<PAGE> 1
THIS PAPER DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE 901(d) OF
REGULATION S-T
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 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 0-31986 (82-689)
---------------------------------------------------------
GLAMIS GOLD LTD.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
British Columbia, Canada None.
- --------------------------------------------------------------------------------
(Jurisdiction of incorporation (IRS Employer Identification No.)
or organization)
5190 Neil Road, Suite 310, Reno, Nevada, 89502
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices)
702-827-4600
------------
(Registrant's telephone number, including area code)
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 (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 180 days. Yes [X] No [ ].
The number of shares outstanding of the Registrant's common stock, as of August
7, 1998, was 31,270,707.
<PAGE> 2
GLAMIS GOLD LTD.
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I - Financial Information
Item 1. Financial Statements..................................................................... 1
Consolidated Balance Sheets as at June 30, 1998 and
December 31, 1997.................................................................... 1
Consolidated Statements of Earnings for the three months and the six months ended
June 30, 1998 and 1997............................................................... 2
Consolidated Statements of Retained Earnings for the three months and the six months
ended June 30, 1998 and 1997......................................................... 2
Consolidated Statements of Changes in Financial Position for the
three months and the six months ended June 30, 1998 and 1997......................... 3
Notes to Interim Consolidated Financial Statements................................... 4
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................................... 7
Part II - Other Information
Item 1. Legal Proceedings........................................................................ 11
Item 2. Changes in Securities.................................................................... 11
Item 3. Defaults Upon Senior Securities.......................................................... 11
Item 4. Submission of Matters to a Vote of Security Holders...................................... 12
Item 5. Other Information........................................................................ 12
Item 6. Exhibits and Reports on Form 8-K......................................................... 12
Signatures.......................................................................................... 12
Exhibit Index ...................................................................................... 13
</TABLE>
<PAGE> 3
- 1 -
[Part I - Item 1]
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of U.S. dollars)
- ---------------------------------------------------------------------------------------------------------------
JUNE 30, December 31,
ASSETS 1998 1997
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash $ 28,660 $ 26,913
Other current assets (note 3) 11,160 14,024
- --------------------------------------------------------------------------------------------------------------
Current assets 39,820 40,937
Plant and equipment and mine development costs 59,113 58,074
Other assets 2,190 2,632
- --------------------------------------------------------------------------------------------------------------
$ 101,123 $ 101,643
==============================================================================================================
LIABILITIES
Current liabilities $ 3,673 $ 4,507
Long term liabilities 4,805 4,707
SHAREHOLDERS' EQUITY
Share capital (note 4):
Authorized:
200,000,000 common shares without par value
5,000,000 preferred shares, $10 par value, issuable in Series
Issued and fully paid:
31,245,707 common shares (1997 - 31,222,707) 89,724 89,650
Contributed surplus 63 63
Cumulative translation adjustment (61) --
Retained earnings 2,919 2,716
- --------------------------------------------------------------------------------------------------------------
92,645 92,429
- --------------------------------------------------------------------------------------------------------------
$ 101,123 $ 101,643
==============================================================================================================
</TABLE>
Prepared by Management without audit
Approved by the Directors:
/s/ C.F. MILLAR /s/ C. KEVIN McARTHUR
- ----------------------------- -----------------------------
Director Director
<PAGE> 4
- 2 -
CONSOLIDATED STATEMENTS OF EARNINGS
(Expressed in thousands of U.S. dollars)
(Except per share amounts)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
1998 1997 1998 1997
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue from gold production $ 8,189 $ 11,092 $ 17,144 $ 22,451
Cost of production 5,434 6,349 10,620 11,898
- ---------------------------------------------------------------------------------------------------------------
2,755 4,743 6,524 10,553
- ---------------------------------------------------------------------------------------------------------------
Expenses
Depreciation & depletion 2,228 2,916 4,530 5,839
Royalties 454 762 1,094 1,581
Selling, general & administrative 668 894 1,346 1,704
Exploration 2 868 7 901
- ---------------------------------------------------------------------------------------------------------------
3,352 5,440 6,977 10,025
- ---------------------------------------------------------------------------------------------------------------
Earnings from operations (597) (697) (453) 528
Interest expense 87 25 97 50
Other (income) expense (542) (146) (893) (502)
