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Placer Dome Announces 2005 Second Quarter Results
Excerpts from Company Press Release
via Business Wire
Wednesday, July 27, 2005
(U.S. dollars used)
http://biz.yahoo.com/bw/050727/276165.html?.v=1
VANCOUVER, British Columbia -- Placer Dome Inc. announces a second
quarter loss of $7 million ($(0.01) per share), inclusive of a non-
cash tax charge of $15 million ($0.03 per share). Gold production
during the quarter was 916,000 ounces at cash costs of $282 per
ounce.
President and CEO Peter Tomsett said: "This quarter does not reflect
the performance our assets are capable of delivering. The
combination of a challenging cost environment and operating issues
at a number of mines are impacting our results and we are addressing
these issues. We remain on track to make decisions in the second
half of the year on three of the projects in our development
portfolio: Cerro Casale, Cortez Hills, and Pueblo Viejo." ...
Placer Dome reported a loss of $7 million (($0.01) per share) for
the second quarter and net earnings of $24 million ($0.06 per share)
for the first six months of 2005. Earnings were negatively impacted
by increased costs, lower copper production and higher hedging
losses. The second quarter results include a $15 million non-cash
tax charge relating to the valuation allowance on the Corporation's
Australian assets.
Mine operating earnings were $78 million in the second quarter and
$182 million for the first six months. Cash from operations totalled
$53 million for the second quarter and $121 million for the six
months.
Placer Dome's second quarter earnings were impacted by a pre-tax net
loss on all of the company's hedge positions of $43 million, of
which $31 million related to maturing gold hedge positions.
Placer Dome's realized gold price was $391 per ounce in the second
quarter compared to a spot price of $427 per ounce as the company
delivered into all maturing hedge positions. The realized gold price
was lower by $36 per ounce in the second quarter (compared to $11
per ounce in the first quarter) due to a concentration of lower
valued maturing positions.
During the second half of the year the value of the positions
improves such that if gold averages the same $427 per ounce, Placer
Dome's realized price would be approximately $405 per ounce or $14
per ounce higher than the second quarter.
Placer Dome realized $1.36 per pound for its copper production in
the second quarter versus an average spot price of $1.54 per pound.
The amount of copper production hedged is halved during the second
half of the year. As a result, if copper averages the same $1.54 per
pound in the second half of the year, the realized price would be
approximately $1.47 per pound during that period.
Consistent with expectations, gold production totalled 916,000
ounces during the second quarter of 2005 and 1.83 million ounces for
the first six months of the year. Copper production at 90 million
pounds for the second quarter and 181 million pounds for the first
half of 2005 was below expectations due to short-term operational
issues at Zaldivar.
Cash costs for gold production were $282 per ounce in the second
quarter of 2005 and $278 per ounce for the six months. Eight mines
reported cash cost improvements in the second quarter relative to
the first quarter, but these improvements were more than offset by
higher costs at Porgera, which continues to be impacted by erosion
and slides in the pit wall, and operational challenges at a number
of other mines. Cost reduction initiatives were introduced at a
number of sites that helped offset continued cost pressures from
energy, fuel and input commodity costs. Total costs in the second
quarter were $349 per ounce of gold and for the first six months of
2005, $345 per ounce of gold.
Copper cash costs for the second quarter and first six months were
$0.66 and $0.65 per pound, respectively. Total costs for copper in
the second quarter were $0.80 per pound and for the first six months
were $0.79 per pound. ...
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