<PAGE>
FORM 6-K
SECURITIES EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
COMMISSION FILE NUMBER 0-15577
FOR THE MONTH OF DECEMBER 1997
CONSOLIDATED NEVADA GOLDFIELDS CORPORATION
(Translation of registrant's name into English)
1801 Broadway, Suite 1620
Denver, Colorado 80202
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
----- -----
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
---- ----
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82- .
ENCLOSED ARE PRESS RELEASES FOR CONSOLIDATED NEVADA GOLDFIELDS CORPORATION
97-015, 97-016, 97-017, 97-018, 97-019, 97-020, 97-021, 97-022, AND 97-023.
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.
CONSOLIDATED NEVADA GOLDFIELDS CORPORATION
(Registrant)
/s/ James S. Stirbis, Jr.
Date: Dec. 2, 1997 -----------------------------------------------
By: James S. Stirbis, Jr. - Corporate Secretary
and Treasurer
<PAGE>
CONSOLIDATED NEVADA GOLDFIELDS CORPORATION
N E W S R E L E A S E
DENVER, COLORADO - JULY 30, 1997 #97-015
5:00 PM MST
CONSOLIDATED NEVADA GOLDFIELDS CORPORATION APPOINTS NEW
DIRECTOR AND SENIOR VICE PRESIDENT - OPERATIONS
Consolidated Nevada Goldfields Corporation announced today the appointment of
Donald Worth as a Company Director. Mr. Worth brings to the Board almost 40
years of international mining-industry experience - both operating and
financial. He has been a mining specialist with the Canadian Imperial Bank of
Commerce since 1964, and was named Vice President of that Bank in 1984. He
holds a Master of Applied Science degree in Mining Engineering from the
University of Toronto and currently serves as Immediate Past President of the
Canadian Institute of Mining, Metallurgy, and Petroleum.
Mr. Worth replaces Richard Atkinson, an independent mining consultant, who had
been a Director of the Company since 1991. Wendell Robinson, Chairman of the
Board, expressed the Company's appreciation for the time, dedication, and
valuable advice given by Mr. Atkinson during his tenure as a Board Member.
The Company also announced the appointment of Jack Haptonstall as Senior Vice
President, with overall responsibility for the Company's mining operations. Mr.
Haptonstall is uniquely qualified for his new position. He holds an Engineer of
Mines Degree from the Colorado School of Mines, and has more than 30 years of
mining-industry management and engineering experience, including 22 years
experience in Latin America.
Consolidated Nevada Goldfields Corporation is a Denver-based, multi-national
mining company, with six producing mines and over 1,300 employees. The Company
has reserves of 560,000 ounces of gold, 51 million ounces of silver, 38 million
pounds of copper, and 4 million tonnes of barite. The Company currently trades
on the Toronto exchange under the symbol KNV, on NASDAQ under the symbol KNVCF,
and on the Stuttgart, Frankfurt, and Berlin exchanges under the symbol CNV. For
further information, please contact: Alex Bissett at (303) 296-3200.
<PAGE>
CONSOLIDATED NEVADA GOLDFIELDS CORPORATION
N E W S R E L E A S E
DENVER, COLORADO - SEPTEMBER 2, 1997
#97-016
1:00 PM MST
CONSOLIDATED NEVADA GOLDFIELDS CORPORATION
SIGNS ELECTRA GOLD ACQUISITION
Consolidated Nevada Goldfields Corporation (CNGC) announced today that it has
signed a definitive agreement with Electra Gold Limited (EGL) and its wholly
owned subsidiaries, Electra Mining Corporation and Minerex Resources (US) Inc.
(The Subsidiaries), to purchase certain patented and unpatented mineral claims
in and around CNGC's Aurora gold mine, located 28 miles southwest of Hawthorne,
Nevada. The purchase price is US$2 million, payable US$500,000 in cash and
US$1.5 million in shares of CNGC. Closing is scheduled to take place on
September 4, 1997.
