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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: August 15, 1997
Date of earliest event reported: August 15, 1997
ATLAS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-2714 13-5503312
(State of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
370 SEVENTEENTH STREET, SUITE 3050
DENVER, COLORADO 80202
(Address of principal executive offices)
(303) 629-2440
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
The news release dated August 15, 1997 a copy of which is attached as
Exhibit 1 hereto, is incorporated herein by reference and made a part hereof.
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SIGNATURES
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.
ATLAS CORPORATION
Date: August 15, 1997 By: /s/ Gregg B. Shafter
--------------------
Gregg B. Shafter
Vice President
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EXHIBIT INDEX
Exhibit No. Description Page No.
- ----------- ----------- --------
99 News Release dated August 15, 1997 5
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ATLAS CORPORATION NEWS RELEASE
370 SEVENTEENTH STREET, SUITE 3050 NYSE: AZ
DENVER, CO 80202
USA
ATLAS CORPORATION REPORTS
SECOND QUARTER 1997 RESULTS
_________________________________
DENVER, COLORADO - AUGUST 15, 1997 - ATLAS CORPORATION today reported a net
loss of $9,178,000 or $.38 per share on mining revenues of $1,649,000 for the
six months ended June 30, 1997 compared with a net loss of $4,101,000 or $.20
per share for the same period in 1996 which had no operating revenues. The
1997 net loss includes a one-time charge of $5,411,000 on the Company's
repurchase of the $9,810,000 outstanding principal and accrued interest due
on its 7% Exchangeable Debentures. Without this item, the net loss for the
three and six month periods ended June 30, 1997 would be $2,201,000 and
$3,767,000, respectively, compared with a net loss of $2,989,000 and
$4,101,000 in the same periods in 1996.
Operations resulted in cash production costs for the three and six month
periods ended June 30, 1997 of $778,000 and $1,392,000, respectively, and
depreciation, depletion and amortization charges of $186,000 and $436,000 for
the same periods, neither of which were incurred in the 1996 period, during
which the Company had no active mining operations. General and administrative
expenses and shutdown and standby costs for the three month period ended June
30, 1997 were reduced by 62% and 55%, respectively, from those incurred in
the comparable 1996 three month period and by 56% and 59% for the six months
ended June 30, 1997 as compared to the six months ended June 30, 1996.
Exploration and prospecting costs for the three and six month periods ended
June 30, 1997 were $82,000 and $639,000, the latter of which included a non-
recurring charge described below, compared to $79,000 and $168,000 for the
corresponding 1996 periods.
Other non-recurring items were an equity loss of $1,722,000 in the 1996 six
month period attributable to Atlas's investment in Vista Gold Corp., offset
by a one-time gain of $1,333,000 on the sale of Vista's common shares in
October 1996. The loss for the six-month period ended June 30,1997 also
includes a charge of $450,000 relating to the termination of a joint venture
agreement with Vista, in January 1997 and a $1,225,000 writedown of the Doby
George property in the second quarter to reflect current market conditions.
Atlas's working capital deficit of $3,657,000 at June 30,1997 was primarily
the result of the Company's $1,690,000 in capital expenditures in the three
month period ended June 30, 1997 of which $1,368,000 related to the ongoing
mine and mill expansion at its Bolivian properties and $322,000 was utilized
for development and construction costs at the Tucker Hill perlite facility in
Lakeview, Oregon. Working capital at June 30, 1996 was $4,464,000
principally as a result of the release of $10,000,000 in funds provided by
the 1995 placement of the 7% Exchangeable Debentures. In April 1997 Atlas
completed a short-term
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bridge loan for $500,000 with CaribGold Resources Inc. of Toronto. In May
1997 the Company also completed a $3,000,000 financing agreement with the
Corporacion Andina de Fomento to fund development of Atlas's Bolivian
properties of which $2,300,000 was received during the second quarter. The
remaining $700,000 is expected this fall.
Six Month Highlights:
---------------------
. Bolivian Mill Expansion and Mine Development Program
The Bolivian operations, owned and managed by Atlas's wholly-owned subsidiary
Arisur Inc., showed positive cash flow and an operating profit in the second
quarter of this year, including all production costs and depreciation,
depletion and amortization expense. Arisur completed the mill expansion
program in April 1997 and expects to complete its initial underground mine
development program for the Andacaba, Don Francisco and Koyamayu mines by the
end of the year. Mr. Vernon E. Smith joined Arisur as President earlier this
year. His credentials include the successful management of a number of
mining operations in both North and South America.
