TVX Gold Inc. Reports Earnings of $4.0 Million; Cash Costs of $172 Per Ounce.Business Editors TORONTO--(BUSINESS WIRE)--May 10, 2000 TVX TVx Target Vertex TVX Transmission Valid Timer (FDDI) TVX Valid Transmission Gold Inc. ("TVX") (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :TVX.) (NYSE NYSE See: New York Stock Exchange :TVX) reports consolidated net earnings of $4.0 million ($0.01 per share) in the first quarter of 2000. Production from TVX Normandy Normandy (nôr`məndē), Fr. Normandie (nôrmäNdē`), region and former province, NW France, bordering on the English Channel. Americas' ("TVX Normandy") five precious metals Precious Metals Valuable metals such as gold, iridium, palladium, platinum, and silver. Notes: Investing in precious metals can be done either by purchasing the physical asset, or by purchasing futures contracts for the particular metal. mines totaled 124,400 gold equivalent ounces during the first quarter of 2000, a 13% decrease from the 142,970 ounces produced during the corresponding 1999 period. Cash cost per gold equivalent ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. increased 9% to $172 from $158 year-over-year. While the cash cost increased, production cost per ounce remained flat at $249. TVX's share of gold equivalent production was 62,200 ounces (48,700 ounces of gold and 740,000 ounces of silver). During the first three months of 2000, revenue and 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. were $42.1 million and $14.5 million, respectively compared to revenue of $41.1 million and an operating cash flow of $3.6 million in the corresponding 1999 quarter. The significant increase in cash flow is the result of lower working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. at the operations. Gold production during the first quarter of 2000 from the Crixas, Brasilia, New Britannia Bri·tan·nia n. 1. A female personification of Great Britain or the British Empire. 2. also britannia Britannia metal. and Musselwhite mines exceeded 1999 first quarter levels. At La Coipa, production was lower primarily due to the conclusion of mining operations at the high grade Chimberos silver deposit during 1999. The spot per ounce gold and silver prices during the first quarter were $290 and $5.20, respectively, compared to $287 and $5.30 during the first quarter a year ago. Realized prices during the period were $365 per ounce of gold and $4.30 per ounce of silver after taking into account a positive impact of deferred revenue of $75 per ounce of gold and a negative impact of deferred revenue of $0.90 per ounce of silver. Realized prices during the first quarter of 1999 were $412 per ounce of gold and $4.30 per ounce of silver. TVX's consolidated cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments, as of March 31, 2000, totaled $149.0 million.
Summary of TVX Normandy's Share of Operations
Quarter ending: March 31, 2000
---------------------------------------------------------------
Tonnes Gold Reco- Produc- Cash Produc-
Milled Grade very tion(1) Cost tion
Mine (000s) g/t % ounces Cost
---------------------------------------------------------------
La Coipa
Gold equivalent 715.5 2.4 65.4 36,700 $216 $305
Brasilia 2,438.2 0.5 76.3 28,800 169 247
Crixas 90.4 8.3 97.4 24,100 110 165
Musselwhite 97.2 6.7 95.7 19,900 155 234
New Britannia 95.6 5.3 92.5 14,900 195 270
------- ---- -----
124,400 $172 $249
---------------------------------------------------------------
Quarter ending: March 31, 1999
Produc- Cash Produc-
tion Cost tion
Mine ounces $/oz Cost $/oz
---------------------------------------------------------------
La Coipa
Gold equivalent 75,700 $140 $240
Brasilia 20,800 173 257
Crixas 18,400 136 189
Musselwhite 16,200 187 304
New Britannia 11,900 215 301
------- ---- ----
143,000 $158 $249
---------------------------------------------------------------
(1.) After accounting for minority interest, TVX's attributable
production is 62,200 gold equivalent ounces.
All dollar amounts are expressed in US dollars, unless otherwise
stated.
