SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 6-K
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Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
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For the Month of June, 2000 Commission File Number: 001-12003
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MERIDIAN GOLD INC.
(Translation of Registrant's Name into English)
9670 Gateway Drive, 2nd Floor
Reno, Nevada 89511
(Address of Principal Executive Offices)
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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 [ ] Form 40-F [x]
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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 [ ]
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<PAGE>
Meridian Gold Inc.
9670 Gateway Drive, Suite 200
Reno, Nevada 89511
Phone: (775) 850-3777
Fax: (775) 850-3733
MERIDIAN GOLD REPORTS RECORD PROFITS IN THE SECOND QUARTER
(All dollar amounts in U.S. currency)
Reno, Nevada, July 19, 2000
2nd QUARTER HIGHLIGHTS
o Record net income of $10 million, or $0.14 per share
o Record gold production of 122,474 ounces (up 107%) at a cash cost of $94 per
ounce (down 46%)
o El Penon gold production of 75,400 ounces at a cash cost of $45 per ounce
o Operating cash flow of $23 million (up 400%)
2nd Quarter Results
Meridian Gold Inc. is pleased to report record earnings resulting in a net
income of $10.0 million for the second quarter of 2000, or $0.14 per share,
versus a loss of $5.5 million, or $0.07 per share, for the second quarter of
last year. Margins were strong with net income of $10 million being derived off
a revenue base of $32.9 million. Revenues increased 98% with the continued
ramping-up of the El Penon underground mines.
For the second quarter, Meridian Gold produced 122,474 ounces of gold with a
cash cost of production of $94 per ounce. Total production costs were $155 per
ounce, one of the lowest in the sector, based upon reported first quarter
results (all production costs are per ounce of gold).
The El Penon ramp-up continues smoothly. For the quarter, the mine produced
75,400 ounces of gold at a cash cost of $45 per ounce and total production costs
of $83 per ounce. For the first six months of El Penon's production the mine
produced 136,041 ounces of gold at a cash cost of $57 per ounce and total
production cost of $95 per ounce. Meridian believes these costs make El Penon
the world's lowest total cost gold mine.
Cash flows were better than plan as cash balances for the quarter increased by
$15.4 million to $42.9 million. The increase in cash flows occurred in spite of
the first principal payment on the Company's long-term credit facility. This
payment reduced project debt by $4 million to $26 million.
Revenue increased 98% to $32.9 million versus the prior year reflecting a 107%
increase in gold production and an increase in gold prices. Gold production
increased as El Penon production ramped-up. Operating margins increased
significantly as compared to the prior year mainly as a result of lower cash
production costs ($94 per ounce versus $174 per ounce) and lower non-cash
production costs ($61 per ounce versus $90 per ounce). Exploration costs
continue to be expensed and were consistent with the level of expenditures
during the prior year.
The Company has continued to deliver into its hedge position during the quarter.
At June 30, the remaining hedge position was 329,093 ounces of gold being sold
forward at an average price of $312 per ounce through 2004.
Meridian Gold's Chief Executive Officer, Brian Kennedy, summed up the results,
"This is another breakthrough quarter as Meridian continues to optimize El Penon
and increase its standing as one of the world's lowest cost gold producers. I am
proud of Meridian's Chilean team for their focused exploration, engineering,
development, and operating efforts, which has developed a world class mine at El
Penon that continues to meet or exceed our best expectations."
2nd Quarter Operating and Exploration Results
El Penon
During its second quarter of commercial production, the mine produced 75,400
ounces of gold and 1,018,499 ounces of silver at a cash cost of $45 per ounce of
gold. Total production costs including depreciation, depletion, amortization,
and reclamation were $83 per ounce.
<PAGE>
The mill processed ore at design capacity of 2,000 tonnes per day for the
quarter at an average grade of 13.8 g/tonne gold and 195 g/tonne silver. Gold
recovery was 94% and silver recovery 89%.
The underground mine continues to ramp up ahead of schedule with an average
mining rate of 1,775 tonnes per day realized through the quarter, up more than
25% from the prior quarter. Underground development is on schedule, with an
additional 1.2 kilometers of development drifting completed during the quarter,
which will allow mining at a rate of 2,000 tonnes per day in the second half of
the year. This production level has already been achieved as the underground
mine was producing at 2,000 tonnes per day during June, two months ahead of
schedule.