Under the agreement, the Subsidiaries will keep their respective interests in
the heap-leach operations. In addition, EGL and the Subsidiaries will retain
responsibility for the reclamation of the heaps as well as the mining and
processing operations.
Alex Bissett, President and CEO of CNGC, stated that the purchase of the Electra
property would add more than 150,000 ounces of gold reserves to its Aurora
operation. This new reserve, when added to the existing Aurora reserve, would be
sufficient to justify increasing the current annual production level at Aurora
from approximately 13,000 ounces of gold to 25,000 to 30,000 ounces of gold
for at least seven years.
Consolidated Nevada Goldfields Corporation is a Denver-based multinational
mining company with six producing mining properties and over 1,300 employees.
Upon the completion of the purchase of the Electra property, the company
reserves will include over 700,000 ounces of gold, 51 million ounces of silver,
and 38 million pounds of copper. The Company trades on the Toronto exchange
under the symbol KNV, on the NASDAQ under the symbol KNVCF, and on the
Stuttgart, Frankfurt, and Berlin exchanges under the symbol CNV. For additional
information, please contact Shelley Thompson at (303) 296-3200.
<PAGE>
CONSOLIDATED NEVADA GOLDFIELDS CORPORATION
N E W S R E L E A S E
DENVER, COLORADO - SEPTEMBER 9, 1997
#97-017
1:00 PM MST
CONSOLIDATED NEVADA GOLDFIELDS CORPORATION
ANNOUNCES SECOND QUARTER RESULTS
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
---- ---- ---- ----
Ounces of Gold Sold 18,077 14,330 29,671 30,316
Ounces of Silver Sold 486,720 8,670 916,717 20,451
Pounds of Copper Sold 1,280,093 107,601 2,324,248 112,451
Revenue (000's US$) $ 9,608 $ 4,985 $16,935 $10,643
Net (loss) (000's US$) $(4,002) $(3,475) $(8,240) $(5,200)
Net (loss) per Share $ (0.03) $ (0.06) $ (0.06) $ (0.10)
Consolidated Nevada Goldfields Corporation announced that during the second
quarter ending March 31, 1997 it reported a net loss of ($4,002,000) or ($0.03)
per share on revenues of $9,608,000 from the sale of 18,077 ounces of gold,
486,720 ounces of silver, and 1.3 million pounds of copper, compared to a net
loss of ($3,475,000) or ($0.06) per share on revenues of $4,985,000 from the
sale of 14,330 ounces of gold, 8,670 ounces of silver, and 107,601 pounds of
copper, for the comparable period last year. Included in the net loss were non-
cash charges for depletion, depreciation, and amortization of ($3,157,000) and
($2,138,000), respectively. For the six months ended June 30, 1997, the Company
reported a net loss of ($8,240,000) or ($0.06) per share on revenues of
$16,935,000 from the sale of 29,671 ounces of gold, 916,717 ounces of silver and
2.3 million pounds of copper compared to a net loss of (5,200,000) or ($0.10)
per share on revenues of $10,643,000 from the sale of 30,316 ounces of gold,
20,451 ounces of silver and 112,451 pounds of copper for the comparable period
last year.
OPERATIONS
The loss for the quarter was primarily attributable to low precious-metal
prices, coupled with lower-than-expected metal production at the company's two
most important mines, Pachuca in Mexico and Nixon Fork in Alaska.
The PACHUCA operation in the State of Hidalgo, Mexico increased tonnage slightly
over first quarter but experienced lower-than-expected head grades. Pachuca
produced 465,414 ounces of silver and 2,869 ounces of gold for the quarter.
While tonnage throughput improved over first quarter, a blockage of a seven-
kilometer tailings pipe, constructed and buried decades ago, kept Pachuca from
achieving budgeted production. Material to construct a new bypass tailings line
has been ordered and construction on the bypass has begun. With this bypass in
place, it is expected that tonnage throughput will increase significantly by the
end of the year.
