SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the Month of December, 1998 Commission File Number: 001-12003
MERIDIAN GOLD INC.
(Name of Registrant)
9670 Gateway Drive
Reno, Nevada 89511
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [ ]
Indicate by check mark whether the registrant by furnishing the information
contained in this form is also thereby furnishing the information to the SEC
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [X] No [ ]
Meridian Gold Inc. [LOGO OF MERIDIAN GOLD INC.
9670 Gateway Drive APPEARS HERE]
Reno, Nevada 89511
Phone: 775-850-3777
Fax: 775-850-3733
<PAGE>
MERIDIAN GOLD INC.
9670 GATEWAY DRIVE
RENO, NEVADA 89511
PHONE: (775) 850-3777
FAX: (775) 850-3733
MERIDIAN GOLD SECURES DEBT FINANCING AND UPDATES ACTIVITIES
RENO, NEVADA, DECEMBER 21, 1998 - Meridian Gold Inc. is pleased to announce the
arrangement of a US$50 million debt financing with Standard New York and
Standard Bank London Limited to complete the construction and development of the
El Penon mine in northern Chile. The fully underwritten facility is for a term
of six years with no payments due the first year.
"We are very pleased to begin our first borrowing relationship with Standard",
said Brian J. Kennedy, President and CEO. "The $50 million in financing will
help us develop our El Penon mine, which will more than double Meridian Gold's
current production rate. More importantly, it will significantly enhance the
cash flows and profitability of the Company into the next century. And finally,
the financing will allow Meridian sufficient cash balances to continue its
growth plans."
The facility is expected to close late this year or early in 1999. Mine
development and construction have commenced, with Meridian financing the initial
construction costs through its existing cash reserves.
EL PENON CONSTRUCTION UPDATE
Construction is progressing on schedule. Fluor Signet of Perth, Western
Australia, the contractor responsible for the construction of the processing
facilities, finished pouring the primary crusher foundation in November. The
earthworks for the processing facilities are essentially complete and leach
tanks are currently being erected. All the major equipment has been ordered.
First gold pour is on schedule for the fourth quarter of 1999. Following a
ramp-up to steady state during the fourth quarter of 1999, commercial production
is anticipated in the first quarter of 2000.
The Chilean underground contractor, Constructora Gardilcic, has 160 people on
site developing the underground mines. Over the past two months, Gardilcic has
performed extremely well and developed over 2000 meters of underground
development. The underground drift from Quebrada Orito to Quebrada Colorada is
progressing with development having crossed the Quebrada Orito structure by
about 40 meters. Quebrada Colorada and Quebrada Orito underground development is
on schedule to provide high grade ore to the mill in the first quarter of 2000.
During the fourth quarter of 1999, the mill will be brought to steady state
using ore from several 4-5 g/tonne open pit mines.
EL PENON EXPLORATION UPDATE
QUEBRADA COLORADA - Since the discovery of Quebrada Colorada earlier this year,
Meridian has drilled 172 holes into this zone, including 150 reverse circulation
holes and 22 core holes, which provide a high level of confidence in the grade
and extent of the mineralization. To date, the structure has been drill tested
for 1.7 kilometers and is open along strike. An updated long-section can be
found attached to this press release as Appendix II on the company's website at
www.meridiangold.com. The long-section, which focuses on the core of Quebrada
Colorada, includes the three major ore shoots over a 1.3 kilometer strike
length. The grades of the deposit have been confirmed or enhanced with
additional drilling, including in-fill drilling, with selected results shown in
Appendix I.
To the north of Quebrada Colorada, a possible extension has been drilled for a
further 120 meters to the north of Discovery Wash, with the results shown below.
This extension remains open to the north with the last hole intercepting 4m of
10.8g/tonne gold and 296 g/tonne silver. This is a high priority target for
1999.
<PAGE>
<TABLE>
- --------------------------------------------------------------------------------
Hole Section From To Interval Gold grade Silver grade
- ---- ------- ---- --- -------- ---------- ------------
(m) (m) (m) (g/tonne) (g/tonne)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PP321C 3190N 248 249 1 15.4 500
PP312 3250N 252 256 4 9.6 339
PP328 3280N 244 246 2 6.2 65
PP330 3310N 262 266 4 10.8 296
- --------------------------------------------------------------------------------
</TABLE>
Ore grade mineralization has also been discovered by drilling in two other areas
within 200 meters of planned mining areas: Playa and Vista Norte.
PLAYA - Drilling which targeted a geophysical anomaly in the vicinity of the
processing facility, parallel to and about 200 meters from the Quebrada Orito
structure, encountered significant mineralization. The mineralization has been
tested over a strike length of 180 meters to date, with results shown below.
Playa is open along strike and can be seen on a map of the core area attached to
this press release as Appendix III on the Company's website.
