FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities
Exchange Act of 1934 For the month of March, 2000
Meridian Gold Inc.
9670 Gateway Drive
Reno, Nevada 89511
(775)850-3777
(775)850-3733 fax
[Indicate by check mark whether the registrant files or will file annual reports
under over Form 20-F or Form 40-F.]
Form 20-F [ ] Form 40-F [X]
----- -----
[Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.]
Yes [ ] No [X]
----- -----
[If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b):
82- -------
<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, hereunto duly authorized.
MERIDIAN GOLD, INC.
March 28, 1999 By: Brian J. Kennedy
/s/ -----------------------------
President and Chief Executive Officer
<PAGE>
1999 ANNUAL REPORT
<PAGE>
Corporate Profile
- -----------------
Meridian Gold Inc. is a growing low-cost gold producer and a very successful
mine finder facing a bright future. Meridian-discovered gold deposits include
the new 100%-owned El Penon Mine in northern Chile; the Jerritt Canyon Mine (30%
owned), currently in production with Anglogold as the operator; the Rossi
project, currently under a joint venture agreement with Barrick gold
Corporation; and the highly profitable Paradise Peak Mine, which was exhausted
in 1996.
Meridian has established a solid reputation for great exploration and efficient
operations. Through concentrated efforts, we expect that this reputation will
remain intact.
Meridian's shares are traded on The Toronto Stock Exchange under the symbol MNG
and on the New York Stock Exchange under the symbol MDG.
<PAGE>
1999 Message to Shareholders
- ----------------------------
While rollercoasters are not our business, we and the rest of the gold industry
rode a good one this past year. With gold hitting a valley of less than $253 in
July and a peak of nearly $338 in October, the gold business has been
challenging and exciting, if a little frustrating at times.
Be advised: The vagaries of the gold market have not changed our focus. We are
in the gold business to stay, and we will stay focused on gold. We aim to grow
our gold business, and we believe that profitable, low-cost production is the
best way to grow - that's why we're so excited about El Penon and Jerritt
Canyon, and about the encouraging prospects at Rossi. All three of these
deposits were discovered by Meridian's geologists, and are an excellent
manifestation of the exploration and growth focus that feeds the spirit of this
company.
Of course, while the spirit of Meridian comes from its exploration focus and its
strong history of exploration success, the heart of the company must be
strengthened by continually improving operating results. You see, finding gold
is only half the challenge - once you discover it, you'd better be able to
efficiently and economically get it out of the ground.
Meridian performed well throughout the rollercoaster ride of 1999, even if the
share price sometimes suffered from what we will euphemistically call the
"oddities" of the market. In the midst of very low gold prices, we completed
construction of our great new El Penon mine in Chile and produced
better-than-projected cash flows from our Beartrack operation - in fact,
Beartrack's performance set records for the mine in production and cash costs,
and set an annual gold production record for the state of Idaho. The Rossi Joint
Venture exploration program, directed and funded by Barrick Gold Corporation,
progressed smoothly and is starting to generate encouraging results from this
well-placed property on the Carlin trend in Nevada. Exploration successes
continue at El Penon, which is still largely unexplored and which still makes
the hearts of our geologists race with anticipation. We entered into a joint
venture agreement with International Northair Mines Ltd. on the Venturina
property in Mexico, which we hope will be the first of many deals in Mexico and
other Latin American countries as we seek our next gold mine. We maintained our
strong balance sheet, ending the twentieth century with a cash balance of about
$20 million, debt of $30 million (used for El Penon's construction), and a
relatively modest five-year hedge position which was put in place as a
requirement of the El Penon financing.
<PAGE>
Meridian Gold, as an independent entity, is now about three-and-a-half years
old. For those shareholders who have stayed with us from the beginning, returns
have been good, even though the trying times of the gold market over the last
three years have sometimes required patience and foresight. Meridian shares were
initially issued at Cdn.$5.00. At December 31, 1999, the shares closed at a
price of Cdn.$9.80. That's a gain of 96%, and if you assume annual compounding
over this roughly three-and-a-half-year investment time frame, the average
annual return was 21%. That's good in any industry. The XAU gold index, over the
same period of time, fell from 124.35 to 67.97, a decline of 16% annually on
average, while the TSE Gold & Silver Index also dropped, from a lofty 11,183 in
the wistful good times for gold to 4,875, and an average annual decline of more
than 21%.
There are two primary reasons for Meridian's rise during a time when most of the
rest of the industry was suffering. First, over that three-and-a-half-year time
frame, Meridian's gold reserves and resources increased 84%, from 3.2 million
ounces to 5.7 million ounces. Second, most of that increase in ounces consisted
of high-quality, low-cost ounces that will provide Meridian with excellent
cash-generating potential. And we're not out of breath - there's plenty left to
achieve and we're ready to begin. Meridian's plan to continue building
shareholder value can be split into three parts: short-term, medium-term and
long-term. In the short term, our success will hinge on how well we execute on
El Penon.
In the medium term, we believe that potential production from Rossi can take the
place of the production we will be losing from Beartrack as it winds down. In
addition, recent exploration results at Jerritt Canyon are leading us to believe
that this already long-lived operation can both continue to extend its life and
actually improve its cash flow generation capability. In fact, we are looking at
<PAGE>
the possibility of increasing the amount of high-grade underground ore fed to
the mill, which would replace a portion of the lower-grade feed from stockpiles.
That would translate into higher production, lower cash costs, and increased
cash flow, even after accounting for the additional development capital that
would be needed. In addition to Rossi and Jerritt Canyon, we are seeking
acquisition opportunities, especially of advanced stage projects, that could
make positive contributions to the company's value in the medium term.
For the long-term, our greatest leverage comes from our strong geology group,
who will be focusing both on grassroots programs and advanced-stage acquisition
and development. With a history of five grassroots discoveries of which four
have become successful mines, we're confident that our geology team will
continue to provide value by generating the most profitable type of growth -
organic growth from our own efforts.
Irrespective of any benefits we might get from a rising gold price in the
future, we expect to continue providing value for our shareholders by continuing
to improve our operating ability, by continuing our success at finding quality
gold deposits, and by continuing to treat our gold focus as a business.
We would like to announce the following changes to Meridian's management which
occurred in January of 2000. After successfully building the El Penon mine on
schedule and on budget, we are shifting Mr. Gonzalo Tufino's efforts to help
create the next chapter for Meridian. Mr. Tufino will now focus his efforts on
finding our next development project in South America as Vice President,
Development. Mr. Edgar Smith will assume the responsibility of Vice President
and General Manager at El Penon. Mr. Smith brings a wealth of operating
experience to this critical project.
On behalf of the Board of Directors, February 23, 2000,
David S. Robertson
CHAIRMAN OF THE BOARD
Brian J. Kennedy
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
Gold
- ----
You don' t have to be romantic or nostalgic to appreciate gold - it is one of
the most beautiful and useful metals on the planet. Not only is it the metal of
choice for jewelry (over three-quarters of gold demand is for jewelry
fabrication) and the ONLY universally accepted medium of exchange in the world,
it is one of the most useful elements in science and industry because of its
very unique physical attributes. These attributes include:
o Non-reactivity, even with oxygen - systems that must work reliably over a long
period of time, like the airbag sensor system in your car or truck, need gold
o Electrical conductivity - gold is among the most electrically conductive of
all metals, and has been found to be very useful in the making of
semi-conductors and other computer components
o Thermal conductivity - the main engine nozzle of the Space Shuttle uses a 35%
gold alloy to transfer temperatures up to 3300 degrees Celsius away from
sensitive instruments
o Reflectivity of Infrared light - high-purity gold reflects up to 99% of
infrared rays, making it a key element in protecting satellites and in infrared
heat applications
o Ductility and Malleability - an ounce of gold can be formed into a wire five
miles long - one ounce!
o Non-toxicity and Biological inactivity - gold is used extensively in
dentistry, medical research, and even for the treatment of arthritis
Meridian's outlook on the price of gold continues to be positive. With supply
becoming more stable, in part due to the Washington Agreement signed by 15
European Central Banks last year, and demand continuing to grow, the future of
gold looks strong. Meridian will continue with its strategy of remaining largely
unhedged - or "leveraged" to the price of gold - with the belief that the
ultimate hedge against low gold prices is low costs of production.
<PAGE>
El Penon
- --------
Summary
o High-grade gold/silver mine in Northern Chile
o Start-up on September 1, 1999 - first gold pour September 20, 1999 o Year-end
1999 reserves of 1,233,000 ounces of gold and 19.3 million ounces of silver o
Year-end 1999 resources of 1.7 million ounces of gold and 29.1 million ounces of
silver
o Year 2000 annual production estimated at 250,000 ounces of gold at cash costs
of less than $75 per ounce, net of silver credits
After a construction period lasting only a short ten months, the El Penon mine
started production on September 1, 1999. The first gold was poured on September
20 and the mine reached its goal of producing 20,000 ounces through the end of
the year. The mine was dedicated on January 21, 2000, with the President of the
Republic of Chile, Eduardo Frei Ruiz Tagle, in attendance. We are very proud of
the tremendous effort from our entire El Penon workforce, who made this start-up
so successful.
