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ECHO BAY ANNOUNCES 1992 NET LOSS AFTER WRITE-OFFS OF INVESTMENTS

 TORONTO, Feb. 18 /PRNewswire/ -- Echo Bay Mines Ltd. (Toronto; AMEX: ECO) today reported a 1992 net loss of US$31.7 million (US$0.30 per share) after previously announced write-offs of investments totaling US$18.1 million (US$0.17 per share). This compares with 1991 net earnings of US$6.8 million (US$0.07 per share).
 At year-end, the company wrote off US$14.9 million (US$0.14 per share) representing the remaining book value of a loan to Crown Resources Corp. and US$3.2 million (US$0.03 per share) for exploration properties. Write-offs are non-cash reductions in the book values of investments on the company's balance sheet.
 The company's production was up and costs were down, but sharply lower gold prices offset the operating improvement. The gold price fell to US$333 per ounce at year-end 1992 from US$353 a year earlier.
 The company's average realized price was US$357 per ounce sold during the year. This was US$13 better than the US$344 average spot price of gold on world markets. The higher price resulted from the company's hedging program.
 Operating earnings fell to US$4.8 million in 1992 from US$23.1 million in 1991, reflecting the gold price decline. Revenues declined to US$312.4 million from US$315.6 million.
 Operating cash flow was US$76.5 million, compared with US$87.8 million a year earlier (US$0.73 versus US$0.87 per share).
 Debt Reduction
 Echo Bay sold US$143.75 million of convertible preferred shares of a finance subsidiary in July, and used some of the net proceeds to eliminate its dollar-denominated debt. All of the company's remaining debt is denominated in gold and silver. Interest rates on gold and silver loans are lower than on currency loans. At Dec. 31, the average interest rate on the company's gold- and silver-denominated debt was 1.7 percent.
 At year-end, the company had nearly US$120 million in cash, cash equivalents, and U.S. Treasury notes. Its total debt, net of cash and U.S. Treasury holdings, was US$100 million, down US$133 million from a year earlier. Net debt has been reduced by more than US$300 million from its peak of US$414 million in mid-1990.
 Leveraged to Gold Price Increases
 Echo Bay is more leveraged to increases in the price of gold than most other gold producers. Through its hedging program, it also has protection against the risk of price erosion covering about two-thirds of its planned 1993 gold production. The company has purchased "put" options that guarantee it a selling price of US$330 per ounce for 475,000 ounces of gold in 1993.
 In addition, the company will deliver 28,200 ounces in 1993 against gold loans at an average price of US$349 per ounce.
 Gold and Silver Reserves
 At year-end, gold reserves were within 8 percent of what they were a year earlier, after a full year of ore had been mined, and silver reserves were within 4 percent. Gold reserves totaled 11.6 million ounces, compared with 12.5 million ounces a year earlier. Silver reserves totaled 112.3 million ounces, compared with 116.9 million ounces a year earlier. During the year, Echo Bay replaced 412,000 ounces of gold and 16.2 million ounces of silver reserves.
 Total reserves include producing mines and development properties. At producing mines alone, the company had 7.2 million ounces of gold in reserves at year-end, compared with 7.9 million ounces five years ago -- and Echo Bay produced 3.6 million ounces of gold in the years in between.
 Increased Production at Reduced Cost
 The company's production was higher and costs were lower in 1992. Gold production rose to 764,188 ounces from 733,907 ounces. Silver production rose even more dramatically, to 7.9 from 5.6 million ounces, or 41 percent.
 The company reduced its cash production costs by US$12 per ounce of gold produced, to US$237 from US$249. Productivity improvements and cost reductions were made at all four of its mines.
 McCoy/Cove in Nevada, the company's largest mine, achieved record production and lower unit costs. Gold production there rose to 301,512 ounces in 1992 from 284,327 ounces in 1991, and silver increased 41 percent to 7.9 million ounces. Cash production costs were reduced to US$234 per ounce of gold in 1992 from US$253 in 1991 and US$270 in 1990. Throughout 1992, numerous productivity efficiencies improved both mill production and heap leaching operations over prior years.
 Echo Bay's mine at Lupin in the Northwest Territories produced 214,482 ounces -- just short of the all-time-record 216,877 ounces, set in 1991, despite the fact that Lupin did not have a "sill" of high-grade ore to mine in 1992 the way it did in 1991. Cash production costs were US$244 per ounce produced in 1992 and US$242 in 1991. Capacity is being expanded by 15 percent at Lupin, to 2,300 from 2,000 tons/day. Startup is expected in the second quarter.
 At 50 percent-owned Round Mountain in Nevada, production was 370,600 ounces in 1992 (Echo Bay's 50 percent share, 185,300 ounces), up 9 percent from 339,024 ounces in 1991 (Echo Bay's half, 169,512 ounces). Cash production costs were reduced to US$216 per ounce in 1992 from US$231 in 1991. Round Mountain continues to be Echo Bay's lowest-cost gold producer.
 Round Mountain discovered a narrow but very high-grade vein of coarse gold within the open pit in 1992. About 30,000 tons of the high-grade material were mined and stockpiled during the year, and a small pilot-plant mill was purchased to begin recovering the coarse gold and to test the feasibility of milling other Round Mountain ores. The 1992 mill feed averaged nearly two ounces of gold per ton of ore and contributed about 50,000 ounces of gold to the year's production (Echo Bay's half, 25,000 ounces).
