Pegasus Gold Reports Second Quarter Results.SPOKANE Spokane, city, United States Spokane (spōkăn`), city (1990 pop. 177,196), seat of Spokane co., E Wash., at the spectacular falls of the Spokane River; inc. 1881. , Wash.--(BUSINESS WIRE)--Aug. 7, 1997-- Pegasus Pegasus, in astronomy Pegasus (pĕg`əsəs), in astronomy, northern constellation lying SW of Andromeda and SE of Cygnus. It is named for the mythological winged horse Pegasus. Gold Inc. (PGU PGU Phil's pyGame Utilities PGU Plant Growth Unit PGU Projectile Gun Unit PGU Previant Goldberg Uelmen (Milwaukee, WI law firm) PGU Programme de Gestion Ubrbain (University of Montreal) : AMEX AMEX See: American Stock Exchange , TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). , ME) recorded a net loss of $3.2 million, or $0.08 per share, in the second quarter and year to date in 1997, compared with a net loss of $1.7 million, or $0.04 per share, in the same periods of 1996. The net loss for the second quarter and first six months of 1997, includes net non-recurring losses of $3.4 million, or $0.08 per share resulting from the disposition of assets. Total gold production for the second quarter was 92,800 ounces bringing year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. gold production to 180,300 ounces. "During the quarter, our efforts focused on completing start-up Start-up The earliest stage of a new business venture. activities and optimizing the new facilities at Mt. Todd Todd , Sir Alexander Robertus 1907-1997. British chemist. He won a 1957 Nobel Prize for his study of nucleic acids and nucleotide structures. ," said Werner Werner is a name of Germanic origins that could refer to numerous people or entities.
The oldest known usage of the name was in the Habsburg family.
deaths of newborn animals, especially those in litters, caused by the mother lying on them accidentally. Contributed to by weakness of the neonate or awkward accommodation. A problem in piglets and puppies. Called also overlying. circuit and had begun implementing modifications to the crushing and flotation flotation or froth flotation Most widely used process for extracting many minerals from their ores. The method separates and concentrates ores by altering their surfaces so that they are either repelled or attracted by water. circuits to help achieve our goals of commercial production and lower costs. We expect to achieve commercial production in the third quarter." "The Company's successful hedging program enabled Pegasus to realize $101 per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. above the average spot price in the quarter, even as the gold price continued to weaken. Going forward, the Company will continue to focus its efforts on reducing costs at all levels in light of the current weak gold market," added Mr. Nennecker. As a result of the cost savings programs implemented by the Company to date, general and administrative expenses decreased 29 percent in the second quarter of 1997 to $2.3 million. Year to date, general and administrative expenses were $5.0 million compared to $6.7 million a year ago. Pegasus realized an average gold price of $444 per ounce for the second quarter of 1997, compared to the COMEX COMEX A division of the New York Mercantile Exchange (NYMEX). Formerly known as the Commodity Exchange, COMEX is the leading US market for metals futures and options trading. COMEX See New York Mercantile Exchange (NYM). average spot price of $343 per ounce. For the first six months, the Company's average realized gold price was $451 per ounce compared to the COMEX average spot price of $348 per ounce. During the same periods of 1996, the Company's realized gold price averaged $424 and $426 per ounce, respectively. At June June: see month. 30, 1997, Pegasus had price protection on 897,000 ounces of future gold production with an average price of $436 per ounce, including forward contracts in place to deliver nearly all of its remaining 1997 gold production at an average price of $435 per ounce. The net non-recurring loss of $3.4 million reported in the second quarter of 1997 represents recognized but unrealized losses Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. on the Company's investments in the Emerging Markets Gold Fund (EMGF) and USMX USMX United States Maritime Alliance, Ltd. . Pegasus marked-to-market Marked-to-market An arrangement whereby the profits or losses on a futures contract are settled each day. the securities received in the liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy of EMGF during the quarter. In addition, the shares received as a result of the USMX merger with Dakota Dakota: see Sioux. Mining Corporation also were marked-to-market. Sales revenue was $50.6 million and $99.2 million for the second quarter and first half of 1997, respectively, compared with $57.0 million and $105.7 million for the same periods in 1996. The decline in revenue was a direct result of lower gold production, offset by the higher realized gold price due to the Company's