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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 April 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 REPORTS FIRST QUARTER 1997 RESULTS
(ALL DOLLAR AMOUNTS IN U.S. CURRENCY)
RENO, NEVADA, APRIL 22, 1997 - Meridian Gold Inc. today reported an expected
first quarter loss mainly as a result of its aggressive $20 million exploration
program for 1997. The Company recorded a loss of $6.0 million or $0.08 per
share in the first quarter of 1997, compared with a loss of $1.1 million or
$0.01 per share in the first quarter of last year.
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 does not expect to
generate earnings in the short-term.
During the first quarter, exploration spending was $4.6 million, $3.2 million
higher than in the first quarter in 1996 primarily reflecting higher spending at
El Penon in Chile. Currently, there are five drill rigs on the El Penon
property, one underground core rig and four surface rigs.
The Company is in the process of completing a decline into the Quebrada Orito
deposit. The decline will be used for underground core drilling to further
define the mineralization, to acquire bulk samples, and to investigate
underground mining methods. The first cross cut has been completed and ground
conditions are good. Only minimal ground support has been required and the
initial results appear consistent with the geological modeling. The bulk
sampling program has begun with the first assays pending.
Surface exploration drilling started in early March; two core rigs and two
reverse circulation rigs are currently drilling on the Orito Sur ore zone. The
four drill rigs are focused on extending the mineralization to depth and on
infill drilling. Prior surface drilling in February was focused on defining
areas for waste dumps, tailings, and plant facilities in order to support the
ongoing feasibility study. Currently, Kvaemer Metals is performing the
engineering to complete a pre-feasibility study by the end of the second quarter
and a bankable feasibility study by year-end.
Sales for the first quarter were $14.0 million compared with $17.8 million last
year, reflecting significantly lower realized gold prices and slightly lower
production. The average realized price of gold decreased to $349 per ounce from
$402 per ounce. Gold production decreased to 41,604 ounces from 47,257 ounces
in 1996. The decrease reflects timing of gold recovery from the heap leach pad
at Beartrack and the expected wet mill closure at Jerritt Canyon in early
February of this year.
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At Beartrack, gold production was 23,145 ounces with cash costs of $213 per
ounce. Cash costs increased relative to the same period in 1996 primarily as a
result of the lower production. The mine moved 800,000 tons of ore with an
average grade of 0.029 ounces per ton. During the second half of the year, gold
production is projected to be higher than in the first half of the year as a
result of pad construction activities and lower production during the winter
months. For 1997, Beartrack is expected to produce 120,000 ounces at a cash
cost of $210 per ounce.
At Jerritt Canyon, the Company's share of gold production was 18,459 ounces at a
cash cost of $286 per ounce. Cash costs were 17% lower than in the first
quarter 1996. In early February 1997, the wet mill was shutdown as planned
after the remaining low-grade ore stockpiles were processed. Gold production
for the second half of the year is projected to be higher than that for the
first half of the year, primarily reflecting higher ore grade at the Murray
underground mine and the Dash open pit mine. For 1997, Meridian Gold's share of
Jerritt Canyon production is expected to be 80,000 ounces of gold at a cash cost
of $225 per ounce.
At the end of the first quarter, Meridian Gold's balance sheet remained strong,
with cash resources of approximately $76 million to support the Company's growth
plans.
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).
For further information:
Wayne M. Hubert
Investor Relations
Meridian Gold Inc.
Tel: (702) 827-7130
Fax: (702) 827-7133
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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
Ended March 31
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1997 1996
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<S> <C> <C>
Sales $ 14.0 $ 17.8
Costs and expenses
Operating expenses 10.3 12.2
Depreciation, depletion & 4.5 5.2
amortization
Exploration costs 4.6 1.4
Selling, general and 1.6 1.3
administrative expenses ------ ------
Total costs and expenses 21.0 20.1
Loss before interest and taxes (7.0) (2.3)
Interest income 1.0 1.2
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Income (loss) before income taxes (6.0) (1.1)
Provision for income taxes - -
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Net income (loss) $ (6.0) $ (1.1)
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Loss per common share $(0.08) $(0.01)
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Number of common shares used in 73.6 73.5
earnings per share computations ====== ======
</TABLE>
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Meridian Gold Inc.
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Operating Data (Unaudited)
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<TABLE>
<CAPTION>
Three Months
Ended March 31
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1997 1996
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<S> <C> <C>
BEARTRACK MINE
Gold production - Heap leach
(ounces) 23,145 26,846
Tons mined (thousands):
Ore 800 758
Waste 950 1,215
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Total 1,750 1,973
Average heap leach grade (ounce/ton) 0.029 0.027
Cash cost of production/ounce $ 213 $ 183
JERRITT CANYON JOINT VENTURE
Gold production (Meridian Gold 30%
share ounces):
Milling 18,246 20,237
Heap leach 213 174
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Total 18,459 20,411
Tons mined (thousands):
Ore 247 317
Waste 7,043 2,655
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Total 7,290 2,972
Mill tons processed (thousands) 443 661
Average mill ore grade (ounces/ton) 0.150 0.125
Mill recoveries 88.2% 87.4%
Cash cost of production/ounce $ 286 $ 343
TOTAL
Ounces of gold produced 41,604 47,257
Ounces of gold sold 40,449 44,976
Average realized price/ounce $ 349 $ 402
Cash cost of production/ounce $ 245 $ 252
</TABLE>
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Meridian Gold Inc.
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Consolidated Balance Sheets
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(Unaudited and in millions)
<TABLE>
<CAPTION>
March 31 December 31
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1997 1996
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ASSETS
Current Assets:
<S> <C> <C>
Cash and cash equivalents $ 75.8 $ 82.6
Trade receivables 0.6 1.8
Inventories 17.7 16.8
Other current assets 2.8 2.7
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Total current assets 96.9 103.9
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Property, plant and equipment, net 106.0 106.6
Other assets 3.9 4.1
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Total Assets $206.8 $214.6
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade $ 6.5 $ 7.6
Accrued and other liabilities 9.7 10.7
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Other current liabilities 16.2 18.3
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Other long-term liabilities 14.9 14.6
Shareholders' equity 175.7 181.7
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Total liabilities and shareholder's equity $206.8 $214.6
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</TABLE>
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Meridian Gold Inc.
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Statement of Cash Flows
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(Unaudited and in millions)
<TABLE>
<CAPTION>
Three Months
Ended March 31
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1997 1996
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<S> <C> <C>
Net income (loss) $(6.0) $(1.1)
Provision for depreciation, depletion
and amortization 4.5 5.2
Change in assets and liabilities, net (1.6) (3.1)
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Net cash provided by (used in) operations (3.1) 1.0
Cash flows from investing activities:
Capital spending (4.0) (4.1)
Increase in other assets 0.3 1.8
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Net cash used in investing activities (3.7) (2.3)
Cash flows from financing activities:
Proceeds from sale of common stock - 0.2
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Decrease in cash and cash equivalents (6.8) (1.1)
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Cash and cash equivalents, beginning of
period 82.6 79.2
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Cash and cash equivalents, end of period $75.8 $78.1
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</TABLE>
SIGNATURES
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.
Date: April 24, 1997 MERIDIAN GOLD INC.
By: /s/ Brian J. Kennedy
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Its: Chief Executive Officer