Up until the beginning of 2000, the mill was processing only open pit ore, which
was significantly lower in grade than the underground ore which is now providing
the primary feed. Now that commercial production has begun and high-grade
underground ore is being fed to the mill, El Penon is well on its way to
achieving its 2000 target of 250,000 ounces of gold and 3.5 million ounces of
silver at a gold cash cost of less than $75 per ounce.
Underground work (drilling and drifting) at the very high-grade Quebrada
Colorada deposit was successful in bringing a significant amount of that
resource into a reserve, after only one year of activity. This work was part of
the planned mining, drilling, and development. The success of this resource to
reserve conversion underscores the high quality nature of the deposit at
Quebrada Colorada.
To put it simply, El Penon will be a very profitable mine. The gold deposits are
high-grade, primarily underground, with high silver content and good metallurgy.
The process design is efficient in capital and operating costs, and the
operating team is well-trained and capable. Finally, the support of the
community of Antofagasta and the government of Chile has been first rate - we
look forward to a long and prosperous partnership with the people in Region II
of the Republic of Chile.
Underground mining at El Penon is carried out by Constructora Gardilcic, a
contract miner. Gardilcic continues to improve its efficiency and is meeting the
mining targets set by the Company. The processing facilities, which consist of
crushing, SAG milling, a gravity circuit, a counter-current decantation, and a
Merrill-Crowe circuit to produce dore bars of gold and silver, are performing at
design specifications after a relatively smooth start-up phase.
<PAGE>
Jerritt Canyon
- --------------
Summary
o Year 1999 production of 109,000 ounces at a cash cost of $191 per ounce
o Year 2000 estimated production of 100,000 ounces at a cash cost of $200 per
ounce
o Aggressive exploration program for 2000 o Continuous production since 1981
Since 1981, Jerritt Canyon has been a consistent, quality gold mine. It has been
a solid long-term asset for Meridian.
In 1999, Jerritt Canyon, 30%-owned by Meridian and now operated by Anglogold,
produced 109,000 ounces for Meridian's account at cash costs of $191 per ounce.
The resulting cash flow was nearly $5 million, exceeding budget expectations.
During the year, open pit mining ceased at Jerritt Canyon with the completion of
the Dash open pit. The bottom two benches of the pit yielded more than 49,000
unplanned ounces of gold at an average grade of 0.46 opt. A new drill program
subsequently defined additional mineralization of similar grade. This area of
mineralization is being considered as part of a new area of underground
development. Jerritt Canyon will continue its long life into 2000 and beyond as
a collection of underground mines to be supplemented over the next few years by
the remaining above-ground stockpiles. For 2000, Meridian's share of gold
production at Jerritt Canyon is expected to be 100,000 ounces at a cash cost of
about $200 per ounce.
Exploration work continues as it has for nearly 30 years at Jerritt Canyon, and
results in 1999 were especially encouraging. In fact, because of some recent
encouraging results, we are now looking at the possibility of increasing the
amount of high-grade underground ore delivered to the mill on a daily basis,
thus decreasing the amount of lower-grade stockpiles currently being used. This
would be a change for the long-term, and would translate into higher annual
production and lower cash costs.
Surface exploration work at Jerritt Canyon was focused on drilling for reserve
definition and new mine exploration. Resource to reserve conversion drilling was
concentrated around SSX and the Dash-Smith areas. This drilling took place
primarily within large areas of higher-grade resource and was successful in
nearly replacing mine production in 1999. In general, reserve replacement is a
trend that has occurred in the Jerritt Canyon district since the inception of
mining in 1981.
We look forward to another strong year at Jerritt Canyon.
<PAGE>
Beartrack
- ---------
Summary
o Outstanding 1999 performance of 133,000 ounces at a cash cost of $140 per
ounce
o Year 2000 estimated production of 60,000 ounces at cash costs of less than
$150 per ounce
o Mine operations cease in March of 2000, but heap gold production continues
o Exemplary environmental and safety record
Beartrack, in its last full year of mining, performed at record-setting levels.
Gold production of 133,000 ounces was a new annual gold production record both
for the mine and for the state of Idaho, and combined with cash costs of $140
per ounce, those ounces provided $18 million of cash flow. This cash flow from
Beartrack made it possible for the Company to complete the construction of El
Penon without having to draw on its additional $20 million line of credit. For
2000, Beartrack will produce about 60,000 ounces from the ore already on the
heap leach pads, at cash costs of less than $150 per ounce. An additional 10,000
- - 20,000 ounces should be recovered in 2001 as the leach pads are rinsed of
residual gold and silver and reclaimed.
Along with good production and cash cost performance, the Beartrack mine had
another great year with regards to safety performance. During the year, the mine
reached 997,000 operating person hours before experiencing only the second lost
time accident in its five year history. Meridian is very proud of this safety
record at Beartrack.
As the mine is approaching the end of its productive life, reductions in force
have begun. Thanks to the hard work of dedicated employees in Salmon, Idaho, the
reductions in force have proceeded very smoothly, with efforts from Meridian,
the community, the state, and the federal agencies to make sure that work
transition programs are operating effectively.
When Beartrack ceases operations, we will be sad to see it end, but we will
leave having gained much from the Beartrack operating experience and with our
good reputation as operators and solid members of the community intact. Thank
you, Salmon, Idaho!
<PAGE>
Rossi
- -----
Summary
o Underground decline into the STORM resource completed in December 1999
o Underground drilling began in January 2000
o 1 million ounces of currently identified high-grade gold resource
o $2.7 million planned for both surface and underground programs
All work on the Rossi property in 1999 was carried out and funded by our joint
venture partner, Barrick Gold Exploration Inc. Barrick will obtain its 60%
interest in Rossi by spending a total of $15 million by June 6, 2003. Through
1999, Barrick spent approximately $7 million, with another $2.7 million planned
for exploration in 2000.
Barrick's 1999 exploration campaign for Rossi consisted of both surface and
underground activities. The surface program incorporated property-wide detailed
geologic mapping, rock sampling, 6,096 meters of trenching, and 248
line-kilometers of ground magnetics, culminating in 21 drill holes totaling
10,829 meters. These activities were primarily focused on extending known
mineralized regions (49'er and End Zones), but included identification of new
target areas within the 27.7 square-kilometer Rossi property.
Underground efforts centered on the successful completion of the initial phase
of the STORM exploration decline (production-ready), which was started in March
and was completed in December. With its portal near the bottom of Glamis Gold's
Dee open-pit, the decline finished with nearly 1,250 meters of total development
and has successfully reached the high-grade one million ounce STORM Resource. A
40-hole, 4,572 meter, underground drill program began in January 2000 to better
define a portion of the resource's high-grade mineralization at the 49'er Zone.
Drilling will also target 49'er Zone mineralization extensions down-dip and
along strike. Positive results from the underground drilling at Rossi will help
confirm the existence of another deposit on the northern Carlin Trend.
<PAGE>
Exploration
- -----------
Summary
o Year 1999 exploration spending of $10.9 million
o Planned expenditures for 2000 of $10 million
o Priority exploration targets in Mexico and Peru established
o Office established in Lima, Peru in 1999
Ongoing exploration work is in progress at two of Meridian's three producing
properties - Jerritt Canyon and El Penon - and the Rossi advanced stage
property. A large measure of Meridian's successes, however, have always come
from quality grassroots exploration programs.
Surface exploration work at El Penon in 1999 was focused on drilling, with 262
holes totaling more than 58,000 meters completed. Nearly all of this work was
concentrated in the core area of the property. A modest amount of high-grade
underground resource was added for the year on the north and south ends of
Quebrada Colorada. These resources will receive further underground exploration
to upgrade their status during the planned development of that deposit. At El
Valle, the grade of the initial feasibility study resource was significantly
upgraded and should present a future underground and possible open pit target.
Although additional mineralization was encountered at Cerro Martillo, the
resource for this area was not re-estimated.
In 1999, after focusing for the prior two years primarily on El Penon and Rossi
- - both Meridian grassroots discoveries, Meridian embarked on another aggressive
grassroots program. The targeted areas were Argentina, Mexico, Peru and Nevada.
As the program progressed and was refined during the year, Mexico and Peru moved
to the forefront of Meridian's attention. In Peru, an exploration office was
opened in Lima to support our exploration program.
In Mexico, grassroots investigation led to the June 29 announcement of a joint
venture between Meridian and International Northair Mines Ltd. on the Venturina
property in the State of Chihuahua. Under the agreement, Meridian may earn up to
a 65% initial interest in the property by paying $1.035 million to Northair,
spending $2 million in exploration and development work, and reimbursing
Northair for all underlying obligations, all over four years. In exploration, we
will need to make a number of these arrangements in order to accomplish future
success.
<PAGE>
Corporate Responsibility
- ------------------------
As we've both said and proven, Meridian is serious about being a responsible
company with regards to the environment and the health and safety of its
employees. This history of safety and environmental responsibility has benefited
our shareholders by creating a productive workforce and by engendering good
relations between Meridian and communities, government authorities, and
investors. We're excited to work with our new neighbors in Chile, where the El
Penon mine is located, and we have been very pleased with their cooperative
approach. Chile is indeed a great country in which to live and do business.
Beartrack has experienced only two lost-time accidents in six years of
construction and operation. Beartrack has been a multiple recipient of the U.S.