successful hedging program. Sales of other metals increased during the second quarter of 1997 by $1.4 million to $9.4 million, compared to $8.0 million 1996. For the first six months of 1997, sales of other metals were $17.8 million, $3.0 million higher than the same period in 1996. Increases are attributable to higher production levels of zinc zinc, metallic chemical element; symbol Zn; at. no. 30; at. wt. 65.38; m.p. 419.58°C;; b.p. 907°C;; sp. gr. 7.133 at 25°C;; valence +2. Zinc is a lustrous bluish-white metal. It is found in Group 12 of the periodic table. and lead at Montana Montana (mŏntăn`ə), Rocky Mt. state in the NW United States. It is bounded by North Dakota and South Dakota (E), Wyoming (S), Idaho (W), and the Canadian provinces of British Columbia, Alberta, and Saskatchewan (N). Tunnels (due to increased mill feed grades and higher tonnage TONNAGE, mar. law. The capacity of a ship or vessel. 2. The act of congress of March 2, 1799, s. 64, 1 Story's L. U. S. 630, directs that to ascertain the tonnage of any ship or vessel, the surveyor, &c. ), and improved zinc prices. These were partially offset by lower production and realized prices for silver. Realized prices in the second quarter were $4.77 per ounce, $0.56 per pound, and $0.24 per pound for silver, zinc, and lead, respectively, compared to $5.35, $0.48, and $0.34, in last year=s second quarter. Year-to-date realized prices were $4.60 per ounce, $0.55 per pound, and $0.27 per pound for silver, zinc, and lead, respectively, compared to $5.30, $0.49, and $0.26, respectively, in the same period last year. PRODUCTION Gold production totaled 92,800 ounces for the second quarter of 1997, compared to 115,500 ounces in last year's second quarter. This lower gold production resulted from both Mt. Todd and Zortman continuing to produce only residual heap 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. ounces and from Beal n. 1. (Med.) A small inflammatory tumor; a pustule. v. i. 1. To gather matter; to swell and come to a head, as a pimple. [ imp. & p. p. os> ( ) r>; p. pr. & vb. n. os> The Company's total cash costs averaged $295 per ounce in the second quarter of 1997, compared to $298 per ounce a year earlier. Year-to-date total cash costs averaged $296 per ounce, unchanged from the same period in 1996. Total cash costs in 1997 reflect higher by-product by·prod·uct or by-prod·uct n. 1. Something produced in the making of something else. 2. A secondary result; a side effect. by-product Noun 1. credits per ounce, offset partially by lower gold production. At Mt. Todd, gold production during the second quarter was 4,900 ounces from residual 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. . Total cash costs reflect the cost of residual production from the heap. Pre-commercial gold production for the second quarter of 1997 from the new mill facility at Mt. Todd was 35,800 ounces bringing year-to-date pre-commercial gold production to a total of 55,400 ounces. Pre-production development costs, net of revenue generated from pre-commercial production, have been capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. through June. Commissioning and start-up activities continued throughout the second quarter, with the expectation that commercial production would be achieved by June 30, 1997. However, a failure of the gas turbine turbine, rotary engine that uses a continuous stream of fluid (gas or liquid) to turn a shaft that can drive machinery. A water, or hydraulic, turbine is used to drive electric generators in hydroelectric power stations. in the power station, poor performance in the crushing circuit, and lower recoveries in the flotation circuit because of copper dissolution Act or process of dissolving; termination; winding up. In this sense it is frequently used in the phrase dissolution of a partnership. The dissolution of a contract is its Rescission by the parties themselves or by a court that nullifies its binding force and reinstates each have resulted in delays. With the power station repaired, improved performance from the crushing circuit, better than planned recoveries from the whole ore carbon-in-leach (CIL (Common Intermediate Language) The ECMA version of the Microsoft Intermediate Language (MSIL). See CLI. 1. (project) CIL - Component Integration Laboratories. 2. (language) CIL - Common Intermediate Language. ) circuit and the temporary shut down of the flotation circuit, the Company expects to achieve commercial production in the third quarter. Preliminary July July: see month. production results indicate that Mt. Todd achieved over 22,000 ounces of gold production from the mill. Once the steady state operating costs operating costs npl → gastos mpl operacionales and the implications of planned improvements to the circuit are determined the Company will evaluate the status of commercial production. Because the crushing circuit has only achieved 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. of approximately 1,065 tonnes per hour (tph) (7.5 million tonnes per year) at a product size of 3.2 millimeters (mm) compared to design criteria Noun 1. design criteria - criteria that designers should meet in designing some system or device; "the job specifications summarized the design criteria" criterion, standard - the ideal in terms of which something can be judged; "they live by the standards of their of 1,220 tph (8.0 million tonnes per year) at 2.6 mm crushing costs have been about 45 percent higher than planned. A coarse size reject system designed to increase throughput and reduce crushing costs is being engineered. This system will reject a low grade to barren bar·ren adj. 1. Not producing offspring. 