For the second quarter, mine production from Quebrada Orito was 123,540 tonnes
at 10.2 g/tonne gold and 150 g/tonne silver. Production from Quebrada Colorada
was 36,175 tonnes at 41.5 g/tonne gold and 637 g/tonne silver. At the end of the
quarter, stockpiled ore grade was up 24% from the prior quarter.
Rich Lorson, Vice-President of Exploration, commented on the higher grades:"To
date, the ore zones at Quebrada Colorada have been narrower than expected, but
this has been offset by higher grades. Overall, if this trend continues, the
entire reserve and resource base at El Penon will be more profitable than
expected."
Looking ahead, the focus at El Penon is as follows:
1. to continue reducing operating costs by improving efficiencies
2. to continue an underground reserve expansion program to extend areas of
mineralization at Quebrada Colorada and Quebrada Orito that were only partially
defined by surface drilling. This is especially important at Orito Sur where the
deposit is completely open to extension along strike to the south and at many
areas open to depth. Before year-end, underground drifting towards the south
from Orito Sur will provide exploration-drilling access to test this potential.
During the quarter, seven underground core holes were drilled beneath the
central ore-shoot in Quebrada Colorada to test the down-dip potential of the
high-grade zone:
<PAGE>
<TABLE>
--------------------------------- ------------------------------- ------------------------------- -------------------------------
Hole Intercept (m) * Gold (g/tonne) Silver (g/tonne)
--------------------------------- ------------------------------- ------------------------------- -------------------------------
<S> <C> <C> <C>
------------------------------ ------------------------------- ------------------------------- -------------------------------
PX13 0.5 15.5 42
--------------------------------- ------------------------------- ------------------------------- -------------------------------
PX14 0.4 25.3 263
--------------------------------- ------------------------------- ------------------------------- -------------------------------
PX15 Below mining cut-off
--------------------------------- ------------------------------- ------------------------------- -------------------------------
PX16 1.2 40.9 66
--------------------------------- ------------------------------- ------------------------------- -------------------------------
PX17 1.1 34.6 232
--------------------------------- ------------------------------- ------------------------------- -------------------------------
PX18 Below mining cut-off
--------------------------------- ------------------------------- ------------------------------- -------------------------------
PX20 1.6 54.2 317
--------------------------------- ------------------------------- ------------------------------- -------------------------------
</TABLE>
* underground drill intercepts slightly greater than true width. Hole PX19 was
an infill hole.
These holes tested extensions from 25 to 50 meters below the central ore-shoot
over a strike length of more than 250 meters. More underground drilling is
planned.
At Cerro Martillo, 17 reverse circulation holes have been completed to further
delineate the current resource. Fourteen of the holes returned ore-grade values,
generally ranging from 5-10 g/tonne gold. The best of the fourteen holes are
shown below:
<TABLE>
--------------------------------- ------------------------------ ------------------------------- ------------------------------
Hole Intercept (m) * Gold (g/tonne) Silver (g/tonne)
--------------------------------- ------------------------------ ------------------------------- ------------------------------
<S> <C> <C> <C>
--------------------------------- ------------------------------ ------------------------------- ------------------------------
PS213 8 70.2 799
--------------------------------- ------------------------------ ------------------------------- ------------------------------
PS228 4 7.6 31
6 21.4 301
--------------------------------- ------------------------------ ------------------------------- ------------------------------
PS233 14 29.8 2,158
--------------------------------- ------------------------------ ------------------------------- ------------------------------
</TABLE>
* 1 meter samples, true width approximately 60% of intercept
Jerritt Canyon
During the second quarter, Meridian's share of Jerritt Canyon production was
24,431 ounces at a total cash cost of $206 per ounce, similar to the prior year.
Ore production was sourced from the two underground mines of SSX and Murray, and
from ore stockpiles. Mill throughput of 3,600 tonnes per day was slightly lower
than the prior year reflecting the timing of the spring run-off. Headgrade to
the mill of 8 g/tonne was slightly lower than the prior year.
Exploration work has increased at the end of the quarter with six drill rigs
currently on the property. Exploration in the Mahala Basin area, which had
previously intersected high-grade mineralization, was resumed earlier than was
originally planned following the spring run-off.
Beartrack
For the second quarter, Beartrack produced 22,643 ounces of gold at a cash cost
of $136 per ounce. Cash costs per ounce were 9% lower than the prior year as
mining, and crushing operations were completed in the first quarter of this
year. Leaching will continue to produce the economically recoverable gold over
the next several years on a declining basis.