The mine development program is expected to increase production at Andacaba
from 220 tonnes to 400 tonnes per day and at the Don Francisco and Koyamayu
mines from 80 tonnes to a combined 300 tonnes per day. The expansion of the
Don Roy mill at Andacaba has increased processing capacity to 600 metric tons
per day. The Comali mill, which was acquired in late 1996, will have
additional throughput of up to 250 tonnes per day when it commences
operations, expected in 1998. The mill expansion and completion of the mine
development programs are expected to result in annual production of 1,950
tonnes of lead, 5,550 tonnes of zinc and 613,000 ounces of silver providing
approximately $10,000,000 of annual revenue after smelting costs and before
transportation charges.
. Upgrade of Tucker Hill Perlite Production Facility
Cornerstone Industrial Minerals Corporation, a majority-owned subsidiary of
Atlas, produced and delivered the first shipment of its processed perlite ore
in February 1997. Subsequent production was suspended while operating
improvements could be completed and storage facilities added. Operations
began again in mid-June. Throughput at the mill is expected to increase to
the permitted capacity of 100,000 tons annually by mid-1998. Mr. Julian T.
Garcia joined the Cornerstone staff as Vice President and General Manager on
August 4, 1997.
. Agreement Finalized for Barrick to Begin Work on Gold Bar
On June 6, 1997 Barrick Gold Exploration Inc. completed the purchase from
Atlas of 90% of the Gold Bar claim block with an option to acquire the
balance within two years. Atlas received $1,000,000 in cash from Barrick and
Barrick purchased one million new Atlas common shares at $1 per share as a
result of the transaction. Under the terms of the purchase agreement Barrick
is obligated to spend $3,000,000 on the property over the two year period.
Unless at the end of the two year period Barrick elects to reconvey Gold Bar
to Atlas, Atlas may choose either to receive an additional $15,000,000 in
cash and retain a 2% net smelter royalty, or to participate with Barrick in
the
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further exploration and development of the property as a 25% carried joint
venture participant. If Atlas elects to participate as a joint venture
partner, Barrick will spend a minimum of $15,000,000 on the project before
any contribution by Atlas will be required.
. Repurchase of 7% Exchangeable Debentures due October 25, 2000
Atlas repurchased all of the $9,810,000 of outstanding principal amount of
its 7% Exchangeable Debentures together with accrued interest on June 25,
1997. The Debentures, together with accrued interest, were exchanged for a
combination of 1,500,928 new issue Atlas common shares and the 8,313,065
Vista Gold Corp. common shares owned by Atlas which had secured the
Debentures. The transaction removed a substantial liability from Atlas's
balance sheet and eliminated $700,000 in annual interest charges.
. Receipt of Technical Evaluation Report from the US Nuclear Regulatory
Commission
In March 1997 the US Nuclear Regulatory Commission issued its final Technical
Evaluation Report on Atlas's proposed reclamation plan for its uranium mill
site located near Moab, Utah. The Report concluded that the plan for capping
the uranium tailings on-site meets its technical requirements. The final
step in the reclamation process is the Commission's Final Environmental
Impact Statement which Atlas expects to receive in late 1997 or early 1998,
at which time the Company can proceed with final reclamation of the site.
Subsequent Event:
----------------
Following the quarterly period covered by this Release, on August 11, 1997
Atlas received a delisting notice from the New York Stock Exchange.
According to the notice received by the Company, it has continued to fall
below the Exchange's continued listing criteria based on the Company's second
quarterly filing dated June 30, 1997. The notice becomes effective before
the opening of trading on Friday, August 29, 1997 when trading of Atlas
shares on the New York Stock Exchange will be suspended. The Company is
currently considering alternative exchanges for the trading of its shares,
which include both American and Canadian stock exchanges.
Mr. Douglas R. Cook, Chairman, stated, "We are greatly disturbed that the New
York Stock Exchange has chosen this moment to delist Alas. The Company has
shown that it has effectively implemented its turnaround plan. Atlas showed
good operational progress in the second quarter, with the Bolivian operations
becoming profitable and producing positive cash flow and the results of our
cost-cutting program beginning to contribute substantial savings."
