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, 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 THIRD QUARTER
(All dollar amounts in U.S. currency)
Reno, Nevada, October 18, 2000
o Record net income of $10.4 million, or $0.14 per share
o Gold production of 112,000 ounces (up 77%) at a cash cost of $85 per ounce
(improved 44%)
o El Penon gold production of 77,000 ounces at a cash cost of $37 per ounce
o Operating cash flow of $17.4 million
3rd Quarter Results
-------------------
Meridian Gold Inc. is pleased to report record earnings resulting in net income
of $10.4 million for the third quarter of 2000, or $0.14 per share, versus a
loss of $3.8 million, or $0.05 per share, for the third quarter of last year.
Revenue increased 90% to $32.9 million versus the prior year reflecting a 77%
increase in gold production due to El Penon. Operating margins increased
significantly as compared to the prior year mainly as a result of lower cash
production costs ($85 per gold ounce versus $153 per gold ounce). Exploration
costs were consistent with the level of expenditures during the prior year.
For the third quarter, Meridian Gold produced 112,000 ounces of gold, 77% higher
than third quarter last year, with a cash cost of production of $85 per gold
ounce. Total production costs were $155 per gold ounce, remaining one of the
lowest in the sector.
El Penon's operating performance continues to improve. For the quarter, the mine
produced 77,000 ounces of gold at a cash cost of $37 per gold ounce and total
production costs of $94 per gold ounce. For the first nine months of El Penon's
production, the mine produced 213,000 ounces of gold at a cash cost of $50 per
gold ounce and total production cost of $95 per gold ounce. Meridian believes El
Penon to be one of the world's lowest total production cost gold mines.
Strong operating cash flows increased cash balances to $51.6 million. The
increase in cash balances occurred even with the second principal payment on the
Company's long-term credit facility. This payment reduced project debt to $22
million.
The Company has continued to deliver into its hedge position during the quarter.
As of September 30, the remaining hedge position was approximately 312,000
ounces of gold sold forward at an average price of $312 per gold ounce through
2004. The banks required this hedge as a condition of the long-term credit
facility. All margin requirements have been removed from this facility.
El Penon
During the third quarter of commercial production, the mine produced 77,000
ounces of gold and 1 million ounces of silver at a cash cost of $37 per gold
ounce. Total production costs including depreciation, depletion, amortization,
<PAGE>
and reclamation were $94 per gold ounce. The mill processed ore at design
capacity of 2,000 tonnes per day for the quarter at an average grade of 13.5
g/tonne gold and 193 g/tonne silver. Gold recovery was 94% and silver recovery
90%. Mine production from Quebrada Orito was 137,000 tonnes, or 1,489
tonnes/day, at 10.0 g/tonne gold and 131 g/tonne silver. Production from
Quebrada Colorada was 48,000 tonnes, or 521 tonnes/day, at 27.4 g/tonne gold and
438 g/tonne silver.
The mine has satisfied all of the requirements for the 90-day Economic
Performance Test required by the El Penon loan agreement. Accordingly, the
interest rate on the loan is reduced by 0.25% to LIBOR plus two percent and
Meridian Gold Incorporated is relieved of its guarantee of this loan, which is
now considered project debt.
The mine continues to see a positive reconciliation of actual mine production
compared to estimated reserves. During the 90-day Economic Performance Test,
Quebrada Orito saw 8% higher tons, 23% higher gold grade and 11% lower silver
grade, as compared to the reserve estimate, which resulted in a 24% increase in
gold equivalent ounces.
Quebrada Colorada, during the same time period, saw 11% higher tons, 9% higher
gold grade and 20% higher silver grade, resulting in a 24% increase in gold
equivalent ounces versus the original reserve estimate. This greater number of
tons compared to reserve estimates is not expected to continue, but increased
grades are.
