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Gold/Mining/Energy : Steppe Gold (SPE:V) -- Ignore unavailable to you. Want to Upgrade?

To: John Stokes who wrote (532)	1/22/1998 9:13:00 PM
From: traacs	Read Replies (1) \| Respond to of 1248

Information to keep the discussion lively Indochina Goldfields Improves Financial Position Indochina Goldfields Ltd. has undertaken a series of strategic measures in response to the current downturn in the mining industry to safeguard the company's sound financial position. Indochina Goldfields has closed out gold hedge put contracts on 500,000 ounces of gold, for total proceeds of US$14.3 million. The company purchased gold hedge put contracts on one million ounces of gold for US$14.7 million in July 1997 and has closed out one half of its position to recover nearly the total original cost and realize a net gain of US$6.9 million. The put contracts had been purchased to provide a floor to support debt service of project financing. Indochina Goldfields took advantage of the current level of gold prices and closed out 50% of its hedge facility once gold fell below US$278 an ounce. Following this transaction, Indochina Goldfields has cash and liquid assets totaling approximately US$75 million. Pending sustained recovery of the gold price, Indochina Goldfields has begun a program to place the Bakyrchik Gold Project in Kazakhstan on a sustained care and maintenance basis. While this will defer the timing of some scheduled investments, the company will continue to operate the new pilot plant designed by Drinkard Metalox, Inc. and built with the assistance of Kvaerner Metals of Toronto, Ontario, to test the application of an advanced hydro-metallurgical process that could boost anticipated recoveries of gold from the Bakyrchik ore. Bench-scale tests completed on the Bakyrchik ores have demonstrated that, if successful, a commercial Drinkard plant could achieve recoveries of up to 94% and replace one stage of a planned two-stage roaster in the oxidation circuit. The Drinkard pilot plant was commissioned last month at a total construction cost of US$5.5 million. By placing the project on a care and maintenance program, the local workforce has been trimmed by 50% and will provide only for operation of the recently commissioned pilot plant, site security, equipment maintenance services and administration during the stand-down. Indochina Goldfields has asked the government of Kazakhstan to restructure the schedule for remaining payments totaling US$30 million for the purchase of the government's interest in the Bakyrchik mine. During the past year, the Bakyrchik joint venture, now owned 86% by Indochina Goldfields, has made payments of US$35 million to the government and has provided an additional US$50 million in working capital, infrastructure development and investments in the mine. The company is continuing to fund its social obligations in Kazakhstan. The company's statement said that while Indochina Goldfields remains committed to the Bakyrchik project, this is an appropriate time to concentrate resources on the hydro-metallurgical research, social welfare at the mine site and efforts to seek a potential joint venture partner. The company has proposed linking future installment payments to the successful arrangement of project financing and a sustained recovery in the gold market. Discussions with the Kazakhstan government are expected to commence later this month.