Dayton News!
Friday August 14, 9:25 am Eastern Time
Company Press Release
Dayton Mining: Second Quarter 1998
Results
VANCOUVER, BRITISH COLUMBIA--(BUSINESS
WIRE)--Aug. 14, 1998-- Dayton Mining(TSE:DAY. - news; AMEX:DAY - news) Dayton Mining
Corporation (AMEX, TSE: DAY - news news) announces today its results for the three and six
months ended June 30, 1998. All amounts are in
Canadian dollars unless otherwise stated.
FINANCIAL REVIEW
Dayton today reported a net loss of $3,929,000 ($0.13 per share, after recognizing the effect of the
equity accretion on convertible debentures) for the three months ended June 30, 1998, compared
with a net loss as restated of $730,000 ($0.05 per share) for the same period in 1997. Gold
production for the second quarter of 1998 was 18,804 ounces compared with 23,895 ounces over
the same period in 1997. The primary reasons for the increased loss were the lower gold
production, costs related to the departure of Mr. Roland Horst the former president of the Company
and costs related to the annual general meeting, offset in part by foreign exchange gains.
Cash operating costs at the Andacollo Gold Mine were US$271 per ounce in the second quarter of
1998 compared with US$238 per ounce (as restated) in the same period in 1997. As announced in
the first quarter, since the stripping ratio in 1998 is significantly higher than the life-of-mine stripping
ratio, Dayton has commenced in 1998 allocating mining costs based upon the life-of-mine average
stripping ratio, in accordance with the Gold Institute guidelines. Since this is a change in accounting
policy, 1997 and 1996 operating results have been restated.
Revenues were $8,918,000 for the second quarter of 1998 compared with $12,718,000 in the
same period in 1997. The average price realized for gold sold during the second quarter of 1998
was US$325 per ounce compared with US$402 per ounce for the same period in 1997.
For the six months ended June 30, 1998 Dayton Mining Corporation had a net loss of $7,315,000
($0.25 per share, after recognizing the effect of the equity accretion on convertible debentures),
compared with net loss of $17,000 ($0.01 per share) for the same period in 1997. Gold production
at the Andacollo Gold Mine for the first half of 1998 was 36,913 ounces compared with 47,435
ounces over the same period in 1997. Cash operating costs at the Andacollo Gold Mine were
US$277 per ounce in the first half of 1998 compared with US$233 per ounce (as restated) in the
same period in 1997. The primary reasons for the increased loss were the lower gold production,
costs related to the departure of Mr. Roland Horst and Mr. Wayne McClay former presidents of the
Company, and annual general meeting costs, offset in part by foreign exchange gains.
Revenues were $19,112,000 for the first half of 1998 compared with $25,217,000 in the same
period in 1997. The average price realized for gold sold during the first half of 1998 was US$355
per ounce compared with US$395 per ounce for the same period in 1997.
In reaction to the disappointing results for the first half of 1998, Mr. Myckatyn stated, ''The new
board of Directors has nearly completed its review of the Andacollo operation in Chile. We have
hired additional consultants to continue the analysis of grade control techniques at Socorro and have
taken steps to improve crusher throughput. The results of this work is expected to yield
improvements to the production and cost performance at the Andacollo Mine''.
EXPLORATION REVIEW
During the first half of 1998 approximately 13,000 meters of exploration drilling was completed at
Andacollo with the majority in the Churrumata sector. This drilling resulted in an additional 173,400
ounces of gold resources. The impact of this drilling on mineable reserves is currently being studied.
No further exploration spending is planned on site this year.
Dayton Mining Corporation holds a 100 percent interest in the Andacollo Gold Mine located in
central Chile, and trades on both the American Stock Exchange (AMEX) and Toronto Stock
Exchange (TSE) under the trading symbol DAY.