Operations TVX Normandy Operations ----------------------- Effective July July: see month. 1, 1999 TVX and Normandy Mining Limited formed a strategic business alliance, TVX Normandy, to pursue business opportunities in the Americas A·mer·i·cas , the See America. . The new arrangement is owned 50 per cent plus one share by TVX Gold and 50 per cent less one share by Normandy Mining. At the La Coipa Mine, Chile (TVX 25 per cent), TVX's share of gold equivalent production was 18,350 ounces (739,500 ounces of silver and 4,900 ounces of gold). Cash cost per gold equivalent ounce during the first quarter rose to $216 from $140 for the same period one year ago. The increased cash cost and decreased production are the result of the conclusion of mining operations at the Chimberos deposit during the third quarter of 1999 and the temporary suspension of mining operation at the Ladera Farellon pit to allow for a diamond drilling Diamond Drilling is a highly specialized industry used for mineral exploration around the world. Most commonly using wireline and core bits with diamond encrusted matrix. To drill holes to max depths of twelve thousand feet, for the recovery of core used in verifying mineral program. This suspension resulted in lower than planned 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 grades as mining activities moved to the Coipa Norte pit. At the Brasilia Mine, Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. (TVX 24.5 per cent), the Company's share of gold production was 14,400 ounces in the first quarter of 2000. Heavy rains during the first quarter resulted in lower than planned mined tonnages; however, improved milling rates and gold recoveries, up 26% and 5% respectively, resulted in increased gold production. The improved mill performance is due to plant modifications, including the installation of a fifth ball mill, completed in mid- mid- pref. Middle: midbrain. 1999. At the Crixas Mine, Brazil (TVX 25 per cent), TVX's share of gold production was 12,050 ounces for the quarter. Cash costs declined 19% to $110 per ounce compared to the same quarter in 1999, while production at the mine increased 31%. The performance of Crixas is the result of the successful implementation of the planned increase in mill 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. from 600,000 tonnes per annum Per annum Yearly. to 700,000 tonnes per annum. At the Musselwhite Mine, Ontario Ontario, city, United States Ontario, city (1990 pop. 133,179), San Bernardino co., S Calif., near Los Angeles, in a region of vineyards; inc. 1891. (TVX 16 per cent), TVX's first quarter share of gold production was 9,950 ounces. In January January: see month. 2000, the mine achieved its highest monthly production since the start of operations in April 1997 pouring pour v. poured, pour·ing, pours v.tr. 1. To make (a liquid or granular solid) stream or flow, as from a container. 2. 21,000 ounces of gold (3,350 ounces attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to TVX). The Musselwhite operation benefitted from increases in tonnage milled, gold recoveries and head grades compared to the same period last year. At the TVX Normandy operated New Britannia Mine, Manitoba Manitoba (mănĭtō`bə), province (2001 pop. 1,119,583), 250,934 sq mi (650,930 sq km), including 39,215 sq mi (101,580 sq km) of water surface, W central Canada. (TVX 25 per cent), the Company's share of gold production was 7,450 ounces in the first quarter of 2000. Cash cost per ounce declined to $195 from $215 in the corresponding period last year, a reduction of 9%. Increased grades, resulting from better hanging wall stability and less dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. , and increased milled tonnage were factors leading to the improved performance of the operation. Stratoni Operation At the Stratoni operation, Greece Greece, Gr. Hellas or Ellas, republic (2005 est. pop. 10,668,000), 50,944 sq mi (131,945 sq km), SE Europe. It occupies the southernmost part of the Balkan Peninsula and borders on the Ionian Sea in the west, on the Mediterranean Sea in the south, on (TVX 100 per cent), as at January 1, 2000, the Company undertook to treat the Stratoni lead/zinc/silver operation as a separate business unit within the Company's 100% owned Greek In desktop publishing, to display text in a representative form in which the actual letters are not discernible, because the screen resolution isn't high enough to display them properly. The software lets you set which font sizes should be greeked. subsidiary, TVX Hellas S Hellas: see Greece. .A.. The Company produced 262,000 ounces of silver, 4,188 tonnes of lead and 4,234 tonnes 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. in concentrates. During the quarter, 46,000 tonnes of ore was mined, 38,000 tonnes from the Madem Lakkos Lakkos is the archaeological site of an ancient Minoan settlement on Crete, just south of Archanes. Archaeology Artifacts
