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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)
July 12, 1996
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 File Number) (I.R.S. Employer
of incorporation) Identification No.)
5011 Meadowood Way, Reno, Nevada 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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Item 5. Other Events
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On July 12, 1996 FMC Gold Company issued the following release:
FMC GOLD REPORTS SECOND QUARTER RESULTS
CHICAGO, July 12, 1996--FMC Gold Company today reported a second quarter net
loss of $1.8 million compared with a $3.2 million net loss in the second quarter
of 1995. Loss per share was $0.02 in the second quarter compared with loss per
share of $0.04 in last year's quarter.
Sales for the second quarter of 1996 were $18.3 million and compare favorably
with $9.7 million in the prior-year quarter, due to the operation of the
Beartrack mine in the current period. The average realized price of gold
increased to $393 per ounce from $387 in the second quarter of 1995.
Exploration spending of $1.9 million in the quarter was focused on the company's
advanced stage opportunity at El Penon in Chile, continuing work at the Rossi
project on the Carlin Trend in Nevada, and at the Jerritt Canyon and Beartrack
operations. Exploration spending is expected to increase over the remainder of
the year, with significant efforts devoted to El Penon and the Rossi project.
At El Penon, an extensive drilling campaign was initiated in the second
quarter, and the company plans to have multiple drill rigs exploring several
targets on the property for the balance of the year. At the company's Rossi
project, a deep drilling campaign is planned to be initiated by the end of July.
At the Jerritt Canyon and Beartrack operations, exploration efforts to expand
the reserve base were initiated in the second quarter with drilling at both
properties, and drilling is expected to continue until near the end of the year.
In the second quarter, FMC Gold produced 49 thousand ounces of gold compared
with 24 thousand ounces in the same period last year. At the Beartrack mine,
second quarter 1996 production was 23 thousand ounces. Extended winter weather
conditions and the impact of heavy spring runoff had a negative effect on
solution grades in the second quarter. Cash costs at Beartrack increased to
$195 per gold equivalent ounce in the second quarter from $187 in the first
quarter of 1996. Solution grades began to recover with warmer, dryer weather
near the end of the quarter, and production is expected to increase throughout
the remainder of the year.
At the Jerritt Canyon mine, FMC Gold's share of gold production increased to 26
thousand ounces from 24 thousand ounces in 1995 as a result of improved grades
and recoveries. Cash costs at Jerritt Canyon of $311 per gold equivalent ounce
increased versus the 1995 period due to temporary mechanical difficulties in
both processing facilities and a shift to underground production.
However, FMC management is encouraged that cash costs at Jerritt Canyon improved
near the end of the second quarter, with June costs at $282 per gold equivalent
ounce.
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FMC Gold held $76 million in cash and cash equivalents at the end of the
quarter. Interest income of $1.2 million was lower during the second quarter
compared with $1.6 million last year, primarily due to a lower loan balance to
FMC Corporation.
SIX MONTH RESULTS
Net loss for the first half of 1996 was $2.9 million compared with a net loss of
$6.7 million in the first half of 1995. Loss per share was $0.04 in the first
half of 1996 compared with a loss per share of $0.09 last year. Sales were $36.1
million compared with $18.8 million in the year-ago period, reflecting
production from the company's Beartrack operation, which did not start producing
until the third quarter of 1995. Exploration spending of $3.4 million was below
1995 expenditures due to delays in initiating drilling activities at El Penon
and Rossi. The average realized price of gold for the first half of 1996 was
$397 per ounce--$14 above the 1995 price of $383.
Cash production costs increased to $254 per gold equivalent ounce compared with
$226 per gold equivalent ounce in the first half of 1995. The increase in cash
production costs reflects higher mining and milling costs at Jerritt Canyon.
RESULTS
As previously announced, on June 21, 1996, a registration statement was filed
with the Securities and Exchange Commission relating to the possible
reincorporation of FMC Gold Company (to be renamed Meridian Gold Inc.) in
Canada. In addition, on June 10, 1996, FMC Gold Company filed preliminary
documents with securities regulators in Canada relating to a possible secondary
public offering of FMC Corporation's 80 percent equity interest in FMC Gold.
The company continues to evaluate this and other options to maximize shareholder
value; however, there is no assurance that any transaction will be completed.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION ACT OF 1995:
STATEMENTS IN THIS NEWS RELEASE THAT ARE FORWARD-LOOKING STATEMENTS ARE
SUBJECT TO VARIOUS RISKS AND UNCERTAINTIES CONCERNING THE SPECIFIC FACTORS
IDENTIFIED ABOVE AND IN THE CORPORATION'S 1995 FORM 10-K AND OTHER SEC FILINGS.
THE INFORMATION CONTAINED HEREIN REPRESENTS MANAGEMENT'S BEST JUDGMENT AS OF THE
DATE HEREOF BASED ON INFORMATION CURRENTLY AVAILABLE. THE CORPORATION DOES NOT
INTEND TO UPDATE THIS INFORMATION AND DISCLAIMS ANY LEGAL OBLIGATION TO THE
CONTRARY.
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FMC GOLD COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited and in millions, except per share data)
<TABLE>
<CAPTION>
(Unaudited) (Unaudited)
Three Months Six Months
Ended June 30 Ended June 30
---------------- ----------------
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sales $18.3 $ 9.7 $36.1 $18.8
Costs and expenses
Cost of sales 18.3 11.0 35.6 20.0
Exploration costs 1.9 2.4 3.4 6.4
Selling, general and
administrative expenses 1.1 1.1 2.4 2.4
------ ------ ------ ------
Total costs and expenses 21.3 14.5 41.4 28.8
Loss before interest and taxes (3.0) (4.8) (5.3) (10.0)
Interest income 1.2 1.6 2.4 3.3
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Loss before income taxes (1.8) (3.2) (2.9) (6.7)
Provision for income taxes -- -- -- --
------ ------ ------ ------
Net loss $(1.8) $(3.2) $(2.9) $(6.7)
====== ====== ====== ======
Loss per common share $(0.02) $(0.04) $(0.04) $(0.09)
====== ====== ====== ======
Number of common shares used in
earnings per share computations 73.5 73.5 73.5 73.5
====== ====== ====== ======
</TABLE>
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FMC Gold Company
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Operating Data (Unaudited)
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<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30 Ended June 30
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1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Heap leach operation - Beartrack
Tons of ore mined (thousands) 1,240 1,007 1,921 1,566
Ore grade (ounces per ton mined) 0.029 0.034 0.029 0.033
Milling operations - Jerritt Canyon (FMC Gold share)
Tons of ore processed (thousands) 196 221 394 427
Ore grade (ounces per ton milled) 0.140 0.123 0.132 0.127
Mill recoveries 88.0% 86.8% 87.7% 85.8%
Production (thousands of ounces)
Gold
Beartrack 23 -- 50 --
Jerritt Canyon 26 24 46 46
Paradise Peak -- -- -- 2
--- --- --- ---
Total 49 24 96 48
Silver -- 4 -- 12
Cash cost of production
($ per gold equivalent ounce)
Beartrack $195 -- $189 --
Jerritt Canyon $311 $221 $326 $225
Paradise Peak -- -- -- $244
Average cash cost of production
($ per gold equivalent ounce) $256 $221 $254 $226
</TABLE>
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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 Company
Registrant
Date: July 16, 1996 By: /s/ Robert L. Day
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Name: Robert L. Day
Title: Secretary
