Thursday August 19, 9:33 pm Eastern Time
Company Press Release
SOURCE: Bema Gold Corporation
Bema Gold Corporation - Second Quarter Results
VANCOUVER, Aug. 19 /CNW-PRN/ - Bema Gold Corporation (''Bema'' or the
''Company'') reported a net loss of $1.5 million (two cents per share) on revenues of $9.6 million for the quarter ending June
30, 1999. Cash from operating activities was $1.0 million (or one cent per share) for the quarter. These results compare to a
net loss of $2.5 million (two cents per share) on revenues of $7.9 million and cash provided to operations of $1.8 million (or
one cent per share) for the same period in 1998. The loss in the second quarter is mainly attributable to termination costs
associated with the change over to self-mining from contract mining at the Company's 50% owned Refugio Mine.
For the first six months of 1999, Bema reported a net loss of $0.8 million (one cent per share) on revenue of $19.3 million and
cash from operating activities of $4.3 million (or four cents per share) compared to a net loss of $3.7 million (four cents per
share) on revenues of $17.7 million and cash provided to operating activities of $1.4 million (or one cent per share) in the
corresponding period in 1998.
The Company realized an average price of $377 per ounce of gold versus a spot price of $273 per ounce of gold during the
quarter ending June 30, 1999. This $104 premium over the spot price generated a hedging gain of $2.7 million in the second
quarter. In the first half of 1999, Bema's hedging program realized $381 per ounce of gold and resulted in $5.3 million in
additional revenue.
Refugio Mine, Chile
Cia Minera Maricunga (''CMM'')
(50% Bema / 50% Kinross Gold)
The Refugio Mine produced 48,600 ounces of gold during the quarter (Bema's share - 24,300 ounces) at an operating cash
cost of $250 per ounce of gold compared to 38,000 ounces (Bema's share - 19,000 ounces) at an operating cash cost of
$320 per ounce during the same period in 1998. For the first six months of 1999, the Refugio Mine produced 101,500 ounces
of gold (Bema's share - 50,750 ounces) at an operating cash cost of $244 per ounce of gold compared to 86,500 ounces of
gold (Bema's share - 43,250 ounces) at an operating cash cost of $302 in the first half of 1998.
Operating cash costs of $250 per ounce of gold in the second quarter were higher by approximately $10 per ounce due to
one-time expenses associated with repairing the fine ore bin, which partially collapsed due to poor construction by the
contractor. Gold production in the second quarter was eight percent less than production in the first quarter and was also
below budget primarily due to the problem with the fine ore bin, which has since been remedied.
CMM's first full month of self-mining was in June following the termination of contract mining on May 31. The change over to
self-mining will reduce operating cash costs and allow greater flexibility in mine planning and production.
The new Nordberg tertiary crusher continued to perform very well. It is anticipated that the remaining three Nordberg crushers
will be operational by October 1999, allowing fine ore production to move towards 35,500 tonnes per day at a crush size of
80% minus 3/8 inch.
Effective June 1999, Kinross Gold Corporation (''Kinross'') is responsible for overseeing the daily operations at the Refugio
Mine with ownership of the mine remaining at 50% Bema/50% Kinross and all material decisions affecting CMM and the
Refugio Mine will continue on a joint basis. The decision to appoint Kinross to oversee the daily operations of the Refugio
Mine is based on increasing daily efficiencies by eliminating the joint operator format and to capitalize on Kinross' technical and
operating expertise.
Kinross and Bema are confident the changes implemented at the Refugio Mine will substantially lower production costs and
result in higher gold production in the foreseeable future.
Other Developments
Julietta Deposit, Magadan Region, Russia
In June, Bema released an updated development plan for the Julietta project following an extensive re-evaluation of the project.
The development plan has changed the construction plan, mining method and recovery process, all of which combine to reduce
both operating and capital costs as projected in the Final Feasibility Study. Operating cash costs in the first five years, with
average annual production at 113,000 gold equivalent ounces, is forecast at $75 per gold equivalent ounce. Total construction
costs are $24.8 million and the total financing requirement including working capital and financing fees is $38.5 million.