Bureau of Mines' Sentinels of Safety Award, and most recently received a Safety
Achievement Award from Liberty Northwest Companies, which underwrites the mine's
worker compensation insurance. Beartrack received a Special Project Award in
1997 from the Idaho Land Board for its work on improving a 36-acre wetlands area
around Napias Creek, and has consistently enjoyed the support of the community
of Salmon, Idaho.
At El Penon we are working hard to establish a culture of safety and
environmental responsibility. Our reclamation plans for El Penon, which
incorporate an innovative, effective, and economical compacted dry-tailings
process, have been fully endorsed by the Chilean authorities. Safety at our
newest mine is an important priority, and is being enforced under a focused
program of training and accountability.
Finally, our reclamation program at Royal Mountain King is being viewed as a
model for others to follow in the state of California. It is that kind of
example which we will continue to be.
<PAGE>
Statistical Summary
- -------------------
<TABLE>
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
MILLING OPERATIONS
Tonnes of ore processed (thousands)
Jerritt Canyon (Meridian Gold share) 438 404 419 726 802
El Penon* 165 -- -- -- --
Gold ore grade
(grams per tonne milled)
Jerritt Canyon 8.6 8.7 7.4 4.5 4.4
El Penon* 4.8 -- -- -- --
Gold recoveries
Jerritt Canyon 91% 91% 91% 88% 86%
El Penon* 94% -- -- -- --
LEACHING OPERATIONS (BEARTRACK)
Tonnes of ore mined (thousands) 4,671 4,088 3,764 3,969 3,539
Gold ore grade
(cyanide soluble grams per tonne) 1.1 0.8 0.9 0.9 1.2
Gold recovery 90% 90% 90% 90% 90%
PRODUCTION (THOUSANDS OF OUNCES)
Gold
Jerritt Canyon (Meridian Gold share) 109 105 96 93 98
El Penon* 21 -- -- -- --
Beartrack 133 110 107 109 49
Paradise Peak -- -- -- -- 4
Silver
El Penon* 214 -- -- -- --
Total Gold 263 215 203 202 151
Total Silver 214 109 60 38 27
Cash Cost of Production
(United States $ per gold ounce)
Jerritt Canyon 191 187 209 297 250
Beartrack 140 220 202 190 166
Paradise Peak -- -- -- -- 155
Average 163 204 205 239 221
</TABLE>
The calculation of cash costs of production conforms to the standards
recommended by the Gold Institute.
* El Penon: Figures do not represent commercial production, which commenced on
January 1, 2000. Operating costs for 1999 were capitalized as part of the
project.
CAUTIONARY STATEMENT: Certain statements in this Annual Report constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company, or other future events
including forecast production, earnings and cash flows, to be materially
different from any future results, performances or achievements or other events
expressly or impliedly predicted by such forward-looking statements. Such risks,
uncertainties and other factors include, but are not limited to, factors
associated with fluctuations in the market price of precious metals, mining
industry risks, recent operating losses, uncertainty of title to properties,
risk associated with foreign operations, environmental risks and hazards,
proposed legislation affecting the mining industry, litigation, governmental
regulation of the mining industry, properties without known mineable reserves,
uncertainty as to calculations of ore reserves, mineral deposits and ore grades,
requirement of additional financing, uninsured risks, risk of hedging
strategies, competition, dependence on key management personnel, potential
volatility of market price of common shares, dilution and certain anti-takeover
effects.
<PAGE>
Market for the Registrant's Common Equity and Related Shareholder Matters
- -------------------------------------------------------------------------
The principal public trading markets for Meridian Gold common shares are The
Toronto Stock Exchange and the New York Stock Exchange. The quarterly high and
low trading prices of Meridian Gold common shares as reported on such exchanges
for the years ended December 31, 1999 and 1998 are set forth in the table of
Supplementary Data on page 40.
The year-end 1999 market price of Meridian Gold shares was $6 13/16 on the New
York Stock Exchange. At year-end 1999, the shares closed on The Toronto Stock
Exchange at Cdn.$9.80 per share.
Meridian Gold had 413 shareholders of record as of December 31, 1999.
Selected Financial Data
- -----------------------
The following selected financial data, for the years 1995 through 1999, have
been derived from the consolidated financial statements of Meridian Gold Inc.
<TABLE>
(IN MILLIONS OF UNITED STATES DOLLARS, EXCEPT SHARE AND PER SHARE DATA)
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Summary of Operations
Sales $ 71.2 $ 65.7 $ 68.7 $ 76.2 $ 57.4
Costs and expenses
Cost of sales 53.0 49.0 54.6 54.3 29.8
Depreciation, depletion,
and amortization 18.9 22.1 23.3 21.0 21.2
Exploration costs 10.2 13.1 31.1 13.4 10.8
Selling, general and
administrative expenses 5.0 7.2 6.2 6.4 5.1
Other operating expense
(income) (0.9) (3.6) 0.4 1.9 0.3
Provision for impairment
of mining properties -- 19.8 26.2 -- --
Total costs and expenses 86.2 107.6 141.8 97.0 67.2
Operating loss (15.0) (41.9) (73.1) (20.8) (9.8)
Interest income 1.7 2.7 3.7 4.9 5.9
Gain (loss) on sale of assets (0.4) -- 0.2 -- 1.7
Loss before income taxes (13.7) (39.2) (69.2) (15.9) (2.2)
Income taxes -- -- -- -- 4.5
Net income (loss) $ (13.7) $ (39.2) $ (69.2) $ (15.9) $ 2.3
Net income (loss) per
common share $ (0.19) $ (0.53) $ (0.94) $ (0.22) $ 0.03
Weighted average common
shares outstanding
(thousands) 73,726 73,609 73,601 73,563 73,484
Total Assets at
December 31 $ 141.5 $ 110.1 $ 147.9 $ 214.6 $ 225.2
Total Long-term debt
(including current
portion) at December 31 $ 30.0 $ -- $ -- $ -- $ --
</TABLE>
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
---------------------------------------------
Financial Review
SALES AND NET LOSS
Sales for 1999 increased to $71.2 million from $65.7 million in 1998, reflecting
a record production year for the Beartrack mine. Revenues were not recognized
for the 21,000 ounces of gold produced at the new El Penon mine in 1999, as the
mine was still in its start-up phase and all operating costs were capitalized.
Gold production, excluding El Penon, was 242,000 ounces, versus 215,000 ounces
in 1998, and the average realized price of gold was $295 per ounce, compared to
$307 per ounce in 1998. Sales in 1999 include income of $2.9 million recognized
on the closing of put options covering 44,000 ounces of gold; 1998 sales
included income of $2.8 million gain on put options covering 33,000 ounces of
gold.
Cost of sales was $53.0 million in 1999 versus $49.0 in 1998. This increase was
largely attributable to a 1999 charge of approximately $5.7 million relating to
an increase in the Company's reclamation liability for the Royal Mountain King
mine. Average cash costs declined sharply to $163 per ounce of gold from $204
per ounce in 1998, due to improvements in mining productivity at Beartrack.
Beartrack cash costs decreased to $140 per ounce from $220 per ounce. At Jerritt
Canyon, cash costs per ounce were $191 per ounce, versus $187 per ounce in 1998.
Exploration expenditures decreased from $13.1 million in 1998 to $10.2 million
in 1999. This decrease was planned and was the result of a refocusing and
rationalization of the Company's exploration program in response to the low gold
price environment. In addition to continuing efforts to expand reserves and
resources at El Penon, 1999 exploration activities focused on increasing
reserves at Jerritt Canyon and on initiating strong grass roots exploration
programs in Mexico and Peru. Included in expenses for Peru were the costs of
setting up an exploration office in Lima. Selling, general and administrative
expenses decreased to $5.0 million in 1999 from $7.2 million in 1998.
Meridian's net loss for the year was $13.7 million, compared with a net loss of
$39.2 million in 1998. The net loss in 1998 included a non-cash charge for
mining property impairments of $19.8 million relating to the Beartrack mine due
to the low gold price environment. The Company did not recognize a tax benefit
in either 1998 or 1999.
LIQUIDITY AND CAPITAL RESOURCES
Cash to meet the Company's operating needs, to finance capital expenditures and
to fund exploration activities was provided from operations, from existing cash
reserves, and from a $30 million project loan obtained from Standard Bank of
London Limited. Cash provided by operating activities was $21.1 million in 1999,
compared to cash provided by operating activities of $3.8 million in 1998. The
improvement in 1999 is due to lower operating cash costs, higher production,
lower exploration spending, and collection of $5.7 million in recovered
value-added tax (VAT) related to the company's Chilean operations. At December
31, 1999, cash and cash equivalents totaled $20.8 million, vs. $34.1 million as
of the previous year end.
In 1998, the Company had agreed in principle to the terms of a $50 million loan
facility with Standard Bank of London Limited. In 1999 the terms of the loan
were finalized and the Company drew down $30 million. The financing is secured
by the El Penon assets and by a Corporate guarantee until commercial production,
as defined by the terms of the loan, is achieved. Upon reaching commercial
production, the Corporate guarantee will be eliminated and the project assets
alone will secure the loan. The interest rate is 2.25% over the London Interbank
Lending Rate (LIBOR) through the end of performance testing; thereafter, the
rate will be 2% over LIBOR. The loan matures over a period beginning June 30,
2000 and ending June 30, 2004. Interest incurred in 1999, which was capitalized
as part of the El Penon mine, was $1.4 million.
