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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
April 20, 1995
FMC GOLD COMPANY
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(Exact name of registrant as specified in its charter)
Delaware 1-9569 88-0226676
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
5011 Meadowood Way, Suite 200, Reno, NV 89502
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(Address of principal executive offices) (Zip Code)
(702) 827-3777
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Registrant's telephone number,
including area code
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[FMC GOLD COMPANY LETTERHEAD]
Item 5 Other Events
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FMC GOLD REPORTS FIRST QUARTER RESULTS
CHICAGO, April 20, 1995 -- FMC Gold Company reported a first quarter net loss
of $3.6 million compared with net income of $4.6 million in the first quarter
of 1994. The July 1994 closing of the Royal Mountain King mill and the winding
down of Paradise Peak heap-leach operations resulted in significant declines in
production. The 30 percent owned Jerritt Canyon operation is now the company's
only producing property. Increased exploration activity in Chile led to
exploration spending of $4 million in the first quarter, up 33 percent from the
year-ago period. Loss per share was $0.05 in the first quarter compared with
earnings per share of $0.06 in last year's quarter.
Sales for the first quarter of 1995 were $9.1 million compared with
$22.3 million last year. The average realized price of gold decreased to
$378 per ounce from $383 in the first quarter of 1994.
Also during the quarter, FMC Corporation, which owns 80 percent of FMC Gold,
engaged Wood Gundy, an investment banking firm specializing in precious metals
properties, to evaluate the strategic options relating to its ownership
interests in FMC Gold Company.
In the first quarter, FMC Gold produced 24 thousand ounces of gold compared
with 62 thousand ounces in the same period last year. At the Jerritt Canyon
mine (30 percent owned by FMC Gold), gold production declined due to lower
throughput, mill ore grades and recoveries. FMC Gold's share of production was
22 thousand ounces compared with 29 thousand ounces in the first quarter of
1994.
-more-
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PAGE 2/FMC GOLD REPORTS FIRST QUARTER EARNINGS
At the Paradise Peak mine, reclamation activity continued while residual gold
production decreased to 2 thousand ounces compared with 20 thousand ounces in
the first quarter of 1994. Production from the Paradise Peak operation is
expected to end in the second quarter of 1995.
Average cash production costs increased during the first quarter to $221 per
gold equivalent ounce compared with $201 per gold equivalent ounce in the first
quarter of 1994. The increase in average cash production costs per ounce
reflects the decrease in production at the low-cost Paradise Peak operation.
FMC Gold held $103 million in cash and cash equivalents at the end of the
quarter. Interest income was $1.6 million during the first quarter compared
with $2.2 million last year, due to a lower loan balance to FMC Corporation.
Beartrack Project Update
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At Beartrack, an injunction against all ongoing and future forest activities,
including mining, that could affect the local endangered species of salmon, was
issued, stayed and subsequently dissolved during the first quarter of 1995.
Another lawsuit filed last year by the Sierra Club Legal Defense Fund is
still pending. The lawsuit alleges that the biological opinion issued by the
National Marine Fisheries Service on the Beartrack property fails to satisfy
the requirements of the Endangered Species Act. FMC Gold believes the
biological opinion was carefully considered and is fully supported by the
record.
Development at Beartrack has continued uninterrupted, and production is
scheduled to begin during the second quarter of 1995.
El Penon Project: Northern Chile
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FMC Gold Company's wholly owned Chilean subsidiary, Minera FMC Limitada, has
identified significant gold and silver mineralization at the El Penon project
in northern Chile. The mineralization has substantial potential to become an
economic orebody based on the primary target area that has been surface drilled
to date.
-more-
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PAGE 3/FMC GOLD REPORTS FIRST QUARTER EARNINGS
The primary target area remains open, and several other target areas have
been identified elsewhere on the El Penon property. The El Penon discovery was
made by FMC Gold geologists as a result of the company's on-going grassroots
exploration program.
The El Penon project comprises 220 square miles of mining concessions and
leases and is located 75 miles southeast of Antofagasta, Chile. There are 155
completed exploration drill holes on the property. In the primary target area,
33 holes have intercepted significant mineralization (at least
0.13 ounces per ton (opt) gold for at least 13 feet). Drilling on a 100-foot
spacing along a portion of the primary target area has identified a significant
resource, with an average grade of 0.25 opt gold and 4.43 opt silver.