- ---------------------------------------------------------------------------------------------------------------
Earnings before income taxes (142) (576) 343 980
Provision for income taxes (11) 8 140 413
- ---------------------------------------------------------------------------------------------------------------
Net earnings $ (131) $ (584) $ 203 $ 567
===============================================================================================================
Earnings per share $ 0.00 $ (0.02) $ 0.01 $ 0.02
===============================================================================================================
</TABLE>
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(Expressed in thousands of U.S. dollars)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
1998 1997 1998 1997
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Retained earnings, beginning of period $ 3,050 $ 12,146 $ 2,716 $ 12,529
Net earnings (131) (584) 203 567
Dividends -- -- -- (1,534)
- ----------------------------------------------------------------------------------------------------------------
Retained earnings, end of period $ 2,919 $ 11,562 $ 2,919 $ 11,562
================================================================================================================
</TABLE>
<PAGE> 5
- 3 -
CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION
(Expressed in thousands of U.S. dollars)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
1998 1997 1998 1997
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net earnings (loss) $ (131) $ (584) $ 203 $ 567
Adjustment for items not affecting working capital 2,348 3,001 4,720 6,059
Net changes in non-cash working capital 666 1,970 2,030 1,960
- --------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operations 2,883 4,387 6,953 8,586
NET INVESTMENT ACTIVITIES (3,307) (1,043) (5,219) (6,862)
- --------------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Stock issues -- (16) 74 508
Cumulative translation adjustment (61) -- (61) --
Dividends paid -- -- -- (1,534)
- --------------------------------------------------------------------------------------------------------------------------------
Net financing activities (61) (16) 13 (1,026)
- --------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash (485) 3,328 1,747 698
Cash, beginning of period 29,145 23,863 26,913 26,493
- --------------------------------------------------------------------------------------------------------------------------------
Cash, end of period $ 28,660 $ 27,191 $ 28,660 $ 27,191
================================================================================================================================
</TABLE>
<PAGE> 6
- 4 -
GLAMIS GOLD LTD.
Notes to Interim Consolidated Financial Statements
(tables expressed in thousands of United States Dollars)
June 30, 1998
1. GENERAL
In the opinion of management, the accompanying unaudited interim consolidated
balance sheets and consolidated statements of earnings, retained earnings and
changes in financial position contain all adjustments, consisting only of normal
recurring accruals, necessary to present fairly the financial position of Glamis
Gold Ltd. (the "Company") as of June 30, 1998 and December 31, 1997 and the
results of its operations and changes in its financial position for the six
months ended June 30, 1998 and 1997. The results of operations for the six
months ended June 30, 1998, are not necessarily indicative of the results to be
expected for the entire fiscal year.
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 annual financial statements. These financial statements should be
read in conjunction with the Company's audited consolidated financial statements
and related footnotes included in the Company's Form 10-K for the year ended
December 31, 1997.
The financial statements are prepared in accordance with accounting principles
generally accepted in Canada which conform, in all material respects, with
accounting principles generally accepted in the United States, except as
described in note 5 hereof.
2. FOREIGN CURRENCY TRANSLATION
The Canadian and Mexican operations of the Company are considered
"self-sustaining" and its accounts are translated into U.S. dollars using the
current rate method under which assets and liabilities are translated at the
rate of exchange at the end of the period. Revenues and expenses are translated
at the average exchange rate for the period. Exchange gains and losses are
deferred and included as a separate component of shareholders equity.
3. OTHER CURRENT ASSETS
Included in other current assets are the following inventories:
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
--------- ---------
<S> <C> <C>
Finished goods $ 1,551 $ 3,403
Work-in-progress 6,925 8,256
Supplies and spare parts 497 560
--------- ---------
$ 8,973 $ 14,427
========= =========
</TABLE>
<PAGE> 7
- 5 -
4. SHARE CAPITAL
<TABLE>
<CAPTION>
Six Months Ended Six Months Ended
June 30, 1998 June 30, 1997
------------------------------ ------------------------------
# of Shares Amount # of Shares Amount
(000) (000)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Issued and fully paid:
Balance beginning of period 31,222,707 $ 89,650 31,004,707 $ 88,296
Issued during the period:
For cash consideration under
the terms of directors'
and employees' stock
options 13,000 74 88,000 508
---------- ---------- ---------- ----------
Balance end of period 31,245,707 $ 89,724 31,092,707 $ 88,804
========== ========== ========== ==========
</TABLE>
5. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES
Accounting in these interim consolidated financial statements under Canadian and
United States generally accepted accounting principles is substantially the same
except for accounting for income taxes and investments in equity securities.