 With its joint venture partners at Round Mountain, Echo Bay is examining a variety of mill alternatives for processing between 5,000 and 10,000 tons/day of nonoxidized and high-clay ores. Heap leach recovery rates can run considerably lower than 50 percent on nonoxidized material, depending on a variety of factors such as type of ore, clay content, and amount of coarse gold present. A mill could recover more than 85 percent of the contained gold in nonoxidized material. Over the life of the mine, as much as 750,000 additional ounces of gold could be recovered from the total ore body. A mill construction decision is expected to be made later in 1993.
 Echo Bay's joint venture partner at Kettle River in Washington State, Crown Resources Corp., announced its withdrawal from the venture at year-end, increasing Echo Bay's interest in Kettle River from 70 percent to 100 percent. The property is Echo Bay's smallest, accounting for about 8 percent of the company's gold production. Echo Bay's share of Kettle River gold production was 62,894 ounces in 1992, about the same as 63,191 ounces in 1991. Cash production costs were US$294 per ounce, compared with US$303 in 1991. A tunnel is currently being driven into the mineralization at the nearby Lamefoot deposit, with promising results. Ore from other nearby properties is also likely to be milled at Kettle River in the longer term, further enhancing the project's economics.
 Alaska-Juneau: Revised Feasibility Study, Lower Costs
 The A-J, as it is known, was the largest gold mine in North America for most of the 1920s, 1930s and 1940s. Echo Bay owns 100 percent. The company proposes to reactivate the A-J, using modern large-volume mining and milling methods to achieve significant economies of scale. A revised feasibility study completed by Kilborn Engineering Pacific Limited in late 1992 contemplates an underground mine and mill capable of processing 22,500 tons/day during the first two years of operation with the potential for expansion up to 30,000 tons/day thereafter. This would produce about 335,000 ounces/year of gold in the first two years, and an average of 450,000 ounces/year after expansion.
 The feasibility study contemplates cash production costs of less than US$200 per ounce of gold prior to expansion, and under US$170 per ounce thereafter.
 The initial capital cost is projected to be US$270 million. The cost to expand production up to 30,000 tons/day would be an additional US$37 million. All amounts are stated in fourth quarter 1992 dollars.
 The prior feasibility study had looked at steady throughput of 22,500 tons/day over the life of the mine. If an expansion decision were to be made, some permits might require amendment.
 The project economics are considerably improved from a year ago. Operating costs are US$25 per ounce lower prior to expansion and US$55 per ounce lower thereafter, for an average reduction of about US$50 per ounce over the life of the project. Initial capital costs are also significantly lower. Even if the project scope were increased to 30,000 tons/day, capital costs would still be about the same as in the earlier feasibility study. The improvement came from a redesign of the A-J mill flowsheet to maximize recovery of gold in the gravity-recovery portion of the mill at the "front end" of the facility.
 The increased throughput would produce more gold faster and at a lower cost per ounce, accelerating the project's payback. Because it would also deplete the mine's current reserves and other mineralization sooner, Echo Bay is launching a two-year exploration program aimed at increasing this already-large resource by 20 percent to 30 percent. If successful, as the historic mining data indicates it should be, this would further enhance the project economics.
 The necessary permits are expected to be issued shortly. Construction would require a total of about 2-1/2 years. It is prudent to anticipate administrative and legal challenges, which could delay the final construction decision by an indeterminable period of time. However, with the gold price near a seven-year low, Echo Bay is in no particular hurry to commence construction.
 Kensington: Updated Feasibility Study
 Echo Bay owns a 50 percent interest in this development property 45 miles north of Juneau in southeastern Alaska.
 An updated feasibility study prepared by Bechtel Corp. calls for a 4,000-ton/day mill to produce 200,000 ounces/year of gold (Echo Bay's 50 percent share, 100,000 ounces) at an initial cash production cost of about US$225 per ounce.
 To bring the property into production, Echo Bay's share of the capital investment would be on the order of US$90-95 million, stated in fourth quarter 1991 dollars (including Echo Bay's estimates for contingencies). Echo Bay and its partner, Coeur d'Alene Mines Corp., (NYSE: CDE) have decided that a higher gold price and/or additional reserves are needed to justify that investment. The property's potential becomes significantly greater at higher gold prices than current depressed levels.
 In the meantime, the partners are evaluating Kensington's geologic data base to identify targets for development of additional reserves to improve project economics.
 Echo Bay is one of the largest gold producers in North America. The company's shares are traded principally on the Toronto and American stock exchanges and on other major exchanges in North America and Europe.
 -0- 2/18/93
 /NOTE: Additional information is available by fax on request. Please call Sharon Taylor at 303-592-8075/
 /CONTACT: Paddy Broughton, 303-592-8048; or Ted Sheldon, 303-592-8049, both of Echo Bay Mines/
 (ECO CDE)


CO: Echo Bay Mines Ltd. ST: Colorado IN: MNG SU: ERN

BB -- DV005 -- 7885 02/18/93 12:13 EST
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