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 TORONTO, Nov. 4 /PRNewswire/ -- Echo Bay Mines Ltd. (Toronto; AMEX: ECO) today reported third quarter earnings of US$2.6 million before preferred stock dividends, compared with a loss of US$2.5 million a year ago.
 On a per share basis, the company had breakeven net earnings of US$0.00 (after preferred stock dividends), compared with a net loss of US$0.04 per share a year ago.
 Preferred stock dividends totaled US$2.5 million in the third quarter, up from US$1.8 million a year ago, reflecting the preferred shares' issuance in late July 1992.
 The company produced more gold and silver at lower costs per ounce. Operating earnings increased seven-fold, to US$12.1 million this year from US$1.6 million a year ago, reflecting the strength in operating results and a US$11 higher gold price realized per ounce. The cash production cost per ounce of gold was reduced by US$29 to US$212, and the cash production cost of silver was reduced by US$0.25 to US$2.39 per ounce. Gold production increased by 19 percent to 217,617 ounces, a new record for the third quarter, and silver production totaled 2.7 million ounces, up 92 percent from last year's third quarter.
 Operating cash flow increased to US$27.4 million (US$0.25 per share) from US$17.6 million (US$0.17 per share) a year ago. Quarterly revenues grew to US$92.0 million from US$75.2 million.
 The improvement in earnings was achieved despite a US$3.1 million charge against earnings in the third quarter for development property expenses, compared with zero a year ago. At year-end 1992, the company adopted a policy of expensing the holding costs and reducing the net book values of its development properties over the lives of the major development permits, once permits have been obtained but final construction decisions have not yet been made. The company's applications for Major Mine Permits have been approved for both of Echo Bay's Alaska development projects by the City and Borough of Juneau.
 Exploration expense also increased sharply in the third quarter, to US$4.3 million this year from US$2.5 million last year. Echo Bay is funding major exploration programs at all four of its producing mines in Canada and the United States, and is also examining other opportunities in North America, Latin America, Russia and elsewhere.
 Echo Bay sold 6.4 million common shares to the public in the third quarter, increasing the number of common shares outstanding to 111.6 million. The net proceeds of US$79.1 million were added to available funds to be used for general corporate purposes.
 Following the sale of common shares, the company wiped out its net debt (total debt offset by cash, cash equivalents, and U.S. Treasury holdings). Echo Bay has in excess of US$230 million in cash and U.S. Treasury notes, which more than offsets its total debt of US$216 million.
 The company has reduced its net debt by more than US$400 million over the past three years. Echo Bay's debt peaked at US$415 million at June 30, 1990. The net debt reduction totaled US$123 million over the past 12 months.
 Echo Bay is leveraged to the price of gold. The company normally hedges about one-third of its coming year's gold production by a combination of forward sales and gold loan maturities. During the third quarter, the company delivered 41,550 ounces of gold against its forward positions and gold loan maturities, accounting for 18 percent of its quarterly gold production. On these deliveries, the average realized price was US$352 per ounce of gold hedged. The average price realized by the company for all gold sold during the quarter was US$372 per ounce, or US$5 lower than the US$377 average spot price of gold on world markets, reflecting the fact that a significant portion of the company's quarterly production is always sold in the latter part of each quarter, while spot gold prices peaked early in the third quarter of this year, then dropped sharply.
 Gold production rose by 19 percent to 217,617 ounces in the third quarter of 1993 from 183,320 ounces a year ago. This is more gold than Echo Bay produced in all but one of the 43 prior quarters since it began producing gold in 1983.
 The company reduced its cash production costs by US$29 per ounce of gold produced, to US$212 per ounce. Productivity improvements and cost reductions were made at all four of its mines, many of them generated by a quality- and teamwork-based initiative involving all employees company-wide, based on the concepts of Total Quality Management (TQM).
 The McCoy/Cove mine in Nevada achieved near-record production levels and lower costs. Quarterly gold production rose 29 percent to 96,545 ounces from 74,970 ounces in the year-ago quarter. Silver production nearly doubled, rising to 2,708,993 ounces this year from 1,410,553 ounces a year ago. The cash production cost per ounce of gold was reduced to US$191 in the third quarter, down US$47 from US$238 a year ago, and the cash production cost of silver was reduced to US$2.39, down US$0.25 from US$2.64. The unit cost reductions reflect increased production, successful cost containment efforts, and numerous operating efficiencies.
 The Lupin mine in the Northwest Territories produced 55,153 ounces of gold in the third quarter, up 12 percent from 49,128 ounces a year ago, despite a lower grade of ore mined. Cash production costs were reduced to US$249 from US$255 per ounce.
 At 50 percent-owned Round Mountain in Nevada, third quarter production increased by 13 percent to 98,164 ounces (Echo Bay's share, 49,082 ounces). Cash production costs were reduced by US$16 per ounce to US$201 this year from US$217 last year.
 At Kettle River in Washington State, Echo Bay's share of third quarter production was 16,837 ounces, up from 15,808 ounces a year ago. Third quarter cash production costs were US$289 per ounce this year, compared with US$281 last year.
 Echo Bay is one of the largest gold producers in North America. The company's shares are traded principally on the American and Toronto stock exchanges and on other major exchanges in North America and Europe.
 -0- 11/4/93
 /NOTE TO EDITORS: Additional information is available by fax on request. Call Janine Townsend at 303-592-8046./
 /CONTACT: Paddy Broughton, 303-592-8048, or Ted Sheldon, 303-592-8049, both of Echo Bay Mines Ltd./

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

EH-JB -- LA018 -- 0740 11/04/93 12:43 EST
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Publication:PR Newswire
Date:Nov 4, 1993

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