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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended MARCH 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-8488
CAMPBELL RESOURCES INC.
(Exact Name of registrant as specified in its charter)
Under the Canada Business Corporations Act
(Jurisdiction of Incorporation)
I.R.S. Employer Identification No - Not Applicable
120 ADELAIDE ST. WEST, SUITE 1910
TORONTO, ONTARIO M5H 1T1 CANADA
TELEPHONE - (416) 366-5201
(Address, including zip code, and telephone number including area code of
registrants principal executive offices)
----------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. YES X NO ____
Indicate the number of shares outstanding of each of issuer's classes of common
stock, as of the latest practicable date.
Shares Outstanding as of March 31,1998, 152,519,683 Common Shares, without par
value
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CAMPBELL RESOURCES INC.
Table of Contents
<TABLE>
<CAPTION>
Page
PART I. FINANCIAL INFORMATION
<S> <C>
ITEM 1. FINANCIAL STATEMENTS
Unaudited Consolidated Balance Sheets as at March 31, 1998 and
December 31, 1997...............................................................................3
Unaudited Consolidated Statements of Income for the Three Months
Ended March 31, 1998 and 1997...................................................................4
Unaudited Consolidated Statements of Retained Earnings for the Three Months
Ended March 31, 1998 and 1997...................................................................4
Unaudited Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 1998 and 1997.........................................................................5
Notes to the Unaudited Consolidated Financial Statements .......................................6
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations .....................................................................11
PART II. OTHER INFORMATION:
ITEM 1. Legal Proceedings..............................................................................14
ITEM 2. Changes in Securities..........................................................................14
ITEM 3. Defaults Upon Senior Securities................................................................14
ITEM 4. Submission of Matters to a Vote
of Security Holders............................................................................14
ITEM 5. Other Information..............................................................................14
ITEM 6. Exhibits and Reports on Form 8-K...............................................................14
SIGNATURES.....................................................................................15
</TABLE>
2
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CAMPBELL RESOURCES INC.
(Incorporated under the laws of Canada)
UNAUDITED CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of Canadian dollars)
<TABLE>
<CAPTION>
MARCH 31 December 31
1998 1997
---------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and short-term deposits $38,653 $41,735
Receivables 5,978 4,805
Inventories (Note 2) 6,292 7,250
Prepaids 1,629 995
---------------------------------
Total current assets 52,552 54,785
---------------------------------
OTHER ASSETS 752 986
---------------------------------
NATURAL RESOURCE PROPERTIES 173,239 170,256
Less accumulated depreciation and amortization (103,717) (102,145)
---------------------------------
69,522 68,111
---------------------------------
Total assets $122,826 $123,882
=================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $3,116 $3,989
Accrued liabilities 2,102 1,757
Income taxes payable 31 31
---------------------------------
Total current liabilities 5,249 5,777
---------------------------------
OTHER LIABILITIES 2,928 1,442
CONVERTIBLE DEBENTURES (NOTE 3) 6,591 7,341
DEFERRED MINING TAXES 3,990 4,198
SHAREHOLDERS' EQUITY
Capital stock (Note 4) 122,157 121,425
Foreign currency translation adjustment 350 408
Deficit (18,439) (16,709)
---------------------------------
Total shareholders' equity 104,068 105,124
---------------------------------
Total liabilities and shareholders' equity $122,826 $123,882
=================================
</TABLE>
Commitments and contingencies (Note 5)
3
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CAMPBELL RESOURCES INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(Expressed in thousands of Canadian dollars except per share amounts)
<TABLE>
<CAPTION>
Three months ended
March 31
1998 1997
---- ----
<S> <C> <C>
METAL SALES $10,281 $12,289
---------------------------------
EXPENSES
Mining 9,524 11,582
General administration 695 740
Depreciation and amortization 1,621 2,127
Exploration 592 1,065
---------------------------------
12,432 15,514
---------------------------------
Loss from operations (2,151) (3,225)
---------------------------------
Other income (expense)
Interest income 455 572
Foreign exchange gain (loss) 5 (31)
Convertible debenture interest expense (146) (149)
---------------------------------