<TABLE>
- --------------------------------------------------------------------------------
PLAYA
Hole Section From To Interval Gold grade Silver grade
- ---- ------- ---- -- -------- ---------- ------------
(m) (m) (m) (g/tonne) (g/tonne)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PC036 0459N 118 124 6 3.3 68
PC035 0489N 122 126 4 86.8 3,009
132 134 2 47.8 8
PC030 0489N 62 66 4 7.6 188
PC038 0527N 62 64 2 14.2 619
PC056 0552N 108 112 4 4.4 46
PC057 0580N 120 122 2 5.2 248
PC058 0580N 78 80 2 9.3 287
- --------------------------------------------------------------------------------
</TABLE>
VISTA NORTE - This north-south mineralized structure was discovered following
detailed geologic mapping of minor quartz float. Two drill holes on the same
section have intercepted the structure, which lies north of the intersection of,
and between, Quebrada Orito and Discovery Wash.
Vista Norte has been mapped on the surface for approximately 500 meters and is
covered by alluvium both to the north and south. The deepest hole (PX 082) was
the higher grade intercept at an elevation of 1830 meters above sea level. Since
drilling within the core exploration area has correlated the 1700 meter
elevation with some of the highest grade mineralization, deeper drilling on this
structure will be a high priority for 1999.
<PAGE>
<TABLE>
- --------------------------------------------------------------------------------
VISTA NORTE
Hole Section From To Interval Gold grade Silver grade
- ---- ------- ---- -- -------- ---------- ------------
(m) (m) (m) (g/tonne) (g/tonne)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PX081 3165N 26 34 8 1.2 28
PX082 3165N 46 56 10 7.4 36
84 86 2 5.8 6
176 178 2 4.6 73
- --------------------------------------------------------------------------------
</TABLE>
Rich Lorson, VP Exploration, summarized the year: "The exploration group had
outstanding success at El Penon this year. We started out with the discovery of
Quebrada Colorada, which confirms El Penon as a world class deposit, and we
finished by defining new areas with ore grade mineralization at Vista Norte and
Playa. We have more high priority targets for 1999 at El Penon than we had last
year at this time, and that's after drilling 286 holes and more than 72,000
meters during the year. We clearly still have tremendous potential on the
property."
BEARTRACK UPDATE
Meridian is basing its current and future business plans, including its
reserves, on a $300 gold environment. While Meridian believes all of its assets
provide significant value in a $300 gold environment, after a careful review of
the carrying values of the Beartrack operation in Idaho, the Company will record
a non-cash provision of approximately $20 million.
Meridian Gold will take the nonrecurring charge against 1998 fourth quarter
results, reflecting the current gold price environment. This asset impairment
will have no impact on current or future cash flow from operations.
Meridian Gold Inc. is a growth gold business with a proven exploration,
development and production track record. The common shares of Meridian are
traded on The Toronto Stock Exchange (MNG) and the New York Stock Exchange
(MDG).
Safe Harbor Statement under the United States Private Securities Litigation
Reform Act of 1995: Statements in this release that are forward-looking
statements are subject to various risks and uncertainties concerning the
specific factors identified above and in the corporation's periodic filings with
the Ontario Securities Commission and the U.S. Securities Exchange Commission.
Such information contained herein represents management's best judgment as of
the date hereof based on information currently available. The corporation does
not intend to update this information and disclaims any legal liability to the
contrary.
For further information, please visit our website at www.meridiangold.com, or
contact:
Wayne M. Hubert Tel: (775) 850-3730
Investor Relations Fax: (775) 850-3733
Meridian Gold Inc. E-mail: [email protected]
<PAGE>
APPENDIX I
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
QUEBRADA COLORADA
Hole Section From To Interval Gold grade Silver grade
- ---- ------- ---- --- -------- ---------- ------------
(m) (m) (m) (g/tonne) (g/tonne)
- --------------------------------------------------------------------------------------------------------------
Southern ore-shoot
<S> <C> <C> <C> <C> <C> <C>
PP281 2200N 168 176 8 56.0 487
PP284 2230N 142 154 12 58.2 458
PP332 2230N 126 134 8 34.5 393
PP380 2260N 182 187 5 29.5 250
PP323C 2260N 145 149 4 20.6 272
PP280 2320N 158 168 10 80.3 586
PP377 2320N 240 246 6 63.5 1,298
PP329C 2350N 222 224 2 114.0 2,691
Central ore-shoot
PP294C 2740N 229 232 4 42.4 457
PP294C 2740N 236 239 4 141.0 935
PP365 2680N 226 231 5 125.5 1,313
PP368 2650N 236 241 5 42.2 776
PP362 2620N 193 198 5 128.4 896
PP347 2620N 227 232 5 102.5 2,658
PP367 2560N 224 227 3 41.1 385
PP353 2530N 184 185 1 52.3 954
Northern ore-shoot
PP303C 2860N 168 169 1 69.0 509
PP301 2890N 268 274 6 26.6 1,359
PP322 2920N 240 248 8 42.3 296
PP314 2950N 318 328 10 18.3 108
PP300 2980N 220 224 4 37.3 516
PP316C 2980N 226 229 3 59.1 1,094
PP296 3040N 222 226 4 43.8 576
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Note:
1. True widths of the mineralized intercepts range from 50-70% of the interval
2. C denotes core holes
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.
Date: December 21, 1998 MERIDIAN GOLD INC.
By: /s/ Brian J. Kennedy
--------------------
Brian J. Kennedy
President and Chief Executive Officer