In connection with this financing, the Company has entered into contracts for
forward sales of 9.3 million ounces of silver at a price of $5.34 per ounce, and
485,000 ounces of gold at prices ranging from $305 to $321 per ounce. These
contracts mature over the life of the loan, beginning in January 2000. The total
ounces hedged represent approximately one-third of the project's estimated
annual production of gold and one-half of the annual production of silver for
the years that the hedges are in effect.
<PAGE>
Capital expenditures increased to $64.9 million in 1999 from $23.8 million in
1998 due to the development of El Penon. At El Penon, 1999 expenditures were
$58.1 million, compared to $12.6 million in 1998. Expenditures in 1999 related
to Jerritt Canyon were $6.4 million, down from $9.2 million in 1998, reflecting
decreased development costs related to the startup of the SSX underground mine.
At Beartrack, 1999 expenditures decreased to $0.1 million from $1.3 million in
1998 as the mine neared the end of its life.
Expected cash requirements for 2000 include approximately $16.4 million for
planned capital expenditures, directed toward additional underground development
of the El Penon and Jerritt Canyon mines. Exploration spending in 2000 is
expected to be approximately $10.0 million. The Company expects to fund all of
these cash requirements from cash flows from operations and existing cash
reserves.
Should the Company decide to develop other exploration and development
properties, significant additional capital may be required. The Company believes
that these capital requirements could be funded by existing cash reserves and by
borrowings from third parties (including the $20 million available from Standard
Bank), although no assurance can be given that such borrowings will be available
at rates acceptable to the Company.
ARRIVAL OF THE YEAR 2000
The Year 2000 issue, which had the potential to cause computers and
date-sensitive devices which employ microprocessors to be unable to correctly
process data for dates occurring after 1999, was of high concern in 1999. In
1997, Meridian Gold implemented an action plan to address the impact of
potential Year 2000 problems on the Company and all action plans had been
completed before the end of 1999. The cost of testing and compliance or upgrade
measures was not significant at less than $100,000. The company has not, as of
the date of this report, experienced any material problems relating to the Year
2000 issue, either from internal systems or through its refiners and suppliers.
OUTLOOK
Gold production is estimated to be approximately 410,000 ounces in 2000. El
Penon is expected to produce 250,000 ounces, with Beartrack and Jerritt Canyon
contributing 60,000 ounces and 100,000 ounces, respectively. Exploration efforts
will be focused on increasing reserves and resources at El Penon, continuing
exploration programs at Jerritt Canyon, evaluating the Venturina project in
Chihuahua State in Mexico which is the subject of a joint venture agreement with
International Northair Mines Ltd., and "grass roots" prospecting, primarily in
Mexico and Peru. Exploration work is also planned at the Company's Rossi project
in Nevada. Funding will be provided by the Company's joint venture partner,
Barrick Gold Corporation, under the terms of the joint venture agreement.
<PAGE>
Independent Auditors' Report
- ----------------------------
The Board of Directors and Shareholders,
MERIDIAN GOLD INC.:
We have audited the accompanying consolidated balance sheets of Meridian Gold
Inc. and subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of operations, cash flows, and changes in shareholders'
equity for each of the years in the three-year period ended December 31, 1999
which have been prepared on the basis of accounting principles generally
accepted in Canada. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Meridian Gold Inc.
and subsidiaries as of December 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the years in the three year period
ended December 31, 1999 in conformity with accounting principles generally
accepted in Canada.
KPMG LLP
Denver, Colorado
February 9, 2000
<PAGE>
Management Responsibility for Financial Statements
- --------------------------------------------------
The accompanying consolidated financial statements and all of the data included
in this annual report have been prepared by and are the responsibility of the
management of the Company. The consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in Canada
and reflect management's best estimates and judgements based on currently
available information. The Company has developed and maintains systems of
internal accounting controls in order to assure, on a reasonable and
cost-effective basis, the reliability of its financial information, and that its
assets are safeguarded from loss.
The Board of Directors is responsible for ensuring that management fulfills its
responsibilities for financial reporting and internal control. The Board
exercises its responsibilities through the Audit Committee of the Board which
meets with the external auditors to satisfy itself that the management's
responsibilities are properly discharged and to review the financial statements
before they are presented to the Board of Directors for approval.
The consolidated financial statements have been audited by KPMG LLP. Their
report outlines the scope of their examination and their opinion on the
consolidated financial statements.
Brian J. Kennedy
President & Chief Executive Officer
Edward H. Colt
Vice President, Finance & Chief Financial Officer
February 9, 2000
<PAGE>
Consolidated Statements of Operations
- -------------------------------------
<TABLE>
YEAR ENDED DECEMBER 31
(IN THOUSANDS OF UNITED STATES DOLLARS, EXCEPT PER SHARE DATA)
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Sales $ 71,247 $ 65,676 $ 68,740
Costs and expenses
Cost of sales 53,013 48,961 54,544
Depreciation, depletion, and amortization 18,869 22,168 23,346
Exploration costs 10,248 13,133 31,107
Selling, general and administrative expenses 5,025 7,172 6,242
Other operating expense (income) (921) (3,595) 401
Provision for impairment of mining properties -- 19,768 26,233
Total costs and expenses 86,234 107,607 141,873
Operating loss (14,987) (41,931) (73,133)
Interest income 1,731 2,686 3,788
Gain (loss) on sale of assets (467) 14 178
Net loss $ (13,723) $ (39,231) $ (69,167)
(note 1) Loss per common share $ (0.19) $ (0.53) $ (0.94)
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
Consolidated Balance Sheets
- ---------------------------
<TABLE>
DECEMBER 31 (IN THOUSANDS OF UNITED STATES DOLLARS)
1999 1998
-------- --------
<S> <C> <C>
Assets
Current assets:
(note 1) Cash and cash equivalents $ 20,809 $ 34,122
Trade and other receivables 5,098 8,051
(note 3) Inventories 8,728 6,302
Other current assets 928 1,526
Total current assets 35,563 50,001
(note 4) Property, plant and equipment, net 102,888 57,515
(notes 1 and 13) Other assets 3,041 2,625
Total assets $ 141,492 $ 110,141
Liabilities and Shareholders' Equity
Current liabilities:
(note 12) Current portion long-term debt $ 12,000 $ --
Accounts payable, trade
and other 5,423 3,894
(note 6) Accrued and other liabilities 17,147 9,652
Total current liabilities 34,570 13,546
(note 12) Long-term debt,
net of current portion 18,000 --
(note 7) Other long-term liabilities 28,516 23,118
Shareholders' equity:
(note 11) Series 1 preferred shares,
no par value, authorized unlimited shares,
10,000 shares issued and outstanding in 1998 -- 100
(note 1) Common shares, no par value,
authorized unlimited shares, 73,999,891 and
73,641,420 shares issued and outstanding
in 1999 and 1998, respectively 69,347 68,595
Additional paid-in capital 3,658 3,658
Retained earnings (accumulated deficit) (12,599) 1,124
Total shareholders' equity 60,406 73,477
Total liabilities and shareholders' equity $ 141,492 $ 110,141
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Signed on behalf of the Board of Directors:
Dr. David S. Robertson
Director
Brian J. Kennedy
Director
<PAGE>
Consolidated Statements of Cash Flows
- -------------------------------------
<TABLE>
YEAR ENDED DECEMBER 31 (IN THOUSANDS OF UNITED STATES DOLLARS)
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (13,723) $ (39,231) $ (69,167)
Adjustments to reconcile net loss to
net cash provided by (used in) operating activities:
Provision for depreciation, depletion and amortization 18,869 22,168 23,346
Gain on sale of assets 467 (14) (178)
Provision for impairment of mining properties -- 19,768 26,233
Provision for reclamation, net of costs incurred 6,771 972 5,487
Accrued pension cost 253 172 310
(Increase) decrease in assets:
Trade and other receivables 2,953 (6,802) 519
Inventories (2,426) 3,680 6,781
Other current assets 598 1,833 (642)
Other assets (528) 616 680
(Decrease) increase in liabilities:
Accounts payable, trade and other 1,529 (1,378) (2,277)
Accrued and other liabilities 12,858 870 1,428
Other long-term liabilities (6,489) 1,143 82
Net cash provided by (used in) operating activities 21,132 3,797 (7,398)
Cash flows from investing activities:
Capital spending (64,921) (23,774) (18,959)
Disposal of property, plant and equipment 324 132 591
Net cash used in investing activities (64,597) (23,642) (18,368)
Cash flows from financing activities:
Proceeds from long-term borrowings 30,000 -- --
Proceeds from sale of common stock 752 146 17
Repayments of long-term debt (500) (500) (2,500)
Redemption of preferred stock (100) -- --
Net cash provided by (used in) financing activities 30,152 (354) (2,483)
Decrease in cash and cash equivalents (13,313) (20,199) (28,249)
Cash and cash equivalents, beginning of year 34,122 54,321 82,570
Cash and cash equivalents, end of year $ 20,809 $ 34,122 $ 54,321
Supplemental disclosure of cash flow information:
Cash paid and (refunds received) for income taxes during 1999, 1998, and 1997
were ($560), ($1,450), and $2,324, respectively.
