Denison Mines Q3 results
(Full text of press release from Canadian Corporate News)
OCTOBER 28, 1999
Denison Third Quarter Earnings Are $7.859 Million
TORONTO, ONTARIO--Denison Mines Limited reported earnings of $7.859 million ($0.02 per share) for the three months ended September 30, 1999, compared with a loss of $10.361 million ($0.03 per share) in the corresponding period of 1998. Earnings in the third quarter of 1999 include a $7.6 million gain from the sale of the Company's interest in the White Rose oil field. The loss in the corresponding third quarter of 1998 includes a $11.5 million write down of the Company's Greek oil field.
Revenue in the third quarter of 1999 was $2.497 million (1998-$14.159 million). Revenue in 1999 does not include any revenue from uranium sales from the McClean Lake project as it has not yet reached a commercial production rate or from the Prinos oil field, where production ceased in November 1998.
For the nine months ended September 30, 1999 earnings were $14.152 million ($0.04 per share) compared with a loss of $6.242 million ($0.02 per share) in the corresponding period of 1998.
Denison's remaining liability in Greece is limited to its share of the cost of abandoning wells, platforms and plant facilities. Negotiations with the Greek State to settle this liability are continuing. To date the representatives of the Greek State have recognized the significant salvage value of the assets and appear to indicate that it is large enough to virtually
eliminate the Consortium's remaining liability for restoration. A settlement is subject to a number of conditions, including a definitive agreement which must be ratified by the Greek Parliament.
The first two scheduled deliveries of uranium produced at McClean Lake have been made. All the uranium circuits in the mill are operating at or better than the levels expected. Problems with the by-product circuit from which ammonium sulphate crystals are produced has necessitated modifications to this circuit.
It is still expected that the commercial production rate will be achieved prior to year end. None of the sales revenue received in the third quarter has been recognized in earnings.
During the third quarter, the Company completed the acquisition of an additional 5.5 % interest in the Midwest uranium property, increasing its interest to 25% and its uranium reserves by about 1.9 million pounds.
Oil production has now commenced at the Villano field in Ecuador where Denison holds a royalty interest equal to 3% of cash flow up to a maximum of $U.S. 7.8 million. Royalty payments are expected to commence in November following the first sale of this production in early October.
Peter Farmer, Denison's President and Chief Executive Officer said that ``with cash and marketable securities exceeding $26 million, the commencement of McClean and the Ecuador royalty, and the satisfactory growth in the Environmental Services Division together with the positive progress in reducing the uncertainties associated with Elliot Lake and Greece, Denison is pursuing growth opportunities, particularly in the environmental services and uranium sectors. The extent of growth will be dependant upon the outcomes of the Oceanic appeal, which was completed in June and the Hydro arbitration, which was completed in August.'