However, these differences have no material effect on the amounts presented in
the financial statements as at March 31, 1998 or for the six months ended June
30, 1998 or 1997.
ITEM 2 MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS
Except for the statements of historical fact contained herein, the information
presented constitutes "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements, including but not limited to those with respect to the price of
gold, estimated future production, the Company's hedging policy and permitting
time lines, involve known and unknown risks, uncertainties, and other factors
which may cause the actual results, performance or achievements of the Company
to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, the factual results of current exploration activities, conclusions
of feasibility studies now underway, changes in project parameters as plans
continue to be refined, future prices of gold, as well as those
<PAGE> 8
- 6 -
factors discussed in the section entitled "Other Considerations" in the
Company's Annual Report on Form 10-K.
SUMMARY OF RESULTS OF OPERATIONS
The following information should be read in conjunction with the unaudited
interim consolidated financial statements and related notes included herein
which are prepared in accordance with generally accepted accounting principles
in Canada for interim financial information. In all material respects, they
conform with those principles generally accepted in the United States, except as
described in note 5 of Item 1.
Gold production of 27,596 ounces for the three-month period ended June 30, 1998
represents a decrease of 15% over the 32,451 ounces of gold produced during the
same three-month period in the prior fiscal year. Revenues derived from gold
production decreased from $11.092 million for the three-month period ended June
30, 1997 to $8.189 million for the current period. The average price for gold
realized in the three-month period ended June 30, 1998 was $297 per ounce
compared to $342 per ounce for the same three-month period of the prior fiscal
year. This decrease in the price realized per ounce of gold reduced revenue in
the current three month period by approximately $1.2 million compared to the
same three-month period in the last fiscal year, while the 4,855 ounce decrease
in production during the current three-month period lowered revenue by
approximately $1.7 million. The Rand Mine produced 1,472 fewer ounces of gold
during the three-month period ended June 30, 1998, as compared to the same
three-month period in the prior fiscal year, while the Picacho Mine produced
3,773 fewer ounces of gold during the current period as compared to the same
three-month period in the prior fiscal year.
Gold production of 54,933 ounces for the six-month period ended June 30, 1998
represents a decrease of 16% over the 65,405 ounces of gold produced during the
same six-month period in the prior fiscal year. The decrease in production
during the current six-month period was primarily due to decreased production of
7,452 ounces of gold at the Picacho Mine with an additional decrease of 3,776
ounces of gold produced at the Rand Mine.
Revenue for the six-month period ended June 30, 1998 decreased $5.3 million
(24%) from that reported for the six-month period ended June 30, 1997. The
decrease in production of 10,472 ounces of gold during the current six-month
period decreased revenues by approximately $3.6 million while the decrease in
revenue realized per ounce of gold from $343 per ounce in the six-month period
ended June 30, 1997 to $312 per ounce in the current six-month period decreased
revenue by $1.7 million.
The decrease in production at the Rand Mine was the result of fewer ore tons at
lower grades being placed on the heap. With the cessation of mining at the
Picacho Mine, production decreased since a relatively small amount of new ore
was placed on the heap during the six month period.
The Company's cost of production of $5.4 million for the three-month period
ended June 30, 1998 compared with $6.3 million experienced in the three-month
period ended June 30, 1997 as a result of reduced manpower levels and fewer
ounces produced which resulted in a lower ore inventory relief cost being
charged to expenses. Even with production for the current three-month period
being significantly lower than that for the same three-month period
<PAGE> 9
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in the prior fiscal year, the average cash cost per ounce of production at $197
per ounce of gold was virtually equal to the $196 experienced in the three-month
period ended June 30, 1997.
<PAGE> 10
- 8 -
Cost of production for the six-month period ended June 30, 1998 was $10.6
million compared to $11.9 million for the six-month period ended June 30, 1997.
