BEMA GOLD CORPORATION
NEWS RELEASE
First Quarter Results
May 6, 1999 FOR IMMEDIATE RELEASE
VANCOUVER — Bema Gold Corporation (“Bema” or the “Company”) is
pleased to report a net profit of $718,000 (one cent per share) on
revenues of $9.7 million for the quarter ending March 31, 1999. Cash
from operating activities was $3.3 million (or three cents per
share). These results compare to a net loss of $1.2 million (or one
cent per share) on revenues of $9.8 million and cash from operating
activities of $394,000 (nil per share) for the same period in 1998.
The Company realized an average price of $386 per ounce of gold
compared to an average spot price of $287 per ounce of gold for the
period. Bema's hedging program generated $2.6 million of additional
revenue in the first quarter of 1999.
At the end of the first quarter Bema had cash of $14.2 million, an
increase of approximately $700,000 from December 31, 1998.
Bema's share of cash received for insurance claims from the Refugio
mine was $1.0 million in the period and is included
inearnings. The proceeds received represent an advance of the access
denial claim resulting from the severe winter storms in 1997.
Refugio Mine, Chile
Cia Minera Maricunga (“CMM”)
(50% Bema / 50% Kinross Gold)
The Refugio Mine had an improved first quarter with gold production
of 52,850 ounces (Bema's share – 26,425 ounces) at an operating cash
cost of $239 per ounce of gold. This compares to 48,544 ounces
(Bema's share – 24,272 ounces) of gold produced at an operating cash
cost of $287 per ounce of gold during the same period in 1998.
Operating cash costs declined in the first quarter of 1999 compared to the same period in 1998 primarily due to changes in the mining
plan that resulted in a decreased stripping ratio and to repairs
that resulted in better crusher throughput. Both ounces produced and operating cash costs per ounce were ahead of budget for the first
three months of 1999.
CMM has recently negotiated termination of the mining contract at
Refugio in favour of self-mining. It is anticipated that the initial
stages of the changeover to self-mining should begin by mid-May with
haulage of crushed ore to the heap, and be completed by the end of July. A mobile equipment fleet consisting of eight 170 tonne haul trucks purchased through a capital lease is scheduled to arrive at the mine site in early May. The changeover to self-mining is planned to reduce operating cash costs and improve operating flexibility.
On site testing of a more powerful and durable third stage crusher
has been successfully completed, and as such, the Board of CMM has
approved the purchase of four new crushers. The crushers will be
capable of achieving design capacity and producing a consistently
fine crushed product thus improving gold recovery rates from previous
results. The full changeover of the crushers is expected by the end
of September.
Arbitration has begun and legal counsel has been retained to
represent CMM in an arbitration in Chile against Fluor Daniel
Corporation, Fluor Daniel Ingeniería y Construcción Chile S.A. and
Fluor Daniel Wright, Ltd. which were contracted for the engineering,
procurement and construction of the Refugio Mine in 1994 and 1995.
CMM is claiming that Fluor Daniel has failed to meet and complete
its contract obligations and guarantees. Specific areas of non-
compliance by Fluor Daniel include earthworks, performance
guarantees, items repaired or completed by CMM and failure to design
and construct in accordance with the contract documents. The
facilities as engineered, designed and constructed by Fluor Daniel
have experienced numerous failures, and the crushing plant has never
achieved the basic design criteria production goals.
Other Developments
Aldebaran Project, Chile
Exploration and feasibility work continued through the first quarter
with $4.8 million spent on the feasibility study and $1.0 million on
exploration. In addition to drilling on the Cerro Casale deposit,
Placer Dome has completed further diamond drilling on the Eva,
Estrella, Anfileatro and Romancito Sur zones. Additional work
included water well drilling and testing, metallurgical testing and
water rights applications.
Placer Dome is working to earn a 51% interest in the Aldebaran
Project and is planning to spend $18 million in 1999 on exploration
and feasibility work. The Final Feasibility study on the Cerro
Casale Deposit is expected to be completed in February 2000.
Lo Increible Property, Venezuela
Based on a positive pre-feasibility study announced in February,
1999, El Callao Mining Corp. (38.4% owned by Bema) plans to commence,
in mid-1999, a final feasibility study at a cost of approximately
$6.0 million.