2. Incapable of producing offspring. barren see infertility. barren adjective Gynecology Infertile, sterile, fruitless, inconceivable product that is encapsulated encapsulated Localized Oncology adjective Confined to a specific area, surrounded by a thin layer of fibrous tissue; encapsulation generally refers to a tumor confined to a specific area, surrounded by a capsule. See Islet encapsulation. in material with a very high work index in advance of the last stage of crushing. An expected capital outlay capital outlay See capital expenditure. of less than $5 million should make the system operational by early 1998. Higher copper loading in the concentrate CIL leach circuit, resulted in higher consumption of cyanide cyanide (sī`ənīd'), chemical compound containing the cyano group, -CN. Cyanides are salts or esters of hydrogen cyanide (hydrocyanic acid, HCN) formed by replacing the hydrogen with a metal (e.g., sodium or potassium) or a radical (e.g. and reduced recovery. As a result, the Company temporarily shut-down operation of the flotation circuit in June and produced gold only from the whole ore CIL leach circuit. The effect of not operating the flotation circuit has resulted in a recovery of 76 percent, compared to the ultimate design of 84 percent. Preliminary engineering and metallurgical met·al·lur·gy n. 1. The science that deals with procedures used in extracting metals from their ores, purifying and alloying metals, and creating useful objects from metals. 2. test work indicate the flotation circuit can produce a commercial gold/copper concentrate with only minor modifications to the process flowsheet. If successful, this flowsheet change will result in annual savings of $4 to $5 million in cyanide costs and improved recovery. The modifications, for which capital costs are estimated to be less than $1.5 million, are expected to be complete by year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. . Until modifications to the flotation circuit are implemented, Mt. Todd will operate only the whole ore CIL leach circuit. Gold production is expected to average 18,000 to 20,000 ounces a month over the second half of 1997 with total cash costs averaging approximately $335 per ounce. Actual total cash costs could differ from those projected to the extent that throughput continues to increase and the processing changes are implemented. At the end of June, 1997 year-to-date capital expenditures at Mt. Todd totaled $12 million excluding $12 million of start-up costs and $7 million of capitalized interest Capitalized interest Interest that is not immediately expensed, but rather is considered as an asset and is then amortized through the income statement over time. In the context of project financing, interest that is paid by additional borrowing. . The total capital invested in Phase II of Mt. Todd is $180.6 million excluding start-up costs and capitalized interest. The recovery of ounces from ore loaded on the heap leach pad during the last half of 1996 caused gold production at Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and Canyon to increase 12 percent to 45,500 ounces in the second quarter of 1997 compared to the same quarter last year. Total cash costs have increased in the quarter due to lower 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 (0.59 grams per tonne tonne measure of weight or mass; 1 tonne=1000 kg. See also ton. versus 0.79 grams per tonne) and an increase in the stripping ratio to 2.47 from 1.79 for the same period last year. In addition, harder, abrasive abrasive, material used to grind, smooth, cut, or polish another substance. Natural abrasives include sand, pumice, corundum, and ground quartz. Carborundum (silicon carbide) and alumina (aluminum oxide) are important synthetically produced abrasives. ore being mined during the first half has negatively impacted mining and crushing costs and increased the amount of dust. This ore type makes up the majority of the ore for the remainder of 1997 and is expected to continue to negatively impact the costs and production. However, a major effort is underway at Florida Canyon to improve dust control including upgrading collection systems, modifying bins and chutes at the crushers, installing finer water sprayers and modifying operating procedures. These changes have already significantly improved dust