<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 6-K
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REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
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For the month of November 1996
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MERIDIAN GOLD INC.
(Translation of registrant's name into English)
5011 Meadowood Way
Reno, Nevada 89502
(Address of principal executive offices)
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Form 20-F X Form 40-F
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Yes X No
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<PAGE>
SHAREHOLDERS' REPORT
FOR THE NINE MONTH PERIOD ENDED
SEPTEMBER 30, 1996
CORPORATE PROFILE
Meridian Gold Inc. is a proven exploration-oriented gold producer, well financed
and led by a strong management team committed to growth.
CORPORATE OFFICES 5011 Meadowood Way
Reno, Nevada
USA 89502
Tel: (702) 827-3777
Fax: (702) 827-7133
LISTINGS Toronto Stock Exchange - Symbol : MNG
New York Stock Exchange - Symbol : MDG
INVESTOR RELATIONS Brian Kennedy, CEO
TRANSFER AGENT & REGISTRAR The Trust Company of Bank of Montreal
<PAGE>
MESSAGE TO SHAREHOLDERS
Meridian Gold Inc. today reported a significant year-over-year increase in
revenue for the third quarter and nine months ended September 30, 1996. The
Company reported a loss for both periods, reflecting costs associated with its
aggressive exploration and development program. All dollar amounts are stated
in U.S. dollars.
Revenue in the third quarter increased 40% to $20.1 million, from $14.4 million
over the same period last year. This was primarily due to this year's full
quarter of production from the Company's 100% owned Beartrack gold mine in
Idaho, which began operating in July 1995. The Company reported a net loss of
$2.1 million, compared with a profit of $1.5 million in the third quarter of
1995. The 1995 third quarter included recognition of $3.8 million of income tax
benefits associated with 1995 and prior period losses. Loss per share was $0.03
in the third quarter, compared with income per share of $0.02 for the same
period last year.
For the first nine months of fiscal 1996, sales increased 69.3% to $56.2 million
from $33.2 million, with a loss of $5.0 million compared with a loss of $5.3
million a year ago. The Company generated positive cash flow from operations of
$8.6 million in the nine-month period.
We made it clear at the time of the equity offering in July 1996 that our
emphasis, following the sale by FMC Corporation of its interest in Meridian, is
on generating significant long-term growth through an aggressive exploration and
development program. We made good progress during the latest quarter. We settled
our dispute with Dee Gold Mining Co. on the Carlin Trend in Nevada, to the
benefit of both companies, and we have 16 exploration drill rigs operating. We
are very encouraged regarding our exploration and development programs in Chile,
Idaho and Nevada.
BEARTRACK OPERATION
Beartrack's production continued to increase in the third quarter following
difficult operating conditions due to weather in both the first and second
quarters of 1996. The mine produced 27,595 gold ounces in the third quarter of
1996, up from the 12,709 gold ounces produced in the same period last year,
which was the operation's first quarter of production.
The mine moved 1.6 million tons of ore in the quarter, an 83% increase over the
same period last year. The average grade of ore mined was 0.025 ounces per ton
(opt), down from the average of 0.037 opt in the same period last year as the
operation mined a higher proportion of lower grade ore from the mine's lower
grade north pit. The mine moved 0.8 million tons of waste in the third quarter
of 1996, equivalent to last year's period.
Beartrack's income contribution for the three months ended September 30, 1996
was $2.0 million, up $1.2 million from the third quarter of 1995 due to higher
ounces produced in this year's full three months of production versus the
operation's start-up quarter of 1995.
<PAGE>
JERRITT CANYON OPERATION
The Company's 30% interest in the production at the Jerritt Canyon mine totaled
23,333 gold ounces in the third quarter of 1996 versus 24,777 ounces in the
year-ago period. The decrease reflects a shift to a higher proportion of
underground production from open pit resources.
During the three-month period ended September 30, 1996, the operation mined 117
thousand tons of ore at an average grade of 0.173 opt gold versus 197 thousand
tons of ore at an average grade of 0.147 opt gold in the year ago period. The
mine also moved 1.5 million tons of waste, resulting in an average strip ratio
of 17:1, versus the 1.7 million tons of waste moved in the same period last year
at an average strip ratio of 10:1.
The Jerritt Canyon processing facilities handled 197 thousand tons of ore,
consisting of both mined and stockpile material, at an average grade of 0.132
opt gold in the third quarter of 1996 versus 223 thousand tons of ore, also at
an average grade of 0.132 opt gold, in the same period last year. Mill
recoveries in the current year's quarter averaged 87.2% versus 86.4% in last
year's quarter.