Consolidated Balance Sheets
in thousands of Canadian dollars
30 Jun 1998 31 Dec 1997
(unaudited) (audited)
Assets
CURRENT ASSETS
Cash and short term investments 52,619 95,237
Investments in marketable
securities 1,339 839
Bullion settlements receivable 2,513 2,950
Other receivables 2,860 3,841
Inventories 13,609 9,521
------------------------
Total current assets 72,940 112,388
PLANT, PROPERTY AND EQUIPMENT 116,693 105,729
OTHER ASSETS 4,968 4,826
------------------------
Total assets 194,601 222,943
------------------------
Liabilities
CURRENT LIABILITIES
Accounts payable and accrued
liabilities 10,464 9,812
Bank loan - current 36,790 61,307
Capital lease obligation - current 4,967 3,596
Convertible debentures - liability
- current 6,865 6,673
------------------------
Total current liabilities 59,086 81,388
------------------------
LONG-TERM LIABILITIES
Capital lease obligation 10,325 7,233
Convertible debentures - liability 17,597 19,605
Other accrued liabilities 1,731 1,540
------------------------
Total long-term liabilities 29,653 28,378
------------------------
Total liabilities 88,739 109,766
------------------------
Shareholders' Equity
SHARE CAPITAL 90,714 90,714
CONVERTIBLE DEBENTURES 70,686 67,904
DEFICIT (55,538) (45,441)
------------------------
Total shareholders' equity 105,862 113,177
------------------------
Total liabilities and equity 194,601 222,943
------------------------
Consolidated Statements of Income
for the periods ended June 30
in thousands of Canadian dollars
(unaudited)
Three months ended Six months ended
June 30 June 30
1998 1997 1998 1997
(1997 figures as restated)
REVENUES
Sales 8,918 12,718 19,112 25,217
-----------------------------------
COST OF SALES
Operating costs 7,546 7,867 14,685 15,190
Depreciation, depletion
and amortization 2,361 2,741 4,638 5,396
-----------------------------------
Total cost of sales 9,907 10,608 19,323 20,586
-----------------------------------
(989) 2,110 (211) 4,631
-----------------------------------
EXPENSES
Amortization of deferred
financing costs 391 444 566 928
Exploration 617 393 810 678
Foreign exchange
and other (1,539) 290 (890) (751)
General and
administrative 2,560 1,036 4,778 2,072
Interest expense 1,609 2,131 3,422 3,732
Interest income (698) (1,454) (1,582) (2,011)
-----------------------------------
Total expenses 2,940 2,840 7,104 4,648
-----------------------------------
NET LOSS (3,929) (730) (7,315) (17)
-----------------------------------
Weighted average shares outstanding
- basic (000's) 40,857 40,857 40,857 40,852
Earnings (loss) per share
- basic $ (0.13) $ (0.05) $ (0.25) $ (0.04)
Earnings (loss) per share
- fully diluted $ (0.13) $ (0.05) $ (0.25) $ (0.04)
Consolidated Statements of Deficit
for the periods ended June 30
in thousands of Canadian dollars
(unaudited)
Three months ended Six months ended
June 30 June 30
1998 1997 1998 1997
(1997 figures as restated)
DEFICIT, BEGINNING
OF PERIOD 50,189 14,554 45,441 14,880
Convertible debentures
- equity accretion 1,420 1,253 2,782 1,640
Net (income) loss
for the period 3,929 730 7,315 17
-----------------------------------
DEFICIT, END OF PERIOD 55,538 16,537 55,477 16,537
-----------------------------------
Gold produced (oz) 18,804 23,895 36,913 47,435
Average price realized
(US$/oz) 325 402 355 395
Cash operating costs
per ounce (US$/oz) 271 238 277 233
Consolidated Statements of Cash Flows for the periods ended June
30 in thousands of Canadian dollars (unaudited)
Three months ended Six months ended
June 30 June 30
1998 1997 1998 1997
(1997 figures as restated)
OPERATING ACTIVITIES
Net loss for the period (3,929) (730) (7,315) (17)
Adjustment to reconcile net loss
for the period to cash provided
by operating activities
Depletion, depreciation
and amortization 2,361 2,741 4,638 5,396
Amortization of deferred
financing costs 391 444 566 928
Amortization of deferred
foreign exchange 1,060 189 1,432 191
Amortization of
other assets 12 12 23 25
-----------------------------------
Cashflow from
operations (105) 2,656 (656) 6,523
Bullion sales receivable 456 (1,613) 438 (1,118)
Other receivables 1,116 280 981 (857)
Inventories (2,266) 469 (4,088) 358
Accounts payable 274 1,213 (1,842) 2,466
Bank loans - current
portion (5,106) - (25,689) 53,936
Capital lease obligation
- current portion 1,273 733 1,371 758
-----------------------------------
Cashflow provided by (used for)
operating activities (4,358) 3,738 (29,485) 62,066
-----------------------------------
INVESTING ACTIVITIES
Property, plant and
equipment (7,705) (7,742) (11,040) (9,189)
Deferred stripping (2,862) (56) (4,562) (580)
Investments in marketable
securities (500) - (500) -
Other assets 195 (171) 127 (147)
-----------------------------------
Cashflow used for
investing activities (10,872) (7,969) (15,975) (9,916)
-----------------------------------
FINANCING ACTIVITIES
Bank loans - - - (58,766)
Capital lease obligation 3,006 2,281 2,650 1,583
Accrued liabilities 112 125 192 152
Share capital - (18) - 223
Convertible debentures - - - 90,869
-----------------------------------
Cashflow provided by
financing activities 3,118 2,388 2,842 34,061
-----------------------------------
NET INCREASE (DECREASE)
IN CASH (12,112) (1,843) (42,618) 86,211
CASH, BEGINNING OF
PERIOD 64,731 110,168 95,237 22,114
-----------------------------------
CASH, END OF PERIOD 52,619 108,325 52,619 108,325
-----------------------------------
Cashflow from operations
per share - basic $ 0.00 $ 0.07 $ (0.02) $ 0.16
Cashflow from operations per
share - fully diluted $ 0.00 $ 0.05 $ (0.02) $ 0.12
Notice: The Company relies on litigation protection for ''forward looking'' statements.
Contact:
Dayton Mining Corporation
Diane Thomas, 604/662-8383
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