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 September, 1999 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. [LOGO OF MERIDIAN GOLD INC.
9670 Gateway Drive, 2nd Floor APPEARS HERE]
Reno, Nevada 89511
Phone: 775-850-3777
Fax: 775-850-3733
MERIDIAN GOLD REPORTS FIRST QUARTER EARNINGS OF $8.3 MILLION
(All dollar amounts in U.S. currency)
Reno, Nevada, April 25, 2000 - Meridian Gold Inc. is pleased to report
significant growth in profitability during first quarter resulting in net
earnings of $8.3 million, or $0.11 per share. During the quarter, Meridian
production increased 134% versus the prior year, to a record of 114,823 ounces
of gold at a cash cost of $111 per ounce. With an average cash cost of $111 per
ounce and total production costs of $175 per ounce, Meridian becomes one of the
lowest cost producers within the industry.
The increases in net earnings primarily reflect the successful startup of the El
Penon mine in Chile. On January 1, El Penon went into commercial production. By
the end of the quarter, the mine had produced approximately 61,000 ounces of
gold at a cash cost of $71 per ounce. First quarter results at El Penon support
the Company's 2000 plan for the mine to achieve estimated production of 250,000
ounces of gold at a cash cost of less than $75 per ounce.
Meridian Gold's Chief Executive Officer, Brian Kennedy, summed up the results,
"This has been a breakthrough quarter for Meridian. Recent history has
publicized significant risks in starting up mines. These strong results have
proven the removal of significant startup risks for our shareholders. In
addition, our current cash balance approximates the debt incurred to build the
project. I still see significant opportunities for further cash flow and
earnings growth within our own portfolio at El Penon, Rossi, and Jerritt Canyon
and also within the gold industry. We will continue to focus our efforts for
continued and further business growth."
First Quarter Results
First quarter revenues increased 173% to $32.8 million, mainly as a result of
higher production and of slightly higher realized gold prices of $290 per ounce.
Cash production costs declined 45% from the prior year to $111 per ounce.
Exploration costs increased slightly versus the prior year to $2.4 million as a
result of a drilling program on the Venturina property in Mexico. Even though
the results were initially encouraging, Meridian, considering the current gold
price environment, elected not to further participate in this explorattion
joint-venture with International Northair Mines.
Cash flows from operating activities improved significantly to $12.1 million
bringing the cash balances at the end of the quarter to $27.5 million.
El Penon
During its first quarter of commercial production, the mine produced 61,000
ounces of gold and 741,000 ounces of silver at a cash cost of $71 per ounce of
gold. Total production costs including depreciation, depletion, amortization,
and reclamation were $112 per ounce.
The mill processed ore at design capacity of 2,000 tonnes per day for the
quarter. Of the 182,000 tonnes of ore processed at an average grade of 11.1
<PAGE>
g/tonne gold and 143 g/tonne silver, 65% was sourced from Quebrada Orito
underground, 24% from open pit stockpiles, and the remaining 11% from Quebrada
Colorada.
Gold recovery was 93% and silver recovery 88%. Even though recoveries are near
design specifications, Meridian has identified and is currently working on
several opportunities to improve overall recoveries.
The underground mine continues to ramp up slightly ahead of schedule with an
average mining rate of 1,400 tonnes per day realized through the quarter. With
the 1.3 kilometers of underground development completed during the quarter, the
underground mine is on schedule to produce at 2,000 tonnes per day during the
second half of the year. At the end of the quarter, stockpiled ore was 185,000
tonnes with average grades of 10 g/tonne gold and 137 g/tonne silver.
Looking ahead, the focus at El Penon is as follows:
1. to continue reducing operating costs
2. to initiate 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.
Due to the exceptional performance of the El Penon operation and the high
resource to reserve conversion reported earlier this year, Meridian was able to
reduce its hedge position by 129,000 ounces to 356,000 ounces of gold with an
average price of $312 per ounce. Meridian's current gold hedging position as of
April 25, 2000 is as follows:
<TABLE>
Year Gold Price Gold Hedged
---- ---------- -----------
<S> <C> <C>
2000 $306 63,832
2001 $308 73,500
2002 $312 67,651
2003 $314 81,103
2004 $318 69,846
Total/Avg $312 355,932
</TABLE>
All gold forwards have a fixed lease rate. Ed Colt, Meridian's Chief Financial
Officer summarized as follows, "Meridian's hedging position was put in place as
a requirement of the loan facility. We took the opportunity to reduce our
position, which will allow our shareholders to participate more fully in any
gold price rally. Currently, we have about 6% of our reserves and resources
hedged."
