Scorpio
02-22-2006, 09:01 AM
FEBRUARY 20, 2006 - 16:41 ET Show Text
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LONGUEUIL, QUEBEC--(CCNMatthews - Feb. 20, 2006) - Cambior Inc. (TSX:CBJ) (AMEX:CBJ). All amounts are expressed in US dollars, unless otherwise indicated.
2005 HIGHLIGHTS
- Net earnings of $20.2 million ($0.07 per share)- Cash flow from operating activities of $40.5 million, up 7%- Revenues of $368.5 million, up 22%- Record year of production at Rosebel (341,000 ounces at $208 per ounce)- Total production of 638,400 ounces (at $285 per ounce)- 42% increase in reserves- Operations ended at Omai Gold mine in September- Sale of the Carlota Copper project for a net gain of $12.5 million- Final deliveries on prepaid gold forward sales agreement
The Company generated record net earnings in 2005 of $20.2 million (or $0.07 per share), a major reversal from the $73.8 million net loss (or $0.30 per share) incurred in 2004. Revenues increased to $368.5 million in comparison to $300.9 million the year before, mainly as a result of higher gold prices and increased revenues from non-gold operations. Cash flow from operating activities was $40.5 million in 2005 compared to $38.0 million the previous year. Following the sale of the Carlota project in December 2005, the Company recorded a gain on disposal of assets of $12.5 million. In 2004, an impairment charge of $73.1 million was recorded at the Doyon mine.
Operating costs were negatively affected by the strength of the Canadian dollar and higher costs for fuel and other consumables such as steel, chemicals and lubricants, as compared to costs prevailing in 2004.
FOURTH QUARTER
For the fourth quarter ended December 31, 2005, revenues reached $97.4 million compared to $81.9 million for the same period a year earlier. A higher gold price and stronger non-gold revenues more than offset lower gold output. Cambior realized net earnings of $19.8 million (or $0.07 per share) for the quarter compared to a net loss of $76.7 million (or $0.28 per share) for the corresponding period in 2004. Cash flow from operating activities for the quarter was $6.8 million compared to $3.8 million a year earlier.
Mine operating costs at Rosebel and Doyon remained in line with those achieved during the third quarter of 2005. This performance is primarily due to the stabilization of the costs of fuel and other consumables during the last three months of the year. Moreover, the Sleeping Giant training program, set in place to counter the workforce attrition problem observed during the third quarter, was a significant contributing factor to the decrease in mine operating costs to $444 per ounce during the fourth quarter of 2005 from $525 in the previous quarter.
On December 21, 2005, Cambior completed the previously announced sale of its Carlota Copper project to Quadra Mining Ltd. As per the terms of the agreement, the Company received a cash consideration of $15 million at closing and will receive, commencing on March 31, 2006, further consideration in the form of eight quarterly deliveries of 6,250 ounces of gold each. The final four gold deliveries may be deferred if the buyer is unable to begin construction at Carlota by the first quarter of 2007. Based on the forward prices of these gold deliveries as of the closing date and assuming a 3% risk premium, the total value of the transaction was estimated to be $38.6 million. Cambior's net gain on disposal was $12.5 million.
COMMENTARY
Louis P. Gignac, Cambior's President and Chief Executive Officer stated: "We are proud to announce that Cambior not only returned to profitability, but also earned a record profit of $20.2 million. This profit was fuelled by the Rosebel mine which, building on the results achieved during its first year of operations, increased its production by 25% in 2005. This strong performance allowed us to surpass our 2005 gold production target by 3%. Total reserves were also increased by 42% to reach 5 million ounces of gold, mostly due to the conversion of Camp Caiman's 1.1 million ounces from resources to reserves and to the addition of 753,000 ounces, net of production, at Rosebel. More importantly, 2005 was a cornerstone year in the development of a new generation of gold mines. We completed the Camp Caiman feasibility study, delivered promising drilling results on our La Arena project and accelerated our Westwood exploration program. These accomplishments were achieved while Cambior was attaining profitability. We intend to build on the fourth quarter's performance and on favourable conditions in the gold market to further progress toward our objective in 2006 of increased shareholder value through growth in production and reserves."
FINANCIAL POSITION
At year end, Cambior's financial obligations stood at $63.0 million while cash and short-term investments amounted to $15.6 million.