2000 Year-to-Date Results
For the six months ended June 30, sales revenue increased to $65.7 million, an
increase of 130% over the prior year reflecting a 119% increase in production.
Net income for the period was $18.3 million compared to a loss of $8.5 million
reported in the prior year. The improvement is mainly attributable to the higher
production (237,297 ounces gold versus 108,258 ounces); lower cash production
costs ($102 per ounce versus $184 per ounce); and lower non-cash cost ($62 per
ounce versus $102 per ounce).
Based on the year-to-date results with gold production of 237,000 ounces of gold
at a cash cost of $102 per ounce, Meridian is confident in increasing its
calendar year 2000 production estimates from 410,000 ounces at a cash cost of
$115 per ounce, to 440,000 ounces of gold at a cash cost of about $105 per
ounce. For the year 2000, the Company expects El Penon to produce 285,000 ounces
of gold and 3.8 million ounces of silver, an increase of 14% from the prior
estimate. The cash costs are anticipated to decrease to approximately $60 per
ounce of gold, an improvement of nearly 40% from the pre-production estimates.
<PAGE>
2nd Quarter Conference Call
Meridian is hosting a live webcast of its conference call on www.vcall.com. If
you would like to listen to our conference call on the web, please go to
www.vcall.com on Thursday July 20, at 11:00 AM EDT, and search under the ticker
"MDG" to join our conference call live. There will be a slide show for the live
webcast on both Vcall's website and on the www.meridiangold.com website. You
will need to have RealPlayer installed on your computer in order to hear the
live broadcast, which can be downloaded free from Vcall's website. You will also
be able to listen to the rebroadcast on either website.
Meridian Gold Inc. is a growth gold business with its common shares traded on
The Toronto Stock Exchange (MNG) and the New York Stock Exchange (MDG).
Safe Harbor Statement under the United States Private Securities Litigation
Reform Act of 1995: Statements in this release that are forward-looking
statements are subject to various risks and uncertainties concerning the
specific factors identified above and in the corporation's periodic filings with
the Ontario Securities Commission and the U.S. Securities Exchange Commission.
Such information contained herein represents management's best judgment as of
the date hereof based on information currently available. The corporation does
not intend to update this information and disclaims any legal liability to the
contrary.
A "Qualified Person", as defined by the Ontario Securities Commission National
Instrument 43-101, within Meridian Gold, has reviewed the exploration results
contained within this release.
For further information, please visit our website at www.meridiangold.com, or
contact:
Wayne M. Hubert Tel: (800) 572-4519
Investor Relations Fax: (775) 850-3733
Meridian Gold Inc. E-mail: [email protected]
<PAGE>
<TABLE>
Meridian Gold Inc.
Consolidated Condensed Statement of Operations
(Unaudited and in US$ millions, except per share data)
Three Months Six Months
Ended June 30 Ended June 30
------------------------------------------
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Sales $32.9 $ 16.6 $65.7 $28.6
Costs and expenses
Cost of Sales 11.2 11.5 23.5 19.5
Depreciation, depletion & amortization 6.0 4.6 12.0 8.3
Reclamation 1.2 1.7 2.6 2.6
Exploration costs 2.9 3.2 5.4 5.1
Selling, general and administrative 1.4 1.5 2.9 2.6
Other expenses/(income) - 0.1 0.4 -
--- --- --- ---
Total costs and expenses 22.7 22.6 46.8 38.1
---- ---- ---- ----
Operating income (loss) 10.2 (6.0) 18.9 (9.5)
Interest income (expense) (0.2) 0.5 (0.6) 1.0
Net income (loss) $ 10.0 $ (5.5) $ 18.3 $ (8.5)
====== ====== ====== ======
Income/(loss) per common share basic $ 0.14 $ (0.07) $ 0.25 $ (0.12)
===== ======= ====== =======
Number of common shares used in earnings per 74.0 73.7 74.0 73.7
==== ==== ==== ====
share computations (millions)
</TABLE>
<PAGE>
<TABLE>
Meridian Gold Inc.