control at the mine. The Draft Environmental Impact Statement for the new 60 million tonne leach pad expansion has been issued and public hearings have been held. Sufficient leach pad capacity exists on the current leach pad to allow operations to continue until the new leach pad is built. Recently, the Company received permit approval to stack ore up to 91 meters on the existing heap leach pad. At Montana Tunnels, gold production in the second quarter was up 30 percent due to the processing of higher ore grades (0.69 grams per tonne compared to 0.53 grams per tonne a year earlier). Lead and zinc production were also higher in the quarter due to higher grades and mining slightly more ore tonnes. Total cash costs have decreased compared to last year due to higher gold production and by-product credits. During the second quarter, USMX shareholders approved the sale of its net profits royalty in Montana Tunnels to Pegasus. At Zortman, residual leaching commenced during the quarter, producing 5,447 ounces. In June, the Company was notified that the Interior Board of Land Appeals had granted a stay of the Record of Decision for the Zortman Extension pending its review and decision on the appeal. The Company asked for, and has been granted, an expedited review. As a result of this stay, construction of the Zortman Extension may be delayed past 1998. Currently, the Company is reviewing engineering studies which could reduce the capital required for construction of the Zortman Extension. The stay does not affect the ongoing construction work required under the water quality compliance plan. Beal Mountain's gold production was lower in the quarter because loading to the pad temporarily ceased during the first half of 1997 to allow for the pre-stripping of the South Beal Pit and to backfill back·fill n. Material used to refill an excavated area. tr.v. back·filled, back·fill·ing, back·fills To refill (an excavated area) with such material. the Main Beal Pit. Total cash costs are lower but only reflect the cost of residual leaching. Pad loading with South Beal ore commenced late in June and will continue into September September: see month. . Black Pine produced fewer ounces of gold and total costs increased during the second quarter compared to the same period last year because of lower ore tonnage mined which was only partially offset by higher grades (0.59 grams per tonne versus 0.52 grams per tonne). EXPLORATION Exploration and evaluation expenses were $1.2 million in the second quarter and $2.4 million for the first half of 1997, down from $2.2 million and $3.6 million in the same periods in 1996 due to lower overall program expenditures. Total exploration expenditures, including amounts capitalized, were $3.5 million in the second quarter of 1997, bringing year-to-date spending to $5.4 million, compared to $4.3 million and $7.3 million for the same periods last year. "I am pleased that Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs H. Burkhart, formerly our Director of Exploration, who has been with the Company for more than 12 years, has been promoted to Vice President of Exploration," stated Mr. Nennecker. Florida Canyon: The Phase I drilling program was completed with 136 drill holes totaling 22,270 meters in the Radio Tower East, Jasperoid Jasperoid is a rare, peculiar type of metasomatic alteration and occurs in two main forms; sulfidic jasperoids and hematitic jasperoids. True jasperoids are different from jaspillite, which is a form of metamorphosed chemical sedimentary rock, and from jasper which is a chemical Hill, Cone and Radio Tower West target areas. Resource modeling on the Radio Tower East target indicates that it contains Mineralized min·er·al·ize 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 of 13.2 million tonnes grading 0.68 grams of gold per tonne containing 286,000 ounces. The deposit is open to the north into the Cone target, to the south into the Jasperoid Hill target and locally to the east. The expansion potential will be tested in a Phase II drill program which will begin in October October: see month. . Results from drilling on the Jasperoid Hill target continue to appear favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. , outlining a near surface oxide oxide, chemical compound containing oxygen and one other chemical element. Oxides are widely and abundantly distributed in nature. Water is the oxide of hydrogen. Silicon dioxide is the major component of sand and quartz. deposit. At the Cone target, drilling indicates that a near surface, mixed oxide/sulfide deposit exists. At the Radio Tower West target area, drilling intercepted favorable near surface oxide 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. ; the best hole to date reported 33.5 meters at 0.72 grams per tonne of gold. Mt. Todd: Exploration drilling commenced at Driffield where four main target areas are being tested. While the exploration work is at an early stage, initial results have been encouraging. The Company is waiting for