Jerritt Canyon lost $0.2 million from operations in the quarter, a $1.0 million
improvement from the prior year's quarter due to lower non-cash charges for
depreciation and depletion. Partly offsetting the lower non-cash charges were
slightly higher cash operating costs.
EXPLORATION AND DEVELOPMENT
Exploration spending increased over initial 1996 plans at all project areas and
totaled $4.3 million in the quarter, a 54% increase over the prior year period.
Throughout the quarter, significant efforts were focused on El Penon in Chile,
the Rossi project on the Carlin Trend in Nevada, and at the Jerritt Canyon and
Beartrack operations. As the third quarter ended, exploration drilling was
taking place at El Penon (3 rigs), Rossi (2 rigs), Beartrack (4 rigs), and the
Jerritt Canyon joint venture (7 rigs).
At El Penon, 147 holes have been drilled since the start of the drilling in June
1996. Most of the work was concentrated in the Quebrada Orito deposit, where
additional shallow mineralization was defined and the main zone was extended an
additional 1,280 feet to the north, for a total strike length of more than 6,200
feet. The zone continues to vary from 13-100 feet in true width and is still
open at depth and along strike. Limited deep drilling began in October, 1996.
The best new hole encountered 184 feet of mineralization, from 570 to 754 feet,
at a grade of 0.30 opt gold and 2.8 opt silver over a true width of
approximately 65 feet. A revised resource update for the Quebrada Orito deposit
is in progress and will be completed by and reported during November, 1996.
Drilling is continuing elsewhere on the property with encouraging results from
the Cerro Martillo deposit and other targets.
A contract was signed with Tunnex North S.A. to construct an underground decline
at El Penon, which began in October, 1996. The total underground program is
budgeted at approximately $4.0 million and is expected to be completed in the
second quarter of 1997.
<PAGE>
At Rossi, 3.5 miles north of Barrick's Meikle mine, deep drilling continued in
the Resource Area north of the Dee open pit, where an additional nine holes have
been completed. At the Barite Ridge target, four shallow holes were completed to
determine the dip of the target structure at depth. The best hole in the
Resource Area returned 35 feet of mineralization at 0.491 opt gold from 930 to
965 feet. Drilling is expected to continue until early December, 1996, weather
permitting.
A previously announced accord has been reached with Dee Gold Mining Co. on a
dispute regarding the Rossi property that allows both companies to continue
operations in a manner that is mutually beneficial.
Four drill rigs were active at the Beartrack mine, where drilling was focused on
expanding reserves around existing pits and the Mason Dixon resource. The
drilling was successful in connecting oxide mineralization from the North Pit
to the Mason Dixon area and extending the new mineralization down dip to the
west, where it remains open. Additional oxide mineralization was drilled beneath
the bottom of the South Pit. All of the drill results will be incorporated into
the existing mine plans and remodeled, with a revised reserve figure expected by
the end of the year.
Seven rigs were active at the Jerritt Canyon joint venture, concentrating on
reserve expansion around existing operations and known resource areas.
Significant high grade mineralization has been encountered at Burns Basin and
Coulee, and drilling is still in progress at these areas.
Exploration work also progressed on other properties in Nevada and Chile.
Overall, exploration spending year-to-date was less than in the same nine-month
period of 1995 due to reduced spending in the first half of 1996 related to
corporate reorganization.
/s/ BRIAN J. KENNEDY
Brian J. Kennedy
President and Chief Executive Officer
October 23, 1996
<PAGE>
MERIDIAN GOLD INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, IN MILLIONS OF US DOLLARS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED)
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30 ENDED SEPTEMBER 30
------------------ ------------------
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sales $ 20.1 $14.4 $ 56.2 $ 33.2
Costs and expenses
Cost of Sales 18.6 13.6 54.3 33.8
Exploration costs 4.3 2.8 7.7 9.1
Selling, general and
administrative expenses 0.7 1.6 3.0 4.0
------ ----- ------ ------
Total costs and expenses 23.6 18.0 65.0 46.9
Loss before interest and taxes (3.5) (3.6) (8.8) (13.7)
Interest income 1.4 1.3 3.8 4.6
------ ----- ------ ------
Loss before income taxes (2.1) (2.3) (5.0) (9.1)
Provision for income taxes -- (3.8) -- (3.8)
------ ----- ------ ------
Net income (loss) $ (2.1) $ 1.5 $ (5.0) $ (5.3)
====== ===== ====== ======
Income (loss) per common share $(0.03) $0.02 $(0.07) $(0.07)
====== ===== ====== ======
Number of common shares used in
earnings per share computations 73.6 73.5 73.6 73.5
====== ===== ====== ======
</TABLE>
<PAGE>
MERIDIAN GOLD INC.
