Interest building in Chile!
Placer Dome Inc PDG
Shares issued 401,030,718 1999-11-11 close $18.4
Friday Nov 12 1999
Mr. Jay Taylor reports
Placer Dome has exercised a right to acquire the remaining 50 per cent of the Zaldivar copper mine in Chile from its joint-venture partner, Outokumpu, for $251-million. The purchase is expected to close by mid-December.
According to Placer Dome president, Jay Taylor, Zaldivar is a low-cost, long-lived asset of considerable value to the company. "I am pleased we are able to capitalize on an opportunity to add value to an already excellent asset. This purchase will simplify the ownership structure and will give management the flexibility to extract full worth from the mine. This does not represent a change in our strategy to focus on gold, but will further our aims of increasing value for our shareholders," Mr. Taylor said.
The purchase will be financed from existing cash balances. At the conclusion of the transaction, Placer Dome will remain financially strong with cash on hand exceeding $200-million.
In the first 10 months of this year, Zaldivar produced a record 275 million pounds of copper at a cash production cost of 38 cents per pound, well below the current spot price of 80 cents/pound. The mine is slated to produce an average of 275 million pounds of copper per year for the next 10 years, at an average cash cost of 50 cents/pound. As of Dec. 31, 1998, Zaldivar's proven and probable ore reserves contained 4.9 billion pounds of copper for a remaining mine life of 13 years.
WARNING: The company relies upon litigation protection for "forward-looking" statements.
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