Printer Friendly

Philex Gold Announces Second Quarter Results.

Business Editors

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

Philex Gold Inc. (TSE:PGI.) 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 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 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 work on the first three production lines and related draw points, which had become constricted due to the very soft ground conditions. Ore grades 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.

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 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 encountered. The drill rig was moved about 1.5 km south to the Boyugnan prospect, where similar mineralized floats and boulders were encountered. Ground geophysical surveys at this area delineated magnetic and induced polarization anomalies. The first hole encountered a pyritic zone, believed to be a pyritic halo of a copper porphyry 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 (TSE), effective September 1, 2000. Earlier this year, the TSE revised its continued listing requirements, 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, 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)
COPYRIGHT 2000 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2000, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

 Reader Opinion

Title:

Comment:



 

Article Details
Printer friendly Cite/link Email Feedback
Publication:Business Wire
Geographic Code:1CANA
Date:Aug 10, 2000
Words:1090
Previous Article:Zonagen Awarded SBIR Grant to Research New Class of Compounds for the Treatment of Endometriosis.
Next Article:FastComm Communications Offers Signaling System 7 Support For the Spanish Variant.
Topics:


Related Articles
Philex Gold Inc. completes initial public offering and commences TSE trading.
Eldorado Gold Corporation -- Second Quarter Operating Results: Record Quarterly Production At a Cash Cost Of $199/oz.
Philex Gold Lists On Canadian Venture Exchange.
Philex Gold Announces Drilling Results.
Philex Gold Inc. Reports Fourth Quarter And Year-End Financial Results.
Philex Gold Inc. - Announcement.
Philex Gold Inc. Reports Fourth Quarter and Year-End Financial Results.
Philex Gold Announces Second Quarter Results.
SURVEILLANCE CAN PAY.

Terms of use | Copyright © 2014 Farlex, Inc. | Feedback | For webmasters