314 392
---------------------------------
Loss before income taxes (1,837) (2,833)
Income tax recovery (107) (51)
---------------------------------
NET LOSS ($1,730) ($2,782)
=================================
LOSS PER SHARE ($0.011) ($0.019)
=================================
</TABLE>
UNAUDITED CONSOLIDATED STATEMENTS OF RETAINED EARNINGS (DEFICIT)
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(Expressed in thousands of Canadian dollars)
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Balance at beginning of period ($16,709) $23,701
Net loss (1,730) (11,025)
---------------------------------
Balance at end of period ($18,439) $12,676
=================================
</TABLE>
4
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CAMPBELL RESOURCES INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands of Canadian dollars)
<TABLE>
<CAPTION>
Three months ended
CASH PROVIDED BY (USED IN): March 31
--------
1998 1997
---- ----
OPERATING ACTIVITIES
<S> <C> <C>
Net loss ($1,730) ($2,782)
Items not involving cash
Depreciation and amortization 1,621 2,127
Deferred mining taxes (208) (100)
Other 1,662 952
---------------------------------
1,345 197
Net change in non-cash operating working capital (1,377) (534)
---------------------------------
(32) (337)
---------------------------------
FINANCING ACTIVITIES
Issues of capital stock 732 2,104
Conversion of convertible debentures (669)
---------------------------------
63 2,104
---------------------------------
INVESTMENT ACTIVITIES
Expenditures on natural resource properties (3,232) (9,219)
Decrease in other assets 185 186
---------------------------------
(3,047) (9,033)
---------------------------------
Effect of exchange rate change on cash
and short-term deposits (66) 73
---------------------------------
Decrease in cash and short-term deposits (3,082) (7,193)
Cash and short-term deposits at beginning of period 41,735 55,302
---------------------------------
Cash and short-term deposits at end of period $38,653 $48,109
=================================
CHANGES IN NON-CASH WORKING CAPITAL
Receivables ($1,173) $91
Inventories and prepaids 324 39
Accounts payable (873) (1,119)
Accrued liabilities 345 463
Income taxes payable (8)
---------------------------------
($1,377) ($534)
=================================
</TABLE>
5
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CAMPBELL RESOURCES INC.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1998
(Tabular amounts are expressed in thousands of Canadian dollars)
1--GENERAL
These unaudited consolidated financial statements reflect all adjustments which
are, in the opinion of management, necessary to a fair statement of results for
the interim period presented. The unaudited financial statements presented
herein have been prepared in accordance with the instructions to Form 10-Q and
do not include all the information and note disclosures required by generally
accepted accounting principles for complete financial statements. For further
information, refer to the financial statements and related footnotes included in
the Company's annual report on Form 10-K for the year ended December 31, 1997.
The financial statements are prepared in accordance with accounting principles
generally accepted in Canada and, except as described in note 6, conform in all
material respects with accounting principles generally accepted in the United
States.
The results of operations for the first three months of the year are not
necessarily indicative of the results to be expected for the full year.
2--INVENTORIES
<TABLE>
<CAPTION>
March 31 December 31
1998 1997
<S> <C> <C>
Materials and supplies $5,482 $5,519
Work-in-progress 810 1,731
------ ------
$6,292 $7,250
====== ======
</TABLE>
3 -- CONVERTIBLE DEBENTURES
In July 1994, the Company issued US$11,005,000 of 7.5% Convertible Subordinated
Debentures. The debentures are unsecured, bear interest at 7.5% payable in
arrears on June 1 and December 1 each year and mature on July 21, 2004. The
debentures are convertible at the option of the holder into common shares of the
Company at any time prior to maturity at a conversion of US$0.50 per common
share. The debentures are redeemable for cash at any time after the fifth
anniversary of the date of issue or, at the Company's option, may be redeemed in
common shares on the basis of one common share for each US$0.50 of debenture
principal being redeemed. The right of the Company to redeem the debentures for
cash or common shares is conditional on the average price of the common shares
exceeding US$0.50 during a period of 20 consecutive days prior to notice of
redemption. The Company may, at its option, repay the debenture at maturity by
issuing common shares of the Company at the conversion price of US$0.50 per
common share.
During the three months ended March 31, 1998, debenture holders converted
US$484,000 (1997 - US$nil) of debenture principal into 968,000 (1997 - nil)
common shares of the Company resulting in a balance outstanding at March 31,
1998 of US$4,653,000 ( December 31, 1997 - US$5,137,000).
