<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 July 1997
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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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Meridian Gold Inc. LOGO OF MERIDIAN
5011 Meadowood Way GOLD INC.
Reno, Nevada 89502
Phone: (702) 827-3777
Fax: (702) 827-7133
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MERIDIAN GOLD INC.
5011 MEADOWOOD WAY
RENO, NEVADA 89502
PHONE: (702) 827-3777
FAX: (702) 827-7133 [LOGO OF MERIDIAN GOLD COMPANY APPEARS HERE]
MERIDIAN GOLD REPORTS SECOND QUARTER 1997 RESULTS, UPDATE
ON EL PENON PROJECT IN CHILE
(All dollar amounts in U.S. currency)
RENO, NEVADA, JULY 17, 1997 -- Meridian Gold Inc. today reported a second
quarter loss of $7.8 million, or $0.11 per share, due primarily to its
aggressive $24 million annual exploration program for 1997. This compares to a
loss of $1.8 million or $0.02 per share in the second quarter of 1996.
The Company is pleased to provide an update on its continuing activities at El
Penon, near Antofagasta, Chile. A preliminary feasibility study is progressing,
with the goal of having a bankable feasibility study by the end of this year.
SECOND QUARTER RESULTS
- ----------------------
Sales for the quarter were $16.9 million, versus $18.3 million in the second
quarter of 1996, reflecting lower realized gold prices and slightly lower
production. The average realized price of gold decreased to $376 per ounce from
$392 per ounce in the second quarter of 1996. Gold production for the quarter
decreased to 44,203 ounces from 48,263 ounces in 1996, while cash production
costs improved to $211 per ounce from $256 per ounce.
At Beartrack, gold production in the second quarter was 24,836 ounces, with cash
costs of $185 per ounce. This compares to second quarter 1996 production of
22,929 ounces at a cash cost of $195 per ounce. The decrease in cash costs over
1996 was the result of cost-cutting measures and the higher production. During
the second quarter the mine moved 1.1 million tons of ore, and the average heap
leach grade was 0.026 ounces per ton. Gold production is projected to be higher
in the second half of 1997 than in the first half as a result of pad
construction activities which took place in the first half and lower production
during the winter months.
At Jerritt Canyon, the Company's share of gold production in the second quarter
was 19,367 ounces at a cash cost of $245 per ounce. Production for the quarter
was down from second quarter 1996 production of 25,334 ounces, due primarily to
the shutdown of the wet mill operation in the first quarter of 1997. The cash
costs represent a 21% reduction from second quarter 1996. Higher ore grade at
the Murray underground mine was the primary factor in the cash cost improvement.
Exploration spending in the second quarter, primarily at El Penon, was $8.6
million, compared to $1.9 million in the second quarter of 1996.
At the end of the second quarter, Meridian Gold's balance sheet remained strong,
with cash resources of $65.5 million to support the Company's growth plans.
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2
FIRST HALF RESULTS
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For the first half of 1997, the Company has recorded a loss of $13.8 million, or
$0.19 per share, compared to a loss of $2.9 million or $0.04 per share for the
first half of 1996.
Sales for the first half were $30.9 million, versus $36.1 million in the same
period last year. Exploration spending for the first six months, primarily at
El Penon, was $13.2 million, significantly higher than the $3.4 million spent in
the same period last year. The average realized price of gold for the first
half of 1997 was $363 per ounce, compared to $397 in 1996.
Gold production for the first half declined from 1996 first-half levels, falling
to 85,807 ounces from 95,520 ounces. Cash production costs improved to $228 per
ounce from $254 per ounce. As previously released, Meridian expects second-half
production to exceed first-half levels, with cash production costs expected to
remain at first-half levels.
Meridian Gold stated at the time of the secondary offering in July 1996 that its
emphasis would be on generating significant long-term growth through an
aggressive exploration and development program. The Company's 1997 operating
results reflect this program, which is already generating significant
opportunities that will benefit the Company in the long term.
EL PENON UPDATE
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The decline and planned crosscuts into the Quebrada Orito deposit have been
completed, and assays are being processed from new drill samples taken from the
decline. Two underground drill rigs are currently active in the decline, while
four surface rigs are at work on Quebrada Orito, Orito Sur and Cerro Martillo.
Work on all phases of the preliminary feasibility study continues, including
resource estimates, mine planning, plant engineering and cost estimating. The
study is currently based on surface mining at Cerro Martillo and surface and
underground mining at Quebrada Orito. However, the study will be extended to
include potential from Orito Sur when additional information becomes available,
as well as to incorporate evaluations of a broad range of development options
and production rates. As a result, the time required to complete the
preliminary feasibility study will be extended.
NEW CORPORATE WEBSITE
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Meridian Gold has a new corporate website, where more information on the
Company's history and operations may be accessed. This site will be updated as
necessary with relevant new information on the Company's activities. The site
can be accessed at www.meridiangold.com.
Meridian Gold Inc. is a proven exploration-oriented gold producer, well financed
and led by a strong management team committed to growth. In 1996, annual
production was 202,000 ounces of gold from two producing properties: Beartrack
in Idaho (100% owned) and Jerritt Canyon (30% owned) in Nevada. At year-end
1996, the Company had reserves of 1.4 million ounces of gold. In addition,
Meridian Gold holds an active inventory of exploration properties in Chile and
the United States. The common shares of Meridian are traded on the Toronto
Stock Exchange (MNG) and the New York Stock Exchange (MDG).