The Company reimbursed $18 million on its corporate term loan. The $12.2 million balance in deferred revenue resulting from the $55 million prepaid gold forward sales agreement signed in 2001, was totally extinguished following the last scheduled gold delivery in December 2005.
Over the course of 2005, $10.0 million was borrowed from a Caribbean financial institution under a credit facility received by Omai Bauxite Mining Inc. (OBMI), a company owned 70% by Cambior and 30% by the government of Guyana; $8.0 million was also borrowed under a separate credit facility received from the same financial institution by Omai Services Inc. (OSI), a power generation company 100% owned by Cambior which supplies electricity to OBMI. These two financings, that are non-recourse to Cambior Inc., have been used to finance the refurbishing of the bauxite infrastructure.
Capital expenditures amounted to $93.8 million in 2005 compared to $133.0 million in the previous year. Of this amount, sums of $6.5 million were invested in the Rosebel Phase-2 construction, $11.6 million to increase our mine gold reserves, $16.0 million in our advanced development projects, $4.1 million to purchase the remaining 50% interest in the Sleeping Giant mine, $16.6 million to complete phase-1 and initiate phase-2 of the Omai Bauxite rehabilitation process, $6.1 million on the Niobec expansion program and the remaining $32.9 million in sustaining capital.
PRODUCTION HIGHLIGHTS
Cambior achieved gold production of 638,400 ounces at a mine operating cost of $285 per ounce in 2005, compared to 694,100 ounces at $244 per ounce in the previous year. The decrease in production is primarily attributable to the scheduled termination of operations at the Omai Gold mine in late September 2005. The increase in unit cost in 2005 is due to the increased value of the Canadian dollar (relative to the US dollar) and its effect on Canadian operations, in addition to increased energy and commodity costs.
For the fourth quarter of 2005, gold production totalled 141,600 ounces at a mine operating cost of $286 per ounce compared to 175,100 ounces at a mine operating cost of $251 per ounce for the corresponding quarter in 2004. The cost increase is mainly due to higher energy costs.
OPERATIONS
The Rosebel mine produced 341,400 ounces of gold in 2005, compared to gold production of 273,700 ounces in 2004. Since the commencement of commercial production in February 2004, improvements and minor circuit expansions have allowed the mill to process at a tonnage above design capacity. Daily throughput averaged 19,700 tonnes in 2005, a 30% increase from the 15,200 tonnes averaged in 2004. The higher 2005 throughput allowed the termination of the planned high-grading period in the mining plan and all available ore was fed to the mill as it was mined. During 2005, the mill processed 7.2 million tonnes of ore at an average grade of 1.56 g Au/t, compared to 5.1 million tonnes at an average grade of 1.84 g Au/t in 2004. The mining operating costs increased to $208 per ounce from $170 per ounce in 2004; the increase is mainly attributable to the end of focusing on higher grade ore and increased energy and blasting costs.
For 2005, the Doyon Division (which includes both the Doyon and Mouska mines) produced 157,500 ounces of gold at a mine operating cost of $358 per ounce, compared to the 146,500 ounces produced at a mine operating cost of $374 per ounce in 2004. The 7.5% increase in gold production is due to the full year of production at the Mouska mine following the completion of the shaft deepening project and operational improvements following the reorganization of the Doyon mine in late 2004.
Cambior's share of production at the Sleeping Giant mine amounted to 40,000 ounces of gold in 2005 at a mine operating cost of $449 per ounce compared to 33,500 ounces at a mine operating cost of $291 per ounce in 2004. Cambior acquired the residual 50% interest in the mine in April 2005. Production was seriously impaired from May to September due to the loss of experienced miners. Following the implementation of a recruitment and training program for new miners, gold production increased 42% in the fourth quarter to 13,900 ounces from 9,800 in the third quarter. Along with an increase in the grade milled, the higher production lowered the mine operating cost in the last quarter.
The Omai Gold mine ceased its operations in September 2005. The final year was mostly devoted to processing the low grade ore stockpiled in the early years of operations. Consequently, a total of 3.7 million tonnes of ore were processed at an average grade of 0.91 g Au/t for production of 99,500 ounces of gold in 2005, compared to 5.5 million tonnes at an average grade of 1.46 g Au/t for production of 240,400 ounces in 2004. During its lifetime, Omai Gold produced over 3.7 million ounces of gold.