Cash paid for interest in 1999 was $1.4 million; this cost was capitalized as
part of the El Penon mine. There was no such cost in 1998 or 1997.
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
Consolidated Statements of Changes in Shareholders' Equity
- ----------------------------------------------------------
<TABLE>
YEAR ENDED DECEMBER 31 (IN THOUSANDS OF UNITED STATES DOLLARS)
Number of Number of
Meridian Meridian Meridian Meridian
Gold Gold Gold Gold Additional
Preferred Common Preferred Common Paid-in Retained
Shares Shares Shares Shares Capital Earnings
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balance December 31, 1996 10 73,597 100 68,432 3,658 109,522
Net loss (69,167)
Issuance of shares upon
exercise of stock options 4 17
Balance December 31, 1997 10 73,601 100 68,449 3,658 40,355
Net loss (39,231)
Issuance of shares upon
exercise of stock options 40 146
Balance December 31, 1998 10 73,641 $ 100 $ 68,595 $ 3,658 $ 1,124
Net loss (13,723)
Issuance of shares upon
exercise of stock options 198 752
Issuance of restricted shares 161
Redemption of preferred shares (10) (100)
Balance December 31, 1999 -- 74,000 $-- $ 69,347 $ 3,658 $ (12,599)
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
Notes to Consolidated Financial Statements
- ------------------------------------------
AS OF DECEMBER 31
Note 1: Principal Accounting Policies
NATURE OF OPERATIONS AND BACKGROUND
Meridian Gold Inc. ("Meridian") is an exploration oriented gold producer.
BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of
Meridian and all majority-owned subsidiaries (collectively referred to as "the
Company"). The accounts of joint ventures in which the Company holds an interest
are consolidated on a pro rata basis. All significant intercompany accounts are
eliminated in consolidation.
These financial statements are presented in accordance with accounting
principles generally accepted in Canada. As described in note 15, these
principles differ in certain respects from principles and practices generally
accepted in the United States. The United States dollar is the principal
currency of the Company's business; accordingly, the accompanying consolidated
financial statements are presented in United States dollars.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles ("GAAP") requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS
Meridian considers all highly liquid marketable securities with remaining
maturities at date of purchase of fewer than 91 days to be cash equivalents.
Cash equivalents consist primarily of Euro dollar time deposits with major
commercial banks and totaled approximately $17.8 million and $33.5 million at
December 31, 1999 and 1998, respectively.
INVENTORIES
Finished goods inventories are stated at the lower of the average cost or
market, and include labor, materials, other production costs and depreciation.
No inventory value is assigned to stockpiled ore, except for in-process ore
where cost includes labor, materials and other production costs.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, including development costs and capitalized
interest associated with the construction of certain capital assets, are
recorded at cost. Start-up costs associated with new properties, net of revenues
from pre-commercial production, are capitalized as part of the cost of the
projects. Depreciation, depletion and amortization for financial reporting
purposes are provided on a units of production basis or on the straight-line
basis over the shorter of the estimated lives of the assets or the estimated
proven and probable recoverable reserves. Gains and losses are reflected in
income upon sale or retirement of assets.
MINERAL EXPLORATION AND DEVELOPMENT COSTS
Mineral exploration costs are expensed as incurred. Development costs applicable
to mineralized properties deemed capable of commercial production are
capitalized and then amortized using the units of production method.
RECLAMATION
Reclamation and shutdown costs to be incurred following mine closures are
estimated and accrued over the life of each mine using the units of production
method. Changes in cost estimates are recognized over the remaining reserve
life.
<PAGE>
REVENUE RECOGNITION
Sales are recognized upon shipment of gold and silver dore to third parties.
INCOME TAXES
The Company adopted the asset and liability method of accounting for income
taxes in 1997, and elected to apply the new method retroactive to January 1,
1995. The retroactive application of the new method of accounting for income
taxes had no effect on the financial statements for 1997 or 1996.
Under the asset and liability method of accounting for income taxes, deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and operating
loss and tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.
FORWARD SALES AND HEDGING
In order to reduce its exposure to decreasing prices for future gold and silver
production, the Company has hedged portions of future gold production by
entering into put option contracts and gold and silver forwards.
The costs of the contracts are deferred and recognized as a reduction of sales
when the hedged production is sold. Proceeds received upon the exercise of put
options are recorded as sales when the hedged production is sold.
LOSS PER COMMON SHARE
Loss per common share has been computed based on the weighted average number of
shares of common stock outstanding during the year (73,725,780 shares in 1999,
73,608,853 shares in 1998 and 73,600,788 shares in 1997).
FAIR VALUE OF FINANCIAL INSTRUMENTS
At December 31, 1999 the book value of the Company's financial instruments
approximates their fair value except as disclosed in Note 13.
RECLASSIFICATIONS
Certain amounts in the prior years' financial statements have been reclassified
to conform to the current year's presentation.
Note 2: Acquisitions and Divestitures
In June 1994, the Company agreed to purchase the remaining 14 percent interest
in the Beartrack joint venture from Minex for $6.0 million. The final
installment of $0.5 million due under this note was paid in June 1999.
Note 3: Inventories
Inventories (at cost) consist of the following:
<TABLE>
(IN THOUSANDS) 1999 1998
---- ----
<S> <C> <C>
Gold and silver dore $ -- $ 220
In-process ore 6,278 5,262
Materials and supplies 2,450 820
Total $ 8,728 $ 6,302
</TABLE>
<PAGE>
Gold and silver inventories are in the form of dore, which is delivered to
precious metal treatment facilities for further processing.
In-process ore inventory includes the labor, materials, and other production
costs of loading ore on the heap leach pads at the Beartrack mine and of
delivering ore to the crusher at the El Penon mine. At December 31, 1999, there
were approximately 21.1 million tonnes of ore under leach at the Beartrack mine,
containing approximately 36,000 ounces of gold, and approximately 250,000 tonnes
of in-process ore at El Penon, containing approximately 75,000 ounces of gold.
At December 31, 1998 approximately 16.1 million tonnes of ore were under leach
at the Beartrack mine, containing approximately 34,000 ounces of gold.
Note 4: Property, Plant, and Equipment
Property, plant and equipment consists of the following:
<TABLE>
(IN THOUSANDS) 1999 1998
-------- --------
<S> <C> <C>
Land and land improvements $ 22,024 $ 20,804
Less accumulated depreciation (16,989) (12,303)
--------- ---------
5,035 8,501
--------- ---------
Buildings 15,218 13,087
Less accumulated depreciation (11,323) (9,281)
--------- ---------
3,895 3,806
--------- ---------
Machinery and equipment 117,423 109,584
Less accumulated depreciation (99,401) (90,867)
--------- ---------
18,022 18,717
--------- ---------
Development costs 102,020 98,317
Less accumulated depletion (91,771) (88,891)
--------- ---------
10,249 9,426
--------- ---------
Construction in progress and deferred
start-up costs 65,687 17,065
--------- ---------
Net property, plant and equipment $ 102,888 $ 57,515
</TABLE>
Allocated to the projects as follows:
<TABLE>
(IN THOUSANDS) 1999 1998
-------- --------
<S> <C> <C>
Beartrack mine $ 6,451 $ 19,562
Jerritt Canyon mine 18,799 17,893
Rossi project 5,500 5,500
El Penon mine 70,538 12,920
Royal Mountain King property 449 449
Administrative and exploration assets 1,151 1,191
--------- --------
Net property, plant and equipment $ 102,888 $ 57,515
</TABLE>
<PAGE>
Note 5: Joint Venture
The Company's 30% interest in Jerritt Canyon Joint Venture is reflected in the
consolidated financial statements on a pro rata basis. The Company's share of
the joint venture's assets, liabilities, revenues and expenses included in the
accompanying financial statements are as follows:
<TABLE>
(IN THOUSANDS) 1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Current assets $ 1,745 $ 1,071 $ 2,065
Property, plant and equipment, net 18,799 17,893 15,339
Investments and other assets 48 492 561
------- ------- -------
Total assets 20,592 19,456 17,965
Current liabilities 2,962 3,657 2,219
Long-term liabilities 11,418 12,530 9,720
------- ------- -------
Total liabilities 14,380 16,187 11,939
Equity in Joint Venture $ 6,212 $ 3,269 $ 6,026
------- ------- -------
Revenue $ 30,318 $ 30,506 $ 30,559
Expenses
Cost of sales 23,294 20,791 29,060
Depreciation, depletion and amortization 5,323 6,617 10,053
Impairment of assets -- -- 26,233
Gain on curtailment of pension plan 1,347 -- --
------- ------- -------
Net operating income (loss) $ 3,048 $ 3,098 $(34,787)
------- ------- -------
Cash provided by operating activities $ 10,066 $ 14,297 $ 11,403
Cash used in investing activities (6,406) (9,184) (12,737)
</TABLE>
Note 6: Debt
On June 30, 1999 the Company finalized the terms of a $50 million debt facility
with Standard Bank of London Limited; as of December 31, 1999, Meridian has
drawn $30 million against this facility to finance construction at El Penon. The
debt matures over five years with an interest rate of LIBOR +2.25% during
construction, converting to LIBOR + 2.0% following completion testing. The
financing is secured by the El Penon assets and by a Corporate guarantee until
commercial production, as defined by the terms of the loan, is achieved. Upon
reaching commercial production, the Corporate guarantee will be eliminated and
the project assets alone will secure the loan. Under the terms of the agreement,
the remaining balance of $20 million not yet drawn under the facility will be
available to the Company for corporate purposes until October 2000.