Operating Data (Unaudited)
Three Months Six Months
Ended June 30 Ended June 30
---------------------------------------------
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Jerritt Canyon Joint Venture
Gold production (Meridian Gold's 30% share) 24,431 26,152 49,794 51,771
Tonnes ore mined (100%, thousands) 189 252 354 562
Mill tonnes processed (100%, thousands) 328 351 651 703
Average mill ore grade (grams / tonne) 8.0 8.78 7.9 8.57
Mill recoveries 89.9% 90.8% 90.5% 91.0%
Cash cost of production / ounce $ 206 $ 205 $ 199 $ 200
Total production cost/ounce $ 253 $ 254 $ 242 $ 258
El Penon Mine
Gold production 75,400 - 136,041 -
Silver production 1,018,499 - 1,759,532 -
Tonnes ore mined (thousands) 160 - 282 -
Mill tonnes processed (thousands) 182 - 364 -
Avg. mill gold ore grade (grams / tonne) 13.8 - 12.4 -
Avg. mill silver ore grade (grams / tonne) 195.4 - 169.2 -
Mill gold recovery 93.6 - 93.5 -
Mill silver recovery 89.3 - 88.9 -
Cash cost of production / ounce $45 $- $57 $-
Total production cost / ounce $83 $- $95 $-
Beartrack Mine
Gold production-heap leach (ounce) 22,643 32,959 51,461 56,487
Tonnes mined (thousands)
Ore - 1,213 839 2,290
Waste - 865 366 1,773
--- --- -----
Total - 2,078 1,205 4,063
Average heap leach grade (grams / tonne) - 0.96 0.90 0.93
Cash cost of production / ounce $ 136 $ 150 $ 129 $ 171
Total production cost/ounce $ 288 $ 272 $ 268 $ 311
Company Totals
Ounces of gold produced 122,474 59,111 237,297 108,258
Ounces of gold sold 117,759 61,216 235,790 103,238
Average realized price / ounce $ 286 $ 272 $ 284 $ 278
Cash cost of production / ounce $ 94 $ 174 $ 102 $ 184
Total production cost / ounce $ 155 $ 264 $ 164 $ 286
</TABLE>
Note: Cash and total cost per gold ounce are net of silver by-product credits
<PAGE>
<TABLE>
Meridian Gold Inc.
Consolidated Condensed Balance Sheets
(Unaudited and in US$ millions)
June 30 December 31
2000 1999
<S> <C> <C>
Assets
Current Assets
Cash and cash equivalents $42.9 $20.8
Trade & other receivables 5.2 5.1
Inventories 7.3 8.7
Other current assets 1.4 1.0
--- ---
Total current assets 56.8 35.6
---- ----
Property, plant and equipment, net 100.2 102.9
Other assets 2.4 3.0
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Total Assets $159.4 $141.5
====== ======
Liabilities and Shareholders' Equity
Current Liabilities
Current portion long term debt $11.8 $12.0
Accounts payable, trade and other 4.9 5.4
Accrued and other liabilities 15.2 17.2
---- ----
Total current liabilities 31.9 34.6
---- ----
Long-term debt, net of current portion 14.2 18.0
Other-long-term liabilities 34.3 28.5
---- ----
Shareholders' equity 79.0 60.4
==== ====
Total liabilities and shareholders' equity $159.4 $141.5
====== ======
</TABLE>
<PAGE>
<TABLE>
Meridian Gold Inc.
Consolidated Condensed Statement of Cash Flows
(Unaudited and in US$ millions)
Three Months Six Months
Ended June 30 Ended June 30
--------------------------------------------
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Net income (loss) $10.0 $(5.5) $18.3 $(8.5)
Provision for depreciation, depletion, and
amortization 6.0 4.5 12.0 8.3
Changes in assets and liabilities, net 7.0 5.6 4.7 14.8
--- --- --- ----
Net cash provided by (used in) operating activities 23.0 4.6 35.0 14.6
---- --- ---- ----
Cash flows from investing activities
Capital spending (3.7) (19.3) (9.2) (40.1)
---- ----- ---- -----
Cash flows from financing activities
Proceeds from long-term borrowings - 17.5 - 30.0
Repayment of current portion of long-term debt (4.0) (0.5) (4.0) (0.5)
Proceeds from sale of common stock 0.1 - 0.3 0.1
Redemption of preferred shares - (0.1) - (0.1)
---- ---- ---- ----
Net cash provided by (used in) financing (3.9) 16.9 (3.7) 29.5
---- ---- ---- ----
Increase (decrease) in cash and cash equivalents 15.4 2.2 22.1 4.0
Cash and cash equivalents, beginning of period 27.5 35.9 20.8 34.1
---- ---- ---- ----
Cash and cash equivalents, end of period $42.9 $38.1 $42.9 $38.1
</TABLE>