With production decreasing by 10,472 ounces during the current six-month period
as compared to the same six-month period in the prior fiscal year, the average
cash cost of production increased $11 per ounce to $193 in the six-month period
ended June 30, 1998 compared to $182 for the six-month period ended June 30,
1997.
The net loss for the three-month period ended June 30, 1998 was $0.1 million
($0.00 per share) compared with a net loss of $0.6 million ($0.02 per share) for
the same period during the prior fiscal year. For the six-month period ended
June 30, 1998 and 1997, earnings were $0.2 million or $0.01 per share and $0.6
million or $0.02 per share, respectively.
For the three-month and the six-month periods ended June 30, 1998 compared to
the same periods in 1997, depreciation and depletion charges and royalties
decreased because of the lower production levels experienced in 1998. With the
closure of the Vancouver office and the consolidation of functions at our Reno
office during the current six month period and the continuing efforts at cost
reduction, administrative expense decreased 25% in the three months ended June
30, 1998 compared to three-month period ended June 30, 1997. The administrative
expenses decreased 21% in the six months ended June 30, 1998 compared to six
month period ended June 30, 1997. The Company significantly reduced its
exploration activity during the three-month and six-month periods ended June 30,
1998 compared to the same periods in 1997. The Company is currently examining
acquisition opportunities rather than carrying on direct exploration for
precious metal deposits.
DISCUSSION OF INDIVIDUAL OPERATIONS
PICACHO MINE, IMPERIAL COUNTY, CALIFORNIA
The Picacho Mine is in its final phase of production prior to being shutdown.
For the three-month period ended June 30, 1998, gold production of 4,753 ounces
was 44% fewer than the 8,526 ounces of gold produced in the same three-month
period of the prior fiscal year.
The average cash cost per ounce of gold produced at the Picacho Mine for the
three-month period ended June 30, 1998 was $128 per ounce, compared to $143 for
the three-month period ended June 30, 1997. The reduction in the cash cost per
ounce is a reflection of decreased employment and activity levels at the mine as
the pad inventories are leach out. Total costs were $211 per ounce in the
current period as compared to $258 per ounce for the same period in the prior
fiscal year.
During the three-month period ended June 30, 1998, no ore was placed on the heap
leach compared with the 325,600 tons of ore grading 0.053 ounces of gold per ton
which were placed on the heap leach pad during the same three-month period of
the prior fiscal year. 123,700 tons of waste was mined during the three-month
period ended June 30, 1997, which produced a stripping ratio of 0.4 tons of
waste to one ton of ore, no mining occurred during the current fiscal period.
Production of 10,442 ounces of gold for the six-month period ended June 30, 1998
was 7,452 ounces less than the 17,894 ounces produced in the six-month period
ended June 30, 1997.
<PAGE> 11
- 9 -
The average per ounce cash cost of gold production at Picacho Mine for the
six-month period ended June 30, 1998 was $120 per ounce, compared to $137 per
ounce for the six-month period ended June 30, 1997. Total costs of production
for the six-month period ended June 30, 1998 were $213 per ounce of gold
produced which were significantly lower than those experienced during the same
six-month period in the prior fiscal year.
During the six-month period ended June 30, 1998, 73,100 tons of ore grading
0.035 ounces of gold per ton were mined compared with 625,800 tons of ore
grading 0.041 ounces of gold per ton mined during the same period in 1997.
14,200 tons of waste was mined during the six months ended June 30, 1998, which
produced a stripping ratio of 0.2 tons of waste to one ton of ore. The stripping
ratio in the same period of the prior year was 0.54 tons of waste to one ton of
ore.
The Picacho Mine is expected to produce in excess of 18,000 ounces of gold for
the year ended December 31, 1998.
RAND MINE, KERN COUNTY, CALIFORNIA
For the three-month period ended June 30, 1998, gold production was 22,192
ounces, which is 6% lower than the 23,664 ounces of gold produced in the same
three-month period in the prior fiscal year.
The average cash cost per ounce of gold produced at the Rand Mine for the
three-month period ended June 30, 1998, was essentially unchanged at $213
compared to the three-month period ended June 30, 1997 and the total cost per
ounce of gold produced was $295 in the current three-month period compared with
$291 for the same three-month period in the prior fiscal year.