assay results and a follow-up follow-up, n the process of monitoring the progress of a patient after a period of active treatment. follow-up subsequent. follow-up plan phase of drilling is in progress. Surface work continues to outline additional targets that are scheduled for drilling this year. Diamond Hill: Phase I underground drilling was completed in the second quarter with 87 holes totaling 10,549 meters. Results were encouraging with 30 holes reporting intercepts averaging 13.7 meters at 12.58 grams per tonne gold. A second phase of underground drilling is being planned. Intermin: Drilling continued to confirm the strike extension of the Janet Janet: see Clouet, Jean. JANET - Joint Academic NETwork Ivy Zone. Six holes were drilled and extended the strike of gold mineralization by 500 meters to the north. Two noteworthy intersections were 12 meters of 1.99 grams per tonne and 17 meters of 1.62 grams per tonne. Gold mineralization has now been identified over three kilometers of strike and has been locally tested to a depth of 100 meters. The potential of the Judith Vera Zone was tested further, the best drill intercept intercept in mathematical terms the points at which a curve cuts the two axes of a graph. being 7 meters of 1.24 grams per tonne. Currently, one aspect of the exploration program is focusing on prioritizing numerous regional air magnetic targets, several of which will be drill tested in the third quarter. Capira Dorada: Located 50 kilometers southwest of Panama City Panama City, city (1990 pop. 34,378), seat of Bay co., NW Fla., on St. Andrews Bay; inc. 1909. A Gulf Coast resort with amusement parks and excellent fishing, it is also a port of entry. The city's industries produce paper, clothing, and chemicals. , this project's Phase I drill program is scheduled to commence in mid-August. Phase I will consist of 16 holes to test the Dorada target, and eight holes to test the Salomon target. OTHER FINANCIAL INFORMATION Care and maintenance costs increased to $1.6 million and $3.5 million in the second quarter and year-to-date, compared to $0.4 million and $0.5 million during the same 1996 periods. Increased costs reflect non-production related costs at Zortman. During the second quarter of 1997, 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 $12.7 million bringing year-to-date cash flow from operations to $24.8 million compared to $3.4 million in the first six months of last year. The improvement primarily reflects working capital changes, including accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying . Cash flow from operations before working capital changes for the first six months of 1997 increased $3.1 million compared to the same period in 1996. During the second quarter of 1997, long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. increased by $8.4 million as additional funds were drawn on the Company's $150 million Revolving Credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. Facility. The total amount borrowed under the facility is $115.4 million at June 30, 1997. At June 30, 1997, the Company had working capital of $55.8 million, compared to $65.2 million at the end of 1996. Cash and cash equivalents totaled $4.7 million at June 30, 1997, compared to $8.6 million at the end of 1996. The Company believes that it has adequate resources to meet this year's remaining cash requirements. Hedging At June 30, 1997, the Company had price protection on 897,000 ounces of gold at an average price of $436 per ounce, consisting of 597,000 ounces sold forward at an average price of $442 per ounce for delivery between 1997 and 2003, and 300,000 ounces of put options purchased at an average price of $423 per ounce for the period 1997 to 2001. Additionally, Pegasus has 905,000 ounces of contingent forward sales forward sales npl → ventas fpl a término deliverable from 1998 through 2003, at an average price of $419 per ounce. Delivery of these contracts is dependent on the spot price of gold at various measurement dates over the term of the related contracts. If the spot price of gold is $340 per ounce or below at the end of the first quarter of 1998, contracts for a total of 720,000 ounces will be canceled. A certain portion of the remaining ounces will be deliverable between $375 and $435 per ounce. Also, 385,000 ounces of call options have been sold at an average price of $479 per ounce for the period 1997 to 2003. The Company's hedge position marked-to-market has a value of approximately $70 million. All or a portion of which could be monetized if additional liquidity is required. -0-
1997 GOLD PRODUCTION AND COST FORECAST
MINE 1997e Total Cash
(ounces) Cost
US$/oz
Zortman 15,000 315
Montana Tunnels 110,000 270
Florida Canyon 170,000 320
Beal Mountain 35,000 300
Black Pine 45,000 310
Mt. Todd (a) 125,000(a) 350
Total 500,000 $315
Note (a): Does not include 55,400 ounces of pre-commercial
production in the first six months of 1997 and assumes commercial
production at the beginning of the third quarter.