Jerritt Canyon
During the third quarter, Meridian's share of Jerritt Canyon production was
23,000 ounces of gold at a total cash cost of $231 per gold ounce. Ore
production was sourced from the two underground mines of SSX and Murray, and
low-grade ore stockpiles. Mill throughput of 4,000 tonnes per day increased 14%
over the second quarter. Cash costs increased as a result of lower-than-expected
grades from mining around the fringes of the Murray mine. Anglogold, our
joint-venture partner and operator of the mine, plans to improve grade control
procedures together with replacing some of the low-grade stockpile ore (2
g/tonne) with higher-grade ore from Placer Dome's Cortez mine.
During 2000, Jerritt Canyon joint will process 150,000 tons (100% basis) of
Cortez ore and receive as payment 3 g/tonne gold. This processing began on
September 26th. For 2001, Jerritt Canyon will process 350,000 tons (100% basis)
of Cortez ore with the option to process up to an additional 1 million tons of
ore.
Beartrack
For the third quarter, Beartrack produced 13,000 ounces of gold at a cash cost
of $121 per gold ounce through residual leaching. Crushing operations were
completed in the first quarter of this year and leaching will continue to
produce the economically recoverable gold over the next several years on a
declining basis.
Year-to-Date Results
--------------------
For the nine months ended September 30, sales revenue increased to $98.6
million, an increase of 113% over the prior year reflecting a 104% increase in
production. Net income for the period was $28.7 million compared to a loss of
$12.4 million reported in the prior year. The improvement is mainly attributable
to the higher production (350,000 ounces of gold versus 172,000 ounces) and
lower cash production costs ($97 per gold ounce versus $175 per gold ounce).
<PAGE>
Based on the year-to-date results with gold production of 350,000 ounces of gold
at a cash cost of $97 per gold ounce, Meridian is confident in meeting its
calendar year 2000 production estimates of 440,000 ounces of gold at a cash cost
of about $105 per gold ounce. For the year 2000, the Company expects El Penon to
produce about 285,000 ounces of gold and 3.8 million ounces of silver, at a cash
cost below $60 per gold ounce, an improvement of nearly 40% from the
pre-production estimates.
Exploration Results
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Exploration drilling at El Penon in the third quarter was focused on Cerro
Martillo and the north end of Quebrada Colorada. At Cerro Martillo, two to three
drill rigs were active completing a 100 hole reverse circulation infill drilling
program into resources beneath, and adjacent, to the open pit reserves. Diamond
drilling is still in progress and should be completed in late October. Recent
step out drilling on the south end of the resource has encountered extensions of
high-grade mineralization for at least 100 meters along strike that is still
completely open to the south. Recent drilling results are the following:
<TABLE>
Cerro Martillo Step-Out Drilling
------------------- ------------------ ----------------------- ---------------- ---------------------- ----------------------
Northing Hole Intercept (m) *Width (m) Gold (g/tonne) Silver (g/tonne)
------------------- ------------------ ----------------------- ---------------- ---------------------- ----------------------
<S> <C> <C> <C> <C> <C>
3990N PS267 83-85 2 19.3 148
PS293 115-117 2 59.8 232
3960N PS268 136-140 4 11.6 103
PS294 180-185 5 5.6 116
186-188 2 8.3 117
PS296 105-108 3 31.5 354
3930N PS298 151-159 8 11.3 121
------------------- ------------------ ----------------------- ---------------- ---------------------- ----------------------
</TABLE>
*True widths are approximately 50-70% of the stated widths.
Holes PS267 and PS268 were step out holes drilled earlier in the quarter, with
PS293, PS294, PS296, and PS298 being recent follow-up drilling. Holes PS295 and
PS297 were not drilled on these sections.
Surface drilling at Quebrada Colorada has been concentrated on extending
mineralization on the north end of the deposit, while underground diamond
drilling has been concentrating on in-fill drilling. During the quarter, about
25 surface drill-holes have encountered extensions of known Quebrada Colorada
mineralization towards the surface for more than 200 meters along strike and
50-100 meters vertical extent. This mineralization is still open to the north.
