BEMA GOLD CORPORATION THIRD QUARTER REPORT
VANCOUVER, Oct. 22 /CNW/ - Bema Gold Corporation (''the Company'') today reported a net loss of $4.9 million (5.7 cents per share) on revenues of $3.8 million for the quarter ending September 30, 1997. These results compare to a loss of $1.2 million (1.9 cents per share) on zero revenue for the same three months of 1996.
The third quarter loss resulted mainly from significanlower than
planned production at the 50% owned Refugio Mine in Chile due to a series of severe winter storms. Although mining operations have since resumed, the storms had caused the closure of access roads to the mine, and resulted in the suspension of mine operations for several weeks during the period. The 1997 winter was the most severe in modern history in Chile. In normal conditions, the Refugio Mine is planned to operate throughout the winter with only a few days of lost production due to snow. Despite the unusual nature of the 1997 Chilean winter, modifications to the buildings, equipment and road access are planned to reduce the impact of future winter storms.
Included in gold revenue were hedging gains of $800,000 for the quarter. The average price received per ounce of gold was $408 compared to the quarter average spot price of $324 per ounce.
Nine Months Earnings
For the first nine months ended September 30, 1997, the Company recorded a net loss of $5.6 million (7.4 cents per share) compared to a net loss of $1.3 million (3.4 cents per share) in the same period of 1996. Revenues during the 1997 period were $21.1 million, compared with zero revenues for the same period in 1996. As reported above for the third quarter, the nine-month results are heavily impacted by the loss of production associated with the severe winter in Chile.
Included in gold revenue were hedging gains of $2.6 million for the nine months. The average price received per ounce of gold was $391 for the nine-month period ended September 30, 1997, compared with the nine-month average spot price of $339 per ounce.
Refugio Mine, Chile
The Refugio Mine produced a total of 19,600 ounces during the quarter, of which the Company's portion was 9,800 ounces produced at an average operating cash cost of $529 per ounce. As expected, the operating cash cost was higher than projected due to the disruptions caused by the winter storms. For the first nine months of 1997, operating cash costs have averaged $313 per ounce.
Although production levels at Refugio were hampered in both the second and third quarter due to the severe winter storms, the mine is projected to achieve full production levels towards the end of the fourth quarter. As well, reserve expansion drilling at Refugio is scheduled to recommence in the fourth quarter of this year.
While gold prices remain at low levels, the Company has hedged 100% of its planned production for the remainder of 1997 at an average price of approximately $385 per ounce consisting mainly of put options. In addition, the Company has hedged predominantly by way of put options, approximately 85% of the planned production for 1998 and 1999, at an average price exceeding $380 per ounce.
Other Developments
As reported October 9, 1997, an independent Pre-Feasibility Study on the Cerro Casale gold copper deposit in Northern Chile demonstrates the deposit can be developed as a low-cost, large-scale open pit gold copper mine. The extensive study, by Mineral Resources Development, Inc., concludes that the Cerro Casale deposit contains a mineable reserve of 19.5 million ounces of gold and 5 billion pounds of copper. 85% of this reserve is in the proven and probable category. The study recommends processing 150,000 tonnes of ore per day, yielding average annual production of 916,000 ounces of gold and 282 million pounds of copper, over a mine life of 16 years.
Using copper credits at $1.00 per pound, the direct operating cash costs including mining, processing, concentrate transportation, smelting and refining would total $79 per ounce of gold. The total costs of producing gold including all capital costs for the life of the mine are estimated at $182 per ounce of gold net of copper revenues.
Based on the data and recommendations from the Pre-Feasibility Study, Bema Gold and partner Arizona Star Resources Corp. will continue to advance the Cerro Casale Project and proceed with a Final Feasibility Study.
Bema Gold Corporation produces gold in Chile, and explores for gold in Argentina, Canada, Chile, 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''.
Note: All dollar amounts are expressed in United States dollars unless otherwise noted.
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 Exchange, symbol: BGO.
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For further information: John D. Anderson, Director of Investor Relations or Andrea Bell at (604) 681-8371 or toll-free 1-800-316-8855 |