<PAGE>
The NIXON FORK operation, while increasing tonnage over third quarter, did not
meet budgeted tonnage throughput. Good progress was made in advancing the
spiral decline in the Crystal Garnet Mine; however, in April and May ore losses
occurred. The Crystal Garnet Mine operation was near target in June, producing
4,488 ounces of gold, and a total of 10,462 ounces for the quarter. Progress
was also made in negotiations with a Japanese company which, when completed,
will call for the funding of an extensive exploration program in the Nixon Fork
district.
The AURORA operation in Nevada operated well during the quarter, producing 3,825
ounces of gold. Negotiations continued for the purchase of a neighboring
property containing reserves of approximately 180,000 ounces of gold, which can
be mined using open-pit methods. A new feasibility study was completed which
showed that the new reserve, combined with the existing Aurora reserve, would
justify an expansion of the Aurora process plant from its present capacity of
350 tonnes per day to 700 tonnes per day. With a gold production rate of 25-
30,000 ounces per year, the expanded operation would have a life of at least
seven years. It is expected the transaction will be completed by the end of the
third quarter.
The BAZTAN underground copper operation in the State of Michoacan, Mexico,
performed well except for concentrate sales which were limited by Mexican
smelter capacities. The stockpile of concentrates continued to build during the
quarter; however, in June an agreement was reached with Industrial Mineral
Mexico Sociedad Anonima to start taking concentrate deliveries late in the third
quarter in quantities that would reduce concentrate inventory. Metallurgical
improvements were achieved resulting in significant improvements in concentrate
grade.
Metallurgical testing at the MAGISTRAL DEL ORO tailings reprocessing operation
in the State of Durango, Mexico, showed it would be uneconomical to continue to
agglomerate, stack, and leach old tailings at this property at current gold
prices. The company has continued to leach tailings that have already been
agglomerated and stacked and will continue to produce small quantities of gold
from this property as long as the operation provides a positive cash flow.
The Barita de Sonora operation, in the State of Sonora, Mexico, underperformed
during the quarter. The company is considering several options regarding this
operation to maximize shareholder value from this asset.
CORPORATE FINANCE
Due diligence work commenced on both legal and engineering issues in conjunction
with a restructuring of $30 million of long-term debt by Standard Bank.
Consolidated Nevada Goldfields Corporation is a Denver-based multinational
mining company with six producing mining properties and over 1,300 employees.
Upon the completion of the purchase of the Electra property, the company's
reserves will include over 700,000 ounces of gold, 51 million ounces of silver,
and 38 million pounds of copper. The Company trades on the Toronto exchange
under the symbol KNV, on the NASDAQ under the symbol KNVCF, and on the
Stuttgart, Frankfurt, and Berlin exchanges under the symbol CNV. For additional
information, please contact Shelley Thompson at (303) 296-3200.
<PAGE>
CONSOLIDATED NEVADA GOLDFIELDS CORPORATION
N E W S R E L E A S E
DENVER, COLORADO - SEPTEMBER 18, 1997
#97-018
1:00 PM MDT
CONSOLIDATED NEVADA GOLDFIELDS CORPORATION
CLOSES ON ELECTRA ACQUISITION
Consolidated Nevada Goldfields Corporation (CNGC) announced today it has
finalized and closed the agreement with Electra Gold Limited (EGL) and its
subsidiaries, to acquire patented and unpatented mineral claims in and around
CNGC's Aurora project, located 28 miles southwest of Hawthorne, Nevada. The
purchase price was US$2 million, payable US$500,000 in cash and US$1.5
million in shares of CNGC.
The acquisition has added 180,000 ounces of gold to CNGC reserves, resulting
in total CNGC gold-reserve holdings of 740,000 ounces. The Company has
completed a feasibility study, with positive results, of expanding plant
operations at Aurora to increase mine and plant production to 700 tonnes per
day. The Electra acquisition, in conjunction with planned plant expansion,
would raise the production level at Aurora from 13,000 ounces of gold to more
than 25,000 ounces of gold per year, while increasing the mine life to at
least seven years.
Consolidated Nevada Goldfields Corporation is a Denver-based, international
mining company with six producing mining properties and over 1,300 employees.
The Company reserves include 740,000 ounces of gold, 51 million ounces of
silver, and 38 million pounds of copper. The Company shares trade on the
Toronto exchange under the symbol KNV, on the NASDAQ under the symbol KNVCF,
and on the Stuttgart, Frankfurt, and Berlin exchanges under the symbol CNV.
For additional information, please contact Shelley Thompson at (303) 296-3200.
<PAGE>
CONSOLIDATED NEVADA GOLDFIELDS CORPORATION
N E W S R E L E A S E
DENVER, COLORADO - SEPTEMBER 22, 1997
#97-019
5:00 PM MDT
CONSOLIDATED NEVADA GOLDFIELDS CORPORATION CLOSES US$7.5 MILLION
CONVERTIBLE DEBENTURE
Consolidated Nevada Goldfields Corporation (CNGC) announced today that it has
closed a US$7.5 million, 10% Convertible Unsecured Debenture ("the Debentures")
with four of its major shareholder groups.
The Debentures are convertible at a conversion price of Cdn$0.77 per share, into
13,593,510 fully paid and non-assessable common shares of the Company, subject
to adjustment in accordance with the Debentures. The Debentures also contain an
automatic conversion feature, triggered if the weighted average price at which
the common shares trade on The Toronto Stock Exchange, during 20 consecutive
trading days, is not less than Cdn$1.50. Interest is payable semiannually,
commencing on March 12, 1998 with principal due and payable on September 12,
2002.
The proceeds from the Debentures will be used by the Company to pay down
US$982,500 of previously issued shareholder promissory notes, for general
corporate purposes, and to accelerate the pace of capital investment in the
Company's Mexican operations. In addition, a portion of the proceeds were used
to acquire 180,000 ounces of gold reserves from Electra Gold Limited and its
subsidiaries, as previously announced. The purchase price for these reserves
was US$2,000,000, payable US$500,000 in cash and US$1,500,000 in shares of CNGC.
Alex Bissett, President and Chief Executive Officer, stated he is pleased with
the strong support from the shareholder group of CNGC. He also stated the
Debenture transaction is a positive statement of long-term commitment by CNGC
shareholders.
Consolidated Nevada Goldfields Corporation is a Denver-based, international
mining company with six producing mining properties and over 1,300 employees.
The Company reserves include 740,000 ounces of gold, 51 million ounces of
silver, and 38 million pounds of copper. The Company shares trade on the
Toronto exchange under the symbol KNV, on the NASDAQ under the symbol KNVCF, and
on the Stuttgart, Frankfurt, and Berlin exchanges under the symbol CNV. For
additional information, please contact Shelley Thompson at (303) 296-3200.
<PAGE>
CONSOLIDATED NEVADA GOLDFIELDS CORPORATION
N E W S R E L E A S E
DENVER, COLORADO - SEPTEMBER 24, 1997
#97-020
5:00 PM MDT
CONSOLIDATED NEVADA GOLDFIELDS CORPORATION
WINS SAFETY AWARDS AT AURORA OPERATION
Consolidated Nevada Goldfields Corporation (CNGC) announced today that for the
second consecutive year, its Aurora operation, located 28 miles southwest of
Hawthorne, Nevada, has been selected to receive the following safety awards from
the Nevada Mining Association (NMA):
- First Place - Small Open-Pit Mine
- First Place - Small Underground Mine
The awards were presented at the NMA Convention in South Lake Tahoe on
September 6, 1997. The CNGC Aurora unit, with only 45 employees, has a
history of safe and environmentally sound operation. Recently, CNGC acquired
a neighboring Aurora Partnership property from Electra Gold Ltd., which will
increase the reserves at Aurora by 180,000 ounces of gold.
Consolidated Nevada Goldfields Corporation is a Denver-based, international
mining company with six producing mining properties and over 1,300 employees.
The Company reserves include 740,000 ounces of gold, 51 million ounces of
silver, and 38 million pounds of copper. The Company shares trade on the
Toronto exchange under the symbol KNV, on the NASDAQ under the symbol KNVCF, and
on the Stuttgart, Frankfurt, and Berlin exchanges under the symbol CNV. For
additional information, please contact Shelley Thompson at (303) 296-3200.