In 2005, niobium sales from the Niobec mine totalled $51.4 million compared to $37.9 million in 2004. This increase was primarily due to Cambior's acquisition of the residual 50% interest in Niobec in July 2004. In September 2005, the Company completed a major expansion and optimization program that increased capacity by 20 percent.
In its first year of production, Omai Bauxite had total sales of $36.9 million. During the year, the Company completed its Phase 1 rehabilitation program which totally rebuilt kiln #14. Along with kiln #13, monthly production reached 28,300 tonnes of high-alumina bauxite in December 2005.
MINERAL RESERVES AND RESOURCES
At year-end 2005, proven and probable reserves for the gold mines amounted to 5 million ounces of gold contained compared to 3.5 million ounces of gold contained at the end of 2004, representing a 42% increase. This increase is attributable to a net gain of 753,000 ounces at the Rosebel mine and the addition of 1.1 million ounces in the probable category following the completion of the Camp Caiman feasibility study. A full description of Cambior's mineral reserves and resources is provided in the January 18, 2006 press release.
EXPLORATION AND PROJECT DEVELOPMENT
In 2005, Cambior pursued an aggressive exploration and business development program with total expenditures of $33.6 million. The program included completion of a full feasibility study at the Camp Caiman project as well as exploration and development of the Westwood and La Arena projects. The Company completed the Camp Caiman feasibility study in August 2005 and is currently working on fulfilling the conditions set by the board of directors to allow the beginning of construction, namely obtaining all operating permits, satisfactory government grants under Loi Girardin and relief from certain regional fuel tax. Drilling results at the La Arena property in Peru have been positive and the Company has plans to aggressively pursue additional drilling programs and studies and complete a pre-feasibility study in 2006. Additionally, Cambior is accelerating its exploration of the Westwood deposit following positive surface drilling results. A more detailed description of Cambior's exploration program can be found in its January 18, 2006 press release.
2006 PRODUCTION TARGETS
Cambior's gold production target for 2006 is 529,000 ounces at an estimated mine operating cost of $294 per ounce. The decrease in the 2006 projected production compared to 2005 is the result of the termination of operations at the Omai Gold mine in September 2005.
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Show Financial Table(s)
Show All
LONGUEUIL, QUEBEC--(CCNMatthews - Feb. 20, 2006) - Cambior Inc. (TSX:CBJ) (AMEX:CBJ). All amounts are expressed in US dollars, unless otherwise indicated.
2005 HIGHLIGHTS
- Net earnings of $20.2 million ($0.07 per share)- Cash flow from operating activities of $40.5 million, up 7%- Revenues of $368.5 million, up 22%- Record year of production at Rosebel (341,000 ounces at $208 per ounce)- Total production of 638,400 ounces (at $285 per ounce)- 42% increase in reserves- Operations ended at Omai Gold mine in September- Sale of the Carlota Copper project for a net gain of $12.5 million- Final deliveries on prepaid gold forward sales agreement
The Company generated record net earnings in 2005 of $20.2 million (or $0.07 per share), a major reversal from the $73.8 million net loss (or $0.30 per share) incurred in 2004. Revenues increased to $368.5 million in comparison to $300.9 million the year before, mainly as a result of higher gold prices and increased revenues from non-gold operations. Cash flow from operating activities was $40.5 million in 2005 compared to $38.0 million the previous year. Following the sale of the Carlota project in December 2005, the Company recorded a gain on disposal of assets of $12.5 million. In 2004, an impairment charge of $73.1 million was recorded at the Doyon mine.
Operating costs were negatively affected by the strength of the Canadian dollar and higher costs for fuel and other consumables such as steel, chemicals and lubricants, as compared to costs prevailing in 2004.
FOURTH QUARTER
For the fourth quarter ended December 31, 2005, revenues reached $97.4 million compared to $81.9 million for the same period a year earlier. A higher gold price and stronger non-gold revenues more than offset lower gold output. Cambior realized net earnings of $19.8 million (or $0.07 per share) for the quarter compared to a net loss of $76.7 million (or $0.28 per share) for the corresponding period in 2004. Cash flow from operating activities for the quarter was $6.8 million compared to $3.8 million a year earlier.
