ECHO BAY REPORTS SECOND QUARTER RESULTS
ECHO BAY REPORTS SECOND QUARTER RESULTS EDMONTON, Alberta, Aug. 6 /PRNewswire/ -- Echo Bay Mines Ltd.
(Toronto; AMEX: ECO) today reported breakeven earnings per share (US$0.00 per share) in the second quarter of this year, down from US$0.05 per share in the second quarter of 1991, reflecting sharply lower gold prices.
The company's quarterly net loss was US$0.4 million, compared with quarterly net earnings of US$4.7 million a year ago. The company produced more gold at a lower cost per ounce. But the slump in worldwide gold prices more than offset the improved operating performance. The average price realized per ounce of gold sold in the quarter fell by US$33 to US$352 this year from US$385 a year ago. The price realized by Echo Bay was US$13 higher than the US$339 average spot price per ounce of gold on world markets. The better price was obtained by the company's hedging programs. Gold production rose to 207,641 ounces this year from 198,371 ounces last year. Silver production increased to 2.4 million ounces from 1.4 million ounces. The company reduced its cash production costs to US$229 per ounce of gold produced in the quarter from US$236 a year ago. Production was also higher, and unit costs were lower, than in the first quarter of this year. Gold production was up 23 percent, and silver production was up 14 percent. Costs were reduced by US$23 per ounce of gold from US$252 in the first quarter. The increased production lifted revenues to US$86.3 million in the second quarter of this year, up 5 percent from US$82.0 million a year ago, despite lower gold prices. Operating cash flow was US$22.8 million (US$0.22 per share), compared with US$23.8 million (US$0.24 per share) a year ago and US$17.8 million (US$0.17 per share) in the first quarter of this year. Echo Bay reduced its total debt to US$257.9 million at June 30, down US$87.9 million from June 30, 1991, a year earlier. Debt at June 30, 1992 was about the same as the US$256.8 million at March 31, three months earlier. Since June 30, Echo Bay has further reduced its net debt (total debt less cash and short-term investments) by an additional US$136.3 million. The reduction was achieved by selling US$143.8 million of convertible preferred shares to the public and applying a portion of the net proceeds, after expenses, to debt. Echo Bay holds the remaining funds in cash and marketable securities. Production of gold rose by 27 percent at Echo Bay's largest gold mine, McCoy/Cove in Nevada, to 89,987 ounces in the second quarter of 1992 from 71,021 ounces a year ago. Quarterly silver output rose by 71 percent to 2.4 million ounces this year from 1.4 million ounces last year. The disproportionate increase in silver production was due to mining an area of the Cove deposit that is richer in silver than the area that was mined a year ago. Quarterly cash production costs fell by US$23 per ounce of gold produced, to US$227 this year from US$250 last year, reflecting successful cost containment efforts and a higher average ore grade milled this year than last. The Lupin mine in Canada's Northwest Territories produced more gold in the second quarter of 1992 than in any previous quarter since the mine began operations in 1982. Gold production totaled 58,863 ounces, up from 56,116 ounces in the second quarter of last year. The new production record was achieved despite a lower average ore grade processed. Lower grade was more than offset by higher throughput. Cash production costs were US$222 per ounce of gold produced this year, compared with US$223 last year, reflecting increased production and successful cost-containment measures. At 50 percent-owned Round Mountain in Nevada, second quarter production totaled 86,684 ounces (Echo Bay's half, 43,342 ounces), 22 percent lower than second quarter production a year ago but 27 percent higher than production in the first quarter of this year. This is because the ore mined during the second quarter of this year was largely Transition Zone material containing a greater percentage of non-oxidized ore and a higher clay content than a year ago (although a lower clay content than the first quarter of this year). The higher the clay content, the lower the permeability of the ore on the heap leach pad. The lower the permeability, the lower the amount of contained gold that can be recovered. In the third and fourth quarters of this year, less of the high-clay-content Transition Zone ore is scheduled to be processed. Round Mountain's cash production cost was US$224 per ounce of gold produced in the second quarter. This is 6 percent higher than the year-ago unit cost, but 11 percent lower than the cost per ounce produced in the first quarter of this year. At 70 percent-owned Kettle River in northeastern Washington state, production totaled 22,070 ounces (Echo Bay's 70 percent share, 15,449 ounces), about the same as a year ago when Echo Bay's share was 15,771 ounces. Kettle River is Echo Bay's smallest gold mine, accounting for about 7 percent of the company's production in the second quarter. Cash production costs were US$285 per ounce this year, down from US$289 last year. Echo Bay is one of the largest gold producers in North America. The company's common shares are traded principally on the Toronto and American stock exchanges and on other major exchanges in North America and Europe. -0- 8/6/92 /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
BB -- DV003 -- 7622 08/06/92 12:50 EDT
|Printer friendly Cite/link Email Feedback|
|Date:||Aug 6, 1992|
|Previous Article:||BEMIS ADDS THREE DIRECTORS|
|Next Article:||BANISTER REPORTS RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 1992|