During the three-month period ended June 30, 1998, 1,976,700 tons of ore grading
0.019 ounces of gold per ton were placed on the heap leach pad compared with
1,619,500 tons of ore grading 0.017 ounces of gold per ton which were placed on
the heap leach pad during the same three-month period in the prior fiscal year.
2,482,800 tons of waste was mined during the three-month period ended June 30,
1998, which produced a stripping ratio of 1.3 tons of waste to one ton of ore as
compared to the stripping ratio for the same three-month period in the prior
fiscal year of 2.5 tons of waste to one ton of ore. This resulted in 1,208,750
fewer tons of ore and waste being mined during the current three-month as a
result of operating the mine using 3 crews this year compared to 4 crews in the
prior year.
Production of 43,401 ounces of gold for the six-month period ended June 30, 1998
was 3,776 ounces lower than the 47,177 ounces produced in the six-month period
ended June 30, 1997. This decrease in production results from fewer ounces in
the pad inventory at the beginning of the current year as compared to the
beginning of the prior year.
The average per ounce cash cost of gold production at the Rand Mine for the
six-month period ended June 30, 1998 was $211 per ounce compared to $197 per
ounce for the six-month period ended June 30, 1997. Total costs of production
were $293 per ounce of gold produced for the six-month period ended June 30,
1998 compared to $274 per ounce for the same six-month period during 1997. The
higher cost per ounce during the current six-month period is a direct result of
the lower production rates experienced during the current period.
<PAGE> 12
- 10 -
During the six-month period ended June 30, 1998, 3,867,900 tons of ore grading
0.018 ounces of gold per ton were placed on the heap leach pad compared with the
3,010,800 tons of ore grading 0.020 ounces of gold per ton which were placed on
the heap leach pad during the same six-month period of the last fiscal year.
5,208,400 tons of waste was mined during the current six-month period, which
produced a stripping ratio of 1.4 tons of waste to one ton of ore as compared to
the stripping ratio in the same six-month period of the prior year of 2.4 tons
of waste to one ton of ore.
It is expected that the Rand Mine will achieve its production target of
approximately 88,000 ounces of gold for the year ended December 31, 1998.
IMPERIAL PROJECT, IMPERIAL COUNTY, CALIFORNIA
The permitting process is continuing at the Imperial Project. The Company is
currently answering comments received during the review of the Draft
Environmental Impact Statement for inclusion in the Final Environmental Impact
Statement which is expected to be filed during October 1998. It is anticipated
that the Bureau of Land Management will issue a Record of Decision in December
1998. Following a 30 day appeal period after the Record of Decision is issued,
construction may begin on or after February 1, 1999. Based upon a timely
conclusion of the permitting process and assuming gold prices are acceptable,
first production from this project is expected in the second quarter of 1999. In
prior periods, the Company had paid deposits totaling $7.2 million (92% of the
total cost of $7.8 million) on a P&H 4100A electric shovel, stored at the
supplier's site. Major capital expenditures for the Imperial Project have been
postponed until all permits are received and the price of gold improves.
Management continues to seek a suitable buyer for the shovel but does not intend
to sell the equipment at a loss.
CIENEGUITA PROJECT, CHIHUAHUA, MEXICO
During the three-month period ended June 30, 1998, the Company was credited with
651 ounces of gold production (1,090 ounces of gold for the six-month period
ended June 30, 1998) compared with 261 ounces of gold for the three-month period
ended June 30, 1997 (334 ounces of gold in the six-month period ended June 30,
1997). During the current period the Company completed the purchase of the 40%
interest in this project held by our joint venture partner for $500,000 in stock
and cash and the cancellation of some debt.
It is expected that the Company will be credited with approximately 3,000 ounces
of gold produced from this project during the year ended December 31, 1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company had working capital of $36.1 million at June 30, 1998 compared to
$36.4 million at December 31, 1997. The long-term liabilities consisting of
reserves for reclamation and deferred taxes totaled $4.8 million at June 30,
1998 compared with $4.7 million at December 31, 1997. Included in the working
capital at June 30, 1998 was cash of $28.7 million, while there was $26.9
million in cash at December 31, 1997.