Julietta Deposit, Magadan Region, Russia
The Company continues to pursue financing to construct Julietta and
is reviewing the capital and operating cost projections where the
Company believes there is potential for reductions. An updated
development plan will be completed by the end of May. The Julietta
deposit is a high grade gold-silver deposit which is economically
viable in today's gold environment.
Bema Gold Corporation produces gold in Chile, and explores for gold
in Canada, Chile, Russia, 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 stated.
On behalf of BEMA GOLD CORPORATION
Clive T. Johnson
Chairman, C.E.O., & President
For more information on Bema Gold please contact Investor Relations
at (604) 681-8371 or toll-free 1-800-316-8855 or alternatively
contact our web-site at www.bema.com
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
exchanges. Symbol: BGO.
Some of the statements contained in this release are forward-looking
statements, such as estimates and statements that describe the
Company's future plans, objectives or goals, including words to the
effect that the Company 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.
BEMA GOLD CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of United States dollars)
As at As at
March 31 December 31
1999 1998
ASSETS
Current assets $31,298 $30,166
Investments 30,304 30,561
Property, plant and equipment 131,213 131,419
Other assets 7,971 8,341
________ ________
$200,786 $200,487
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities $13,017 $12,737
Deferred revenue 6,479 7,414
Long-term liabilities 21,811 21,575
Shareholders' equity 159,479 158,761
$200,786 $200,487
BEMA GOLD CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended March 31
(Unaudited)
(in thousands of United States dollars)
1999 1998
GOLD REVENUE $9,666 $9,779
EXPENSES (INCOME)
Operating 6,088 7,303
Depreciation, depletion and amortization
2,184 2,266
General and administrative 652 750
Interest on long-term debt 469 697
Insurance proceeds (1,009) -
Other 564 6
_______ ______
8,948 11,022
EARNINGS (LOSS) FOR THE PERIOD $ 718 $ 1,243)
EARNINGS (LOSS) FOR THE PERIOD, PER COMMON SHARE
$0.01 $(0.01)
BEMA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31
(Unaudited)
(in thousands of United States dollars)
1999 1998
OPERATING ACTIVITIES
Earnings (loss) for the period $ 718 $ (1,243)
Non-cash charges (credits)
Depreciation and depletion 1,822 1,980
Amortization of deferred financing costs
362 286
Deferred revenue (935) (964)
Equity in losses of associated companies
257 365
Other 61 (36)
Change in non-cash working capital 980 6
Cash from operating activities 3,265 394
FINANCING ACTIVITIES
Common shares issued -- 21
Deferred financing costs (216) (211)
Cash used in financing activities (216) (190)
INVESTING ACTIVITIES
Refugio Mine (521) (2,954)
Acquisition, exploration and development
(1,194) (2,048)
Promissory notes repaid (issued) by associated companies, net
(888) 2,832
Other 76 (401)
Cash used in investing activities (2,527) (2,571)
Effect of exchange rate changes on cash
146 64
INCREASE (DECREASE) IN CASH 668 (2,303)
CASH, BEGINNING OF PERIOD 13,504 24,336
CASH, END OF PERIOD $ 14,172 $ 22,033
The comparative 1998 Consolidated Statement of Cash Flows has been restated to reflect the new reporting requirements relating to the statement of cash flows, adopted by the Company in 1999 and retroactively applied.
Refugio Mine Operating Statistics
First Quarter
1999 1998
Refugio Mine (100%)
Fine crushed ore to pad (tonnes) 2,165,354 2,319,819
Total ore to pad (tonnes) 2,165,354 2,428,983
Stripping ratio 0.38 1.40
Gold grade (grams/tonne) 0.928 0.901
Gold production (ounces) 52,850 48,544
Bema's 50% share
Gold production (ounces) 26,425 24,272
Operating cash cost per ounce $239 $287
Total cash cost per ounce $244 $293
Total cost per ounce $311 $369
Gold revenue per ounce $386 $391
Spot price of gold $287 $294
Cash from operations (000's) $3,265 $394
Cash from operations per share $.03 -- |