Selected results from some of the surface drilling include the following:
<TABLE>
Quebrada Colorada North extensions to surface
------------------- ------------------ ----------------------- ---------------- ---------------------- ----------------------
Northing Hole Intercept (m) *Width (m) Gold (g/tonne) Silver (g/tonne)
------------------- ------------------ ----------------------- ---------------- ---------------------- ----------------------
<S> <C> <C> <C> <C> <C>
2920N PP574 164-170 6 106.5 2,326
PP579 188-190 2 130.5 792
2950N PP576 163-166 3 35.9 656
3010N PP555 115-120 5 122.5 1,621
130-136 6 72.9 1,192
PP558 157-160 3 63.8 775
3160N PP547 112-118 6 15.5 148
3190N PP588 117-120 3 13.1 538
------------------- ------------------ ----------------------- ---------------- ---------------------- ----------------------
</TABLE>
*True widths are approximately 50-70% of the stated widths.
<PAGE>
Underground infill drilling at Quebrada Colorada will be completed early in the
fourth quarter. Exploration drilling will then be initiated beneath the
deposits, where preliminary underground drilling has encountered additional
high-grade mineralization. The Cerro Martillo reserve estimate will be completed
early next year along with a re-estimation of Quebrada Colorada.
At Rossi, Barrick Gold has continued with surface exploration. Approximately six
holes remain to be drilled this year, after which a new resource number will be
estimated. At this time, this number is not expected to differ significantly
from the previous estimate of 1.1 million ounces of gold.
Elsewhere in Meridian's exploration program, the company's generative effort has
been successful in acquiring or signing Letters of Intent to acquire four new
properties, and a due diligence effort on a fifth property is nearing
completion. There are two properties each in Mexico and Peru and one in Chile.
Two of these properties in Mexico and Chile will be drilled in the fourth
quarter this year; both are low sulfidation vein systems. It is expected that
drilling will begin on the other three properties next year.
Brian Kennedy, Meridian's chief executive officer summed up the third quarter
results, "I am very pleased with the continued outstanding results at El Penon,
which are meeting the Company's best expectations. These results help solidify
Meridian's competitive position within the industry as one of the lowest cost
gold producers in the world with significant growth opportunities. Particularly
encouraging are the latest exploration results, which are identifying more high
grade mineralization at El Penon."
3rd 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 October 19, 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).
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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
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(Unaudited and in US$ millions, except per share data)
Three Months Nine Months
Ended Sept. 30 Ended Sept. 30
----------------- -----------------
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Sales $32.9 $ 17.3 $98.6 $46.2
Costs and expenses
Cost of Sales 10.8 10.2 34.3 28.8
Depreciation, depletion & amortization 6.7 5.2 18.7 13.5
Reclamation 0.9 1.9 3.5 4.5
Exploration costs 2.8 2.9 8.2 9.3
Selling, general and administrative 1.7 1.4 4.6 4.0
Other expenses/(income) (0.1) - 0.3 -
---- ---- ---- ----
Total costs and expenses 22.8 21.6 69.6 60.1
---- ---- ---- ----
Operating income (loss) 10.1 (4.3) 29.0 (13.9)
Interest income (expense) 0.3 0.5 (0.3) 1.6
---- ---- ---- ----
Net income (loss) $ 10.4 $ (3.8) $ 28.7 $(12.4)
====== ====== ====== ======
Income/(Loss) per common share basic $0.14 $(0.05) $ 0.39 $(0.17)
===== ====== ====== ======
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 Nine Months
Ended Sept. 30 Ended Sept. 30
-------------- --------------
2000 1999 2000 1999
<S> <C> <C> <C> <C>
El Penon Mine