Jerritt Canyon
During the first quarter, Meridian's share of Jerritt Canyon production was over
25,000 ounces to Meridian's account at a total cash cost of $192 per ounce,
similar to the prior year. Ore production was sourced from the two underground
mines of SSX and Murray, and from stockpiles as open pit operations ceased in
the fourth quarter of last year.
Exploration work continued through the winter with ore grade mineralization
being intersected along known structural trends within the Mahala Basin
including 15 meters of 33 g/tonne gold, 12 meters of 31 g/tonne gold, 5 meters
<PAGE>
of 20 g/tonne gold, and 17 meters of 13 g/tonne gold. Exploration in the Mahala
Basin area will be resumed in July, after a short delay to reduce disturbance
during spring run-off.
Beartrack
For the first quarter, Beartrack produced approximately 29,000 ounces of gold at
a cash cost of $123 per ounce. Cash costs per ounce were 40% lower than the
prior year mainly as a result of improved productivity. At the end of the
quarter, Meridian completed mining and crushing operations as planned, and will
continue leaching operations to recover the remaining gold over the next several
years.
Rossi
During the fourth quarter of 1999, Barrick Gold Exploration Inc. completed the
1,039 meter production size decline to access the Storm deposit. During the
first quarter, drilling was initiated on the 49'er Zone of the Storm deposit to
confirm continuity and extend the mineralization. Of the 23 holes drilled, only
16 of these holes fully tested the zone due to drilling difficulties. Of these,
11 returned significant intercepts greater than 7 g/tonne gold. Some of the
better intercepts with approximate true widths include: 15 meters of 32 g/tonne
gold, 12 meters of 30 g/tonne, 13 meters of 16 g/tonne, 10 meters of 13 g/tonne,
and 2 meters of 19 g/tonne. Most of the unmineralized holes that fully tested
the 49'er Zone were located in the upper portion of the north end of the modeled
zone.
Meridian is confident that the combination of new underground and surface
drilling has not materially changed its original resource estimate of 1.1
million ounces of gold. Barrick is now focusing the remaining exploration budget
on identifying and testing new surface targets with drilling.
1st Quarter Conference Call
Meridian will be hosting a conference call discussing the first quarter results
on Wednesday, April 26, at 11 am EST. To join the conference call, simply dial
(877) 331-7860 in the United States or Canada or (416) 641-6449 internationally.
All participants will be required to register with the operator. This conference
call is listen only; as always, questions are welcome and may be registered by
pressing 1 then 4 on your touch-tone phone.
We will also offer a live webcast of our conference call through Street Events.
If you would like to listen to our conference call on the web, please visit our
website at www.meridiangold.com/investor/conference.html. You will need to have
RealPlayer installed on your computer in order to hear the live broadcast. For
your convenience, there is a link to RealPlayer on our conference call webpage
so that you can download this free software.
For those whose schedules do not permit participation during the call, or for
those who would like to hear the discussion again, a replay will be available
until Wednesday, May 3, at midnight EDT. To listen to this rebroadcast, please
dial (800) 558-5253 and enter the code 14962684 to retrieve. If accessing
internationally, please dial (416) 626-4100 and enter the code 14962609. You
will also be able to listen to the rebroadcast on our website utilizing the
abovementioned site address.
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.
<PAGE>
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>
Meridian Gold Inc.
Consolidated Condensed Statement of Operations
(Unaudited and in US$ millions, except per share data)
<TABLE>
Three Months
Ended March 31
2000 1999
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<S> <C> <C>
Sales $ 32.8 $ 12.0
Costs and expenses
Cost of sales 12.4 7.9
Depreciation, depletion & amortization 6.0 3.8
Reclamation 1.4 0.9
Exploration costs 2.4 1.8
Selling, general and administrative
expenses 1.4 1.1
Other expenses 0.5 --
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Total costs and expenses 24.1 15.7
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Operating income (loss) 8.7 (3.5)
Interest income (expense) (0.4) 0.4
Loss on sale of assets -- (0.1)
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Income (loss) before income taxes 8.3 (3.2)
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Provision for income taxes -- 0.1
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Net income (loss) $ 8.3 $ (3.1)
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Income/(Loss) per common share (basic) $ 0.11 $ (0.04)
========== ===========
Income/(Loss) per common share
(fully diluted) $ 0.11 $ (0.04)
========== ===========
Number of common shares used in earnings outstanding 74.0 73.6
========== ===========
per share computations
</TABLE>
<PAGE>
<TABLE>
Meridian Gold Inc.
