13:12 Indochina Goldfields Releases 1997 Third Quarter Report
SINGAPORE, Dec. 2 /CNW/ - R. Edward Flood, President, and Robert M.
Friedland, Chairman of Indochina Goldfields Ltd. yesterday released the
company's 1997 third-quarter quarter report containing an update on activities
and financial results.
Highlights of third-quarter activities include:
- The acquisition of the controlling interest in the Bakyrchik gold mine.
Indochina Goldfields subsequently contracted Kvaerner Metals, of Toronto, to
complete a detailed engineering evaluation and optimized production plan for
the Phase I construction of the mine. This study contemplates a mining rate
of 550,000 tonnes of ore a year to yield approximately 125,000 ounces of gold
per annum at a cash cost just above US$200 an ounce. The current capital
estimate for the project is US$130 million.
- The purchase of a one-million-ounce gold hedge facility completed in the
form of put options, which are spread over a 10-year period. The average
price that is guaranteed by this facility is US$362.50 an ounce, a floor price
that is sufficient to generate acceptable returns from the project
even at current low gold prices.
- The start of construction of the Monywa copper mine following the securing
of US$90 million in project financing from a Japanese syndicate led by
Marubeni Corporation and Chiyoda Corporation. The project is on track to
commence Phase I production from the Sabetaung open pit by mid-1998 at a rate
of 25,000 tonnes (55 million pounds) of copper cathode per annum, with cash
operating costs below US$0.50 per pound.
- Initiation of feasibility work on the Phase II expansion of the Monywa
copper mine at the nearby Letpadaung deposit. Early results from an updated
reserve estimate indicate that the Letpadaung orebody is capable of sustaining
annual production in excess of 125,000 tonnes (275 million pounds) of copper
cathode at cash costs below US$0.40 a pound.
- Initiation of an exploration program in Thailand. Several areas of
outcropping gold mineralization have already been identified and concession
areas have been secured. Similar progress also is being made in Korea and
Myanmar.
- Further identification of a number of high-priority drill targets
in Indonesia through the efforts of the company's exploration team.
These targets, on the islands of Kalimantan and Java, are to be tested
over the next year.
Financial Results for the nine months ended September 30, 1997:
During the nine months ended September 30, 1997, the company incurred
exploration and development costs of $8.6 million, general and administration
expenses of $6.8 million and loss in equity accounted investments of $6.9
million. This was partially offset by interest income of $3.6 million.
During the period, the company invested $14.7 million in gold put options to
establish a minimum floor price of $362.50 per ounce of gold, on one million
ounces of production. During the period, the company also incurred mineral
property expenditures of $78.4 million primarily on the acquisition of an
additional 65% interest in the Bakyrchik gold project (bringing its total
interest to 80%) and on fulfillment of its $28 million equity financing
commitment for the Monywa copper project.
Indochina Goldfields Ltd. reported a loss of US$20.5 million or $0.29 per
share for the period.
At September 30, 1997, the company had $76.9 million in cash and money
market instruments and had working capital of $81.3 million.
As a result of the disruption of postal services in Canada, the quarterly
report will not be mailed to shareholders at this time. Any shareholder that
wishes to review a copy of the quarterly report can request it from Leigh
Parrish at the company. A copy of the quarterly report may be downloaded from
the Company's website at www.goldfields.com and there is public access to
SEDAR filings at www.sedar.com. The quarterly report will be mailed to
shareholders as soon as practicable after regular mail service is resumed and,
in any event, no later that 10 days following the resumption of service. |