Mine operating costs at Rosebel and Doyon remained in line with those achieved during the third quarter of 2005. This performance is primarily due to the stabilization of the costs of fuel and other consumables during the last three months of the year. Moreover, the Sleeping Giant training program, set in place to counter the workforce attrition problem observed during the third quarter, was a significant contributing factor to the decrease in mine operating costs to $444 per ounce during the fourth quarter of 2005 from $525 in the previous quarter.
On December 21, 2005, Cambior completed the previously announced sale of its Carlota Copper project to Quadra Mining Ltd. As per the terms of the agreement, the Company received a cash consideration of $15 million at closing and will receive, commencing on March 31, 2006, further consideration in the form of eight quarterly deliveries of 6,250 ounces of gold each. The final four gold deliveries may be deferred if the buyer is unable to begin construction at Carlota by the first quarter of 2007. Based on the forward prices of these gold deliveries as of the closing date and assuming a 3% risk premium, the total value of the transaction was estimated to be $38.6 million. Cambior's net gain on disposal was $12.5 million.
COMMENTARY
Louis P. Gignac, Cambior's President and Chief Executive Officer stated: "We are proud to announce that Cambior not only returned to profitability, but also earned a record profit of $20.2 million. This profit was fuelled by the Rosebel mine which, building on the results achieved during its first year of operations, increased its production by 25% in 2005. This strong performance allowed us to surpass our 2005 gold production target by 3%. Total reserves were also increased by 42% to reach 5 million ounces of gold, mostly due to the conversion of Camp Caiman's 1.1 million ounces from resources to reserves and to the addition of 753,000 ounces, net of production, at Rosebel. More importantly, 2005 was a cornerstone year in the development of a new generation of gold mines. We completed the Camp Caiman feasibility study, delivered promising drilling results on our La Arena project and accelerated our Westwood exploration program. These accomplishments were achieved while Cambior was attaining profitability. We intend to build on the fourth quarter's performance and on favourable conditions in the gold market to further progress toward our objective in 2006 of increased shareholder value through growth in production and reserves."
FINANCIAL POSITION
At year end, Cambior's financial obligations stood at $63.0 million while cash and short-term investments amounted to $15.6 million.
The Company reimbursed $18 million on its corporate term loan. The $12.2 million balance in deferred revenue resulting from the $55 million prepaid gold forward sales agreement signed in 2001, was totally extinguished following the last scheduled gold delivery in December 2005.
Over the course of 2005, $10.0 million was borrowed from a Caribbean financial institution under a credit facility received by Omai Bauxite Mining Inc. (OBMI), a company owned 70% by Cambior and 30% by the government of Guyana; $8.0 million was also borrowed under a separate credit facility received from the same financial institution by Omai Services Inc. (OSI), a power generation company 100% owned by Cambior which supplies electricity to OBMI. These two financings, that are non-recourse to Cambior Inc., have been used to finance the refurbishing of the bauxite infrastructure.
Capital expenditures amounted to $93.8 million in 2005 compared to $133.0 million in the previous year. Of this amount, sums of $6.5 million were invested in the Rosebel Phase-2 construction, $11.6 million to increase our mine gold reserves, $16.0 million in our advanced development projects, $4.1 million to purchase the remaining 50% interest in the Sleeping Giant mine, $16.6 million to complete phase-1 and initiate phase-2 of the Omai Bauxite rehabilitation process, $6.1 million on the Niobec expansion program and the remaining $32.9 million in sustaining capital.
PRODUCTION HIGHLIGHTS
Cambior achieved gold production of 638,400 ounces at a mine operating cost of $285 per ounce in 2005, compared to 694,100 ounces at $244 per ounce in the previous year. The decrease in production is primarily attributable to the scheduled termination of operations at the Omai Gold mine in late September 2005. The increase in unit cost in 2005 is due to the increased value of the Canadian dollar (relative to the US dollar) and its effect on Canadian operations, in addition to increased energy and commodity costs.
For the fourth quarter of 2005, gold production totalled 141,600 ounces at a mine operating cost of $286 per ounce compared to 175,100 ounces at a mine operating cost of $251 per ounce for the corresponding quarter in 2004. The cost increase is mainly due to higher energy costs.
