ECHO BAY REPORTS FIRST QUARTER RESULTS
ECHO BAY REPORTS FIRST QUARTER RESULTS EDMONTON, Alberta, May 1 /PRNewswire/ -- Echo Bay Mines Ltd.
(AMEX: ECO) today reported a net loss of US$1.7 million (US$0.02 per share) in the first quarter of 1992, compared with net earnings of US$4.4 million (US$0.04 per share) a year ago, reflecting sharply lower gold prices.
The average price realized per ounce of gold sold in the quarter fell to US$378 this year from US$401 a year ago. The price realized by Echo Bay was US$27 better than the US$351 average spot price per ounce of gold on world markets. The better price was obtained by the company's hedging programs. Results improved from the fourth quarter of last year, despite lower gold prices. The company increased its operating earnings by 26 percent to US$3.9 million and cut its net loss after taxes by 63 percent to US$1.7 million, principally by reducing production costs. The company's average cash production cost was US$252 per ounce of gold produced during the first quarter, US$5 higher than a year ago but US$23 lower than in the fourth quarter of last year. Quarterly revenues declined to US$71.0 million from US$80.2 million in the first quarter of last year and US$74.3 million in the fourth quarter of last year, reflecting the gold price slump. Operating cash flow was US$17.8 million in the first quarter (US$0.17 per share), down from US$23.7 million a year ago (US$0.24 per share) but up from US$16.4 million in the fourth quarter (US$0.15 per share). Echo Bay's total debt was US$256.7 million at March 31, 1992, down US$104.4 million from US$361.1 million a year ago. Debt rose by US$23.0 million during the first quarter, from US$233.7 million at Dec. 31, 1991. The increase was due to a US$8.1 million increase in cash on hand; to decisions to acquire larger loading and hauling equipment at the McCoy/Cove and Round Mountain mines in Nevada, which will reduce both mines' unit operating costs; and to the annual resupply of Lupin in the Northwest Territories with one year of fuel and other bulk supplies via the winter ice road, which is much less costly than delivering bulk supplies year-round by air. As expected, Echo Bay produced less gold but more silver than a year earlier. The ore being mined in 1992 is leaner in gold but richer in silver at the company's largest producer, McCoy/Cove. Company-wide gold production declined 14 percent from a year ago to 168,370 ounces, while silver production increased more than six-fold to 2,080,905 ounces. Compared with the fourth quarter of last year, gold and silver production both rose 5 percent in the first quarter of this year. At McCoy/Cove, gold production was 63,789 ounces this year and 81,506 ounces last year, while silver production increased to 2,080,905 ounces from 273,298 ounces. In dollar terms, the added silver more than offset the lower gold. Quarterly cash production costs fell by US$9 per ounce of gold produced, to US$249 this year from US$258 last year, reflecting successful cost containment efforts. At Lupin, gold production totaled 55,211 ounces in the first quarter, within 4 percent of the all-time-record 57,459 ounces produced a year ago when Lupin was mining a higher-grade "sill" of ore. The average grade milled was 0.318 ounce/ton this year versus 0.333 ounce/ton a year ago. Cash production costs rose by 4 percent, to US$243 per ounce of gold produced in the first quarter of this year from US$233 a year ago. The increase was due to the fewer ounces produced. At 50 percent-owned Round Mountain, Echo Bay's share of first quarter production was 34,030 ounces, about the same as in the fourth quarter of last year when Echo Bay's share was 34,016 ounces. Production levels in both quarters were about 15 percent lower than in the first quarter of last year, when Round Mountain was mining a higher-grade section of the open pit. The grade varies widely from area to area within the massive 290-million-ton ore body. The average ore grade processed in the first quarter of this year was 0.0305 ounce/ton, about 9 percent lower than the average 0.0335 ounce/ton processed a year ago. Higher-grade areas of the open pit are scheduled to be mined in the second half of this year. Cash production costs per ounce rose 9 percent to US$253 in the first quarter of this year over last year, reflecting the reduced number of ounces produced, despite reduced total spending. At 70 percent-owned Kettle River in northeastern Washington State, Echo Bay's share of first quarter production was 15,340 ounces, modestly higher than in the fourth quarter of last year when Echo Bay's share was 14,770 ounces, despite lower grade. Production in the first quarter of this year was 11 percent lower than a year ago, when higher-grade ore was being mined (0.171 versus 0.166 ounce/ton) and mill throughout was higher (1,798 versus 1,647 tons/day). Cash production costs were US$298 per ounce of gold produced in the first quarter of this year, down 15 percent from US$349 in the fourth quarter and up 11 percent from US$269 in the first quarter of last year when more ounces were produced. 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- 5/1/92 /NOTE TO EDITORS: 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) CO: Echo Bay Mines Ltd. ST: Colorado IN: MNG SU: ERN
MC -- DV003 -- 5395 05/01/92 10:35 EDT
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|Date:||May 1, 1992|
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