-0- The Company has revised its gold production estimate for the year to be 500,000 ounces due to the delay in commercial production at Mt. Todd and slightly lower production from Florida Canyon. The Company expects to produce an additional 10,000 ounces of gold at Black Pine by extending mining operations in the >C= pit and adding portable carbon columns to accelerate recovery. Total cash costs are expected to be up slightly for the year to $315 per ounce. The most significant change was in Mt. Todd due to the delay in commercial production and higher crushing costs. Total cash costs at Mt. Todd, including residual leaching, are expected to average $350 per ounce for the last half of the year. Statements in this report which are not historical data are forward looking and involve a number of risks and uncertainties, including but not limited to the price of gold and other commodities and currencies, production, construction and permitting or regulatory delays, reserve estimation estimation In mathematics, use of a function or formula to derive a solution or make a prediction. Unlike approximation, it has precise connotations. In statistics, for example, it connotes the careful selection and testing of a function called an estimator. of tonnage, grade and metallurgical recoveries, exploration success and reserve growth, 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. , capital costs, and other risks that are detailed in the Company's SEC filings. Pegasus Gold Inc. is an international gold mining company, headquartered in Spokane, Washington Spokane (pronounced [spoʊ̯ˈkæn]) is a city located in Eastern Washington. The seat of Spokane County, Spokane is the metropolitan center of the Inland Northwest, the second largest city in Washington state, and . Pegasus currently produces more than 500,000 ounces of gold annually from its properties in the 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. and Australia. The Company carries out exploration internationally through offices located in Mendoza, Argentina Mendoza is a city in the west of Argentina, and the capital of Mendoza Province. As per the 2001 census INDEC] it has about 111,000 inhabitants, plus 848,660 in its metropolitan area, making it the fourth-largest conurbation in Argentina. ; Kalgoorlie, Australia; Itaituba, Brazil; Santiago, Chile Santiago, officially Santiago de Chile (Spanish: (helpinfo)), is the capital of Chile, and the center of its largest conurbation (Greater Santiago). ; and Panama City, Panama. The common shares of Pegasus are traded under the symbol PGU on the American, Toronto and Montreal stock exchanges Montreal Stock Exchange See Bourse de Montreal, Inc. (Canadian Derivatives Exchange) . Options on the Company's common shares are traded on the Chicago Board Options Exchange Chicago Board Options Exchange (CBOE) A securities exchange created in the early 1970s for the public trading of standardized option contracts. Primary place for the trading of stock options, foreign currency options, and index options (S&P 100, 500, and OTC 250 index) and the Montreal Exchange Montreal Exchange A Canadian derivatives exchange that facilitates the trading of stock options, interest rate futures and options, as well as index options and futures. Located in Montreal, Quebec, it is the country's main financial derivative market, while the Winnipeg . five tables follow -0-
PEGASUS GOLD INC.
OPERATIONS STATISTICS(1)
Three Months Ended Six Months Ended
June 30 June 30
------------------- ---------------
1997 1996 1997 1996
FLORIDA CANYON
Production:
Gold (Ounces)....... 45,480 40,510 85,611 64,994
Silver (Ounces)..... 46,113 25,796 70,756 41,856
Ore Mined
tonnes (000's)...... 2,723 3,535 5,999 6,464
Cash Operating Cost... $290 $255 $284 $252
Total Cash Cost....... $300 $269 $295 $268
Total Production Cost. $397 $338 $396 $339
MONTANA TUNNELS(2)
Production:
Gold (Ounces)....... 22,996 17,708 42,864 37,882