OPERATIONS
The Rosebel mine produced 341,400 ounces of gold in 2005, compared to gold production of 273,700 ounces in 2004. Since the commencement of commercial production in February 2004, improvements and minor circuit expansions have allowed the mill to process at a tonnage above design capacity. Daily throughput averaged 19,700 tonnes in 2005, a 30% increase from the 15,200 tonnes averaged in 2004. The higher 2005 throughput allowed the termination of the planned high-grading period in the mining plan and all available ore was fed to the mill as it was mined. During 2005, the mill processed 7.2 million tonnes of ore at an average grade of 1.56 g Au/t, compared to 5.1 million tonnes at an average grade of 1.84 g Au/t in 2004. The mining operating costs increased to $208 per ounce from $170 per ounce in 2004; the increase is mainly attributable to the end of focusing on higher grade ore and increased energy and blasting costs.
For 2005, the Doyon Division (which includes both the Doyon and Mouska mines) produced 157,500 ounces of gold at a mine operating cost of $358 per ounce, compared to the 146,500 ounces produced at a mine operating cost of $374 per ounce in 2004. The 7.5% increase in gold production is due to the full year of production at the Mouska mine following the completion of the shaft deepening project and operational improvements following the reorganization of the Doyon mine in late 2004.
Cambior's share of production at the Sleeping Giant mine amounted to 40,000 ounces of gold in 2005 at a mine operating cost of $449 per ounce compared to 33,500 ounces at a mine operating cost of $291 per ounce in 2004. Cambior acquired the residual 50% interest in the mine in April 2005. Production was seriously impaired from May to September due to the loss of experienced miners. Following the implementation of a recruitment and training program for new miners, gold production increased 42% in the fourth quarter to 13,900 ounces from 9,800 in the third quarter. Along with an increase in the grade milled, the higher production lowered the mine operating cost in the last quarter.
The Omai Gold mine ceased its operations in September 2005. The final year was mostly devoted to processing the low grade ore stockpiled in the early years of operations. Consequently, a total of 3.7 million tonnes of ore were processed at an average grade of 0.91 g Au/t for production of 99,500 ounces of gold in 2005, compared to 5.5 million tonnes at an average grade of 1.46 g Au/t for production of 240,400 ounces in 2004. During its lifetime, Omai Gold produced over 3.7 million ounces of gold.
In 2005, niobium sales from the Niobec mine totalled $51.4 million compared to $37.9 million in 2004. This increase was primarily due to Cambior's acquisition of the residual 50% interest in Niobec in July 2004. In September 2005, the Company completed a major expansion and optimization program that increased capacity by 20 percent.
In its first year of production, Omai Bauxite had total sales of $36.9 million. During the year, the Company completed its Phase 1 rehabilitation program which totally rebuilt kiln #14. Along with kiln #13, monthly production reached 28,300 tonnes of high-alumina bauxite in December 2005.
MINERAL RESERVES AND RESOURCES
At year-end 2005, proven and probable reserves for the gold mines amounted to 5 million ounces of gold contained compared to 3.5 million ounces of gold contained at the end of 2004, representing a 42% increase. This increase is attributable to a net gain of 753,000 ounces at the Rosebel mine and the addition of 1.1 million ounces in the probable category following the completion of the Camp Caiman feasibility study. A full description of Cambior's mineral reserves and resources is provided in the January 18, 2006 press release.
EXPLORATION AND PROJECT DEVELOPMENT
In 2005, Cambior pursued an aggressive exploration and business development program with total expenditures of $33.6 million. The program included completion of a full feasibility study at the Camp Caiman project as well as exploration and development of the Westwood and La Arena projects. The Company completed the Camp Caiman feasibility study in August 2005 and is currently working on fulfilling the conditions set by the board of directors to allow the beginning of construction, namely obtaining all operating permits, satisfactory government grants under Loi Girardin and relief from certain regional fuel tax. Drilling results at the La Arena property in Peru have been positive and the Company has plans to aggressively pursue additional drilling programs and studies and complete a pre-feasibility study in 2006. Additionally, Cambior is accelerating its exploration of the Westwood deposit following positive surface drilling results. A more detailed description of Cambior's exploration program can be found in its January 18, 2006 press release.
2006 PRODUCTION TARGETS
Cambior's gold production target for 2006 is 529,000 ounces at an estimated mine operating cost of $294 per ounce. The decrease in the 2006 projected production compared to 2005 is the result of the termination of operations at the Omai Gold mine in September 2005.
Go to their website for more: