Cambior Announces 1.3 Million Ounce Gold Hedging Program Reduction.
(ME:CBJ.) (TSE:CBJ.) (AMEX:CBJ) Cambior Inc. ("Cambior") announces that it has reduced its gold hedging position by 1.3 million ounces. This reduction, made with a view to improving its aggregate hedging position, results from the purchase of one million ounces of gold (the "Purchased Ounces") at an average price of approximately $300 per ounce and from the closing out by counterparties of other positions totalling 300,000 ounces.
The one million ounce purchase was completed primarily through the bullion markets with the assistance of various parties to the recently executed standstill agreement (the "Standstill Agreement") among Cambior and its lenders and hedging counterparties (collectively, the "Financial Parties"). The terms of the Standstill Agreement are summarized in a press release issued by Cambior on October 27, 1999.
The Purchased Ounces will be applied to close out contracts for the delivery by Cambior of an equal number of ounces under its current hedging portfolio. The close-out will occur upon termination of the Standstill Agreement.
The above-mentioned purchase and close-outs are expected to generate a net crystallized liability for Cambior of approximately $33 million which will be reflected as a non-cash, pre-tax charge to earnings for a corresponding amount in Cambior's consolidated financial statements for the third quarter.
Under the terms of the Standstill Agreement, the above-mentioned liability will be treated as a demand loan to Cambior by the Financial Parties. The determination of more specific repayment arrangements will form part of negotiations with the Financial Parties under the Standstill Agreement regarding the elaboration of a plan for the orderly fulfillment of Cambior's obligations to the Financial Parties over time (a "Definitive Plan").
Cambior reiterates that, while it believes that an agreement regarding a Definitive Plan can be achieved, there can be no assurance that such an agreement will be reached. The failure to achieve such agreement would be likely to have a material adverse effect on Cambior and its financial results, financial condition and prospects.
Cambior also announces that its board of directors has appointed the firm of Bunting Warburg Dillon Read Inc. as its financial advisor. With the assistance of the financial advisor, Cambior will continue to consider all possible courses of action with a view to maximizing shareholder value.
Cambior Inc. is an international diversified gold producer with operations, development projects and exploration activities throughout the Americas. Cambior's shares trade on the Toronto, Montreal and American (AMEX) stock exchanges under the symbol "CBJ".
This press release contains certain "forward-looking statements", as defined in the United States Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Such risks and uncertainties are disclosed under the heading "Risk Factors" in Cambior's Annual Information Form (AIF) filed with the Ontario Securities Commission, the Quebec Securities Commission, the United States Securities and Exchange Commission (Form 40-F) and other regulatory authorities.
|Printer friendly Cite/link Email Feedback|
|Date:||Nov 1, 1999|
|Previous Article:||Park Place Entertainment Corp. Announces Extension of Exchange Offer.|
|Next Article:||Standard & Poor's Announces Changes in S&P Indices.|