<PAGE>
CONSOLIDATED NEVADA GOLDFIELDS CORPORATION
N E W S R E L E A S E
DENVER, COLORADO - OCTOBER 27, 1997
#97-021
5:00 PM MST
CONSOLIDATED NEVADA GOLDFIELDS CORPORATION
APPOINTS TWO CORPORATE OFFICERS
Consolidated Nevada Goldfields Corporation (CNGC) announced today the
appointment of James S. Stirbis Jr., as Corporate Secretary and Treasurer and
Michael Clarke as Vice President of Exploration.
James S. Stirbis, Jr. formerly held the position of Corporate Controller at
CNGC. Stirbis has been with the Company since April 1996 and now has
responsibility for all corporate financial matters. Prior to that, Stirbis was
a Supervising Senior at KPMG Peat Marwick, responsible for manufacturing, retail
and distribution in Chemicals and Energy, auditing several precious and base-
metal clients in the mining industry. Stirbis received his Bachelor of Science
degree in Accounting, as well as a Master of Accountancy from the University of
Denver. He is a registered Certified Public Accountant in the state of
Colorado.
Michael Clarke comes to CNGC from Cyprus Amax Corporation, where he worked as
District Manager of Western Canada, District Manager of Mexico, and Senior
Geologist. His duties at Cyprus included world-wide evaluation of acquisition
candidates, as well as building and carrying out gold and copper exploration
programs in Western Canada and Mexico. Prior to his nine years at Cyprus,
Clarke spent seven years in Mexico as General Manager of Exploration for
Luismin. Clarke holds a Bachelor of Science degree in Geology, as well as a
Ph.D. in Geology from the University of Arizona. He is fluent in Spanish, and
brings excellent work experience in Latin America. Mike Clarke is well-
qualified to head up exploration efforts at CNGC, including evaluation of the
mineral potential of the Company's vast land holdings.
These appointments are part of a continuing program at CNGC to strengthen
management and improve financial performance.
Consolidated Nevada Goldfields Corporation is a Denver-based, international
mining company with six producing mining properties and over 1,300 employees.
The Company reserves include 740,000 ounces of gold, 51 million ounces of
silver, and 38 million pounds of copper, with additional resources of almost 3
million gold equivalent ounces. The Company shares trade on the Toronto
exchange under the symbol KNV, on the NASDAQ under the symbol KNVCF, and on the
Stuttgart, Frankfurt, and Berlin exchanges under the symbol CNV. For additional
information, please contact Shelley Thompson at (303) 296-3200.
<PAGE>
CONSOLIDATED NEVADA GOLDFIELDS CORPORATION
N E W S R E L E A S E
DENVER, COLORADO - NOVEMBER 19, 1997
#97-022
10:00 AM MDT
CONSOLIDATED NEVADA GOLDFIELDS CORPORATION ANNOUNCES EXTRAORDINARY
RESOLUTION BY 3% CONVERTIBLE DEBENTUREHOLDERS
Consolidated Nevada Goldfields Corporation (CNGC) announced today that it has
received approval from the requisite number of holders of its 3% Convertible
Subordinated Debentures currently outstanding (the "Debentures") issued in March
1994 with respect to the reduction of the conversion price of the Debentures
from Cdn.$1.20 to Cdn.$0.72 per share and with respect to the automatic
conversion of the Debentures at the reduced exercise price to be effective on
November 21, 1997. The principal amount of the Debentures currently outstanding
is Cdn.$13,617,000 which will result in the issuance upon conversion of an
additional 7,565,001 common shares, and in the aggregate, 18,912,500 common
shares of the Company, representing approximately 5.65% of the Company's issued
and outstanding share capital.
The automatic conversion of the Debentures and the reduction of the exercise
price are being effected in connection with CNGC's efforts to reduce its
outstanding debt. No additional amount will be payable in respect of the
Debenture following such conversion.
Consolidated Nevada Goldfields Corporation is a Denver-based, international
mining company with six producing mining properties and over 1,300 employees.