The $30 million outstanding at December 31, 1999 matures as follows: $12 million
in 2000, $7.5 million in 2001, $4.5 million in 2002, and $6.0 million in 2003.
Note 7: Accrued and Other Liabilities
Accrued and other liabilities consist of the following:
<TABLE>
(IN THOUSANDS) 1999 1998
-------- --------
<S> <C> <C>
Shutdown and reclamation accrual (notes 1 and 7) $ 8,644 $ 3,265
Notes payable (note 2) -- 500
Accrued bonus and payroll 2,353 2,707
Deferred revenue (note 13) 2,327 --
Other 3,823 3,180
-------- -------
Total $ 17,147 $ 9,652
</TABLE>
<PAGE>
Note 8: Other Long-term Liabilities
Other long-term liabilities consist of the following:
<TABLE>
(IN THOUSANDS) 1999 1998
-------- --------
<S> <C> <C>
Shutdown and reclamation accrual (notes 1 and 7) $ 20,916 $ 19,521
Accrued pension cost (note 10) 735 482
Deferred revenue (note 13) 1,602 --
Other 5,623 3,115
-------- --------
Total $ 28,516 $ 23,118
</TABLE>
Shutdown and reclamation accruals represent estimated costs of earthwork,
including detoxification and recontouring, revegetation, and stabilization. The
costs of heap-leach encapsulation and facility decommissioning are also included
in these accrued costs.
In determining the estimated costs, the Company considers such factors as
changes in laws and regulations, the likelihood that additional permits will be
required, and requirements under existing operating permits. Such analyses are
performed on an ongoing basis.
Although the ultimate amount of reclamation obligations to be incurred is
uncertain, as of December 31, 1999 Meridian has estimated these costs for all of
its properties to be $35 million, and at December 31, 1999, accrued reclamation
costs, including the current portion, were $29.6 million for all properties. The
provision for reclamation costs charged to operations was $12.1 million, $4.2
million, and $9.7 million in 1999, 1998 and 1997, respectively. The 1999
provision included a charge of approximately $5.7 million relating to an
increase in the Company's reclamation liability for the Royal Mountain King
mine. Actual reclamation expenditures were $5.4 million, $3.2 million, and $4.2
million in 1999, 1998 and 1997, respectively.
Note 9: Income Taxes
Meridian commenced operations in July, 1996 upon completion of a series of
transactions in which the Company was reincorporated in Canada and became the
successor to the business of FMC Gold (the "Reincorporation"). In 1995 and prior
to the Reincorporation, the Company was included in FMC's consolidated federal
income tax return. Under a tax-sharing agreement with FMC, the Company paid to
FMC amounts generally equal to the tax the Company would have been required to
pay had it filed a separate return, and FMC paid to the Company amounts
generally equal to any tax benefits the Company would have realized on a
separate return basis which were realized by FMC. Under the terms of the
agreement, the Company is obligated to reimburse FMC for any amounts, including
penalties and interest, that it may be assessed upon an examination of the
consolidated returns by the IRS, to the extent that the additional income taxes
are attributable to the Company's operations prior to the Recapitalization. The
Company believes that it has adequately provided for any amounts that may
ultimately be payable to FMC under the agreement.
In connection with the Reincorporation, Meridian and FMC jointly agreed to elect
to treat the disposition of the shares of Meridian by FMC as an asset sale. As a
result, Meridian's assets were adjusted to their fair market value for income
tax purposes. Accordingly, the Company's net operating loss and alternative
minimum tax credit carryforwards remained with FMC at the time of the
Reincorporation.
On October 26, 1998, the Company entered into foreign investment contracts under
Chilean Decree Law 600 ("DL600"), under which all prior spending in Chile by the
Company was consolidated. Under the provisions of these DL600 contracts, the
Company has elected to have its earnings taxed at a rate of 42% based on Chilean
tax statutes in effect as of the date of the contracts. As provided for in the
statutes governing DL600 contracts, the Company retains the right to elect that
future earnings be taxed at the statutory rate rather than the rate provided in
the DL600.
<PAGE>
The income tax provision (benefit) differs from that computed by applying the
United States applicable federal statutory rate of approximately 34 percent to
income before taxes as follows:
<TABLE>
YEAR ENDED DECEMBER 31 (IN THOUSANDS) 1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Income tax benefit calculated using
statutory tax rate (4,665) (13,339) (23,516)
Increase in valuation allowance for
future income tax assets 4,053 13,125 23,441
Other 612 214 75
------- ------- -------
Actual tax provision (benefit) $ -- $ -- $ --
</TABLE>
The significant components of the Company's future income tax assets and
liabilities at December 31, 1999 and 1998 are as follows:
<TABLE>
(IN THOUSANDS) 1999 1998
---------- ----------
<S> <C> <C>
Deferred income tax assets:
U.S.: Property, plant and equipment $ 18,627 $ 18,304
Reclamation reserves 10,895 6,920
Net operating loss carryforwards 3,091 2,278
Other, net 1,304 1,290
Chile: Property, plant and equipment 3,340 3,340
Net operating loss carryforwards 19,925 14,924
Other, net 270 360
Other foreign:
Net operating loss carryforwards 1,904 1,098
Other, net -- --
-------- --------
Total deferred income tax assets 59,356 48,666
Valuation allowance (50,219) (46,166)
-------- --------
Deferred income tax assets, net of allowance 9,137 2,500
Deferred income tax liabilities:
U.S.: Other, net (2,500) (2,500)
Chile: Property, plant and equipment (6,637) --
-------- --------
Total deferred income tax liabilities (9,137) (2,500)
-------- --------
Net deferred income tax assets $ -- $ --
</TABLE>
At December 31, 1999, the Company and subsidiaries included in these
consolidated financial statements had available U.S. loss carryforwards of $8.8
million, which expire in the years 2018 and 2019, a Chilean net operating loss
carryforward of approximately $58.6 million, which may be carried forward
indefinitely, and Canadian net operating loss carryforwards of approximately
$5.6 million which will expire between the years 2003 and 2006.
Note 10: Geographic Sales and Sales to Major Customers
Sales (excluding hedging transactions) to unaffiliated customers by destination
of sale are as follows:
<TABLE>
YEAR ENDED DECEMBER 31 (IN THOUSANDS) 1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
USA $ 61,551 $ 56,115 $ 17,545
Western Europe 6,772 6,742 50,294
-------- -------- --------
Total $ 68,323 $ 62,857 $ 67,839
</TABLE>
<PAGE>
The Company's gold and silver dore production is purchased and refined by
European and United States refiners. Sales were to three refiners in 1999 and
1997, and to two refiners in 1998, each representing 10 percent or more of
consolidated sales. The Company believes that several other refiners would be
willing to purchase the Company's production should any of the current refiners
discontinue buying the Company's production.
Note 11: Employee Plans
The Company has a defined benefit pension plan covering substantially all
salaried employees. Pension benefits are generally based on years of service and
average yearly earnings. The Company's funding policy is to contribute the
minimum amount required by applicable regulations. The amortization period for
unrecognized gains and losses is 12 years and is based on the expected average
remaining service life of eligible employees. Net periodic pension expense is
composed of the following:
<TABLE>
YEARS ENDED DECEMBER 31 (IN THOUSANDS) 1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Accrual for service cost $ 364 $ 287 $ 265
Interest cost 184 156 124
Return on assets (218) (154) (121)
Net amortization and deferral (78) (24) --
-------- -------- --------
Net periodic pension cost 252 265 268
</TABLE>
The following table represents the plan's funded status and actuarial
assumptions at December 31, 1999 and 1998:
<TABLE>
YEARS ENDED DECEMBER 31 (IN THOUSANDS) 1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Projected benefit obligation $ 2,768 $ 2,395 $ 1,897
Market value of plan assets 2,836 2,562 1,875
-------- -------- --------
Projected benefit obligation in excess
of (less than) plan assets (68) (167) 22
-------- -------- --------
Unrecognized net gain 803 649 288
-------- -------- --------
Accrued pension cost 735 482 310
Actuarial assumptions:
Weighted average discount rate 8.25% 8.25% 8.25%
Weighted average rate of compensation increase 6.44% 6.59% 6.90%
</TABLE>
The Company also has a non-qualified unfunded supplementary retirement plan that
provides employees with retirement benefits in excess of qualified plan limits
imposed by law. At December 31, 1999 and 1998, the projected benefit obligation
under this plan totaled approximately $1.2 million and $0.5 million,
respectively. The projected benefit obligation (PBO) is determined using the
same methods and assumptions as those used for the calculation of the PBO for
the qualified plan discussed above.
Note 12: Share Capital
The authorized share capital of the Company consists of an unlimited number of
preferred shares without par value and an unlimited number of common shares
without par value. Preferred shares are issuable in series. The Board of
Directors is authorized to fix the designation, rights, privileges, restrictions
and conditions attaching to the shares of each series. The preferred shares rank
prior to the common shares with respect to dividends and return of capital on
dissolution. Except with respect to matters as to which the holders of preferred
shares as a class are entitled by law to vote, the holders of preferred shares
are not entitled to vote.
