Hi Taurus553,
It doesn't sound to good.
SPOKANE, Wash., Nov 14 (Reuters) - Pegasus Gold Inc Friday posted a massive third quarter loss of $432.8 million, or $10.47 a share, including charges of $421.3 million.
The company said it will cease mining operations at it Mt.
Todd Mine and that it is in default of its $150 million revolving credit facility.
Pegasus posted a third quarter net loss of $432.8 million or $10.47 a share, compared to a net loss of $7.8 million or $0.19 a share in the year-ago quarter. The latest quarter includes non-recurring, non-cash charges of $421.3 million, or $10.19 a share. The year-ago quarter included a charge of $6.5 million, or $0.16 a share.
Excluding charges in both periods, the net loss for the third quarter would have been $11.5 million or $0.28 a share, compared to $1.3 million or $0.03 a share, a year-ago.
During the latest quarter Pegasus recorded total after-tax property write-downs of $396.8 million related to its Mt. Todd ($353.3 million), Zortman ($26.8 million) and Beal Mountain ($2.7 million) mines and the Pullalli Project ($13.9 million), a provision for future closure and reclamation at Mt. Todd of $9 million, net losses on the disposition of assets of $13.3 million, and restructuring charges of $2.2 million.
"It no longer makes sense to operate Mt. Todd given the continued deterioration of the gold price and cost structure of this project," said President and Chief Executive Werner Nennecker.
The mine will be placed on care and maintenance unless a detailed independent review to be completed mid-December identifies substantial improvements in the mine's economics.
"Management has commenced discussions with its lenders under the (revolving credit) facility and is working with financial advisors who specialize in restructuring to investigate alternatives available to the company," he said.
The company said among the options it is considered are curtailment of certain mining operations, deferral of capital expenditures, further cuts in general costs, a scaled down exploration program and the monetization of all or a part of the firm's hedge portfolio.
The company said that in the absence of action by its creditors it has enough liquidity to continue planned operations through 1998.
As the end of September 30 the company had cash and equivalents of $15.9 million and other current assets of $78.0 million. The market value of its hedge portfolio is about $70 to $80 million.
REUTERS
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