Placer Dome Inc -
Low costs sustainable; improved economics for Las Cristinas
Placer Dome Inc PDG
Shares issued 250,016,963 1998-10-07 close $25.35
Thursday Oct 8 1998
Mr. John Willson reports
Placer Dome is continuing to exceed expectations for production and costs.
The company forecasts production of at least 2.8 million ounces of gold in 1998 at an average cash cost of $160 (U.S.) per ounce, compared with a previous forecast of 2.7 million ounces at $170 (U.S.) per ounce. In the three years from 2000 to 2002, average production of 2.5 million ounces is planned at the cash production cost of about $180 (U.S.) per ounce. The cash cost in the third quarter of 1998 is expected to be less than $140 (U.S.) per ounce, the seventh consecutive quarterly decline.
The trend is being achieved by exceptional performance from the new Pipeline mine at the 60 per cent owned Cortez joint venture, which is expected to produce 1 million ounces of gold in each of 1998 and 1999 at about $60 (U.S.) per ounce, as well as higher ore grades at the Granny Smith mine, higher productivity at all mines, and the strong U.S. dollar.
The recently completed feasibility study update for the Las Cristinas gold project shows substantially improved economics. Placer Dome's anticipated average cash production cost over the first 10 years is $155 (U.S.) per ounce and the total cost is $240 (U.S.) per ounce, with total gold production averaging 530,000 ounces per year during that period. Reduced operating costs and the higher production rate are mainly due to increased mill throughput and revised mining schedules.
Even in this low gold market, Placer Dome has a growing cash flow as a result of lower operating costs, increased production, and an effective hedging program. The company expects continuing improvement in cash flow per share and earnings while maintaining the strongest exploration commitment in the gold industry.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
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