PDG beats estimates by a nickle, comming in with .13/share over 1st call ests of .08/share
mad2
Placer Dome Reports Sharp Rise in First Quarter Earnings
April 19, 2000
Vancouver, Canada - (all dollar amounts in U.S. currency) Placer Dome Inc. reports improved financial results compared with a year ago, despite continued low gold prices. Consolidated net earnings were $43 million or $0.13 per common share in the first quarter of 2000, compared with $10 million or $0.03 per common share in the year-earlier period. Cash flow from operations amounted to $112 million compared with $101 million in the first three months of 1999 and mine operating earnings increased 60% to $128 million, compared with $80 million in the corresponding period in 1999.
Jay Taylor, President and CEO, said: ?Our financial results this quarter demonstrate our continued focus on improving the financial yield from all of our assets and increasing total shareholder return. Our strong operating performance and low costs of 1999 are continuing into 2000, and we are ahead of schedule in meeting our targets for the year. This performance demonstrates our ability to manage this low gold price environment by controlling costs and increasing profitability.?
The Corporation?s share of gold production was 786,000 ozs. in the first quarter, 7% higher than production of 734,000 ozs. in the year-earlier period. Cash costs in the first quarter decreased by 8% to $151/oz. and total production costs decreased by 6% to $220/oz., compared to $164/oz. and $235/oz., respectively, in the corresponding period in 1999.
Production highlights in the first quarter include: - All operations in Australia and Papua New Guinea achieved higher production than in the year-earlier period, representing a total increase of 38% to 334,335 oz. - Porgera Mine in Papua New Guinea increased production by 78% to 102,664 ozs., while reducing cash cost to $157/oz., a drop of $134/oz. and reducing total cost to $265/oz., a drop of $138/oz. from 1999. - Misima Mines in Papua New Guinea increased production by 83% to 85,145 ozs. (100%), while reducing cash cost and total cost to $163/oz. and $216/oz., respectively, compared to $265/oz. and $341/oz., respectively, from the prior year period. - Cortez, the lowest-cost gold mine in North America, continued strong production in the first quarter with 187,105 ozs. and reduced cash and total costs by 11% to $47/oz. and $109/oz., respectively. - Golden Sunlight Mine in the U.S. increased production by 36% to 51,310 ozs. and decreased cash and total costs to $111/oz. and $283/oz., respectively, compared to $232/oz. and $377/oz., respectively, in the first quarter of 1999. - Musselwhite Mine in Canada increased production by 23% to 42,508 ozs. and decreased cash and total costs to $154/oz. and $226/oz., respectively, compared to $191/oz. and $302/oz., respectively, in the prior year period. - Following the December 1999 acquisition of the remaining 50% interest, Zaldivar is now fully consolidated and, as a result, contributed $17 million in cash flow from operations in the first quarter of 2000. Production totalled 80,806,000 lbs. at a cash cost of $0.39/lb. and a total cost of $0.58/lb.
These increases in production more than offset the absence of production at the Getchell Mine in the U.S. and the closure of the Detour Lake Mine in Canada. Exploration activity at Getchell continues to produce encouraging results and remains on track to present a resource calculation in July. Production from South Deep in the quarter was lower than expected due to equipment problems which have been rectified, and operations have returned to normal.
Sales revenues were $375 million for the first quarter of 2000, $99 million higher than a year earlier, of which gold sales accounted for $291 million, 10% higher. Gold operating earnings were $110 million compared with $83 million in the prior year, due primarily to improvements at the Porgera and Misima mines.
In February 2000, the Corporation announced that it will reduce its hedge position by at least two million ounces of gold by the end of the year. Through March 31, 2000 the committed gold ounce position was reduced by 600,000 ounces from the 1999 year end. The Corporation will continue to manage its existing positions, which enabled Placer Dome to realize an average of $355/oz. on first quarter sales, $65 above the average London market price of $290/oz. At March 31, 2000, the mark-to-market value of the Corporation?s precious metals derivative program was $394 million.
The first quarter 2000 net earnings results included a mark-to-market adjustment for foreign currency forward and option contracts which reduced net earnings by $10 million compared with an after-tax gain of $9 million in the year-earlier period.
Copper operating earnings in the first three months of 2000 increased to $18 million from a loss of $3 million in the prior year period primarily reflecting the Corporation?s full ownership of the Zaldivar copper mine in Chile. Placer Dome?s share of cash and total production costs per pound of copper in the first quarter of 2000 were $0.45 and $0.64, respectively, compared with $0.46 and $0.73 per pound, respectively, in 1999. In 2000, the Corporation will continue its drive to optimize existing assets, particularly the recent acquisitions, South Deep and Getchell. Consolidated gold production is expected to be approximately 3 million ozs. with cash costs of $165/oz., among the lowest in the industry.
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