The Company reserves include 740,000 ounces of gold, 51 million ounces of
silver, and 38 million pounds of copper. The Company shares trade on the
Toronto exchange under the symbol KNV, on the NASDAQ under the symbol KNVCF, and
on the Stuttgart, Frankfurt, and Berlin exchanges under the symbol CNV.
For additional information please contact Consolidated Nevada Goldfields
Corporation, Alex Bissett, President and Chief Executive Officer at
(303) 296-3200.
<PAGE>
CONSOLIDATED NEVADA GOLDFIELDS CORPORATION
N E W S R E L E A S E
DENVER, CO - NOVEMBER 26, 1997
#97-023
5:30 PM MST
CONSOLIDATED NEVADA GOLDFIELDS CORPORATION ANNOUNCES THIRD QUARTER RESULTS
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
---- ---- ---- ----
Ounces of Gold Sold 16,226 10,171 45,897 40,433
Ounces of Silver Sold 420,206 4,597 1,336,923 11,622
Pounds of Copper Sold 2,502,825 90,479 4,827,073 202,930
Revenue (000's US$) $ 8,585 $ 3,565 $ 25,520 $14,208
Net Loss (000's US$) $(7,126) $(2,543) $ (15,366) $(7,743)
Net Loss per Share $ (0.05) $ (0.05) $ (0.12) $ (0.14)
Consolidated Nevada Goldfields Corporation announced that during the third
quarter ending September 30, 1997 it reported a net loss of $7,126,000 or $0.05
per share on revenues of $8,585,000 from the sale of 16,226 ounces of gold,
420,206 ounces of silver, and 2.5 million pounds of copper, compared to a net
loss of $2,543,000 or $0.05 per share on revenues of $3,565,000 from the sale of
10,171 ounces of gold, 4,597 ounces of silver, and 90,479 pounds of copper, for
the comparable period last year. Included in the net loss were non-cash charges
for depletion, depreciation, and amortization of $2,839,000 and $1,426,000,
respectively. For the nine months ended September 30, 1997, the Company
reported a net loss of $15,366,000 or $0.12 per share on revenues of $25,520,000
from sales of 45,897 ounces of gold, 1,336,923 ounces of silver and 4.8 million
pounds of copper compared to a net loss of $7,743,000 or $0.14 per share on
revenues $14,208,000 from the sale of 40,433 ounces of gold, 11,622 ounces of
silver and 202,930 pounds of copper for the comparable period last year.
Included in the net loss were non-cash charges for depletion, depreciation, and
amortization of $8,463,000 and $6,282,000, respectively.
OPERATIONS
PACHUCA
During the quarter the Pachuca operation mined and processed 88,081 tonnes of
ore, from which 399,923 ounces of silver and 1,616 ounces of gold were produced.
Plugging in a seven-kilometer tailings line, installed decades ago, caused
production to reach a plateau of about 1,200 tonnes per day. Plans call for the
replacement of this line with a 10-inch HDPE pipe that has been engineered to
carry a minimum of 2,400 tonnes per day. With installation of this new tailings
line, the Company expects Pachuca will be able to continue its plan to reach
full annual production of 5.4 million ounces of silver and 25,000 ounces of gold
by mid-1998.
NIXON FORK
The Nixon Fork mine, located near McGrath, Alaska, produced 9,433 ounces of gold
during the quarter. The operation experienced difficulties in keeping a full
complement of skilled workers onsite due to competition from new underground
mines in Alaska. This caused ore-production shortfalls, resulting in less-than-
anticipated gold production. Underground drilling at the Crystal Garnet mine
delineated ore one level below the formerly existing reserve. It is unknown at
this time how deeply ore mineralization in the Crystal Garnet mine extends.
