------
Gross Profit 4,076 2,079
Exploration Related Expenses (1,018) (2,223)
General and Administrative Expenses (1,975) (1,766)
Gain on Sale of Assets 13 86
Equity in loss of unconsolidated affiliate (200) -
Investment Income 311 660
Interest Expense (31) (181)
--------- ---------
Income (Loss) Before Income Taxes 1,176 (1,345)
Income Tax Expense (159) (159)
--------- ---------
Net Income (Loss) $ 1,017 $(1,504)
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Basic and Diluted Income (Loss) Per Share $0.03 $(0.06)
This press release and statements by the Company in reports to its shareholders and public filings, as well as oral public statements by Company representatives may contain certain forward looking information that is subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Without limitation, these risks and uncertainties include economic recessions, fluctuations in metals prices, risks associated with closure and reclamation of mines, risks of exploration and development stage projects, political risks of development in foreign countries, imprecision im·pre·cise adj. Not precise. im  pre·cise ly adv. of reserve estimates, and the ability of the Company to
acquire and fund new mining projects. Readers should review and consider
the various disclosures made by the Company in this press release and in
its reports to its shareholders and periodic reports on forms 10-K and
10-Q.
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