Silver (Ounces)..... 219,196 261,780 460,780 469,853
Lead (Tons)......... 2,502 1,876 4,975 3,334
Zinc (Tons)......... 6,164 5,269 11,418 10,033
Ore Milled
tonnes (000's)...... 1,303 1,225 2,580 2,471
Cash Operating Cost... $201 $217 $198 $190
Total Cash Cost....... $238 $256 $239 $229
Total Production Cost. $386 $423 $394 $386
MT. TODD
Production:
Gold (Ounces)....... 4,938 15,622 11,038 31,245
Silver (Ounces)..... -- -- -- --
Ore Mined
tonnes (000's)...... -- 1,194 -- 2,554
Cash Operating Cost... $408 $467 $419 $431
Total Cash Cost....... $414 $467 $422 $431
Total Production Cost. $517 $577 $525 $530
ZORTMAN
Production:
Gold (Ounces)....... 5,447 8,064 5,447 20,271
Silver (Ounces)..... 12,678 20,197 12,678 66,472
Ore Mined
tonnes (000's)...... -- -- -- 126
Cash Operating Cost... $295 $259 $295 $291
Total Cash Cost....... $310 $240 $310 $296
Total Production Cost. $444 $352 $482 $413
BEAL MOUNTAIN
Production:
Gold (Ounces)....... 2,890 9,766 10,773 16,574
Silver (Ounces)..... 734 1,402 2,279 2,856
Ore Mined
tonnes (000's)..... 106 528 256 676
Cash Operating Cost... $205 $287 $318 $282
Total Cash Cost....... $239 $302 $348 $306
Total Production Cost. $345 $409 $442 $409
BLACK PINE
Production:
Gold (Ounces)....... 11,022 23,790 24,526 42,654
Silver (Ounces).. 4,770 7,379 8,338 17,899
Ore Mined
tonnes (000's)..... 729 2,392 1,419 4,070
Cash Operating Cost... $321 $259 $289 $268
Total Cash Cost....... $344 $285 $314 $294
Total Production Cost. $358 $308 $328 $328
CONSOLIDATED TOTALS
Production:
Gold (Ounces) - 100% 92,773 115,460 180,259 213,620
Silver (Ounces)..... 283,491 316,554 554,831 598,936
Lead (Tons)......... 2,502 1,876 4,975 3,334
Zinc (Tons)......... 6,164 5,269 11,418 10,033
Ore Mined
tonnes (000's)...... 4,861 8,875 10,254 16,362
Cash Operating Cost... $276 $282 $275 $276
Total Cash Cost....... $295 $298 $296 $296
Total Production Cost. $398 $385 $400 $386
Note (1): Effective Jan. 1, 1997, the Company adopted the Gold
Production Cost Standard developed by the Gold Institute in order to
facilitate comparisons among companies in the gold industry. Cash
production costs reported in prior periods have been restated as
cash operating costs and total cash costs in accordance with the new
standard. Cash Operating costs calculated under the new standard
include all operating costs at the mine sites, but exclude
royalties, production taxes and reclamation. Total cash costs
include royalties and production taxes, but exclude reclamation.
Total production costs remain unchanged and include reclamation and
depreciation, depletion and amortization.
Note (2): Includes production from Diamond Hill, net of
by-product credits.
PEGASUS GOLD INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months and Six Months Ended June 30, 1997 and 1996
(In Thousands Except Per Share Amounts)
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
Sales $50,603 $56,958 $99,206 $105,748
Cost of sales 36,792 42,375 71,148 78,070
Depreciation
and amortization 9,542 10,045 18,802 19,262
46,334 52,420 89,950 97,332
Gross profit 4,269 4,538 9,256 8,416
Operating expenses:
General
and administrative 2,332 3,292 4,975 6,665
Exploration
and evaluation 1,190 2,152 2,387 3,608
Care and maintenance 1,601 424 3,495 458
Closure, reclamation
and related costs -- 500 500 1,000
5,123 6,368 11,357 11,731
Loss from operations (854) (1,830) (2,101) (3,315)
Other income (expense):
Interest
and other income 758 995 1,012 2,342
Interest expense,
net of amounts
capitalized (429) (724) (864) (1,834)
Gain (loss)
on disposition
of assets (3,353) 20 (3,348) (170)
Equity in net income
(loss) of affiliates 631 (244) 2,012 498
(2,393) 47 (1,188) 836
Loss before income taxes (3,247) (1,783) (3,289) (2,479)
Income tax benefit (97) (70) (124) (779)
Net loss $ (3,150) ($1,713) ($3,165) ($1,700)
Net loss per share ($0.08) ($0.04) ($0.08) ($0.04)
Weighted average common
shares outstanding 41,191 41,334 41,169 40,492
-0-
PEGASUS GOLD INC.