6
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4--CAPITAL STOCK
Changes in the issued and outstanding common shares for the three months are as
follows (in thousands):
<TABLE>
<CAPTION>
1998 1997
---------------- ----------
Shares Amount Shares Amount
Common shares:
<S> <C> <C> <C> <C>
Balance at beginning of period 151,445 $121,425 148,588 $118,605
Issued:
Conversion of convertible debentures 968 669
Issued to CEMSA 1,770 2,071
Employee Incentive Plan and
Directors' Stock Option Plan 107 63 29 33
-------- -------- -------- --------
Balance at March 31 152,520 $122,157 150,387 $120,709
======== ======== ======== ========
</TABLE>
The Company has 9,000,000 warrants outstanding which arose as a result of the
public issue of units in 1996 that entitle the holders to purchase one common
share of the Company for US$1.50 on or before February 26, 1999. As of March 31,
1998, in addition to the shares reserved for issuance under the terms of the
common share purchase warrants and convertible debentures (see note 3) there
were outstanding stock options under the Directors Stock Option Plan and the
Employee Incentive Plan to purchase 6,825,000 common shares at prices ranging
from $0.57 to $1.48 per share with such options expiring at various dates to
August 13, 2002.
Earnings per share have been calculated using the weighted average number of
shares outstanding during the three months which was 152,472,000 (1997 -
148,888,000).
5--COMMITMENTS AND CONTINGENCIES
a) At March 31, 1998 the Company had purchased puts enabling it
to deliver 37,500 ounces of gold during 1998 at an average
price of US$326 per ounce. In addition, the Company had sold
calls for 33,200 ounces of gold in 2001 and 20,000 ounces of
gold in 2002 at an average price of US$350 per ounce. The
Company has also sold forward 990,000 pounds of copper for
delivery in 1998 at an average price of US$0.95 per pound.
b) At March 31, 1998 the Company had sold forward US$8,000,000 to
purchase Canadian dollars during 1998 at an average rate of
Cdn$1.3761 to the US dollar.
c) The Company's Joe Mann mine is subject to a graduated net
smelter return royalty increasing from 1.8% up to a gold price
of Canadian $500 per ounce to 3.6% at a gold price of Canadian
$625 per ounce.
d) During 1996, the Company's Mexican subsidiary received import
duty assessments following an audit claiming the subsidiary's
interest in certain pieces of machinery and equipment with an
approximate value of US$2,200,000 and levying taxes,
penalties, interest and inflationary adjustments for a further
Mexican pesos 9,200,000. On May 26, 1997, the Company received
notice that it was successful in its appeal against the
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assessments and that the Mexican pesos 9,200,000 was not payable. The
tax authorities have the ability to issue another tax assessment in
connection with their audit but any such assessment must take into
account the supporting documentation in the Company's possession that
was presented at the appeal. The charge against the assets will be
released when the final tax assessment covering this matter is issued
by the tax authorities.
e) During 1991, a subsidiary of the Company entered into a corporate
restructuring and financing arrangement ("Arrangement") in which it
issued to a group of Canadian financial institutions $38,000,000 of
Guaranteed Subordinate Debentures and Notes ("Debentures") and
$12,000,000 of Guaranteed Non-Cumulative Redeemable Retractable
Preferred Shares ("Preferred Shares"). The Debentures are unsecured,
subordinate to all existing non-trade debt and future senior debt, bear
interest at varying rates, are repayable upon maturity in 2007, and
cannot be prepaid. The Preferred Shares are redeemable at any time at
an amount of $240,000 per Preferred Share, rank equally and pari passu
with the common shares for dividends when declared, and are retractable
in 2007. In order to secure the performance of the Debentures and
Preferred Shares the Company's subsidiary entered into an Interest Rate
and Currency Exchange Swap Agreement ("Swap Agreement") with a major
international bank. The Swap Agreement provides for the conversion of
one floating rate interest basis to another and for differences in the
timing of payments so as to match the interest payment requirements
under the Debentures, repay the Debentures upon maturity and retract
the Preferred Shares. All payments are denominated in Canadian dollars.