Olympias Olympias, d. 316 B.C., wife of Philip II of Macedon and mother of Alexander the Great. She did not get on well with Philip, who had other wives, but the story that she murdered him is probably false. Update Over the course of the quarter, the Company continued to fund an extensive archeological campaign at the Olympias site, including the proposed tailings Tailings (also known as tailings pile, tails, leach residue, or slickens[1]) are the materials left over[2] after the process of separating the valuable fraction from the worthless fraction of an ore. area of Kipouristra. The study at the mill site 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. , conducted by Greek government archeologists, has been completed and three areas of potential historical significance were identified. These areas have been fenced off and are not expected to impact the development plans. Work at the Kipouristra tailings site is in progress and scheduled for completion in May, 2000. A final report from the Archeological Council is required prior to receipt of approval of the Environmental Impact Study ("EIS (1) (Executive Information System) An information system that consolidates and summarizes ongoing transactions within the organization. It provides top management with all the information it requires at all times from internal and external sources. ") and is expected during the second quarter of 2000. Greek general elections were held on April 9, 2000 with the PASOK PASOK Panhellenic Socialist Movement (Greece) party being re-elected. The Conseil Conseil taxonomically talented servant of Prof. Aronnax. [Fr. Lit.: Twenty Thousand Leagues Under the Sea] See : Pedantry d'Etat (Supreme Court of Greece) has scheduled June June: see month. 2, 2000 for a hearing of all currently outstanding legal challenges to certain permits relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Olympias project. Any permit issued by the Greek government may be challenged, which has happened with respect to several permits received by TVX Hellas. The challenges are against the respective departments of the Greek government which issued the permits. TVX Hellas and other interested parties, including several labour unions and community groups, have been included as interveners in support of the government's actions. Following receipt of the EIS and the court decision, the Company will apply for its construction permit and, upon receipt of this, commence the 24-month construction period at Olympias. Alpha Group 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. On February February: see month. 17, 18 and 25, 2000, the Ontario Court of Appeal The Court of Appeal for Ontario (frequently referred to as Ontario Court of Appeal) is headquartered in downtown Toronto, in historic Osgoode Hall. The Court is composed of 22 judges who hear over 1 500 appeals each year, on issues of private law, constitutional heard submissions from TVX and the Alpha Group with respect to the appeal and cross-appeal of the 1998 ruling of the Ontario Court of Justice The Ontario Court of Justice is a Provincial Court for the Canadian province of Ontario. This court oversees matters relating to family law and criminal law. This court is subordinate in relationship to the "superior" courts. (General Division) which awarded the Alpha Group a 12% carried interest and an option to purchase a 12% participating interest in the Greek projects upon payment of the costs associated with that interest (the "Judgment"). The Court also heard submissions from 1235866 Ontario Inc. (the successor company to Curragh This article is about the plain in County Kildare. For the racecourse on the plain, see Curragh Racecourse. For the willow scrub habitat known as curragh on the Isle of Man, see Curragh (habitat). For the Irish boat, see Currach. Inc.), requesting that the Judgment be dismissed dis·miss tr.v. dis·missed, dis·miss·ing, dis·miss·es 1. To end the employment or service of; discharge. 2. and that there be a new trial at which the Alpha Group, TVX and 1235866 would all be parties. The Court reserved judgment and gave no indication when it would release its decision on these matters. 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. Some statements in this press release contain forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. information. These statements address future events and conditions and, as such, involve inherent risks and uncertainties. Actual results could be significantly different from those projected. Visit the TVX Gold Web Site at: http://www.tvxgold.com
2000 First Quarter Highlights
(US$ millions, except per share amounts;
unaudited) Three months ended March 31,
2000 1999
------ ------
Revenue $42.1 $41.1
Net Earnings $4.0 $4.8
Less: Interest on convertible notes(1) (2.5) (2.4)
Amortization of issuance costs(1) (0.5) (0.5)
------ ------
Adjusted earnings $1.0 $1.9
------ ------
Earnings per share $0.01 $0.01
Operating cash flow $14.5 $3.6
Operating cash flow per share $0.08 $0.02
Common shares outstanding
Weighted average 179.6 161.8
Period end 179.6 161.8
(1.) 5% Gold linked convertible notes, issued March 24, 1997
Reserves and Resources
December 31, December 31,
1999 1998
------------ ------------
Reserves (ounces) (ounces)
Gold 9,830,000 11,047,000
Silver 31,900,000 77,705,000
------------ ------------
Gold equivalent 10,370,000 12,379,000
Total Resources (Reserves + Resources)
Gold 13,610,000 18,476,000
Silver 38,100,000 93,311,000
------------ ------------
Gold equivalent 14,250,0001 20,075,000
(1.) Represents TVX Gold's share of precious metals reserves and
resources after completion of the TVX Normandy transaction,
effective July 1, 1999.