Work at the Julietta Project continues with improvement to the year-round access road and mill site preparation. The Company
expects to finalize financing arrangements prior to the end of the third quarter with potential lenders for 100% financing of
construction at Julietta.
Aldebaran Project, Chile
Feasibility Study work by Placer Dome is ongoing and is expected to be completed on time by February 2000. Exploration,
feasibility and water exploration drilling was completed in the second quarter and geological modeling of the Cerro Casale
deposit continues. Metallurgical testing has also been completed. Remaining work consists of optimization studies, final analysis
and completion of the final report.
Bema Gold Corporation produces gold in Chile, and explores for gold in Canada, Chile, Russia, the United States and
Venezuela. The common shares of the Company are listed for trading in Canada on The Toronto Stock Exchange and the
Vancouver Stock Exchange and in the United States on the American Stock Exchange under the symbol ''BGO''.
Year 2000
The Company's Year 2000 compliance program is progressing well with the completion of the review of all critical systems.
The Company has upgraded, to Year 2000 compliance, all necessary computer hardware and software at the head office in
Vancouver. During the year, Refugio mine management completed its inventory and analysis of all critical equipment and
systems. Through this process, the process control system and operating system software of the crushers and the operating
system software of the ADR plant were identified as not being Year 2000 compliant. The software in the crushing area has
been replaced whereas the operating system of the ADR plant is scheduled to be replaced by the end of the third quarter
1999. No other significant Year 2000 non-compliance issues have been identified.
Despite its efforts to reduce the risk of internal failures, the Company's principal risk remains with its reliance on critical third
party contractors and vendors since the Company cannot control their Year 2000 efforts. Contingency plans are being
prepared and immediate action will be taken to remedy any identified and reported deficiencies.
Note: All dollar amounts are expressed in United States dollars unless otherwise stated.
On behalf of BEMA GOLD CORPORATION
''Clive T. Johnson''
Chairman, C.E.O., & President
The Vancouver and Toronto Stock Exchanges neither approve nor disapprove the information contained in this News Release,
Bema Gold Corporation trades on the Vancouver, Toronto and American stock exchanges. Symbol: BGO.
Some of the statements contained in this release are forward-looking statements, such as estimates and statements that describe
the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a
stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature,
they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated
in such statements.
BEMA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
For the periods ended June 30
(Unaudited)
(in thousands of United States dollars, except shares
and per share amounts)
Second Quarter Six months
1999 1998 1999 1998
---- ---- ---- ----
GOLD REVENUE $ 9,611 $ 7,914 $ 19,277 $ 17,693
OPERATING COSTS 6,465 5,938 12,553 13,241
-------- -------- -------- --------
GROSS PROFIT FROM MINE OPERATIONS 3,146 1,976 6,724 4,452
-------- -------- -------- --------
EXPENSES (INCOME)
Depreciation and depletion 1,616 1,708 3,438 3,688
General and administrative 1,113 1,008 1,765 1,758
Interest on long-term debt 572 701 1,041 1,398
Amortization of deferred
financing costs 391 305 753 591
General exploration 25 285 288 419
Insurance proceeds - - (1,009) -
Other 879 359 980 (38)
-------- -------- -------- --------
4,596 4,366 7,256 7,816
-------- -------- -------- --------
LOSS BEFORE THE UNDERNOTED ITEMS (1,450) (2,390) (532) (3,364)
Equity in losses of
associated companies (40) (95) (240) (364)
-------- -------- -------- --------
LOSS FOR THE PERIOD $ (1,490) $ (2,485) $ (772) $(3,728)