-------------------------------------------------------- Consolidated Balance Sheet (Unaudited) (In thousands)
--------------------------------------------------------
September 30 December 31
1999 1998
------------ -----------
ASSETS
Cash and short-term deposits $ 21,897 $ 23,815
Restricted cash - 3,045
Marketable securities 4,612 -
Accounts receivable 24,123 38,375
Product inventory 1,734 4,964
Raw materials, supplies and
prepaid expense 1,853 1,652
Net property, plant and equipment 143,246 135,961
------------ -----------
197,465 $ 207,812
------------ -----------
------------ -----------
LIABILITIES
Accounts payable and accrued
liabilities $ 24,245 $ 46,343
Income taxes due within one year 127 120
Income and mining taxes due after
one year 3,838 4,758
Long-term debt 69,351 56,354
Provision for post-employment
benefits 12,068 12,475
Provision for Elliot Lake mine
decommissioning and reclamation
cost 8,119 9,137
Provision for Greek oil field
decommissioning costs 9,600 24,624
Deferred income and mining taxes 2,527 563
------------ -----------
129,875 154,374
SHAREHOLDERS' EQUITY 67,590 53,438
------------ -----------
$ 197,465 $ 207,812
------------ -----------
------------ -----------
----------------------------------------------------------------------- Consolidated Statement of Earnings (Unaudited)
(In thousands except per share data) -----------------------------------------------------------------------
Nine Months Ended
Third Quarter September 30
------------------ ------------------
1999 1998 1999 1998
-------- -------- -------- --------
Revenue $ 2,497 $ 14,159 $ 4,683 $ 40,327
-------- -------- -------- --------
Operating and exploration costs 1,739 12,597 2,638 34,003
Gain on sale of White Rose oil
field (7,735) - (7,735) - Decrease in provision for Greek oil
field decommissioning - - (6,067) -
Write down of Greek oil field - 11,500 - 11,500
General corporate expenses 507 697 2,035 2,597
Investment income (183) (534) (714) (2,274)
-------- -------- -------- --------
(5,672) 24,260 (9,843) 45,826
-------- -------- -------- --------
Earnings (loss) before income and
mining taxes 8,169 (10,101) 14,526 (5,499) Income and mining taxes 310 260 374 743
-------- -------- -------- -------- Net earnings (loss) for the
period $ 7,859 $(10,361) $ 14,152 $ (6,242)
-------- -------- -------- --------
-------- -------- -------- -------- Net earnings (loss) per common
share $ 0.02 $ (0.03) $ 0.04 $ (0.02)
-------- -------- -------- --------
-------- -------- -------- --------
----------------------------------------------------------------------- Consolidated Statement of Cash Flow (Unaudited) (In thousands)
-----------------------------------------------------------------------
Nine Months Ended
Third Quarter September 30
------------------ -------------------
1999 1998 1999 1998
-------- -------- -------- ---------
Operating Activities Net earnings (loss) for the
period $ 7,859 $(10,361) $ 14,152 $ (6,242) Adjustments for:
Depreciation 11 - 31 -
Gain on sale of White Rose
oil field (7,735) - (7,735) -
Decrease in provision for Greek
oil field decommissioning - - (6,067) -
Write down of Greek oil field - 11,500 - 11,500
Gain on sale of assets (92) - (178) (20)
Increase in taxes payable year
after one year and deferred income
and mining taxes 1,075 32 1,044 112
-------- -------- -------- ---------
1,118 1,171 1,247 5,350 Decrease (increase) in operating
working capital (4,633) 7,615 (5,214) 4,212 Spending on Greek oil field
decommissioning costs - - (8,957) - Spending on Elliot Lake
decommissioning
and reclamation costs (118) - (1,018) -
-------- -------- -------- --------- Net cash generated by (used in)
operating activities (3,633) 8,786 (13,942) 9,562
-------- -------- -------- --------- Financing Activities
Borrowings on loan facility 5,026 1,914 12,997 8,529
-------- -------- -------- --------- Investing Activities
Proceeds on sale of assets 13,229 - 13,315 20
Additions to property, plant
and equipment (2,090) (14,014) (12,719) (24,837)
Sale (purchase) of marketable
securities (3,141) - (4,614) 2,367
Decrease (increase) in restricted
cash - (43) 3,045 547
-------- -------- -------- ---------
7,998 (14,057) (973) (21,903)
-------- -------- -------- ---------
Increase (Decrease) in Cash and
Cash Equivalents 9,391 (3,357) (1,918) (3,812) Cash and Short-term Deposits
- Beginning of Period 12,506 35,872 23,815 36,327
-------- -------- -------- --------- Cash and Short-term Deposits
- End of Period $ 21,897 $ 32,515 $ 21,897 $ 32,515
-------- -------- -------- ---------
-------- -------- -------- ---------
FOR FURTHER INFORMATION PLEASE CONTACT:
Denison Mines Limited
E. Peter Farmer
President and Chief Executive Officer
(416) 979-1991 Ext. 231
www.denisonmines.com |