The Company's subsidiary placed Canadian dollar deposits with the
counter party to the Swap agreement which deposits have been charged to
secure the performance under the Swap agreement. These deposits earn
interest at Canadian Bankers Acceptance rates. The Swap Agreement was
irrevocably assigned directly to the investors. Accordingly the bank is
the primary obligor under the Arrangement.
f) The Company is from time to time involved in various claims, legal
proceedings and reassessments for income, mining and other taxes,
arising in the ordinary course of business. The Company's current and
proposed mining and exploration activities are subject to various laws
and regulations governing the protection of the environment. These laws
and regulations are continually changing and are generally becoming
more restrictive. The Company conducts its operations so as to protect
its employees, the general public and the environment and, to the best
of its knowledge, believes its operations are in compliance with all
applicable laws and regulations, in all material respects. The Company
has made, and expects to make in the future, submissions and
expenditures to comply with such laws and regulations. Where estimated
reclamation and closure costs are reasonably determinable, the Company
has recorded a provision for environmental liabilities based on
management's estimate of these costs. Such estimates are subject to
adjustment based on changes in laws and regulations and as new
information becomes available.
8
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6--DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES
The reconciliation of net loss determined in accordance with generally accepted
accounting principles in Canada to net loss determined under accounting
principles which are generally accepted in the United States is as follows:
<TABLE>
<CAPTION>
Three months ended March 31
1998 1997
---- ----
<S> <C> <C>
Net loss for period as reported $(1,730) $(2,782)
Depreciation and amortization (a) 46 (873)
------- -------
Net loss for the year in accordance
with United States accounting principles $(1,684) $(3,655)
------- -------
Loss per share for the year in accordance
with United States accounting principles
Basic and fully diluted $ ( 0.01) $ ( 0.02)
------- -------
</TABLE>
Differences between Canadian and United States accounting principles as they
affect the Company's financial statements are as follows:
a) Depreciation and Amortization
Under Canadian accounting principles, depreciation and amortization may
be calculated on the unit-of-production method based upon the estimated
mine life, whereas under United States accounting principles the
calculations are made based upon proven and probable mineable reserves.
b) Deferred Income Taxes
Under Canadian accounting principles income and mining taxes may be
accounted for under the deferral method. Under United States accounting
principles the asset and liability method (FAS 109) is used, whereby
deferred tax assets and liabilities are recognized for the deferred
taxes attributable to differences between book value and the tax basis
of the Company's assets and liabilities. The impact of this difference
has not been material during the reporting periods presented.
c) Statements of Cash Flows
Under Canadian accounting principles, the issuance of common shares on
the conversion of convertible debentures and as part of the purchase
consideration for the acquisition of the Cerro Quema project and as
consideration for the reduction in the royalty thereon, has been
reflected as a financing activity in the consolidated statements of
cash flows. Under U.S. accounting principles these non-cash
transactions would have been excluded from financing and investing
activities and disclosed in the notes to the financial statements.
Included in cash and short-term deposits at March 31, 1998 are
investments of $9,855,000 (1997 - $22,680,000) with maturities on
acquisition of greater than 90 days. Under United States accounting
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principles these investments would not be included in cash and
short-term deposits.
After adjusting for the above, under United States accounting
principles the use of cash for operating activities would be $273,000
(1997 - $337,000), sources of cash from financing activities would be
$63,000 (1997 - $33,000), the use of cash for investing activities
would become a source of cash of $15,436,000 (1997 - source of
$19,785,000) and the decrease in cash and short-term deposits would
become an increase of $15,160,000 (1997 - increase of $19,554,000).
Additional disclosures required under United States accounting
principles with respect to the Statements of Cash Flows are as follows:
Three months ended March 31
1998 1997
---- ----
Cash taxes paid $100 $ 62
Cash interest paid $ 1 $ 8
d) Contingent Liability
Under United States accounting principles the contingent liability
disclosed in note 5 (e) would be reflected in the balance sheet.
Accordingly, for United States accounting principles total assets and
liabilities would increase by $50 million. The increase in assets
represents investments (non-current) comprising Canadian dollar
payments under the Swap agreement and Canadian dollar deposits with the
counter party to the Swap agreement. The liabilities (non-current)
represent the Guaranteed Subordinate Debentures and Notes of $38
million and the Guaranteed Non-Cumulative Redeemable Retractable
Preferred Shares of $12 million which would be included outside of
shareholders' equity.