CONSOLIDATED BALANCE SHEETS
June 30, 1997 and December 31, 1996
(In Thousands)
ASSETS
1997 1996
Current assets:
Cash and cash equivalents $ 4,677 $ 8,566
Due from sales of products 23,085 36,748
Inventories 56,317 51,997
Other current assets 11,301 10,164
Total current assets 95,380 107,475
Investments 9,857 20,987
Property, plant, and equipment, net 640,915 618,940
Other assets 6,344 6,806
Total assets $ 752,496 $ 754,208
LIABILITIES
Current liabilities:
Accounts payable
and other current liabilities $ 26,294 $ 23,641
Accrued salaries, wages,
and benefits 5,865 10,350
Mining taxes payable 3,710 4,610
Current portion of obligations
under capital lease 3,747 3,626
Total current liabilities 39,616 42,227
Long-term debt 230,437 215,086
Capital lease obligations 20,678 22,466
Deferred income taxes 44,553 44,602
Deferred site closure and reclamation 50,025 50,878
Deferred revenue 9,346 8,074
Other deferred liabilities 8,417 7,598
Total liabilities 403,072 390,931
SHAREHOLDERS' EQUITY
Class A preferred shares,
Series 1, C$10 par value:
Authorized - 20,000,000
shares; none issued
Common shares no par value:
Authorized - 200,000,000 shares; issued
and outstanding, 1997 - 41,198,068 shares
and 1996 - 41,092,342 shares 426,133 425,382
Accumulated deficit (73,899) (70,734)
Net unrealized holding loss
on available-for-sale investments (1,564) --
Foreign currency
translation adjustment (1,246) 8,629
Total shareholders' equity 349,424 363,277
Total liabilities
and shareholders' equity $ 752,496 $ 754,208
PEGASUS GOLD INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 1997 and 1996
(In Thousands)
-----------------------
1997 1996
Operating activities:
Net loss..........................................($3,165) ($1,700)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and amortization.............. 19,168 19,558
Payments for closure, reclamation and
related costs... (4,294) (4,159)
Provision for closure, reclamation and
related costs.. 500 1,000
Loss on disposition of investments......... 4,962 ---
Other, net................................. 2,453 (1,787)
Change in working capital accounts........... 5,222 (13,038)
Net cash provided by operating activities......... 24,845 3,448
Investing activities:
Additions to property, plant, and
equipment, net........ (48,665) (88,595)
Proceeds from investments.................... 1,460 ---
Sale of property, plant and equipment........ --- 3,881
Sale of short-term investments............... --- 624
Purchase of investments...................... --- (4,630)
Net cash used in investing activities.............(47,205) (88,720)
Financing activities:
Proceeds from issuance of long-term debt..... 19,575 ---
Proceeds from issuance of common shares...... 751 90,900
Payments of obligations under capital lease.. (1,667) (1,413)
Payments of long-term debt................... --- (19,189)
Debt issuance costs.......................... --- (1,806)
Net cash provided by financing activities......... 18,659 68,492
Effect of exchange rate changes on cash and
cash equivalents. (188) 181
Net decrease in cash and cash equivalents......... (3,889) (16,599)
Cash and cash equivalents, beginning of period.... 8,566 32,907
Cash and cash equivalents, end of period.......... $4,677 $16,308
========= =========
PEGASUS GOLD INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
For the Six Months Ended June 30, 1997 and the
Year Ended December 31, 1996
(In Thousands)
----------------------------------------------------------------------
Common Shares
------------------- Foreign
Unrealized Currency
Number Accumulated Loss on Translation
of Shares Amount Deficit Investment Adjustment
Balance,
Dec. 31, 1995 34,825,203 $334,214 ($49,131) $ -- $3,621
Net loss......... (21,603)
Common shares
issued for:
Cash........... 6,000,000 88,175
Stock option
plan.......... 234,217 2,612
Employee savings
plan and other. 32,922 381
Foreign currency
translation adjustment 5,008
Balance,
Dec. 31, 1996 41,092,342 425,382 (70,734) -- 8,629
Net loss......... (3,165)
Common shares
issued for:
Stock option
plan.......... 41,100 311
Employee savings
plan and other 64,626 440
Net unrealized
holding loss on
available-for-sale
investments... (1,564)
Foreign currency
translation
adjustment (9,875)
Balance,
June 30, 1997 41,198,068 $426,133 ($73,899) ($1,564) ($1,246)
=========== ======== ======== ======== =======
-0- CONTACT: Pegasus Gold Inc. John W. Pearson, 509/624-4653 |
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