Miramar Reports Results for the Year Ended December 31, 2000
Continued focus on Northern Platform and Maintaining a Strong Balance
Sheet
MAE - TSE
MAENF-OTC Bulletin Board
VANCOUVER, March 23 /CNW/ - Miramar Mining Corporation today announced
its results for the year ended December 31, 2000. Miramar continues to focus
its efforts on developing its Northern gold platform, comprised of the Hope
Bay project and Yellowknife operations, while striving to maintain a strong
balance sheet to support these activities. At December 31, 2000, Miramar had
consolidated working capital of $21.2 million.
"During the fourth quarter, our Yellowknife operations delivered
excellent results, producing 35,678 ounces of gold at a cash cost of US$242
per ounce," said Tony Walsh, Miramar's President and CEO. "These results
allowed us to generate positive cash flow from operations, despite the low
gold price." During the fourth quarter of 2000, Miramar reported a cashflow
from mining operations before changes in working capital of $1.2 million, and
$2.3 million for the year, versus losses in the same periods in 1999. "This is
a direct result of our focus on generating positive cash flow from operations,
even at low gold prices, and allows us to maintain our balance sheet so it is
available to support our activities at Hope Bay," he said.
The recent announcement of an agreement in principle to sell Miramar's
interest in Northern Orion Explorations Ltd. ("Northern Orion") is a further
step in strengthening the Company's balance sheet. "While the proposed
transaction has resulted in a significant write down of our investment in
Northern Orion, this is a non-cash charge and the proposed transaction would
eliminate further cash and management demands by Northern Orion(*). The
contemplated sale of our interest in Northern Orion could potentially generate
additional funds to support our priority activities(*)," said Mr. Walsh.
Financial Results
Miramar's consolidated loss from operations, before write-downs
(including the provision for the potential disposition of its controlling
interest in Northern Orion) and other charges, was $6,214,000 or $0.10 per
share for the year, compared to a loss of $7,779,000 or $0.14 per share for
the same period in 1999. The reduction in the loss reflects the improved
operating performance of the Con and Giant mines during the year, as well as
lower general and administrative costs. The fourth quarter 2000 loss, before
the other items noted above, was $1,231,000 ($0.02 per share), compared to
$2,026,000 ($0.04 per share) for the same quarter in 1999, and largely relates
to write downs of exploration properties. The consolidated net loss for the
year was $43.4 million ($0.76 per share) including a $48.2 million charge
reflecting the write down of San Jorge in Northern Orion and a provision
against the Company's investment and advances to its majority owned
subsidiary, Northern Orion, offset by a future income tax recovery of $5.7
million and $3.7 million in charges related to severance, mineral exploration
and other writedowns recorded in the period. Miramar continues to consolidate
the losses and assets of Northern Orion, net of the provision mentioned above,
and will do so until the option on Miramar's shares in Northern Orion is
exercised.
During the three-month period ending December 31, 2000, Miramar reported
a cashflow from mining operations before changes in working capital of $1.2
million, versus negative $214,000 for the same period in 1999. The net
cashflow from mining operations for the year was $2.3 million, before changes
in working capital. At December 31, 2000, the Company had consolidated
working capital of $21.2 million (September 30 - $24.9 million). The
reduction in working capital in the quarter is a result of investment in
Miramar's Northern Platform - capital investment related to funding of
exploration activities at Hope Bay ($2.6 million), increased cash collateral
bonding in the quarter of $537,500 for the Hope Bay land use and water
licences, losses incurred in Northern Orion in the quarter and funding of
$251,000 and the increase in the working capital deficiency in Northern Orion
of approximately $500,000.
Gold Sales & Hedging
In the fourth quarter, Miramar realized an average selling price of C$417
per ounce of gold, which compares favourably to the average spot price of
C$411 for the quarter. Miramar also realized an average exchange rate of
1.5357 Canadian on US dollar revenues, which also compares favourably to the
average spot rate for the quarter of 1.5257. Miramar's hedge position at
December 31, 2000 was as follows:
Instrument Ounces Price
Spot deferred gold sales contract 7,300 US$275
Gold calls sold (July/02-June/03) 36,000 US$285
For further information on operating results for the fourth quarter 2000,
please see news release MAE 01-01 dated January 17, 2001 on our website at
miramarmining.com.
2001 Progress
As a result of the revised operating plan for the Giant Mine, Miramar
expects 2001 gold production from its Yellowknife operations to be
approximately 125,000 oz of gold(*). Cash costs are forecast at approximately
US$260 per ounce(*). Estimates of gold production and costs for January and
February are somewhat ahead of budget(*). Production in March will be
impacted by the temporary shutdown of the autoclave for relining, which
shutdown was originally scheduled for April(*).
The production outlook for each of 2002 and 2003 remains at approximately
120-125,000 ounces at cash costs of approximately US$245 per ounce, with costs
falling due to the virtual elimination of development costs in the final two
years of the plan(*). Operations are planned to wind up in 2004 with the
completion of treatment of arsenic wastes(*). Continued operation beyond 2004
is dependent on improved gold prices and exploration success(*).
This news release has been authorized by the
undersigned on behalf of
Miramar Mining Corporation.
