Placer Dome Q1 profit falls to US$31M, 2005 production forecast lowered
Canadian Press April 27, 2005
VANCOUVER (CP) - Placer Dome Inc.'s first-quarter net earnings were cut in half to $31 million US, as mine operating earnings fell and the company adopted a new accounting policy for post-closure termination obligations, Placer said Tuesday.
The Vancouver-based gold and copper producer's net profit, reported in U.S. currency, amounted to seven cents a share. That compared with 16 cents a share in the first quarter of 2004 when the profit was $64 million.
Sales fell to $491 million during the three months ended March 31, down from $508 million a year earlier.
Placer Dome also said Tuesday that it has decreased its 2005 gold production forecast by 50,000 ounces. The new range will be between 3.6 million and 3.7 million ounces.
The lowered gold production forecast was due to increased erosion and
slides on the west wall of its Porgera open pit mine.
Peter Tomsett, Placer Dome's president and chief executive officer, said first-quarter production was in line with expectations, with the majority of operations meeting targeted output levels.
"A number of our operations delivered improvements in production and cost performance from the fourth quarter of 2004," Tomsett said. "However, cost pressures remain challenging."
Placer owns 75 per cent of the production at Porgera mine in Papua New Guinea.
The mine has been experiencing minor failures of the west pit wall since
2002 but without a significant impact on production.
However, due to heavy rainfall in the first quarter of 2005, the failures have accelerated and are having a more significant impact on production. Production in the first three months of 2005 was 11 per cent below the fourth quarter of 2004 and six per cent below the first quarter of 2004.
The situation at Porgera is being evaluated to determine a long-term solution and this study will be completed by June, Placer said.
Placer Dome's overall share of gold production was 911,000 ounces of gold in the first quarter of 2005, a decrease of two per cent over both the first and fourth quarters of 2004.
The decrease in production was due to lower production at the Cortez, Kalgoorlie West and Porgera mines and the cessation of production at Misima in the second quarter of 2004.
This was partially offset by the restart of the Golden Sunlight mine and higher
production from the Granny Smith, Campbell and North Mara mines.
Copper production was 91 million pounds, a decrease of 17 per cent from the same quarter in 2004 and three per cent from the fourth quarter of 2004.
On the Toronto Stock Exchange, Placer shares (TSX:PDG) closed at $18.23 Cdn, down 35 cents, prior to the announcement.
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Retail has little influence any more...the big guns rule...and they are in suppression mode.