The Company had 10,000 shares of Series 1 preferred stock outstanding at
December 31, 1998 which were redeemed at $10 per share in May 1999. Dividends at
5% per annum payable on the preferred shares were recorded as compensation
expense.
<PAGE>
In 1989, the stockholders of FMC Gold Company approved the FMC Gold Company 1988
Long-term Incentive Compensation Plan (the "1988 Plan"), which authorized the
Board of Directors to grant stock options to key employees of the Company. Under
the terms of the 1988 Plan, options were granted at the fair market value of the
common stock as of the date of grant. Stock options granted in 1988 had an
exercise price ranging from $9.625 to $10.625 and expired May 6, 1998. During
1992, additional options were granted to purchase 223,000 shares of common stock
at an exercise price of $4.25, with an expiration date of April 2007. In
connection with the Reincorporation, FMC Gold stock options granted under the
1988 Plan were converted to options to purchase a like number of common shares
of the Company.
During 1999, the Company's shareholders adopted the Meridian Gold Inc. 1999
Share Incentive Plan (the "1999 Plan"), which replaced the Company's 1996 Share
Option Plan and which provides for the granting of equity-based or
equity-related awards to certain directors, officers and employees of the
Company. A maximum of 5,200,000 shares of common stock are reserved for issuance
under the 1999 Plan. Options are granted at exercise prices equal to the fair
market value of the common stock at date of grant, for a period of ten years.
The options vest over periods of one to five years.
At December 31, 1999 options to purchase 3,241,446 common shares with a weighted
average remaining life of 7.5 years were outstanding, as detailed in the table
below. The options outstanding and exercisable at December 31, 1999 had a
weighted average exercise price of $4.407 and $3.954, respectively.
<TABLE>
NUMBER OF OPTION PRICE
COMMON SHARES U.S.$ PER SHARE
------------- ---------------
<S> <C> <C>
Outstanding, December 31, 1996 1,679,950 3.650 - 10.625
Granted in 1997 932,900 2.250 - 5.250
Exercised in 1997 (4,000) 4.250
Surrendered in 1997 (34,775) 3.650 - 4.250
- -------------------------------------------------------------------------------
Outstanding, December 31, 1997 2,574,075 2.250 - 10.625
Granted in 1998 1,264,000 3.187 - 4.6250
Exercised in 1998 (39,925) 3.650
Surrendered in 1998 (541,117) 3.650 - 10.625
- -------------------------------------------------------------------------------
Outstanding, December 31, 1998 3,257,033 2.250 - 5.250
Granted in 1999 313,600 6.6875
Exercised in 1999 (197,571) 3.650 - 4.3750
Surrendered and expired in 1999 (131,616) 3.650 - 4.6250
- -------------------------------------------------------------------------------
Outstanding, December 31, 1999 3,241,446 2.250 - 6.6875
Exercisable, December 31, 1999 1,006,720 2.250 - 5.250
</TABLE>
In October 1999 the Company awarded 160,900 restricted common shares under the
Plan. These shares vest ratably over a three-year period.
In March 1999, the Company established a Shareholder Rights Plan, which replaced
the existing Plan established in July 1996. The Plan has a term of ten years and
expires on July 30, 2009. In implementing the Plan, one Right was distributed
for each common share outstanding on July 30, 1999, as well as each common share
to be issued prior to the Separation Time. The "Separation Time" is defined as
the tenth trading day after the earlier of (i) the first date of public
announcement that a person or group other than certain exempt persons (an
"Acquiring Person"), together with affiliates or associates, has acquired, or
obtained the right to acquire, 20% or more of any class of voting shares of the
Company; or (ii) the date of commencement or announcement of a Take-over Bid (as
defined in the Shareholder Rights Plan Agreement). A "Take-over Bid" means an
offer to acquire voting shares of the Company (or securities convertible into
such shares) which, if successful, would result in the person making such an
offer ("the Offeror") beneficially owning 20% or more of any class of the voting
shares of the Company.
<PAGE>
The Shareholder Rights Plan Agreement provides that, until the Separation Time,
the Rights will be transferred with and only with the common shares. After the
Separation Time, separate Rights Certificates will be mailed to holders of
record of the common shares as of the Separation Time. After the Separation Time
and prior to the Expiration Time, the Rights are exercisable by the holders.
Each Right will entitle the holder to purchase one common share for the Exercise
Price (as defined in the Shareholder Rights Plan Agreement).
Note 13: Hedging Contracts
During 1999, the Company liquidated all put option contracts that were
outstanding at December 31, 1998, consisting of options to sell 91,000 ounces at
a strike price of $400 per ounce. These contracts were exercisable over three
years, from 1999 to 2001. Accordingly, the Company recognized income of $2.9
million during 1999 and recorded deferred revenue of $3.9 million as of December
31, 1999.
Hedging revenue recognized on put option contracts was $2.8 million in 1998 and
$0.9 million in 1997. The carrying value of put options (at cost) was $1.3
million at December 31, 1998.
To mitigate continued risks associated with changes in the market price of gold,
Meridian entered into new put option contracts during the year. These contracts
are for a total of 59,000 ounces, bear a strike price of $285 per ounce and are
exercisable at intervals through November 2001. At December 31, 1999, the
carrying value of these options (at cost) was $0.5 million. Put options
establish a minimum sales price for the production covered by such contracts and
permit the Company to participate in any price increases above the strike price
of such options. The estimated market value of the put options as of December
31, 1999, which varies with changes in the market price of gold, was $0.6
million.
In connection with the requirements of the Standard Bank loan facility described
in note 6, the Company instituted an expanded hedge program during 1999
consisting of gold fixed forwards and silver forwards. The contracted gold
forwards contain no lease-rate swap risk; the only lease rates that have not
been fixed are for silver forwards in the years 2003 and 2004. The Company's
credit risk due to non-performance by counterparties to its forward and option
contracts is minimal, as it currently obtains all such financial instruments
from Standard Bank. Accordingly, the Company does not anticipate loss for
non-performance.
At December 31, 1999, the Company's gold and silver forward program
consisted of:
<TABLE>
GOLD FIXED FORWARDS SILVER FORWARDS
---------------------- ------------------------
Year OUNCES AVG.PRICE OUNCES AVG.PRICE
- ---- ------- --------- --------- ---------
<S> <C> <C> <C> <C>
2000 88,440 $ 305 1,830,000 $ 5.34
2001 91,800 $ 309 1,700,000 $ 5.34
2002 103,310 $ 313 1,800,000 $ 5.34
2003 107,680 $ 317 2,000,000 $ 5.34
2004 93,770 $ 321 2,000,000 $ 5.34
</TABLE>
Forward sales contracts establish a selling price for future production at the
time they are entered into, thereby limiting the risk of declining prices. The
Company's forward contracts had no carrying value at December 31, 1999, at which
date their approximate market value was negative $6.7 million. This valuation
was calculated using market projections which are subject to constant change
with fluctuating circumstances in the gold market and does not represent
expected future losses by the Company. Since the majority of the Company's
anticipated gold production is unhedged (less than 10% of the gold reserves and
resources are hedged), Meridian is in a position to benefit from the gold price
increases assumed in the calculations. Thus, if gold prices behave as projected
in the mark to market calculations, the Company should realize substantial
offsetting benefits in its unhedged gold sales.
<PAGE>
Note 14: Commitments and Contingent Liabilities
The Company leases office and warehouse space in Reno and Santiago, as well as
various types of equipment (primarily mobile mining equipment at the Beartrack
mine) under operating leases. Total rent expense under all operating leases
amounted to $2.9 million, $2.3 million and $1.9 million for 1999, 1998 and 1997,
respectively. Minimum future rentals under noncancellable leases aggregated
approximately $2.8 million as of December 31, 1999, and are estimated to be
payable $1.0 million in 2000, $0.4 million in 2001, $0.4 million in 2002, $0.4
million in 2003, and $1.1 million thereafter.
Beginning in November 1995, the National Forest Service and the National Marine
Fisheries Service had been working under court order to complete a reinitiated
consultation under Section 7 of the Endangered Species Act ("the Act") on the
potential impacts of the Beartrack Mine on salmon and their designated critical
habitat listed under the Act. This case was administratively closed during 1999,
with no impact on the Beartrack mine. Also in 1999, the National Marine
Fisheries Service removed the area from critical habitat designation.
The Company is exposed to certain other contingent liabilities resulting from
litigation, claims and commitments incident to the ordinary course of business.
Management believes that the resolution of such matters will not materially
affect the financial position, results of operations or cash flows of the
Company.
Note 15: Differences from United States Accounting Principles
The consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in Canada ("Canadian GAAP"), which
differ in certain respects from those principles and practices generally
accepted in the United States ("U.S. GAAP"). Except as noted below, none of
these differences have a material effect on the financial statements of the
Company.
Under U.S. GAAP, the Company would have been required to expense the cost of
start-up activities at the El Penon mine as incurred; these costs were
capitalized under Canadian GAAP. Broadly defined, start-up activities consist of
the operating activities of the facility prior to reaching commercial production
levels. Sales revenues and costs incurred during this time give rise to
differences under Canadian and United States GAAP. The differences that would
have resulted from the Company following U.S. GAAP in 1999 with regard to the El
Penon startup are summarized below. There were no material differences in 1998
or 1997.