Thickness of the mineralization in the resource averages 50 to 100 feet in a
steeply dipping zone with mineable widths. The resource is oxidized, contains
minimal contaminants and is amenable to direct cyanidation. Ore grade
minerlization beyond the preliminary inferred resource has been intercepted
nearby, and additional drilling is proceeding in an attempt to link this
mineralization to the resource.
FMC Gold geologists have discovered additional high-grade mineralization at
four separate target areas up to 2-1/2 miles from the primary target. Other
surface and geophysical targets at El Penon have received only minimal
attention to date.
The company expects to begin development of an underground decline into the
primary target area during the second half of this year to confirm
mineralization, acquire bulk metallurgical samples, conduct underground
drilling at depth across the zone, and investigate underground mining
conditions. The discoveries to date are on concessions 100 percent owned, or
under option by Minera FMC Limitada. In addition, the company has acquired
water rights that are expected to be sufficient for initial mine development
and future growth.
-more-
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PAGE 4/FMC GOLD REPORTS FIRST QUARTER EARNINGS
Rossi Project: Carlin Trend, Nevada
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The company's ongoing program also has continued to identify mineralization
at the Rossi property on the northern end of the Carlin Trend in Nevada. The
mineralization occurs in the Popovich geologic formation along a strike length
of 2,400 feet between depths of 770 and 1,940 feet.
Since 1991, FMC Gold has drilled 96 holes at the Rossi property to an average
depth of 1,580 feet. There are 22 holes in the primary target area that have
resulted in 45 significant intercepts (at least 0.20 opt gold for at least 6
feet) with an average grade of 0.47 opt gold over 18 feet. The company has
developed a preliminary geologic model of the mineralization based on these
intercepts and inferred geologic controls. Although the geologic model
indicates significant potential, additional surface drilling and underground
access will be required to confirm the potential indicated by this model,
extend the known mineralized zone and investigate underground mining
conditions. The company continues to investigate the Rossi property with an
active drilling program. The Rossi project comprises approximately 11 square
miles of mining claims.
FMC Gold is is engaged in precious metals exploration, development and
production. The company reported 1994 production of 163,000 ounces of gold and
154,000 ounces of silver, with reserves of 1.8 million ounces of gold. FMC
Gold is publicly traded on the New York Stock Exchange under the common stock
symbol FGL.
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FMC GOLD COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED AND IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
(Unaudited)
Three Months
Ended March 31
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1995 1994
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<S> <C> <C>
Sales $ 9.1 $ 22.3
Costs and expenses
Cost of sales 9.0 15.1
Exploration costs 4.0 3.0
Selling, general and
administrative expenses 1.3 1.5
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Total costs and expenses 14.3 19.6
Earnings (loss) before interest and taxes (5.2) 2.7
Interest income 1.6 2.2
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Income (loss) before income taxes (3.6) 4.9
Provision for income taxes - 0.3
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Net income (loss) $ (3.6) $ 4.6
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Earnings (loss) per common share $(0.05) $ 0.06
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Average number of shares used in
earnings per share computations 73.5 73.5
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</TABLE>
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FMC GOLD COMPANY
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OPERATING DATA
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(UNAUDITED)
<TABLE>
<CAPTION>
Three Months
Ended March 31
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1995 1994
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<S> <C> <C>
Tons of ore processed (thousands)
Jerritt Canyon (FMC Gold Share) 206 230
Royal Mountain King - 332
Ore grade (ounces per ton milled)
Jerritt Canyon 0.129 0.135
Royal Mountain King - 0.055
Mill recoveries
Jerritt Canyon 84.8% 88.9%
Royal Mountain King - 74.6%
Production (thousands of ounces)
Gold
Paradise Peak 2 20
Jerritt Canyon 22 29
Royal Mountain King - 13
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Total 24 62
Silver 8 63
Cash cost of production
($ per gold equivalent ounce)
Paradise Peak $ 152 $ 68
Jerritt Canyon $ 228 $ 236
Royal Mountain King - $ 324
Average $ 221 $ 201
</TABLE>
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Page 4
SIGNATURE
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 hereunto duly authorized.
FMC GOLD
Registrant
Date: April 20, 1995 By: Robert L. Day
Title: Secretary