e) Foreign Exchange Contracts
In accordance with Canadian accounting principles, certain long-term
foreign exchange contracts are considered to be hedges of sales revenue
denominated in foreign currencies. Gains and losses related to changes
in market values of such contracts are deferred and recognized when the
contract is settled as part of sales revenue. Under United States
accounting principles, changes in the market value of the contracts
would be included in current earnings. The impact of this accounting
difference has not been material during the reporting periods
presented.
f) Balance Sheets
The cumulative effect of the application of United States accounting
principles, noted in (a) to (d) above, on the consolidated balance
sheets of the Company as at March 31, 1998 and December 31, 1997 would
be to decrease cash and short-term deposits and increase short-term
investments each by $9,855,000 (1997 - $28,097,000), decrease natural
resource properties by $13,968,000 (1997 - $14,014,000), increase
long-term investments by $50,000,000 (1997 - $50,000,000), increase
long-term liabilities by $38,000,000 (1997 - $38,000,000), decrease
deferred mining taxes by $2,462,000 (1997 - $2,462,000), increase
preferred shares by $12,000,000 (1997 - $12,000,000) and reduce
shareholders equity by $11,506,000 (1997 - $11,552,000).
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CAMPBELL RESOURCES INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
MARCH 31, 1998
(all dollars are Canadian unless noted otherwise)
OVERVIEW
Campbell recorded a loss of $1.7 million or $0.011 per share for the three
months ended March 31, 1998 compared to a loss of $2.8 million or $0.019 per
share in the comparable period of 1997. Cash flow from operations before the
change in operating working capital increased to $1.3 million in the quarter
compared to $0.2 million in the first quarter of 1997. Gold production decreased
by 5% to 24,200 ounces from 25,400 ounces a year earlier as a result of the
cessation of mining operations at the Santa Gertrudis Mine in Mexico. The
decrease in the loss is primarily attributable to the reduction in costs at the
Santa Gertrudis Mine together with the beneficial impact of the weaker Canadian
dollar. Although the mine ceased mining operations in December, 1997, it is
continuing to produce gold through the leaching of ore on the heap leach pads.
REVENUE
Revenue from metal sales decreased 16% to $10.3 million in the quarter compared
to $12.3 million in 1997. The decrease is primarily attributable to the decrease
in gold production noted above combined with the 18% decrease in the average
price realized for gold sales during the three months compared to the same
period of 1997, partially offset by the impact of the weaker Canadian dollar.
The average price realized for gold produced in the three months ended March 31,
1998 was US$297 compared to US$362 in the comparable period of 1997. The average
Comex market price was US$294 in the first three months of 1998 compared to
US$351 in 1997. The Company has hedged 37,500 ounces of gold production for the
balance of 1998 at a price of US$326 per ounce of gold through the use of
purchased put options which give the Company the right, but not the obligation
to sell at these prices. Campbell's general policy is to hedge up to 50% of its
gold production for up to two years, dependent on market conditions and capital
expenditure commitments.
Revenue from copper production decreased to 4.3% of metal sales in the first
three months of 1998 from 4.8% in 1997 due to the decrease in average copper
prices. Copper production increased to 348,000 pounds compared to 335,000 pounds
in 1997 due to lower copper head grades.
EXPENSES
Mining expense in the first quarter of 1998 was $9.5 million compared to $11.6
million in the comparable period of 1997. The overall cash production cost
decreased to US$261 per ounce of gold for the three months compared to US$321 in
1997.
The Joe Mann Mine produced 18,180 ounces of gold in the quarter compared to
17,100 ounces in the comparable period of 1997. The tons milled increased to
76,300 tons compared to 65,800 tons in 1997 while the mill head grade decreased
to 0.258 ounces of gold per ton compared to 0.282 ounces of gold per ton in
1997. The mill recovery rate was 93.8% in the quarter compared to 93.7% in 1997.
The lower mill head grades reflect the scheduled mining of lower grade material.
These grades are expected to increase slightly later in the year as ore in
certain of the higher grade
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shrinkage stopes is sent to the mill.
The cash production cost at the Joe Mann Mine decreased marginally to US$290 per
ounce produced in the first three months of 1998 compared to US$295 for the
comparative period in 1997 largely as a result of the weakening Canadian dollar.
In Canadian dollars the cash cost increased to $415 per ounce from $401 per
ounce a year earlier as a result of the lower grade material mined and lower
copper revenue by-product credits.
