DENVER, COLORADO - MAY 30, 1997 #97-013
7:00 PM MST
CONSOLIDATED NEVADA GOLDFIELDS CORPORATION ANNOUNCES FIRST
QUARTER RESULTS
Three Months Ended
March 31,
1997 1996
Ounces of Gold Sold 13,062 15,987
Ounces of Silver Sold 426,649 -
Pounds of Copper Sold 1,235,699 -
Revenue (000s US$) $7,327 $ 5,658
Net (loss) (000s US$) $ (4,238) $ (1,725)
Net (loss) per Share $ (0.03)$ (0.03)
Consolidated Nevada Goldfields Corporation announced that
during the first quarter ended March 31, 1997 it reported a
net loss of ($4,238,000) or ($0.03) per share on revenues of
$7,327,000 from the sale of 13,062 ounces of gold, 426,649
ounces of silver and 1.2 million pounds of copper compared
to a net loss of ($1,725,000) or ($0.03) per share on
revenues of $5,658,000 from the sale of 15,987 ounces of
gold for the comparable period last year.
The Company has previously announced that it has changed its
fiscal year-end from June 30th to December 31st and the
information is presented for the first quarter of the
current calendar year.
Operations
The loss for the quarter was primarily attributable to
production shortfalls at the Company's mines. Steps have
been taken to address the problems causing the shortfalls.
The Nixon Fork mine in Alaska performed in accordance
with budget in terms of output and costs during the first
quarter of 1997. Performance included planned production
delays in order to complete planned maintenance and
installation of new equipment. It is expected the mine will
be at full capacity by June 1997.
The Company's Aurora mine has continued to perform
according to budget during the first quarter of 1997.
The Company recently announced the signing of a letter of
intent to purchase the assets of the neighboring property to
the Aurora mine subject to the completion of legal and
technical due-diligence. Upon completion of the
transaction, the Company believes the plant could be
modified to increase the throughput from 315 tonnes per day
to 550 tonnes per day and that the life of the Aurora mine
could be extended by at least seven years.
In Mexico, the Company has been engaged in a systematic
program of management strengthening, capital investment,
operational rehabilitation and debt restructuring. The pace
of these improvements has been slower than anticipated with
a consequent impact on operating margins.
Slower than expected improvements during the last
calendar quarter of 1996 resulted in below budget operations
at the Company's Real del Monte y Pachuca silver mine near
Mexico City. During the second quarter of 1997, however,
operations at Pachuca have met tonnage expectations with the
mill periodically running at a higher than anticipated 1,300
tonnes per day. Capital investment continues at the Pachuca
mine with the addition of rubber tired equipment in some
areas of the mine and further development of new shrinkage
stopes and underground haulage ways. As a consequence, the
Pachuca mine is projected to continue to increase production
capacity through the balance of the year and beyond.
Operations at the El Baztan copper mine have been
complicated by reduced concentrate off take by the smelter
at San Luis Potosi. Management is exploring alternatives to
increase concentrate sales.
The Company's Barita de Sonora barite mine near
Hermosillo, experiencing low equipment availability and high
overheads, has been performing below budget. New
maintenance programs, administrative staff restructuring and
improved operating procedures are anticipated to increase
output from Barita de Sonora. The operation has
renegotiated sales contracts with PEMEX which will result
in a 15 to 20 percent increase in the price received from
its barite sales.
The Company's Magistral del Oro gold tailings
reprocessing operation in north central Mexico is in the
second phase of a two phase metallurgical testing program
that will determine the long term viability of this
operation. The operation has experienced difficulties with
excessive copper absorption and slower than anticipated gold
leaching kinetics resulting in below-budget performance.
Lower heap heights, higher leaching rates and different
chemical concentrations are being tested as a potential
remedy for the problem. Results from the testing are
expected to be available by June.
Corporate Finance
The Company previously announced the completion of a $4
million shareholder line of credit and the signing of a $45
million financing commitment with Standard Bank to provide
$30 million in funds for restructuring the Company's
existing bank debt and $15 million for the provision of a
comprehensive hedging facility. The Standard Bank financing
is subject to completion of legal and engineering due
diligence. The Company plans to complete the due-diligence
process during the second quarter of 1997
Consolidated Nevada Goldfields Corporation is a Denver based
multi-national mining company with six producing mines and
over 1,300 employees. The Company has proven and probable
reserves of 560,000 ounces of gold, 51 million ounces of
silver and 39 million pounds of copper. 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.
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