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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(UNAUDITED, IN MILLIONS)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30
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1996 1995
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<S> <C> <C>
Cash flows from operating activities:
Net loss $ (5.0) $ (5.3)
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Provision for depreciation and amortization 15.8 13.3
(Increase) decrease in assets:
Trade receivables 2.3 (0.2)
Inventories (1.3) (9.1)
Other current assets (0.7) (0.1)
(Decrease) increase in liabilities
Accounts payable, trade and other (0.3) (1.5)
Accrued and other liabilities/(1)/ (1.7) 1.0
Income taxes payable (0.4) --
Other long-term liabilities (0.1) (3.7)
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Net cash provided by (used in) operating activities $ 8.6 $ (5.6)
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Cash flows from investing activities:
Capital spending $ (8.8) $(31.3)
Disposal of property, plant and equipment, net -- 1.5
(Increase) decrease in other assets 2.2 (1.0)
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Net cash used in investing activities $ (6.6) $(30.8)
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Cash flows from financing activities:
Proceeds from sale of common stock 0.5 --
Merger consideration upon reincorporation (1.5) --
Reincorporation related cash and equity adjustments 3.8 --
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Net cash provided by financing activities $ 2.8 --
Increase/(decrease) in cash and cash equivalents 4.8 (36.4)
Cash and cash equivalents, beginning of period 79.2 118.4
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Cash and cash equivalents, end of period $ 84.0 $ 82.0
------ ------
</TABLE>
/(1)/Includes amounts due to FMC Corporation in 1995.
Cash and cash equivalents consist of cash and marketable securities at September
30, 1996, and loans and amounts due from FMC Corporation at September 30, 1995,
less outstanding checks in excess of bank balances.
<PAGE>
MERIDIAN GOLD INC.
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OPERATING DATA (UNAUDITED)
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<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30 ENDED SEPTEMBER 30
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1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
BEARTRACK MINE
Gold production - Heap leach (ounces) 27,595 12,709 77,370 12,709
Tons mined (thousands):
Ore 1,643 897 3,564 2,462
Waste 777 813 3,219 1,854
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Total 2,420 1,710 6,783 4,316
Average heap leach grade (ounce/ton) 0.025 0.037 0.027 0.034
Total cost of production/ounce $ 327 $ 299 $ 300 $ 299
Cash cost of production/ounce $ 184 $ 212 $ 187 $ 212
JERRITT CANYON JOINT VENTURE
Gold production (Meridian Gold 30% share ounces):
Milling 23,333 24,777 68,789 70,330
Heap leach 153 291 442 839
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Total 23,486 25,068 69,231 71,169
Tons mined (thousands, 100% basis):
Ore 390 648 1,219 1,651
Waste 3,856 5,534 9,691 17,147
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Total 4,246 6,182 10,910 18,798
Mill tons processed (thousands, 100% basis) 656 743 1,970 2,166
Average mill ore grade (ounces/ton) 0.132 0.132 0.132 0.128
Mill recoveries 87.2% 86.4% 87.6% 86.0%
Total cost of production/ounce $ 393 $ 430 $ 441 $ 418
Cash cost of production/ounce $ 278 $ 261 $ 309 $ 238
PARADISE PEAK (Discontinued in 1995)
Gold production - Heap leach -- 1,184 -- 3,508
Total cost of production/ounce $ -- $ -- $ -- $ 165
TOTAL
Ounces of gold produced 51,081 38,961 146,601 87,386
Ounces of gold sold 53,179 37,763 145,410 86,953
Average realized price/ounce $ 383 $ 384 $ 392 $ 383
Average cost of production/ounce:
Total cost of production/ounce sold $ 357 $ 401 $ 392 $ 421
Cash cost of production/ounce $ 227 $ 238 $ 245 $ 231
</TABLE>
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MERIDIAN GOLD INC.
Date: November 8, 1996 By: /s/ BRIAN J. KENNEDY
Its: Chief Executive Officer