<TABLE>
CANADIAN GAAP U.S. GAAP
--------------- ----------------
<S> <C> <C>
Consolidated Balance Sheet
Property, plant and equipment, net 102,888 98,563
Total assets 141,492 137,167
Retained earnings (12,599) (16,924)
Total shareholders' equity 60,406 56,081
Consolidated Statement of Earnings:
Sales revenue 71,247 78,540
Cost of sales 53,012 61,445
Depreciation, depletion
and amortization 18,869 21,253
Operating loss (14,987) (18,521)
Interest income, net 1,731 930
Net loss (13,723) (18,048)
Net loss per common share (0.19) (0.24)
Consolidated Statement of Cash Flows:
Cash from operations 21,132 19,191
Capital spending (64,921) (62,980)
</TABLE>
Note 16: Outcome of the Year 2000 Issue
As of the date of this report, the Company has reported no adverse effects
resulting from the Year 2000 issue. Internal computerized systems have continued
to function properly, and no problems affecting customers, vendors, suppliers or
other third parties have been reported.
<PAGE>
Supplementary Data
- ------------------
<TABLE>
Quarterly Results and Stock Data
(IN MILLIONS OF UNITED STATES DOLLARS, EXCEPT SHARE AND PER SHARE DATA)
1999 1998
-------------------------------------------- --------------------------------------------
4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales(1) $ 24.9 $ 17.3 $ 16.8 $ 12.2 $ 21.3 $ 14.2 $ 15.9 $ 14.3
Operating loss(1) (1.2) (4.3) (6.0) (3.5) (21.2) (8.8) (6.0) (5.9)
Gain (loss) on sale of assets(1) (0.4) -- -- (0.1) -- -- -- --
Interest income(1) 0.3 0.5 0.5 0.4 0.5 0.7 0.7 0.8
Net loss(1) (1.3) (3.8) (5.5) (3.1) (20.7) (8.1) (5.3) (5.1)
Loss per common share(1) (0.03) (0.05) (0.07) (0.04) (0.28) (0.11) (0.7) (0.7)
Common stock prices(2)
NYSE
High $8 3/4 $ 7 13/16 $6 5/16 $6 1/2 $ 5 13/16 $4 7/8 $4 1/16 $ 3 15/16
Low $5 5/8 $3 15/16 $ 4 1/4 $5 1/2 $4 5/8 $2 1/4 $ 2 $ 2 13/32
TSE (CDN$)
High $12.35 $ 11.50 $ 9.25 $ 9.70 $ 9.00 $ 7.35 $ 6.00 $ 5.60
Low $ 8.35 $ 5.85 $ 6.40 $ 8.25 $ 7.20 $ 3.15 $ 2.85 $ 3.50
</TABLE>
(1) Quarterly figures may not sum to full-year amounts due to rounding.
(2) Meridian Gold shares are traded on both The Toronto Stock Exchange ("TSE")
and the New York Stock Exchange ("NYSE").
<PAGE>
Supplementary Data
- ------------------
<TABLE>
Meridian Gold Reserves and other Mineralized Materials
December 31, 1999 December 31, 1998
----------------------------------------- -----------------------------------------
Ore Grade Contained Ounces Ore Grade Contained Ounces
----------------------- ---------------- ---------------------- ----------------
Ore Ore
tonnes Gold Silver Gold Silver tonnes Gold Silver Gold Silver
(mils) (g/t) (g/t) (K oz) (K oz) (mils) (g/t) (g/t) (K oz) (K oz)
------ ----- ------ ------ ------ ------ ----- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beartrack
Proven and probable 0.97 1.6 -- 45 -- 5.7 1.5 -- 284 --
Jerritt Canyon (30% share)
Proven and probable 1.8 8.1 -- 456 -- 1.9 7.7 -- 479 --
Other mineralized material 4.8 7.4 -- 1,142 -- 5.6 7.1 -- 1,259 --
El Penon
Proven and probable 4.8 8.0 126 1,233 19,302 4.7 6.0 96 894 14,402
Other mineralized material 4.8 11.2 190 1,713 29,141 4.7 12.7 209 1,915 31,564
Rossi
Other mineralized material 2.8 12.7 -- 1,069 -- 2.8 12.7 -- 1,069 --
Total - Meridian's Share
Proven and probable 1,734 19,302 1,657 14,402
Other mineralized material 3,924 29,141 4,243 31,564
Gold Price Assumption ($/oz) (1) $ 300 $ 300
</TABLE>
(1) Beartrack proven and probable reserves at December 31, 1998 used a gold
price assumption of $325 per ounce.
<PAGE>
Meridian Gold Directors
- -----------------------
Brian J. Kennedy,
President and Chief Executive Officer, Meridian Gold Inc.
Mr. Kennedy has been active in the gold industry since 1981. In 1996, he guided
Meridian Gold Inc. through a successful secondary offering of shares that
resulted in the independence of FMC Gold from its former parent company, FMC
Corporation. Mr. Kennedy holds a BS degree from the US Naval Academy and an MBA
from Harvard University
Malcolm W. MacNaught
Mr. MacNaught is a private investor, who culminated a highly successful 28-year
career in 1996 with Fidelity Investments where he managed the Fidelity Select
Precious Metals and Minerals fund and the Fidelity Select American Gold
Portfolio fund. He also acted as Manager of Fidelity Advisor Global Resources.
Mr. MacNaught received his bachelors degree in economics at Yale College and his
MBA from Northeastern University in Boston, Massachusetts.
Christopher R. Lattanzi
Mr. Lattanzi, elected to the Board of Directors in February 1999, is a mining
engineer and President of Micon International Limited, mineral industry
consultants. He holds a B.Eng. (Mining) from the University of Melbourne, and
has nearly 40 years of experience in the planning and supervision of mining
operations, and as a consultant in the mining industry.
John A. Eckersley
Mr. Eckersley is a private investor and most recently held the position of
Vice-President, Secretary and General Counsel of Placer Dome Inc., from which he
retired in 1995 after 22 years of service. He holds a B.Sc. (Geology) and LLB
from the University of British Columbia.
Robert G. Matthews
Mr. Matthews is currently a private investor, who retired in 1990 as Vice
President and Director, Corporate Finance with RBC Dominion Securities where he
specialized in mine financing, mergers and acquisitions. He received a B.Sc.
(Geology) from the University of Toronto.
Dr. David S. Robertson,
Chairman of the Board of Directors, Meridian Gold Inc.
Dr. Robertson is currently a consultant in the mining industry. His
distinguished career in the mining industry has spanned over 30 years. Dr.
Robertson is noted for his extensive knowledge and research on reserve
classification, mineral evaluation and economic geology, and has acted as a
consultant on several mining projects. He has served as a director for several
mining companies, and as president of the Canadian Institute of Mining,
Metallurgy and Petroleum.
Meridian Gold Officers
- ----------------------
Edward H. Colt
Vice-President, Finance and Chief Financial Officer and Corporate Secretary
Peter C. Dougherty
Chief Accounting Officer and Controller
Richard C. Lorson
Vice-President, Exploration
Brian J. Kennedy
President and Chief Executive Officer
Christopher D.S. Bates
Vice-President, Business Development
Gonzalo F. Tufino
Vice-President, Development
Wayne M. Hubert
Investor Relations Officer
Edgar A. Smith
Vice-President and General Manager, El Penon
<PAGE>
Shareholder Information
- -----------------------
CORPORATE OFFICES
9670 Gateway Drive, Suite 200
Reno, NV 89511-8953
Telephone: (775) 850-3777
or (800) 557-4699
Fax: (775) 850-3733
ANNUAL MEETING
The Company's annual shareholder meeting will be held at 4 p.m. on Tuesday, May
2, 2000 at the Toronto Stock Exchange Conference Centre located on street level
of The Exchange Tower, 130 King Street West (NE cor-ner of King and York
Streets).
STOCK EXCHANGE LISTINGS
The Company's common shares are listed and traded on The Toronto Stock Exchange
under the symbol "MNG" and on the New York Stock Exchange under the symbol
"MDG".
AUDITORS
KPMG LLP
Denver, Colorado
INVESTOR RELATIONS
For public and media inquiries, or copies of the Company's annual information
form, annual report or quarterly reports, please contact Wayne M. Hubert at
(775) 850-3730 or (800) 572-4519, or visit the Company's web site at
www.meridiangold.com. The Company's filings with the Ontario Securities
Commission can be accessed on SEDAR at www.sedar.com. The Company's filings with
the U.S. Securities and Exchange Commission can be accessed at the SEC's web
site: www.sec.gov.
TRANSFER AGENTS AND REGISTRARS
The Trust Company of Bank of Montreal in Montreal, Toronto, Calgary and
Vancouver, Canada
The Trust Company of Bank of Montreal
129 St. Jacques Street, B Level North
Montreal, Quebec H2Y 1L6
Attention: Shareholder Services
Telephone: (800) 332-0095
or (514) 877-2584
Harris Trust Company of New York
Wall Street Plaza
88 Pine Street
New York, NY 10005
Telephone: (800) 332-0095