-------- -------- -------- --------
-------- -------- -------- --------
LOSS FOR THE PERIOD, PER
COMMON SHARE $ (0.02) $ (0.02) $ (0.01) $ (0.04)
-------- -------- -------- --------
-------- -------- -------- --------
Weighted average number of common
shares outstanding (in thousands) 122,899 108,600 122,899 106,339
-------- -------- -------- --------
-------- -------- -------- --------
BEMA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended June 30
(Unaudited)
(in thousands of United States dollars)
1999 1998
---- ----
OPERATING ACTIVITIES
Loss for the period $ (772) $ (3,728)
Non-cash charges (credits)
Depreciation and depletion 3,438 3,688
Amortization of deferred financing costs 753 591
Deferred revenue (1,578) (1,888)
Equity in losses of associated companies 353 575
Other 74 467
Change in non-cash working capital 2,032 (1,083)
------- -------
Cash from (used in) operating activities 4,300 (1,378)
------- -------
FINANCING ACTIVITIES
Common shares 600 19,608
Refugio loan repayments (3,000) (3,000)
Deferred financing costs (419) (1,455)
Other - 315
------- -------
Cash from (used in) financing activities (2,819) 15,468
------- -------
INVESTING ACTIVITIES
Acquisition of Arian Resources Corporation - (682)
Refugio Mine (1,867) (3,704)
Acquisition, exploration and development (3,178) (6,266)
Promissory notes repaid (issued) by
associated companies, net (1,709) 1,567
Other (444) (471)
------- -------
Cash used in investing activities (7,198) (9,556)
------- -------
Effect of exchange rate changes on cash 417 (507)
------- -------
INCREASE (DECREASE) IN CASH (5,300) 4,027
CASH, BEGINNING OF PERIOD 13,504 24,336
------- -------
CASH, END OF PERIOD $ 8,204 $ 28,363
------- -------
------- -------
The comparative 1998 Consolidated Statement of Cash Flows has been restated to reflect the new reporting requirements
relating to the statement of cash flows, adopted by the Company in 1999 and retroactively applied.
BEMA GOLD CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of United States dollars)
As at As at
June 30 December 31
1999 1998
ASSETS
Current assets $ 25,775 $ 30,166
Investments 30,208 30,561
Property, plant and equipment 134,687 131,419
Other assets 8,074 8,341
-------- --------
$ 198,744 $ 200,487
-------- --------
-------- --------
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities $ 14,351 $ 12,737
Deferred revenue 5,836 7,414
Long-term liabilities 19,968 21,575
Shareholders' equity 158,589 158,761
-------- --------
$ 198,744 $ 200,487
-------- --------
-------- --------
BEMA GOLD CORPORATION
SEGMENTED EARNINGS (LOSS) INFORMATION
For the six months ended June 30
(Unaudited)
(in thousands of United States dollars)
1999 1998
---- ----
GOLD $ 706 $ (1,149)
EXPLORATION AND DEVELOPMENT (288) (419)
UNALLOCATED CORPORATE
General and administrative (1,765) (1,758)
Equity losses (240) (364)
Other 815 (38)
--------
LOSS FOR THE PERIOD $ (772) $ (3,728)
-------- -------- --------
The Company has a 50% interest in one producing mine, the Refugio Mine, located in Chile to which all operating revenues are
attributable.
Refugio Mine Operating Statistics
For the period ended June 30
(Unaudited)
Second Quarter Six months
1999 1998 1999 1998
---- ---- ---- ----
Refugio Mine (100%)
Fine crushed ore to pad (tonnes) 2,336,077 1,868,409 4,501,431 4,188,228
Total ore to pad (tonnes) 2,336,077 1,875,407 4,501,431 4,304,390
Stripping ratio 0.27 1.63 0.33 1.49
Gold grade (grams/tonne) 0.965 0.972 0.947 0.932
Gold Production (ounces) 48,616 37,964 101,466 86,508
Bema's 50% share
Gold Production (ounces) 24,308 18,983 50,733 43,255
Operating cash cost per ounce $250 $320 $244 $302
Total cash cost per ounce $256 $327 $250 $308
Total cost per ounce $320 $406 $315 $386
Gold revenue per ounce $377 $402 $381 $396
Spot price of gold $273 $300 $280 $297
Cash from (to) operations (000's) $1,035 ($1,772) $4,300 ($1,378)
Cash from (to) operations per share $0.01 ($0.01) $0.04 ($0.01)
SOURCE: Bema Gold Corporation |