The cash production cost at the Santa Gertrudis Mine was US$173 per ounce in the
first three months compared to US$374 in 1997. As discussed earlier, mining
operations ceased at the Santa Gertrudis Mine in December, 1997. Accordingly,
the cash cost for 1998 represents leaching, plant and administration costs to
extract gold from the heaps. A total of 6,010 ounces of gold was produced in the
first quarter of 1998, compared to 8,360 ounces produced in the first quarter of
1997, when mining operations were still continuing. Leaching operations will
continue during 1998 for as long as the process generates positive cash flow,
currently estimated to be mid-summer of 1998.
Depreciation and amortization expense decreased to $1.6 million for the quarter
compared to $2.1 million in 1997 primarily due to lower gold production
resulting from the cessation of mining operations at Santa Gertrudis and the
impact of the writedown of the Joe Mann Mine in the fourth quarter of 1997. On a
per ounce produced basis, depreciation and amortization for the first three
months of 1998 was $67 per ounce compared to $85 per ounce in 1997.
Exploration expense decreased to $0.6 million in the first quarter of 1998
compared to $1.1 million in the comparable period of 1997. Commencing January 1,
1998 the Company began directly expensing exploration performed on the Santa
Gertrudis property in accordance with its stated accounting policies. The
Company will revert to capitalising these expenditures in the future should an
economic ore body be defined as a result of the current exploration efforts. The
1997 expense primarily consists of the write-off and amortization of previously
deferred Santa Gertrudis exploration costs. The Company has budgeted to spend
$1.4 million on exploration at Santa Gertrudis in the first six months of 1998.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1998, the Company's cash and short-term deposits and working
capital decreased to $38.7 million and $47.3 million, respectively compared to
$41.7 million and $49 million, respectively at December 31, 1997. The decrease
is primarily attributable to the cash flow from operations being inadequate to
fund capital expenditures. Cash flow from operations before the net change in
non-cash operating working capital increased to $1.3 million in the first three
months of 1998 compared to $0.2 million in 1997. The increase in cash flow
during the first quarter is principally attributable to the sale of 2001 and
2002 gold call options, the proceeds of which were used to fund the purchase of
the 1998 put options.
Investment activities in the first three months of 1998 include expenditures on
natural resource properties of $3.2 million compared to $9.2 million in 1997.
Expenditures include $2.3 million (1997 -$2.3 million) at the Joe Mann Mine
which includes $1.8 million for the shaft deepening (1997 - $1.6 million), $nil
(1997 - $1 million) at the Santa Gertrudis Mine, and $1 million (1997 - $5.9
million) at the Cerro Quema property in Panama. Approximately $3 million remains
to be spent on the Joe Mann Mine shaft deepening project during the second
quarter of 1998. The Company is continuing to review its options with respect to
delaying the lateral development of the Joe Mann Mine below the 2350 level once
the shaft project is turned over to mine personnel in mid-June, 1998.
Expenditures at the Cerro Quema project for the balance of the year should
decrease substantially as the project is placed on a care and
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maintenance basis awaiting higher gold prices.
The Company's principal sources of liquidity are cash flow from the Joe Mann and
Santa Gertrudis mines and the Company's working capital which amounted to $47.3
million at March 31, 1998. The Company is not aware of any significant
uncertainties or risks with respect to liquidity and capital resources except
for fluctuations in gold prices, the relative U.S./Mexican/Canadian exchange
rates, the ability of the Company to meet its production estimates and any
unforeseen environmental problems and other normal risks associated with
underground and open pit gold mining.
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ITEM 1. Legal Proceedings
Not applicable
ITEM 2. Changes in Securities
Not Applicable
ITEM 3. Defaults Upon Senior Securities
None
ITEM 4. Submission of Matters to a Vote of Security Holders
None
ITEM 5. Other Information
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27.1 - Amended Financial Data Schedule
(b) A current report on Form 8-K dated February 25, 1998 was
filed, on March 3, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CAMPBELL RESOURCES INC.
"PAUL J. IRELAND"
Paul J. Ireland
Vice President, Finance
Toronto, Ontario
May 14, 1998
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CAMPBELL RESOURCES INC.
FORM 10-Q - MARCH 31, 1998
EXHIBIT INDEX
27.1 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS, CONSOLIDATED STATEMENTS OF INCOME AND CONSOLIDATED
STATEMENTS OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> CANADIAN DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
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