Gold production 76,988 - 213,029 -
Silver production 1,044,305 - 2,803,829 -
Tonnes ore mined (thousands) 185 - 467 -
Mill tonnes processed (thousands) 189 - 553 -
Avg. mill gold ore grade (grams / tonne) 13.5 - 12.8 -
Avg. mill silver ore grade (grams / tonne) 193 - 177 -
Mill gold recovery 93.6 - 93.6 -
Mill silver recovery 89.7 - 88.9 -
Cash cost of production / ounce $37 - $50 -
Total production cost / ounce $94 - $95 -
Jerritt Canyon Joint Venture
Gold production (Meridian Gold's 30% share) 22,457 25,745 72,252 77,516
Tonnes ore mined (100%, thousands) 195 350 565 970
Mill tonnes processed (100%, thousands) 375 377 1,026 1,082
Average mill ore grade (grams / tonne) 7.03 7.09 8.06 7.81
Mill recoveries 90.1% 91.1% 90.4% 91.1%
Cash cost of production / ounce $ 231 $ 199 $ 208 $ 199
Total production cost/ounce $ 268 $ 257 $ 250 $ 254
Beartrack Mine
Gold production-heap leach (ounce) 12,818 37,571 64,279 94,059
Tonnes mined (thousands)
Ore - 1,424 839 3,948
Waste - 1,083 366 3,038
----- ----- ----- -----
Total - 2,507 1,205 6,986
Average heap leach grade (grams / tonne) - 1.03 0.90 0.90
Cash cost of production / ounce $ 121 $ 121 $ 127 $ 155
Total production cost/ounce $ 322 $ 272 $ 279 $ 311
Company Totals
Ounces of gold produced 112,263 63,316 349,560 171,575
Ounces of gold sold 117,884 63,366 349,830 168,069
Average realized price / ounce $ 278 $ 261 $ 283 $ 272
Cash cost of production / ounce $ 85 $ 153 $ 97 $ 175
Total production cost / ounce $ 155 $ 264 $ 161 $ 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)
September 30 December 31
2000 1999
---- ----
<S> <C> <C>
Assets
Current Assets
Cash and cash equivalents $51.6 $20.8
Trade & other receivables 6.9 5.1
Inventories 5.3 8.7
Other current assets 1.0 1.0
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Total current assets 64.8 35.6
---- ----
Property, plant and equipment, net 98.4 102.9
Other assets 2.4 3.0
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Total Assets $165.6 $ 141.5
====== =======
Liabilities and Shareholders' Equity
Current Liabilities
Current portion long term debt $9.6 $ 12.0
Accounts payable, trade and other 5.4 5.4
Accrued and other liabilities 13.2 17.2
---- ----
Total current liabilities 28.2 34.6
---- ----
Long-term debt, net of current portion 12.4 18.0
Other-long-term liabilities 35.1 28.5
---- ----
Shareholders' equity 89.9 60.4
==== ====
Total liabilities and shareholders' equity $165.6 $141.5
====== ======
</TABLE>
<PAGE>
<TABLE>
Meridian Gold Inc.
Consolidated Condensed Statement of Cash Flows
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(Unaudited and in US$ millions)
Three Months Nine Months
Ended Sept. 30 Ended Sept. 30
---------------- ----------------
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Net income (loss) $10.4 $(3.8) $ 28.7 $(12.4)
Provision for depreciation, depletion, and amortization 6.7 5.3 18.7 13.6
Stock compensation expense 0.3 0.4
Changes in assets and liabilities, net - 3.3 4.8 17.8
--- --- --- ----
Net cash provided by (used in) operating activities 17.4 4.8 52.6 19.0
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Cash flows from investing activities
Capital spending (4.9) (17.9) (14.2) (58.1)
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Cash flows from financing activities
Proceeds from long-term borrowings - - - 30.5
Repayment of long-term borrowings (4.0) - (8.0) (0.5)
Proceeds from sale of common stock 0.2 0.1 0.4 0.2
Redemption of preferred shares - - - (0.1)
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Net cash provided by (used in) financing (3.8) 0.1 (7.6) 30.1
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Increase (decrease) in cash and cash Equivalents 8.7 (13.0) 30.8 (9.0)
Cash and cash equivalents, beginning of period 42.9 38.1 20.8 34.1
---- ---- ---- ----
Cash and cash equivalents, end of period $51.6 $25.1 $51.6 $25.1
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</TABLE>
