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 DENVER, Oct. 13 /PRNewswire/ -- Atlas Corp. (NYSE: AZ) reported today a net loss of $29,909,000, or $4.72 per share for the fiscal year ended June 30, 1993, compared to a net loss of $7,253,000, or $1.18 per share for fiscal year 1992. The loss includes a year-end charge of $28,716,000 to adjust the carrying value of the company's assets to reflect a reduction in the proven and probable mineable gold reserve at the Gold Bar Project near Eureka, Nev. The loss for fiscal year 1993 is net of a $17,803,000 gain on the leasing of the Grassy Mountain and Musgrove Creek properties in the second quarter.
 Mining revenues declined to $19,280,000 in fiscal 1993 from $29,624,000 in fiscal 1992 as a result of a 33 percent reduction in the number of gold ounces produced. Production was affected by permitting delays at the Gold Canyon deposit and by operational difficulties at the Gold Pick East and Goldstone North open pits. A lower average grade (0.061 oz/ton in fiscal 1993 vs. 0.071 oz/ton in fiscal 1992) and a lower average mill recovery (82 percent in fiscal 1993 vs. 92 percent in fiscal 1992) also contributed to the escalation of production costs.
 Year ended Year ended
 June 30, 1993 June 30, 1992
 Gold Production (oz) 55,080 81,832
 Average Gold Price Realized $350 $362
 Cost/oz Cost/oz
 Cash Cost $323 $223
 Mine Site Non-Cash Cost 163 145
 Head Office Costs 75 52
 Total $561 $420
 A net loss of $35,139,000, or $5.55 per share, was reported during the fourth quarter of fiscal 1993. While the majority of this loss reflects the year-end asset adjustment charges, the company experienced operating losses of $1,642,000. Concerns over the stability of the Goldstone North pit highwall in May resulted in a curtailing of ore production from the pit for a one month period. Milling operations continued through this period by processing previously stockpiled lower grade oxide and refractory ores, resulting in both higher costs and lower recoveries. Gold production during the fourth quarter was approximately 15,200 ounces, compared to approximately 16,700 ounces in the like quarter of fiscal 1992.
 By November 1992, it became evident that a delay in receiving the permits to mine the Gold Canyon deposit would cause an interruption in ore flow under the existing mine plan. In response, the company altered its mine plan and began the accelerated development of the Goldstone North deposit to replace mill feed originally scheduled from the Gold Canyon deposit. Atlas employed a contract mining firm at this time to provide the additional equipment and personnel required under the revised mine plan.
 Atlas experienced a significant fall off in gold production during the second and third fiscal quarters while mining the Gold Pick East Phase I pit. This decrease of approximately 8,000 ounces from the reserve model was due to the unexpected abundance of both restrictive geological structures and refractory ores not previously encountered in early pits. The combination of the decreased production, the decline of the average gold price to $339 in the third quarter, and the cash demands of the accelerated Goldstone North development, all resulted in the company being unable to meet its obligations to the mining contractor. As a result, Atlas negotiated terms for the deferred payment of approximately $3.5 million to the contract miner in March 1993 based on a continued relationship between the companies for the mining of the Gold Canyon deposit. Part of this agreement required the sale of a portion of Atlas' mining equipment and payment of the proceeds to the contract miner. This sale resulted in a reported loss of $615,000.
 The loss of anticipated ounces at the Gold Pick East deposit prompted the company to initiate an in-fill drilling program at the remaining satellite deposits at the Gold Bar Project. The additional information provided by this drilling was used to reassess the company's ore reserves. This work, reviewed by an independent consultant, resulted in the company reducing proven and probable ore reserves from 445,500 ounces as of June 30, 1992 to 220,380 ounces as of June 30, 1993, a reduction of approximately 155,000 ounces net of mining during fiscal year 1993. As the revised mine plan does not provide for the complete recovery of unamortized costs, a charge to operations during the fourth quarter of $28,716,000 was made to adjust the carrying value of the company's mining assets.
 On Sept. 20, 1993, Atlas completed the previously announced sale of certain securities for $8,375,000 to Phoenix Financial Holdings Inc. As part of this transaction, four Phoenix designees were appointed to seats on Atlas' board of directors and to three executive positions within the company. David J. Birkenshaw, Atlas' new chairman of the board and chief executive officer,

stated, "With Atlas, we see an excellent opportunity for a financial and operational turnaround. Steve Manz, Atlas' new president and chief financial officer, and Michael Gross, the new senior vice president and chief operating officer, are both fresh from the successful turnaround of three previously unprofitable 100,000 ounce per year gold mines. With mining beginning at the higher grade, lower stripping ratio Gold Canyon deposit and with the potential for higher grade underground mining, we believe costs can be brought quickly under control. Our 90 square mile claim block, in the heart of Nevada's active Battle Mountain trend, remains 80 percent unexplored. We believe the $5 million we intend to spend on the exploration of our claim block over the next two years will add considerably to the reserve life of the project."
 Condensed Statement of Operations
 (In Thousands, Except per Share Data)
 Three Months Twelve Months
 Ended Ended
 June 30, June 30,
 1993 1992 1993 1992
 Mining revenue $ 5,535 $ 5,759 $19,280 $29,624
 Mining costs 7,177 9,892 26,797 30,041
 Impairment of
 mineral properties 28,716 -- 28,716 --
 Loss from operations (30,358) (4,133) (36,233) (417)
 Other income and (expense)
 Gain on lease transaction -- -- 17,803 --
 Exploration (643) (418) (1,783) (2,318)
 General and administrative (959) (1,027) (4,149) (4,296)
 Impairment of non-producing
 mineral properties (2,796) -- (2,796) --
 Other (net) 2,606 (26) (908) (146)
 Loss from continuing
 operations (32,150) (5,604) (28,066) (7,177)
 Loss from discontinued
 operations (212) (76) (875) (76)
 Extraordinary charge -
 utilization of tax
 loss carryforwards (2,777) -- -- --
 Cumulative effect on prior
 years of postretirement
 benefit obligations -- -- (968) --
 Net loss $(35,139) $(5,680) $(29,909) $(7,253)
 Loss per share of common stock:
 Loss from continuing
 operations $(5.08) $(.90) $(4.43) $(1.17)
 Loss from discontinued
 operations (.03) (.01) (.14) (.01)
 Extraordinary charge -
 utilization of tax
 loss carryforwards (.44) -- -- --
 Cumulative effect on prior
 years of postretirement
 benefit obligations -- -- (.15) --
 Net loss $(5.55) $(.91) $(4.72) $(1.18)
 Average number of common
 shares outstanding 6,336 6,336 6,336 6,171
 Comparative Balance Sheets as of June 30 1993 1992
 Current assets $ 6,333 $ 5,640
 Property, plant and equipment (net) 5,376 51,585
 Other assets 7,840 1,469
 Net assets of discontinued operations -- 518
 $19,549 $59,212
 Liabilities and Stockholders' Equity (Deficit):
 Current liabilities $ 9,149 $19,984
 Long-term liabilities 14,807 13,726
 Total stockholders' equity (deficit) (4,407) 25,502
 $19,549 $59,212
 -0- 10/13/93
 /CONTACT: Robbin A. Lee of Atlas, 303-825-1200/

CO: Atlas Corp. ST: Colorado IN: MNG SU: ERN

BB -- DV005 -- 1894 10/13/93 17:25 EDT
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Publication:PR Newswire
Date:Oct 13, 1993

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