Ward: advancing my pawn forward with this move (read inside)
With the release below, a simple move forward of my pawn . . . or is it a strategic entrenchment that will expose your weaknesses. Think some people might begin to finally take notice that PDG isn't the juggernaut it has trumpeted for the past year? And where do you think the investment community might then shift its focus???? Hint: starts with a C. And Cathy's Cleansing Concubines, albeit an IPO many of us would relish, is incorrect. The game only gets more interesting . . . Your move.
Low gold prices leave Placer with
US$247M hit
By PETER KENNEDY
Vancouver Bureau The Financial Post
One of Canada's largest gold miners, Placer Dome Inc., is taking a
US$247-million writedown in the fourth quarter, reflecting the impact of low
bullion prices on its operations.
The Vancouver company also said yesterday it is slashing its dividend and taking
steps to cut operating costs worldwide by 10%. As well, the deferral of
development of its Mulatos property in Mexico and Las Cristinas site in
Venezuela means Placer will produce an average of only 2.56 million ounces of
gold in each of the next three years.
That's down from the previous estimate of 2.7 million ounces.
As a result, it expects to report a loss of about US$260 million (US$1.04 a
share) for the year ended Dec. 31, 1997.
Placer, which expects to beat its 1997 target by producing 2.56 million ounces
of gold at a cash cost of US$202 an ounce, did not give fourth-quarter earnings
estimates. Those results are due Feb. 18.
However, the company said 1997 cash costs will be US$33 an ounce below
1996, when it produced 1.9 million ounces.
News of the writedown, which came after the close of trading yesterday, comes
as no surprise.
As bullion prices have traded recently near 18 1/2-year lows, analysts have been
expecting most gold producers to take writedowns. The company is also slashing
its annual dividend on common shares to US10› a share from US30›.
Yesterday, Placer shares (PDG/TSE) rose 45› to $19.95, buoyed by higher
bullion prices.
Placer said the writedowns include:
US$18 million for closure provisions and against the carrying value of its
Detour Lake mine in Ontario.
US$21 million against the carrying value of stockpiled ore at the Kidston mine
in Australia.
US$35 million for currency translation adjustments relating to investments in
Kidston and the Misima mine in Papua New Guinea.
US$68 million to reflect a portion of the excess cost related to the acquisition
of Australian producer Highlands Gold Ltd. in early 1997.
US$89 million for deferred development costs and other provisions.
As well, the company is cutting its exploration budget to US$115 million this
year, from US$145 million in 1997. |
