To All: News Release 1/11/99
This news release demonstrates why this stock is a steal. With the great copper production coming out at a low cash production cost (US$0.37 per pound), they can be profitable even with copper at US$0.60 / lb! Couple this with announcements about their Thailand property and Indonesian properties in late February, and you should see this stock at US$2.00 by April. If gold recovers to around $320, the Bakyrchik mine (11 million ounces) becomes break-even, and when copper recovers to US$1.00 in about two years, this stock will be US$30 - $50 a share by 2002.
I called the company about getting a listing on a US exchange, but they said their plans now are to get the stock "registered" in the US, but to not seek an official listing on an exchange. Why they won't list is somewhat odd, but I guess they have their reasons.
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For Immediate Release January 11, 1999
INDOCHINA GOLDFIELDS' NEW S&K COPPER MINE
IS EXCEEDING PRODUCTION GOALS
SINGAPORE - Indochina Goldfields Ltd. announced today that its new S&K Mine at Monywa in Myanmar has met and exceeded its annual production design rate of 25,000 tonnes of copper cathode only 60 days after start-up.
"Monywa has had a very smooth start-up. Achieving design capacity this quickly is the rewarding culmination of several years of planning and hard work by a remarkable team of people. The experience gained through two years of operation of the pilot plant has proved invaluable to this performance," said Edward Flood, President of Indochina Goldfields.
"We've surpassed our full-scale design capacity, putting us at least two months ahead of our initial expectations. It's a real confidence builder as we proceed to finalize plans to boost the mine's output by an additional 40% to achieve our goal of even lower costs and higher revenues."
The heap leach, SX-EW operation, 50% owned by Indochina Goldfields, produced 2,117 tonnes (4.7 million pounds) of LME Grade A copper cathode during December, 1998, the first full month of production after start-up. To date, more than 2.5 million tonnes of ore have been placed on leach pads. A total of 3,164 tonnes (approximately seven million pounds) of copper have been produced since the plant began operation in early November. Cathode copper is being shipped to Japan under a long-term sales agreement with Marubeni Corporation. Proceeds from the sales are deposited into a project operating account in Singapore. The cash cost of production during December was US$0.42 per pound, which includes shipping and marketing fees of US$0.05 per pound.
For 1999, the company expects to reduce operating costs by a further
US$0.05 per pound through a number of cost-cutting initiatives, including:
. A significant reduction in mine overhead costs, including labor, which took effect January 1, 1999.
. A 14% reduction, to US$0.06 per kW/h, in the rate charged for electricity used by the mine - the operation's single largest cost component.
. A proposal by the Myanmar government to reduce the existing 4% production royalty and index the revised royalty to the world price of copper.
. An agreement by the project lender, prompted by the S&K Mine's extensive ore reserves, to review the loan term to help improve the project's cash flow at current copper prices.
"The implementation of these planned cost saving measures should allow the S&K Mine to produce copper at approximately US$0.37 per pound, inclusive of royalties, shipping and delivery to customers," Mr. Flood said. "We are well on our way to becoming one of the copper industry's lowest cost producers."
The company expects to achieve financial completion on the project by October, 1999, a benchmark met by funding the first semi-annual debt service requirement, which will remove Indochina as guarantor of the project loan. In addition, with the production risk reduced by the successful start-up of the mine, Indochina recently entered into forward sales agreements that guarantee a minimum price of US$0.71 per pound for more than half of the mine's production through the first half of 1999.
Development plans are being finalized to significantly expand current
production levels. Key portions of the installed facilities were
constructed with capacities up to 40% greater than current production
requirements. As previously announced, estimates indicate that, for an investment of approximately US$7.5 million, the electro-winning,
solution-pumping and storage capacities can be expanded to produce an additional 10,000 tonnes (22 million pounds) of copper cathode per year, yielding further reductions in production costs. The company is aiming to initiate this first expansion during 1999.
Indochina Goldfields currently has 71.7 million shares outstanding and had a cash balance of approximately US$56 million on December 31, 1998. In addition to the Monywa Copper Complex, the company's assets include a major shareholding in the Emperor Gold Mine in Fiji, which expects to produce approximately 135,000 ounces of gold in 1999, as well as gold and base metal interests in Indonesia, Kazakhstan, Thailand and South Korea. The company's shares trade on the Toronto and Australian stock exchanges under the symbol ING.
For further information, please contact:
R. Edward Flood, President or,
Marco Romero, VP, Corporate Development
North America: 604.688.5755
Web site: goldfields.com |
