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Philex Gold Announces Second Quarter Results.



Business Editors

TORONTO--(BUSINESS WIRE)--Aug. 10, 2000

Philex Gold Inc. (TSE See Tokyo Stock Exchange.

TSE

1. See Tokyo Stock Exchange (TSE).

2. See Toronto Stock Exchange (TSE).
:PGI PGI Protected Geographical Indication
PGI Progiciel de Gestion Intégré (French: Enterprise Resource Planning)
PGI Phosphoglucose Isomerase
PGI Polish Geological Institute (Warsaw, Poland) 
.) reported a net loss of $3.2 million of $0.08 per share in the second quarter of 2000, compared to a net loss of $904,000 or $0.02 per share for the comparable period last year.

The loss was the result of a drop in output to 9,058 ounces from the Bulawan mine compared to 21,891 ounces last year due to continuing difficulties in the transition from the depleting South block to the Central block of the underground deposit. 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
 during the quarter was $544,000 or $0.01 per share compared to $986,000 or $0.02 per share in the prior year. An average gold price of $293 per ounce was realized, compared to $277 per ounce.

For the six months ended June 30, 2000, a net loss of $5.9 million or $0.15 per share was incurred on revenues of $5.9 million. The comparable figures for 1999 were a net loss of $676,000 or $0.02 per share on revenues of $13.5 million. Operating cash flow Operating cash flow

Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements.
 was a deficit of $1.3 million or $0.03 per share, compared to a cashflow surplus of $5.3 million or $0.13 per share in the prior year. An average gold price of $295 per ounce was realized during this first half, compared to $290 per ounce last year.

      Key Operating and Financial Summary For the three months ended
June 30, 2000 and 1999
---------------------------------------------------------------
                                            2000           1999
---------------------------------------------------------------
Operational Results
Bulawan gold production - ounces           9,058         21,891
Average realized price per ounce             293            277

Financial Results
Cash operating costs per ounce               412            171
Revenue from gold sales - (in '000)        2,564          6,253
Net loss for the period - (in '000)      (3,246)          (904)
Net loss per share                        (0.08)         (0.02)
Operating cash flow - (in '000)              544            986
Operating cash flow per share               0.01           0.02
Common shares outstanding             40,181,818     40,181,818
---------------------------------------------------------------


As in the previous quarter, tonnage could not be maximized at the new Central block due to continuing rehabilitation rehabilitation: see physical therapy.  work on the first three production lines and related draw points, which had become constricted con·strict  
v. con·strict·ed, con·strict·ing, con·stricts

v.tr.
1. To make smaller or narrower by binding or squeezing.

2. To squeeze or compress.

3.
 due to the very soft ground conditions. 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  from material extracted from the South block, on the other hand, continued to drop as the block neared full depletion. Given the mine's inability to maintain a satisfactory output due to the foregoing, effective July 16, 2000, milling operations were suspended for a two-month period, as previously announced. During this time, rehabilitation works at the 70-metre level (ml) production lines of the North block will continue, including limited ore extraction by block caving to relieve pressure. The ore extracted will be stockpiled and milled upon the resumption of normal operations Generally and collectively, the broad functions that a combatant commander undertakes when assigned responsibility for a given geographic or functional area. Except as otherwise qualified in certain unified command plan paragraphs that relate to particular commands, "normal operations" of .

Key Operating and Financial Summary
For the six months ended June 30, 2000 and 1999
---------------------------------------------------------------
                                            2000           1999
---------------------------------------------------------------
Operational Results
Bulawan gold production - ounces          20,612         44,981
Average realized price per ounce             295            290

Financial Results
Cash operating costs per ounce               353            169
Revenue from gold sales - (in '000)        5,911         13,474
Net loss for the period - (in '000)      (5,903)          (676)
Net loss per share                        (0.15)         (0.02)
Operating cash flow - (in '000)          (1,251)          5,287
Operating cash flow per share             (0.03)           0.13
Common shares outstanding             40,181,818     40,181,818
---------------------------------------------------------------


