Hello Islander; A PDG Newsrelease??
This is a very good newsrelease from PDG that was posted on SH, but there is one very significant problem with this newsrelease, somehow magically 25% of their future reserves are not now listed.
Last week before they even issued a release I warned that PDG is about to go into damage control, if you think that this is because I'am totally pro KRY, your way off base, I happen to own both, so if anything I'am not biased to either, the difference is I know who has been doing the wheel spinning, and if what I feel is about to happen, the board of directors of PDG will have to come up with plenty of answers for what I'am sure will be a good number of angry shareholders.
It is also IMMHO, PDG will become a takeover candidate right in the middle of trying to explain to their shareholders, how they dropped the ball and spent over, "as they claim" $110,000,000 and do not now have anything to show for it. If all of this comes to pass, the turmoil at the top of PDG will make the company vulnerable to the sharks that are swirling out there in the markets.
They will have a tough time convincing shareholders to believe them anymore, and most likely will take up the offer of a serious bidder that may materialise?
These are just my thoughts of some possibillity's that may emerge!
Attention Business Editors:
PLACER DOME MAINTAINS STRONG OPERATING AND FINANCIAL POSITION (ALL
DOLLAR AMOUNTS IN U.S. CURRENCY)
VANCOUVER, Jan. 26 /CNW/ - Placer Dome Inc. announces it exceeded
operating targets in 1997 by producing for its account 2.56 million ozs. of
gold (compared with 1.9 million ozs. in 1996) at an average cash production
cost of $202/oz., $33/oz. less than in 1996. Total production costs declined
to $282/oz. from $308/oz. in 1996. Cash production costs are expected to
decline further in 1998 to about $185/oz. and total costs to about $260/oz.
The Corporation now expects to maintain average annual gold production
close to the current rate through the year 2000 at cash production costs below
$200/oz. A previous gold production target of 2.7 million ozs. per year is
not expected to be achieved until 2000 as a result of deferrals in the
construction of new projects and closure of the Detour Lake Mine in Canada.
The Corporation's proven and probable ore reserves at year-end 1997,
calculated at an average long-term price of $375/oz., are estimated to contain
31 million ozs. of gold, amounting to an increase after 1997 production of 17%
over year-end 1996. A preliminary assessment of the impact of the gold price
not recovering from the $300/oz. level indicates a reduction in potential
future life-of-mine gold production of about 20%. The Corporation will
complete an assessment of the impact of a lower average gold price for the
purpose of reporting reserves, and will disclose the results at mid-year.
While Placer Dome will reduce its exploration program for 1998 to $115
million, including exploration and feasibility study costs associated with the
Aldebaran project in Chile, it will focus on retaining a competitive global
generative capability and on taking advantage of opportunities presented by
the current market. Gross exploration expense in 1997 was $145 million,
including $20 million related to the Aldebaran project.
The Corporation will reduce the annual dividend to $0.10 per share from
$0.30 per share to be paid on a semi-annual basis with a schedule to be
announced following the February Board meeting.
The Corporation's hedge book valued at about $610 million at a spot price
of $300/oz., along with cash balances and undrawn bank facilities totalling
$1.1 billion, will ensure it remains in a strong financial position during
this period of low gold prices.
The gold hedge program is expected to result in a gold price realization
of about $360 in 1998, assuming the spot price remains around $300/oz. About
35% of the Corporation's 1998 production has been sold forward at prices
averaging $460/oz. In addition the Corporation has purchased 600,000 ozs. of
put options exercisable at a strike price of $300/oz. to provide a floor price
on about 45% of production during the first half of 1998.
The Corporation will write-down by $247 million ($0.99 per share), after
tax and minority interests, assets which have been adversely affected by the
current low gold price. In addition, the Corporation is taking measures to
reduce overhead costs worldwide by 10% and will defer capital expenditures,
including development of the Mulatos Mine.
