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CYPRUS MINERALS TAKES $315 MILLION AFTER-TAX CHARGE ON COAL, STEEL RELATED BUSINESSES

CYPRUS MINERALS TAKES $315 MILLION AFTER-TAX CHARGE ON COAL, STEEL RELATED
 BUSINESSES
 DENVER, July 7 /PRNewswire/ -- Cyprus Minerals Co. (NYSE: CYM) today announced write-downs of certain assets, provisions for associated liabilities, and the recording of various other charges totalling $415 million. These actions, which will not affect near- term cash flow, will result in an after-tax charge of $315 million. The pre-tax charges are for Kentucky coal, $182 million; LTV coal claim, $86 million; Empire coal, $25 million; Thompson Creek molybdenum, $57 million; Northshore iron ore, $31 million; and various other provisions, $34 million.
 Milton H. Ward, Cyprus' chairman, president and chief executive officer, said, "Write-downs are difficult, but several significant recent events make it important to recognize these asset impairments at this time. After the charge, these businesses will reflect their current financial value, given today's outlook for certain regional coal markets and for the steel industry in general. As Cyprus' new chairman and CEO, I believe that Cyprus must strive to make its businesses succeed in spite of weak markets. It is imperative that we continue to reduce costs, improve productivity, and adapt our actions to accommodate the marketplace."
 The coal market price outlook for the Kentucky coal operations is weak based upon oversupply and soft demand. Coal market prices are several dollars per ton below last year. While mine operations continue to focus on cost reductions, existing long-term contracts expire in 1995 and 1998. In the second quarter, Cyprus filed for arbitration regarding coal specifications in one of these long-term contracts. To maintain profitability, Cyprus will need to sign new contracts and/or extend existing contracts at prices above today's market level. Because of the current poor outlook for these markets, a write-down of $182 million for reduced value of assets and reserves is being recorded. Included in the write-down is $154 million of costs resulting from the 1981 acquisition of the properties. The asset basis after the write-down will be $75 million plus an equipment lease obligation.
 Cyprus' LTV bankruptcy claim arose from a long-term coal sales contract at the Emerald coal mine in Pennsylvania. Based upon LTV's business environment and protracted and difficult Chapter 11 reorganization proceedings, Cyprus has become increasingly uncertain as to the amount or timing of ultimate recovery of its claim. Therefore, Cyprus is writing off its $86 million basis in the claim.
 Following settlement of a protracted strike, the Empire Colorado coal mine is operating at reduced production levels reflecting weak demand and increased competition in western coal markets. As a result, management expects to be able to economically mine only 5 million tons over the next several years. Therefore, a write-down of assets and reserves, as well as a provision for eventual closure costs totalling $25 million, is being made.
 Continued weakness in the worldwide steel business has been a major factor causing molybdenum prices to reach 20-year lows during the first half of 1992. In addition, during the second quarter, the Thompson Creek primary molybdenum mine in Idaho experienced a mine slide, creating operating and reserve uncertainties. The mine is continuing in operation at a rate adequate to meet sales to Cyprus' customers. But because of market conditions, management cannot assure that mine operations will continue beyond the next several years and reserves are being reduced accordingly. Consequently, a provision is being made at this time for eventual mine closure costs. Coupled with a write-down of development stripping, the total charge is $57 million.
 In June, the Northshore iron ore mine in Minnesota temporarily shut down due to sales which have been significantly below expectations. The steel business is weaker than anticipated resulting in lower iron ore demand, and the prospect for additional sales from Northshore is uncertain. Cyprus is recording a $31 million asset write-down to reflect the reduced value of this property.
 In addition, Cyprus is recording various other charges totalling $34 million, including write-downs of surplus assets and certain small under-performing operations to net disposable value, costs relating to the sale of the talc business, and provisions for certain litigation.
 Also, Cyprus has adopted Financial Accounting Standard 109, Accounting for Income Taxes. As a result, Cyprus is recording a cumulative $3 million charge for adoption of this new accounting standard and a tax benefit relating to the asset write-downs.
 Despite the second quarter charge, Cyprus will remain financially strong with $1.6 billion of assets, a low debt to capitalization ratio of 19 percent, and strong operating cash flow at current copper prices.
 Ward also said, "These moves, painful as they are at this time, are necessary in order to begin making the most of the bright future of Cyprus Minerals."
 Cyprus Minerals, headquartered in Englewood, Colo., produces copper, molybdenum, coal, lithium, gold, iron ore, zinc, and barite.
 -0- 07/08/92
 CONTACT: Michael Rounds of Cyprus Minerals, 303-643-5186
 (CYM) CO: CYPRUS MINERALS CO. IN: MNG ST: CO -- DV007 -- X942 07/08/92
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Date:Jul 8, 1992
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