Dayton Mining three-month results
Dayton Mining Corp DAY
Shares issued 351,400,000 May 26 close $0.11
Wed 26 May 99 News Release
Mr. Don MacDonald reports
Three months ended March 31, 1999
On March 31, 1999, the company's shareholders and debenture holders
approved the exchange of all its debentures into shares. Effective on that
date under Canadian accounting practice known as "fresh start" accounting,
all Dayton's assets and liabilities were revalued. Under fresh start
accounting, financial results prior to March 31, 1999, are not required to
be disclosed. However, Dayton is reporting the results for the three months
ended March 31, 1999, on the basis of prior accounting, to facilitate
comparison to previous periods.
Effective Jan. 1, 1999, Dayton has changed its reporting currency from
Canadian dollars to U.S. dollars. All amounts unless otherwise stated, are
in U.S. dollars. The 1998 comparative information reported herewith has
been translated from the originally reported Canadian dollar amounts at the
exchange rate at the end of 1998, in accordance with accounting principles
generally accepted in Canada. Realized gold prices and cash operating costs
reported here for 1998 are based upon the actual U.S. dollars received or
expended.
Financial Review
Don MacDonald, chief financial officer, is pleased to report that for the
three months ended March 31, 1999, Dayton had earnings of $410,000 compared
with a loss of $2,212,000 for the same period in 1998. Loss per share,
after recognizing the effect of equity accretion on the convertible
debentures, was two cents for the three months ended March 31, 1999,
compared with a loss of eight cents for the same period in 1998. Cash flow
from operations was $2,713,000 during the quarter compared with an outflow
of $362,000 for the same period in 1998.
Gold production at the Andacollo gold mine for the first quarter was 32,882
ounces at a cash operating cost of $196 per ounce, compared with 18,109
ounces at a cash cost of $284 per ounce in the first quarter of 1998.
During the quarter 1.53 million tonnes of ore grading 0.97 grams of gold
per tonne (gpt) were crushed and stacked on the leach pad compared with
1.40 million tonnes grading 0.78 gpt for the same period in 1998.
Revenues were $10,192,000 for the first quarter of 1999 compared with
$6,658,000 for the same period in 1998. The average price realized for gold
sold during the first quarter of 1999 was $310 per ounce compared with $403
per ounce for the same period in 1998. As a result of fresh start
accounting, the company's remaining gold hedges, which consisted of 63,000
ounces of puts at $340 per ounce, have been shown on the March 31, 1999,
balance sheet at their estimated market value of $3.4-million. Although the
hedges relate to future production and the company will receive cash
proceeds from those hedges in future periods, under fresh start accounting
the $3.4-million gain will not be included in future revenues or income.
In 1997 the company issued a $69-million 7 per cent convertible debenture,
the proceeds from which have been used primarily to service the bank debt,
support capital expenditures at the mine and service interest on the
debentures of approximately $4.8-million per year. Due to the low gold
price environment the company's directors proposed to its debenture holders
and shareholders a transaction to convert all of the $69-million of
debentures into 310.5 million common shares of the company. This
transaction was approved on March 31, 1999, and all of the debentures have
been deemed to be exchanged for common shares. This transaction has been
treated for Canadian accounting purposes as a financial reorganization
resulting in the comprehensive revaluation of all of the assets and
liabilities of the company. The property, plant and equipment figures at
March 31, 1999, and Dec. 31, 1998, are each based on a long-term gold price
of $300 per ounce, but the March 31, 1999, amount is discounted at 8 per
cent compared with an undiscounted amount as at Dec. 31, 1998.
WARNING: The company relies on litigation protection for "forward-looking"
statements.
CONSOLIDATED INCOME STATEMENT
Three months ended March 31
(in thousands of U.S. dollars)
1999 1998
Revenues
Sales $ 10,192 $ 6,658
-------- --------
Cost of sales
Operating costs 6,458 4,663
Depreciation,
depletion and
amortization 2,180 1,487
-------- --------
8,638 6,150
-------- --------
1,554 508
-------- --------
Expenses
Amortization of
deferred financing
costs 115 114
Exploration 66 78
Foreign exchange (109) 424
General and
administrative 560 1,497
Interest expense 608 1,184
Interest income (96) (577)
-------- --------
1,144 2,720
-------- --------
Net income (loss) $ 410 $ (2,212)
======== ========
Per share:
Loss per share,
after effect of
equity accretion
on the convertible
debentures 2 cents 8 cents |