<PAGE> 13
- 11 -
The Company's major capital expenditures during the three months ended June 30,
1998 were $2.6 million ($4.1 million for the six months) on the leach pad
expansion at the Rand Mine and $0.3 million ($0.6 million for the six months)
spent on permitting activities at the Imperial Project.
During the remainder of 1998, the permitting and construction of the Imperial
Project will require approximately $0.6 million.
Estimated cashflow from operations of $5.0 million, cash on hand of $28.7 are
more than sufficient to fund the capital expenditures for the year ended
December 31, 1998.
HEDGING
The Company's current policy adopted during the quarter ended March 31, 1998
allows management to hedge as needed up to 60% of planned production over the
next five years. As at June 30, 1998, the Company had call option contracts
outstanding for 10,000 ounces of gold at prices ranging from $310 to $320 per
ounce exercisable at various dates through December 31, 1998. The Company also
entered into spot deferred sales contracts at various times during the quarter
for a total of 21,000 ounces of gold averaging a price of $302 per ounce of gold
deliverable at various value dates through August 1998.
YEAR 2000
The Company has been actively reviewing all of the computer systems currently in
use from the computer control module in its haul truck, loaders, shovels, and
drills to those used for financial and cost accounting as well as those used for
mine planning. The review has not yet identified any systems which will be
affected by the year 2000 risks. The Company feels that problems identified, if
any, as this review is completed in the coming year will not require significant
resources to correct.
PART II - OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS:
The Company was defending an action, initiated on September 22, 1995 against
Rand and Glamis Gold, Inc. by Rand Communities Water District in the Kern
County, California Superior Court, for declaratory and injunctive relief.
Effective May 29, 1998, a settlement was agreed to which includes the
requirement for the Rand Mine to purchase water from the Water District in an
amount which the Company estimates will not exceed $15,000 annually.
David Robert Johnson served Rand and Glamis Gold, Inc. on February 26, 1996 with
notice of an action commenced by him in the Kern County, California Superior
Court against Rand and Glamis Gold, Inc. for injunctive relief and damages. An
interim judgment against Mr. Johnson was entered March 5, 1998 which became
final with the resolution of the Rand Communities Water District suit effective
May 29, 1998.
ITEM 2 CHANGES IN SECURITIES: None
ITEM 3 DEFAULTS UPON SENIOR SECURITIES: None
<PAGE> 14
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ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
The Company held its Annual General Meeting on May 8, 1998. At the
meeting two shareholders holding 304,138 shares were present in person
and 898 shareholders holding 26,648,856 shares were represented by
proxy.
At the meeting unanimous approval by a show of hands was given in
respect to:
1. The election of Messrs. Chester F. Millar, C. Kevin McArthur,
James R. Billingsley, Jean Depatie, Ian S. Davidson, Francis
O'Kelly and Hans von Michaelis as directors of the Company, and
2. The appointment of KPMG as auditors of the Company.
ITEM 5 OTHER INFORMATION: None
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K:
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Exhibit Description
<S> <C>
27 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K: A report on Form 8-K filed
July 17, 1998 with respect to the acquisition of the
40% interest in the Cieneguita Joint Venture held by
our partner, Aquiline Resources Inc.
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.
GLAMIS GOLD LTD.
(Registrant)
August 14, 1998
/s/ DANIEL J. FORBUSH
----------------------------------------
DANIEL J. FORBUSH
Chief Financial Officer, Treasurer &
Secretary (Principal Accounting and
Financial Officer)
<PAGE> 15
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Page No.
- ----------- ----------- --------
<S> <C> <C>
27 Financial Data Schedule 21
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM GLAMIS
GOLD LTD. CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTH PERIOD ENDED JUNE
30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 28,660
<SECURITIES> 0
<RECEIVABLES> 1,708
<ALLOWANCES> 0
<INVENTORY> 9,023
<CURRENT-ASSETS> 39,821
<PP&E> 69,060
<DEPRECIATION> 34,398
<TOTAL-ASSETS> 101,124
<CURRENT-LIABILITIES> 3,674
<BONDS> 0
0
0
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<TOTAL-REVENUES> 17,144
<CGS> 10,619
<TOTAL-COSTS> 10,619
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<INCOME-PRETAX> 344
<INCOME-TAX> 140
<INCOME-CONTINUING> 203
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 203
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
