MAN:TSE
Here's another chart that's looking good. Some year end info here...
Manhattan Minerals Corp MAN
Shares issued 19,624,523 Mar 2 close $2.68
Mon 2 Mar 98 News Release
Mr Michael Mallard reports
During the year ended December 31 1997, the company recorded a loss of
US$1,981,000 (US$0.09 per share), before writedowns, on reported gold
revenues of US$5,267,000, compared to a loss of US$1,039,000 (US$0.07 per
share) in the previous year. Gold revenues were capitalized in 1996 and
were not reported in operations. The loss in 1997, after writedowns, was
US$13,611,000, or US$0.62 per share. Writedowns refer to the partial
writedown of the Moris mine and the Mexican exploration properties.
The company used cash in operations of US$981,000 (US$0.04 per share)
during the current year, compared to US$971,000 (US$0.07 per share) in the
previous year.
The Moris mine writedown represents a provision of US$8,682,000 against the
risk that the current spot gold price of about US$300 per ounce will
prevail throughout the balance of the mine life. The written down value may
not reflect the long term value of the mine. Similarly, despite encouraging
exploration results from its gold exploration properties in Mexico, the
company has concluded at this time that these properties may not contain
economically viable gold reserves at the prevailing low gold prices.
Accordingly, the carrying costs of these properties of $2,948,000 have been
written down. The properties have not been abandoned and the written down
values may not reflect potential long term values.
Moris Mine
During the eight month commercial production period ended December 31 1997,
11,876 ounces of gold were produced by the Moris mine generating revenue of
US$5,267,000 equivalent to US$443 per ounce. The price realized was
enhanced by the company's hedging program, including gains recorded on the
revaluation of its gold loan. The cash operating cost of production during
the period was US$303 per ounce.
OPERATIONS
Three months ended December 31
1997 1996
Ore mined - tonnes 149,940 84,489
Waste mined - tonnes 56,202 155,943
Strip ratio 0.37 1.85
Cost of ore mined - US$/t 12.82 18.93
Ore stacked - tonnes 170,898 102,076
Ore stacked - tpd 2,249 1,343
Gold grade stacked - g/t 1.87 2.04
Ore stockpile - tonnes - -
Gold production - oz 4,170 4,152
Silver production - oz 13,878 6,179
OPERATIONS
Twelve months ended December 31
1997 1996
Ore mined - tonnes 621,450 414,300
Waste mined - tonnes 711,185 276,993
Strip ratio 1.14 0.67
Cost of ore mined - US$/t 11.83 Note 1
Ore stacked - tonnes 610,516 413,495
Ore stacked - tpd 1,963 1,628
Gold grade stacked - g/t 2.16 2.08
Ore stockpile - tonnes 11,739 805
Gold production - oz 17,001 9,782
Silver production - oz 45,591 12,418
Note 1 - Mining and processing commenced in March and May 1996
respectively.
Higher than expected unit costs in the December 1997 quarter were almost
entirely due to the low gold production which was principally caused by
record rainfalls causing lower than expected recoveries. The first phase
results of current metallurgical test work also indicated that the recovery
of gold from ore on the heaps may take longer than initially predicted. The
test work will be completed in the second quarter of 1998.
During the year, the company implemented a number of improvements at the
Moris mine to reduce costs and increase productivity:
Termination of contract mining and the implementation of an owner operated
mining equipment fleet;
Improvements to the preventative maintenance programs for the crushing
circuit, mining fleet and plant;
Replacement of the atmospheric strip vessel by a pressure strip vessel;
Installation of three additional carbon tanks to increase solution
application volumes and processing capacity; and,
Installation of a propane fired kiln for onsite carbon reactivation.
In addition, the Barmac vertical impact crusher will be replaced by a
second cone crusher in the first quarter of 1998, which will improve the
efficiency of the crushing operation and produce a better crush size.
These operational changes have already achieved a substantial improvement
in operating efficiencies, gold recoveries, and unit costs in 1998.
Tambo Grande Project
The Tambo Grande project comprises 10 mining concessions totalling 100 sq
km in the province of Piura, in northern Peru. The beneficial ownership,
exploration and development of the concessions is currently governed by two
agreements executed in 1979 and 1981 by the government of Peru and the
Bureau de Recherches Geologiques et Minieres. The agreements gave BRGM an
initial 75% beneficial interest in the property, subject to certain
exploration and financing conditions.
In February 1997, BRGM's interest in the agreements was transferred to BRGM
SA. In April 1997, the company completed the acquisition of the entire
interest of BRGM SA in those agreements. The transfer of that interest to
Manhattan is subject to the approval of the government of Peru.
New agreements must be reached with the government of Peru to replace the
agreements of 1979 and 1981. These agreements will govern the ownership,
exploration, and development of the project. It is expected that under
these agreements: Manhattan will complete a feasibility study and a
financing plan within a period of three years; after completion of the
feasibility study and assuming that the company elects to proceed, a mining
company, Empresa Minera Tambo Grande SA, will be formed, which will be
owned 75% by Manhattan and 25% by the government of Peru; EMTG will acquire
100% of the Tambo Grande concessions and will develop and operate the
project; the government of Peru's equity share of the financing will be
contributed by the company; and the government of Peru will retain a nsr
royalty in the project.
All the key business terms of the new agreements were negotiated in the
fourth quarter of 1997, and Manhattan is currently finalizing the
documentation of those agreements.
Financial Position and Liquidity
At December 31 1997, the company had working capital of $11.3 million,
including a cash balance of $10.2 million.
The Moris mine is expected to contribute a positive cash operating surplus,
after capital expenditures, of approximately $3.2 million in 1998. The
surplus assumes a spot gold price of $300 per ounce. At December 31 1997,
Manhattan had hedged 18,430 ounces of gold through equal, monthly, forward
sales contracts in 1998 at an average price of about $405 per ounce. At
year end it also had a gold loan balance of 10,517 ounces at a market price
of $289.20 per ounce and a deferred revaluation gain of $834,000.
The company has estimated about $3.0 million for the initial phase of the
Tambo Grande feasibility program. This phase is expected to be carried out
over approximately six months, and will commence immediately after the
closing of the agreements with the government of Peru.
Manhattan has adequate cash resources to service its debt, finance its
current operations and execute its planned capital expenditures during
1998.
Outlook
Manhattan expects that the Tambo Grande project business terms negotiated
with the government of Peru will be documented and approved by supreme
decree in the second quarter of 1998.
The first phase of the Tambo Grande project feasibility program is planned
to commence immediately following the execution of the agreements. Initial
exploration work will comprise a surface geophysical survey of the
previously identified anomalies in the project area, followed by definition
drilling of the Tambo Grande deposit and exploration drilling of other
confirmed anomalies. An amount of about $3.0 million has been estimated for
this first phase.
The Moris mine has a production budget for 1998 of about 26,000 ounces at a
cash operating cost of about $235 per ounce.
Funds have not been allocated to exploration work on the Mexican gold
properties in 1998 but will be re-evaluated at the end of the first quarter
of 1998.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com |