Tony Walsh
President
Miramar Mining Corporation
(*)This News Release contains forward-looking statements within the
meaning of the United States Private Securities Litigation Reform Act of 1995
concerning the expected financial results of the Company, operating results,
costs, cash flows and capital expenditures at the Con and Giant Mines, the
potential sale of the Company's interest in Northern Orion, the potential of
the Hope Bay project and the future ability of the Company to raise equity
financing. These forward-looking statements are subject to a variety of risks
and uncertainties which could cause actual events or results to differ
materially from those reflected in the forward-looking statement including,
without limitation, uncertainties involved in recovery rates; accidents,
equipment breakdowns, labour disputes or other unanticipated difficulties with
or interruptions in production, and variations in ore grade; risks and
uncertainties relating to fluctuating precious and base metals prices,
currency exchange rates and equity markets; the possibility of unexpected
costs and expenses relating to environmental issues, uncertainties relating to
the need for government approvals and the cooperation of government agencies
in regards to any environmental liabilities and other risks and uncertainties,
including those described in the Company's Annual Report on Form 20-F for the
year ended December 31, 1999 and Reports on Form 6-K filed with the Securities
and Exchange Commission.
Certain forward-looking statements in this report are indicated with a
"(*)".
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MIRAMAR MINING CORPORATION
Consolidated Balance Sheets
(Expressed in Thousands of Dollars)
December 31, 2000 and 1999
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2000 1999
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Assets
Current assets:
Cash and cash equivalents $ 17,670 $ 23,737
Short-term investments - 6,292
Accounts receivable 1,967 1,676
Inventory 9,207 6,443
Prepaid expenses 1,065 2,228
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29,909 40,376
Capital assets 117,209 158,825
Cash collateral deposits 4,546 2,735
Other assets 203 1,015
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$ 151,867 $ 202,951
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and
accrued liabilities $ 8,711 $ 6,559
Reclamation liability 7,039 6,598
Deferred post retirement
benefits payable 1,556 1,363
Future income tax liability 1,680 -
Future income tax liability
of subsidiary 15,990 -
Non-controlling interest 32,142 50,486
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67,118 65,006
Shareholders' equity:
Share capital 231,282 229,377
Deficit (146,533) (91,432)
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84,749 137,945
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$ 151,867 $ 202,951
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MIRAMAR MINING CORPORATION
Consolidated Statements of Operations and Deficit
(Expressed in Thousands of Dollars, except per share amounts)
Years ended December 31, 2000 and 1999
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2000 1999
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Revenue:
Sales $ 51,202 $ 25,535
Interest and other income 1,501 3,358
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52,703 28,893
Expenses:
Cost of sales 44,097 23,040
General and administration 4,163 5,155
Depreciation and depletion 9,242 7,732
Exploration and
property investigation 1,080 290
Foreign exchange (gain) loss (137) 536
Property holding costs
during labour disruption - 2,990
Severance and terminations 678 4,434
Reclamation 1,552 1,125
Write-down of investment,
mine assets and mineral
properties in subsidiary 48,175 11,181
Write-down of mineral properties 1,769 625
Write-down of other assets 189 -
Interest - 136
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110,808 57,244
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Loss before non-controlling
interest and future income taxes 58,105 28,351
Non-controlling interest (8,994) (8,208)
Future income tax recovery
on write-down of subsidiary (5,720) -
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Loss for the year 43,391 20,143
Deficit, beginning of year,
previously reported 89,822 69,871
Retroactive adjustment to deficit
for post-retirement benefits 1,610 1,418
Adjustment to deficit for
future income tax 11,710 -
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Deficit, end of year $ 146,533 $ 91,432
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Loss per share $ 0.76 $ 0.35
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Weighted average number
of common shares outstanding 56,935,480 56,693,804
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MIRAMAR MINING CORPORATION
Consolidated Statements of Cash Flows
(Expressed in Thousands of Dollars)
Years ended December 31, 2000 and 1999
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2000 1999
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Cash provided by (used in):
Operating activities:
Loss for the year $ (43,391) $ (20,143)
Items not involving cash:
Depreciation, depletion
and amortization 9,242 7,732
Write-down of investment,
mine assets, mineral
properties and other
assets in subsidiary 48,175 11,181
Future income tax recovery (5,720) -
Write-down in mineral properties 1,769 625
Write-down of other assets 189 -
Other 779 192
Non-controlling interest (8,994) (8,208)
Reclamation 441 373
Deferred gain - (6,338)
Net change in non-cash
working capital:
Decrease (increase) in
accounts receivable (291) 3,929
Decrease (increase) in
inventory (2,764) 2,455
Decrease (increase) in
prepaid expenses 1,163 (1,768)
Increase in accounts payable
and accrued liabilities 2,153 219
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2,751 (9,751)
Investing activities:
Acquisition of mineral properties (300) (20,506)
Expenditures on mineral
properties and deferred exploration (12,422) (10,799)
Additions to plant and equipment (4,162) (469)
Proceeds on sale of short-term
investments 6,292 8,241
Cash collateral deposits (1,811) (584)
Other assets - (955)
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(12,403) (25,072)
Financing activities:
Proceeds from issue of shares 3,585 -
Repayment of long-term debt - (5,801)
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3,585 (5,801)
Decrease in cash and
cash equivalents (6,067) (40,624)
Cash and cash equivalents,
beginning of year 23,737 64,361
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Cash and cash equivalents,
end of year $ 17,670 $ 23,737
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Supplementary information:
Income taxes paid $ 35 $ 50
Interest paid - 136
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