Operating Data (Unaudited)
Three Months
Ended March 31
2000 1999
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<S> <C> <C>
Jerritt Canyon Joint Venture
Gold production (Meridian Gold 30% share ounces):
Milling 25,364 25,619
Tonnes mined (thousands)
Ore 165 310
Waste 72 2,948
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Total 237 3,258
Mill tonnes processed (thousands) 323 351
Average mill ore grade (grams / tonne) 8.6 8.4
Mill recoveries 91.2% 91.3%
Cash cost of production / ounce $192 $194
Total production cost / ounce $230 $251
El Penon Mine
Gold production 60,641 ---
Silver production 741,025 ---
Tonnes mined (thousands)
Ore 123 ---
Waste 6 ---
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Total 129 ---
Mill tonnes processed (thousands) 182 ---
Gold head grade (grams / tonne) 11.1 ---
Silver head grade (grams / tonne) 143
Gold recovery 93.3% ---
Silver recovery 88.3% ---
Cash cost of production / ounce $ 71 $---
Total production cost / ounce $112 $---
Beartrack Mine
Gold production - heap leach (ounces) 28,818 23,528
Tonnes mined (thousands)
Ore 839 1,077
Waste 366 909
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Total 1,205 1,986
Average heap leach grade (grams / tonne) 0.9 0.9
Cash cost of production / ounce $123 $206
Total production cost / ounce $258 $338
Totals
Ounces of gold produced 114,823 49,147
Ounces of gold sold 114,187 42,022
Average realized price / ounce $290 $287
Cash cost of production / ounce $111 $200
Total production cost / ounce $175 $293
</TABLE>
Note: The calculation of cash cost and total production cost conforms to the
standards recommended by the Gold Institute.
<PAGE>
<TABLE>
Meridian Gold Inc.
Consolidated Condensed Balance Sheets
(In US$ millions)
March 31 December 31
2000 1999
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<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 27.5 $ 20.8
Trade and other receivables 6.7 5.1
Inventories 8.4 8.7
Other current assets 4.4 1.0
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Total current assets 47.0 35.6
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Property, plant and equipment, net 102.4 102.9
Other assets 3.1 3.0
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Total Assets $ 152.5 $ 141.5
=============== ===============
Liabilities and Shareholders' Equity
Current Liabilities:
Current portion long-term debt $ 12.0 $ 12.0
Accounts payable, trade and other 6.3 5.4
Accrued and other liabilities 17.4 17.2
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Total current liabilities 35.7 34.6
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Long-term debt, net of current portion 18.0 18.0
Other long-term liabilities 29.9 28.5
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Shareholders' equity 68.9 60.4
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Total liabilities and shareholders' equity $ 152.5 $ 141.5
=============== ===============
</TABLE>
<PAGE>
<TABLE>
Meridian Gold Inc.
Statement of Cash Flows
(Unaudited and in US$ millions)
Three Months
Ended March 31
2000 1999
------ ------
<S> <C> <C>
Net income (loss) $ 8.3 $ (3.1)
Provision for depreciation, depletion and amortization 6.0 3.8
Gain on sale of assets -- 0.1
Provision for reclamation, net of costs incurred 0.5 0.5
Accrued pension cost 0.1 --
Changes in assets and liabilities, net (2.8) 8.9
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Net cash provided by (used in) operating activities 12.1 10.2
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Cash flows from investing activities:
Capital spending (5.5) (21.0)
Net cash used in investing activities (5.5) (21.0)
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Cash flows from financing activities:
Proceeds from long-term borrowings -- 12.5
Proceeds from sale of common stock 0.1 0.1
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Net cash provided by (used in) financing activities -- 12.6
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Increase (decrease) in cash and cash equivalents 6.7 1.8
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Cash and cash equivalents, beginning of period 20.8 34.1
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Cash and cash equivalents, end of period $27.5 $35.9
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</TABLE>
