As you read the 1998 results in tomorrow's papers and weep, keep this bit in mind:
<<The Andacollo Gold Mine achieved record monthly production and record quarterly production during the fourth quarter of 1998, producing 30,558 ounces of gold at a cash operating cost of US$209 per ounce.
The comprehensive review and subsequent improvements in sample preparation and grade control procedures initiated at Andacollo during the third quarter yielded significant improvements in gold production in the fourth quarter of 1998. This increase in gold production was also due to improvements in crushing system operating time and pit design and mine planning activities.
Dayton is forecasting 1999 gold production of approximately 138,000 ounces at a cash cost of US$190 per ounce. Ore will continue to be mined from the Socorro and Churrumata deposits during 1999 with two additional deposits, Natalia and Chisperos, scheduled to come into production during the year.
First Quarter 1999 Operations and Corporate Review
During the first quarter of 1999 the Andacollo Gold Mine produced 32,882 ounces of gold at cash operating costs of US$199 per ounce. A total of 6.74 million tonnes of material was mined during the first quarter of 1999, of which 1.53 million tonnes of ore grading 0.97 grams of gold per tonne (gpt), were crushed and stacked on the leach pad.
In 1997 the Company issued a US$69 million 7% convertible debenture, the proceeds from which have been used primarily to service the bank debt, support capital expenditures at the mine and service interest on the debentures of approximately US$4.8 million per annum. Due to the current low gold price environment the Company's directors proposed to its debentureholders and shareholders a transaction to convert all the US$69 million of debentures into 310,500,000 common shares of the Company. This transaction was approved on March 31, 1999 and all of the debentures will be exchanged for common shares by May 3, 1999. This transaction will be treated for Canadian accounting purposes as a financial reorganization resulting in the comprehensive revaluation of assets and liabilities of Dayton. Under these rules, the liability related to the debentures is eliminated, and all assets and liabilities will be revalued to their estimated fair values. This comprehensive revaluation of assets and liabilities will occur effective as of March 31, 1999.
Bill Myckatyn, Chairman and CEO of the Company states, ''The positive improvements at the Andacollo operation continue to manifest themselves in improved financial results. The increase in the market capitalization of the Company after the conversion of the debentures is an indicator that the market is starting to recognize the changes that have been made and will value Dayton more appropriately in the future. We are now actively seeking merger and acquisition opportunities that are available in the marketplace. With our proven development and operating expertise in South America, there are a number of strategic alternatives that may be available. We feel that there is still substantial consolidation that needs to occur in the junior gold sector and that Dayton can be a catalyst to help that occur. Also, there are development projects out there that need our particular skill sets to advance.''
Dayton Mining Corporation holds a 100% interest in the Andacollo Gold Mine located in central Chile, and trades on both the American Stock Exchange (AMEX) and Toronto Stock Exchange (TSE) under the trading symbol DAY.>>
And they hedged 84,000 ounces at $ 340 for 1999.
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