AURORA
The Aurora mine, located southwest of Hawthorne, Nevada, produced 3,183 ounces
of gold during the quarter. Production was down from the second quarter due to
a slide in the Chesco pit, which forced mining to divert to the lower-grade Ann
pit for a portion of the quarter. The Company completed acquisition of the
neighboring Humboldt deposit, with reserves of approximately 180,000 ounces. A
pre-feasibility study has shown that this new reserve, coupled with the existing
Aurora reserve, is anticipated to provide a sound economic base to expand the
throughput of the plant from 350 to 700 tonnes per day.
<PAGE>
EL BAZTAN
During the quarter, El Baztan operations mined and processed 23,214 tonnes of
ore, from which 791,000 pounds of copper and 405 ounces of gold were produced.
El Baztan normally operates three of four grinding mills; however, during the
quarter, the operation was hampered because of cracked trunnions on two of these
grinding mills. As a result, the operation experienced lower-than-expected
copper production.
BARITA DE SONORA
The Barita de Sonora operation in the state of Sonora, Mexico, has experienced
continued operating losses during the past year, and the Company has made the
decision to place the operation on standby. The Company is examining the
alternatives of either moving the barite-grinding operation to the east coast of
Mexico, with raw barite being supplied from the Sonora mine, or selling the
operation. The Company has received expressions of interest from potential
buyers.
MAGISTRAL DEL ORO
The Magistral del Oro operation in the state of Durango, Mexico, had been
reprocessing tailings from a gold mine which closed in 1962. These gold-bearing
tailings had been agglomerated and stacked for heap leaching. With the
prevailing market price of gold, the operations can no longer support the cost
of handling, agglomerating, and stacking these tailings. Over the past 12
months, only leaching operations have been carried out. These have provided
very small, but positive cash flow from the operation. Recently, gold
production diminished to a point that it could no longer support the cost, and
the decision has been made to place the Magistral del Oro operation on standby.
The Company can provide no assurance that the alternatives currently being
examined will result in the recovery of the carrying value of the Magistral del
Oro and Barita de Sonora properties, and the Company is currently estimating
what impairment, if any, will be recorded in the fourth quarter.
FINANCING
Previously, the Company announced it signed an indicative term sheet with
Standard New York, Inc. and Standard Bank London Limited (Standard) to provide a
credit facility consisting of $30 million in term debt and a related $15
million hedging facility. The previously announced terms of the credit
facility, stating the corporate debt would be secured by the assets of
corporation, remain; however, Standard has notified the Company that a
completion guarantee will be required by a major shareholder of the Company as a
condition to obtaining this financing. Upon meeting certain economic and legal
completion covenants, the shareholder guarantee would be released. The Company
can provide no assurance that such major shareholder will provide the guarantee
required by Standard.
LAND POSITION
In November 1995, the Company entered into a mining and exploration lease on
46,000 acres of land adjacent to its Nixon Fork mine ("Doyon Leasehold"). The
Company has not made the cash payment of $888,889 currently due and has entered
into preliminary negotiations with the lessor to restructure the remaining cash
payment. Additionally, a payment of 536,684 common shares is due April 30,
1998. A third party has expressed an interest in entering into a joint venture
to explore the district which would also provide funding for the cash payment.
There can be no assurance these alternatives will be available at terms
acceptable to the Company or at all.
MAILING TO CANADIAN SHAREHOLDERS
Due to a current mail strike in Canada, the Company has not yet mailed the
Quarterly Report to Shareholders for the Three Months Ended September 30,
1997 to its Canadian shareholders. Canadian shareholders wishing to obtain
such information and results may contact the Company at the telephone number
indicated below. When mail service resumes in Canada, the Company will mail
the financial results to its Canadian shareholders.
Consolidated Nevada Goldfields Corporation is a Denver-based, international
mining company with six producing mining properties and over 1,300 employees.
The Company reserves include 740,000 ounces of gold, 51 million ounces of
silver, and 38 million pounds of copper. The Company shares trade on the
Toronto exchange under the symbol KNV, on the NASDAQ under the symbol KNVCF,
and on the Stuttgart, Frankfurt, and Berlin exchanges under the symbol CNV.
For additional information please contact Consolidated Nevada Goldfields
Corporation, Alex Bissett, President and Chief Executive Officer at
(303) 296-3200.