After write-downs and dividends on preferred securities, the Corporation
will record a loss in 1997 of about $260 million, or about $1.04 per share
(unaudited). Fourth quarter and year-end 1997 results will be reported in
detail on February 18, 1998, including gold ore reserves and resources.
Three of the Corporation's most mature mines are continuing to operate on
a cash positive basis towards an orderly shutdown consistent with our
commitments to high standards of environmental and post-closure management.
(x) Exploration at the Detour Lake Mine in Canada did not result in
reserve additions during 1997 and the mine will close in 18 months' time.
(x) The 70%-owned Kidston Mine in Australia, which had an average cash
production cost of $363/oz. in 1997, is expected to average about $285/oz. in
1998 and about $220/oz. in 1999 and 2000. In 1997, Kidston processed ore
stockpiles while stripping a new deposit for production starting in 1999. The
mine will fund 1998 stripping and debt servicing by closing out some of its
hedge portfolio valued at $45 million.
(x) Mining at the 80%-owned Misima Mine in Papua New Guinea will cease
during 1999 with milling of stockpiles continuing until 2003. Planned
reclamation, environmental and closure expenditures will be funded from
operating cash flow.
The unaudited write-downs after taxes and minority interests include:
Detour Lake Mine - $18 million for closure provisions and against the carrying
value of mining assets; Kidston Mine - $21 million against the carrying value
of stockpiled ore ($9 million) and other assets ($12 million); Misima Mine -
$16 million against the carrying value of stockpiled ore; currency translation
adjustments related to the investments in Kidston and Misima - $35 million; a
portion of the excess purchase price related to Highlands Gold Limited and
Placer Pacific Limited minority interests acquired in early 1997 - $68
million; stockpiled ore and deferred development costs at several other mines
- $39 million; and other assets and provisions - $50 million.
These write-downs reflect the decline in the gold price and an increased
risk of not recovering the full carrying values of these assets should current
prices prevail for several years.
John Willson, President and Chief Executive Officer, said: ''Our costs
are now on average among the lowest in the world among major gold producers.
In 1997 we continued the ongoing process of enhancing the quality and nature
of our mine portfolio by divesting mines that did not fit our strategy. We
remain focused on quality as demonstrated by the commissioning of the
Musselwhite and Pipeline mines in 1997.
''We are taking the necessary measures to ensure that we maintain our
strong financial position during this period of low gold prices and to
preserve funding for priority exploration and quality reserve acquisitions.
This will keep us well positioned to meet our objective of achieving superior
shareholder returns relative to our industry peer group.''
(Some of the statements contained in this news release may be
forward-looking statements, such as estimates and statements that describe the
Corporation's future plans, objectives or goals, including words to the effect
that the Corporation 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 by reason of factors such as the productivity of the
Corporation's mining properties, changes in general economic conditions and
conditions in the financial markets, changes in demand and prices for the
minerals the Corporation produces, legislative, environmental and other
regulatory, political and competitive developments in areas in which the
Corporation operates, technological and operational difficulties encountered
in connection with the Corporation's mining activities, and labour relations
matters and costs.)
Complete information on the Placer Dome Group is available on most
leading Databases including Stardata (CNW), Dow Jones Telerate, Bloomberg
Financial Markets, Infoglobe, Infomart or QL Systems in Canada and Dow Jones
News Retrieval, Bloomberg Financial Markets, Standard and Poors, Nexis,
Dialog, CompuServe or First Call, in the United States.
%SEDAR: 00002304E
ANY MENTION OF LC's hhhhmmmmmm
Notice their, Porgera Mine.................nice reserves eh PDG
" (x) Mining at the 80%-owned Misima Mine in Papua New Guinea will cease
during 1999 with milling of stockpiles continuing until 2003. Planned
reclamation, environmental and closure expenditures will be funded from
operating cash flow."
Check out PDG's reserves at this old post of mine #45786
superss
So now I ask, where are the numbers supporting the $110,000,000??
We are going to see some very interesting situations develop, and if anyone is sharp they will have a good number of ways to profit here??
With regards,Frank |
