DENISON REPORTS 1996 NET EARNINGS OF $50 MILLION
TORONTO, March 7 /CNW/ - Denison Mines today reported earnings of $50.1 million for the year ended December 31, 1996 compared with earnings of $16.0 million for the year ended December 31, 1995. Earnings in 1996 included a $14.4 million reduction in the estimated cost to complete the Company's Elliot Lake mine decommissioning project and a $5.4 million gain on the repurchase of long-term debt.
Revenue in 1996 was $88.9 million compared with $64.1 million for the previous year. The increased revenue was primarily a result of higher oil prices and increased production at the Company's Greek oil field.
Earnings per share were $0.16 for 1996 compared with pro forma
restructuring earnings per share of $0.05 for 1995.
The Company's oil and gas operations contributed $65.6 million to 1996 revenue (1995 - $48.6 million) and $20.5 million to 1996 earnings (1995 - $7.7 million). During 1996 a successful infill drilling program was carried out at Prinos. In August 1996, oil production commenced from the extended reach horizontal well completed in the adjacent 45% owned Prinos North field. The Company's net share of oil production in 1996 was 2.4 million barrels ( 1995 - 2.2 million barrels). Given the success of the 1996 drilling program and current prices, the Company now estimates its net share of proven recoverable oil reserves at 6.7 million net barrels as at December 31, 1996. Actual field life is difficult to predict due to the complex reservoir and will depend on future oil prices, operating cost control and drachmae exchange rates.
Commissioning of the mill at the Company's 22.5% owned McClean Lake uranium project has begun and is proceeding on schedule. The completion of the tailings management facility has been delayed, however, and the projected start of production is now the latter part of the third quarter.
The Company has substantially completed the capital works for the decommissioning activities at the Elliot Lake mine site and two of its three tailings management areas. The Company has now updated its estimate of costs to complete the decommissioning of the remaining tailings management area and consequently has reduced its provision for remaining reclamation costs at Elliot Lake from $38.4 million to $24.0 million. As a result, the difference of $14.4 million has been included in the fourth quarter 1996 earnings. The
Company had funded $8 million of the $24 million provision. Of the remaining $16 million to be funded, approximately $8 million relates to perpetual care. |