"Atlas has continued to demonstrate reductions in general and administrative
expense and containment of standby costs at the Gold Bar property. In June
we repurchased our 7% Exchangeable Debentures, releasing Atlas from $700,000
in annual interest payments. We are in final negotiations to option the Doby
George property at an acceptable price, and we are working on a joint venture
for our Grassy Mountain gold property in order to secure the time and funding
needed for further exploration and development efforts there. During the
first six months we received the final Technical Evaluation Report from the
Nuclear Regulatory Commission, giving us a clear
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indication that we are close to resolving an environmental issue which has
adversely affected our value for over a decade."
"We have now fully divested our investment interests in other companies and
returned to managing our own operations once again with real potential for
growth in both our Bolivian and Tucker Hill operations," Mr. Cook continued.
"At Tucker Hill we are back in production and expect to reach full permitted
capacity for production of our perlite ore in 1998. The addition of Mr.
Julian T. Garcia as Vice President and General Manager brings the welcome
benefits of his 20 years experience in the perlite industry and an active
focus on marketing of our perlite products."
"Progress in Bolivia was severely restricted during the first three months of
the year due to unseasonably heavy flooding, which constrained our expansion
efforts. However, subsequent to Mr. Smith joining Arisur as President, our
mining operations in Bolivia have benefited from completion of the mill
expansion program and the ongoing mine development program." Mr. Cook
concluded, "We expect the development program to combine greater operational
efficiencies with improved production capacity and that the operation will
continue to show increasing profitability, helping us most quickly to return
value to our shareholders."
Atlas Corporation is an international diversified mining company with gold
properties and development projects in North America and lead, zinc and
silver production in Bolivia, South America. The Company's publicly traded
65%-owned subsidiary Cornerstone Industrial Minerals Corporation produces the
industrial mineral perlite from its Oregon facility.
FURTHER INFORMATION PLEASE CONTACT:
James R. Jensen
Treasurer/Controller
Phone: 303-629-2429
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Condensed Statement of Operations
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------- --------------------------
1997 1996 1997 1996
(unaudited) (unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C>
Mining revenue $ 995 $ - $ 1,649 $ -
Costs and expenses:
Production costs (778) - (1,392) -
Impairment of mineral property (1,225) - (1,225) -
Depreciation, depletion and amortization (186) - (436) -
Shutdown and standby costs (125) (279) (232) (561)
General and administrative expenses (619) (1,635) (1,258) (2,846)
Exploration and prospecting costs (82) (79) (639) (168)
------------ ------------- ----------- ------------
Gross Operating Loss (2,020) (1,993) (3,533) (3,575)
------------ ------------- ----------- ------------
Other income (expense)
Interest expense (297) (214) (607) (637)
Interest income 79 168 196 329
Equity in loss of unconsolidated subsidiary - (1,026) - (1,722)
Gain on sale of marketable securities - - - 1,333
Gain from joint venture agreement 63 - 63 -
Loss on repurchase of debentures (5,411) - (5,411) -
Other (62) (19) 41 (13)
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Loss from continuing operations
before minority interest (7,648) (3,084) (9,251) (4,285)
Minority interest in net loss of subsidiary 36 95 73 184
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Net Loss $(7,612) $ (2,989) $ (9,178) $ (4,101)
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Net Loss per share of common stock: $ (0.31) $ (0.15) $ (0.38) $ (0.20)
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Average number of common shares outstanding 24,582 20,092 24,389 20,071
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Comparative Balance Sheets June 30,
1997 December 31,
(unaudited) 1996
-------------------------------
Assets:
Current assets $ 3,225 $ 2,881
Property, plant and equipment (net) 20,281 19,387
Investment in Vista Gold Corp. - 11,542
Other assets 6,831 7,871
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$ 30,337 $ 41,681
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Liabilities and Stockholders' Equity:
Current liabilities $ 6,882 $ 5,809
Long-term debt 5,800 13,310
Long-term liabilities 10,190 9,505
Minority interest 613 685
Total stockholders' equity 6,852 12,372
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$ 30,337 $ 41,681
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