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3
Meridian Gold Inc.
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Consolidated Statements of Operations
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(Unaudited and in millions, except per share data)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30 Ended June 30
-------------- -------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales $16.9 $18.3 $30.9 $36.1
Costs and expenses
Operating expenses 10.8 12.7 21.4 24.8
Depreciation, depletion & amortization 4.8 5.6 9.3 10.8
Exploration costs 8.6 1.9 13.2 3.4
Selling, general and
administrative expenses 1.5 1.1 2.9 2.4
----- ----- ----- ----
Total costs and expenses 25.8 21.3 46.8 41.4
Loss before interest and taxes (8.8) (3.0) (15.9) (5.3)
Interest income 1.0 1.2 2.1 2.4
----- ----- --- ----
Loss before income taxes (7.8) (1.8) (13.8) (2.9)
Provision for income taxes -- -- -- --
----- ----- ---- ----
Net loss $ (7.8) $ (1.8) $(13.8) $ (2.9)
===== ===== ==== ====
Loss per common share $(0.11) $(0.02) $(0.19) $(0.04)
===== ===== ==== ====
Number of common shares used in
loss per share computations 73.6 73.5 73.6 73.5
===== ===== ==== ====
</TABLE>
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4
Meridian Gold Inc.
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Operating Data (Unaudited)
--------------------------
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30 Ended June 30
--------------- -------------
<S> <C> <C> <C> <C>
1997 1996 1997 1996
---- ---- ---- ----
BEARTRACK MINE
Gold production - Heap leach (ounces) 24,836 22,929 47,981 49,775
Tons mined (thousands):
Ore 1,108 1,240 1,908 1,921
Waste 999 1,149 1,949 2,441
------- ------- ------- -------
Total 2,107 2,389 3,857 4,362
Average heap leach grade (ounce / ton) 0.026 0.029 0.026 0.029
Cash cost of production / ounce $ 185 $ 195 $ 199 $ 189
JERRITT CANYON JOINT VENTURE
Gold production (Meridian Gold 30%
share ounces):
Milling 19,367 25,219 37,613 45,456
Heap leach 0 115 213 289
------ ------ ------ ------
Total 19,367 25,334 37,826 45,745
Tons mined (thousands):
Ore 233 512 472 829
Waste 8,909 3,181 15,961 5,836
------ ------ ------ ------
Total 9,142 3,693 16,433 6,665
Mill tons processed (thousands) 345 653 788 1,313
Average mill ore grade (ounces / ton) 0.201 0.140 0.173 0.132
Mill recoveries 92.9% 88.0% 88.9% 87.7%
Cash cost of production / ounce $ 245 $ 311 $ 265 $ 326
TOTAL
Ounces of gold produced 44,203 48,263 85,807 95,520
Ounces of gold sold 46,207 47,255 86,656 92,231
Average realized price / ounce $ 376 $ 392 $ 363 $ 397
Cash cost of production / ounce $ 211 $ 256 $ 228 $ 254
</TABLE>
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5
Meridian Gold Inc.
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Consolidated Balance Sheets
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(Unaudited and in millions)
<TABLE>
<CAPTION>
June 30 December 31
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1997 1996
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ASSETS
<S> <C> <C>
Current Assets:
Cash and cash equivalents $65.5 $ 82.6
Trade receivables 2.4 1.8
Inventories 15.8 16.8
Other current assets 0.9 2.7
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Total current assets 84.6 103.9
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Property, plant and equipment,
net 104.5 106.6
Other assets 5.5 4.1
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Total Assets $194.6 $214.6
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable, trade $ 5.0 $ 7.6
Accrued and other liabilities 4.3 10.7
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Total current liabilities 9.3 18.3
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Other long-term liabilities 17.4 14.6
Shareholders' equity 167.9 181.7
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Total liabilities and shareholders'
equity $194.6 $214.6
===== =====
</TABLE>
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6
Meridian Gold Inc.
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Statement of Cash Flows
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(Unaudited and in millions)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30 Ended June 30
------------- -------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income (loss) $ (7.8) $(1.8) $(13.8) $ (2.9)
Provision for depreciation,
depletion and amortization 4.8 5.7 9.3 10.9
Change in assets and liabilities,
net (3.9) (4.3) (5.3) (5.6)
---- ----- ----- -----
Net cash provided by (used in)
op. activities (6.9) (0.4) (9.8) 2.4
Cash flows from investing
activities:
Capital spending (3.4) (2.2) (7.4) (6.3)
Disposal of PP&E --- --- 0.1 ---
--- --- --- ---
Net cash used in investing
activities (3.4) (2.2) (7.3) (6.3)
Cash flows from financing
activities:
Proceeds from sale of common
stock --- 0.4 --- 0.6
--- --- --- ---
Decrease in cash and cash
equivalents (10.3) (2.2) (17.1) (3.3)
----- ----- ------ -----
Cash and cash equivalents,
beginning of period 75.8 78.1 82.6 79.2
---- ---- ---- ----
Cash and cash equivalents,
end of period $65.5 $75.9 $65.5 $75.9
---- ---- ---- ----
</TABLE>
For further information:
Wayne M. Hubert
Investor Relations
Meridian Gold Inc.
Tel: (702) 827-7130
Fax: (702) 827-7133
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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: July 21, 1997 By: /s/ BRIAN J. KENNEDY
Its: Chief Executive Officer