To minimize expenditures required to develop the remainder of the block for block caving and in order to access higher grade ore as quickly as possible, the balance of the block will be mined by front caving from the 85-metre undercut level. Development work on the front cave area has started prior to the suspension and will be accelerated throughout this period. Should this strategy prove successful and cash flow projections A Cash Flow Projection is an attempt to forecast the cash flows that will be generated by an asset, often a company, over a specified time frame. Methodology
Projections can be made with varying levels of detail, but any cash flow projection for a business entails
 met, front cave lines can be developed at the 70 ml, immediately below the front cave area at the 85-ml, to extract ore in between as well as ore not recovered from the one-level front cave at the 85-ml. This would extend the life of the block beyond two years.

As a result of the temporary shutdown, about 40% of the work force were suspended. The remainder is required for the rehabilitation and development work as well as for surface support activities. Following the resumption of normal operations mid-September and pursuant to the revised mining plans, 80% of the original work force will be required. A manpower reduction program to achieve the planned decrease is therefore being implemented simultaneously with the layoff associated with the two-month suspension.

The rehabilitation works at the 70-ml should be substantially completed by the end of the shutdown period, leading to the regular drawing of ore at this source. The initial front cave lines at the 85-ml should also be completed by such time. With the expectation of improved ore grades from the Central block following the resumption of operations, production is expected to improve in the fourth quarter and through the following year.

With respect to the exploration work at the North property, under a joint venture with Anglo American, five holes were drilled at the Bagacay prospect with no significant 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.
 encountered. The drill rig was moved about 1.5 km south to the Boyugnan prospect, where similar 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.
 floats and boulders were encountered. Ground geophysical surveys at this area delineated de·lin·e·ate  
tr.v. de·lin·e·at·ed, de·lin·e·at·ing, de·lin·e·ates
1. To draw or trace the outline of; sketch out.

2. To represent pictorially; depict.

3.
 magnetic and induced polarization Induced polarization (IP) is a geophysical imaging technique used to identify subsurface materials, such as ore. The method is similar to electrical resistivity tomography, in that an electric current is induced into the subsurface through two electrodes, and voltage is  anomalies. The first hole encountered a pyritic py·rite  
n.
A brass-colored mineral, FeS2, occurring widely and used as an iron ore and in producing sulfur dioxide for sulfuric acid. Also called fool's gold, iron pyrites.
 zone, believed to be a pyritic halo of a copper porphyry Porphyry, Greek scholar
Porphyry (pôr`fĭrē), c.232–c.304, Greek scholar and Neoplatonic philosopher. He studied rhetoric under Cassius Longinus and philosophy under Plotinus.
 system. The second hole intercepted altered pyroclastics with the presence of copper bearing sulfides, again indicating the possible presence of a copper porphyry system within the area. Further drilling continues.

We regret to inform our shareholders of the suspension of our shares from trading on the Toronto Stock Exchange Toronto Stock Exchange (TSE)

Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options.
 (TSE), effective September 1, 2000. Earlier this year, the TSE revised its continued listing requirements Listing requirements

Requirements, including minimum shares outstanding, market value, and income, that are laid down by an exchange for any stock to be listed for trading.
, under which the market value of the Company's share float must exceed $2 million. Although the Company has complied with all the other revised listing requirements, we are unable to meet this new minimum float rule, due to the current market price of the Company's common shares. We are in the process of completing the necessary paperwork to list our shares on the Canadian Venture Exchange The Canadian Venture Exchange (CDNX) is now a defunct stock exchange having been acquired by the TSX Group in 2001 and renamed the TSX Venture Exchange. History of the Canadian Venture Exchange (CDNX) , to ensure a seamless transition and no disruption in the trading of Philex shares.

(All financial results are unaudited and stated in U.S. dollars; gold production and costs per ounce are stated in equivalent ounces where appropriate)
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Publication:Business Wire
Geographic Code:1CANA
Date:Aug 10, 2000
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