Realized Metals Prices
(US$ per ounce)
Three months ended March 31,
2000 1999
Gold Silver Gold Silver
----------- ------------
Spot $290 $5.20 $287 $5.30
Cash hedge* 2 0.10 21 0.10
Deferred revenue 73 (1.00) 104 (1.10)
---- ------ ---- ------
Realized price $365 $4.30 $412 $4.30
* Also includes mine actual cash realized versus spot average
Consolidated Statements of Operations
(US$ thousands, except per share amounts; unaudited)
Three months ended March 31,
2000 1999
------- -------
Revenue $42,118 $41,127
------- -------
Mine Operating Costs
Cost of sales 25,269 19,574
Depletion and depreciation 9,238 11,230
------- -------
34,507 30,804
------- -------
Earnings from Mining Operations 7,611 10,323
------- -------
Other Expenses (Income)
Corporate administration 2,178 2,078
Interest expense 683 1,409
Exploration 1,012 1,271
Foreign exchange (gain) loss (336) 1,471
Interest income (2,452) (1,937)
Other, net 80 (792)
------- -------
1,165 3,500
------- -------
Earnings before the undernoted 6,446 6,823
Income taxes (note 1) 1,723 2,003
Minority interests and participation rights 718 -
------- -------
Net Earnings $4,005 $4,820
------- -------
Earnings Per Share* $0.01 $0.01
* After accounting for interest and amortization of issuance
costs on the 5% gold-linked convertible notes
Note 1. Change in Accounting Policy
Effective January 1, 2000, in order to comply with new
Canadian accounting standards, the Company changed the method
of accounting for income taxes to the liability method from
the deferral method. This change was adopted retroactively
without restatement of the 1999 comparative figures. As a
result, retained earnings at January 1, 2000 have been reduced
by $2,102 and the effect on earnings for the three-month
period ended March 31, 2000 was not material.
Consolidated Balance Sheets
(US$ thousands; unaudited)
March 31, December 31,
2000 1999
Assets
Current assets
Cash and cash equivalents $119,958 $147,176
Short-term investments 29,044 18,375
Accounts receivable 19,327 23,161
Inventories 40,849 39,849
--------- ----------
209,178 228,561
Mining property, plant and equipment 486,205 480,020
Deferred charges 5,925 6,692
Deferred income taxes (note 1) 8,755 -
Other assets 23,718 24,898
--------- ----------
$733,781 $740,171
========= ==========
Liabilities
Current liabilities
Accounts payable and accrued liabilities $33,155 $31,986
Current portion of long-term debt 40,922 47,253
Current portion of deferred revenue 9,092 10,498
--------- ----------
83,169 89,737
Long-term debt 30,095 38,382
Other liabilities 24,836 24,694
Deferred income taxes (note 1) 30,043 19,263
--------- ----------
168,143 172,076
Minority interests and participation
rights 176,886 181,246
--------- ----------
345,029 353,322
--------- ----------
Shareholders' Equity
Capital stock 385,052 385,052
Gold-linked convertible notes 224,660 221,635
Deficit (note 1) (220,960) (219,838)
--------- ----------
388,752 386,849
--------- ----------
$733,781 $740,171
========= ==========
Note 1. Change in Accounting Policy
Effective January 1, 2000, in order to comply with new
Canadian accounting standards, the Company changed the method
of accounting for income taxes to the liability method from
the deferral method. This change was adopted retroactively
without restatement of the 1999 comparative figures. As a
result, retained earnings at January 1, 2000 have been reduced
by $2,102 and the effect on earnings for the three-month
period ended March 31, 2000 was not material.
Consolidated Statements of Cash Flows
(US$ thousands; unaudited)
Three months ended March 31,
2000 1999
-------- -------
Operating Activities
Net Earnings $4,005 $4,820
Non-cash items:
Depletion and depreciation 9,238 11,230
Deferred income taxes 213 481
Minority interests and participation rights 718 -
Other (137) 121
Deferred revenue (2,836) (4,264)
-------- -------
11,201 12,388
Change in working capital 3,328 (8,835)
-------- -------
Cash provided by operating activities 14,529 3,553
-------- -------
Investing Activities
Mining property, plant and equipment (15,422) (16,462)
Minority interest dividend (5,078) 10,458
Short-term investments (10,669) -
Other 1,184 50
-------- -------
Cash used for investing activities (29,985) (5,954)
-------- -------
Financing Activities
Gold-linked convertible notes (5,637) (5,426)
Net long-term debt (repayment) borrowings (6,125) 50
-------- -------
Cash used for financing activities (11,762) (5,376)
-------- -------
Decrease in cash and cash equivalents (27,218) (7,777)
Cash and cash equivalents, beginning
of period 147,176 41,232
-------- -------
Cash and cash equivalents, end of period $119,958 $33,455
======== =======
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion