Laguna Reports Results for 1999
Denver, Colorado –March 30, 200035.0 million shares outstanding
Laguna Gold Company (Laguna) today reported its 1999 financial
results. The Company reported a net loss of $6.1 million before
extraordinary item of $5.8 million, or $0.21 per share, and net
loss after extraordinary item of $295,000 for 1999, or $0.01 per
share. The Company reported an extraordinary gain from debt
settlements of $5.8 million, or $0.20 per share. In comparison,
the Company reported a net loss of $1.3 million, or $0.05 per
share, for 1998. The decrease in the reported net loss of $1.0
million for 1999 is primarily a result of the extraordinary gain
of $5.8 million. This gain was substantially offset by a
write-down of mining assets of $4.1 million, mining costs of
$212,000, pre-feasibility costs of $505,000, care and maintenance
costs of $128,000 and an increase in interest and other expense
of $15,000.
There were no sales of gold and silver during 1999 and 1998.
Revenue was $120,000 for 1999 compared to $237,000 for 1998,
representing a $117,000 (49%) decrease. Revenues for 1999 consist
primarily of interest income of $69,000, other income of $56,000
and loss on sale of assets of $4,500. Sale of assets consisted of
proceeds of $1,029,000. Revenue for 1998 consists primarily of
interest income of $153,000 and drilling revenue and geological
consulting income of $79,000.
Effective June 30, 1999, the Company recognized a write-down of
$4.1 million affecting its mineral properties and mining
equipment. The write-down was calculated in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 121.
Based on the results of the studies performed by TWC, management
determined that the Rio Chiquito open pit mine plan was not
feasible and any development of the Rio Chiquito ore body would
be on the basis of an underground mine plan. Consequently, the
Company proceeded to write down the capital investment related to
the tangible and intangible costs associated with the open pit
mine plan.
G&A was $666,000 for 1999 compared to $675,000 for 1998,
representing a $9,000 (1%) decrease. The decrease in G&A is
primarily due to a reduction in the workforce and other corporate
costs during 1999. This decrease is primarily due to the
Company's effort to conserve cash through reduction of costs.
The Company reported mining costs of $212,000, pre-feasibility
costs of $505,000, care and maintenance costs of $128,000 and
reclamation cost of $50,000 for 1999. No costs for these
categories were reported in 1998. The Company reported no
exploration costs for 1999, compared to $181,000 in 1998. The
Company's focus for 1999 was putting Rio Chiquito into production
and addressing the ore reserve problems encountered thereafter.
Depreciation and amortization was $90,000 for 1999 compared to
$143,000 for 1998, representing a $53,000 (37%) decrease.
Interest and other was $512,000 for 1999 compared to $497,000 for
1998, representing a $15,000 (3%) decrease. The increase in
interest and other is primarily due to the increase in interest
expense ($335,000) related to the Company's increase in debt
during 1998 and due to amortization of the debt discount of
$158,000 associated with the warrants issued in connection with
the Company's $6.5 million financing in July 1998.
Results of Operations
The following table summarizes selected financial data of the
Company for the years ended December 31, 1999, 1998 and 1997
(In thousands of U.S. dollars, except per share amounts):
1999
1998
1997
--------------------------------------------------------------Revenues
$ 120
$237
$ 91
Write-down of mining assets
4,054
-9,319
General and administrative
666
675
985
Mining
212
Pre-feasibility
505
Care and maintenance
128
Exploration
181
234
Reclamation
50
Depreciation and amortization
90
143
139
Interest and other
512
497
116
Net loss before extraordinary item
(6,097)
Gain on debt settlement
5,802
Net loss
(295) (1,259) (10,702)
Net loss before extraordinary item
per common share
(0.21)
Gain on debt settlement per common share 0.20
Net loss per common share
(0.01) (0.05)
(0.43)
Weighted average shares outstanding
29,321 26,648
25,000
--------------------------------------------------------------At December 31, 1999, Mallon Resources Corporation ("Mallon")
owned approximately 35% of the Company's outstanding common
stock. As a result of Mallon's significant ownership percent of
Laguna, Mallon is required to include Laguna's audited financial
statements and footnotes as a schedule to Mallon's Annual Report
on Form 10-K to the Securities Exchange Commission, which Mallon
is required to file by March 30, 2000. While Laguna's audited
1999 Annual Report is not required to be filed with the Ontario
Securities Commission until May 19, 2000, the Company considered
it prudent to release results of its operations for 1999 in
conjunction with Mallon's filing.
For further information contact Steve Stine, President and CEO,
at 303-766-9287, facsimile at 303-766-9289, or by e-mail at
steph94443@aol.com.
-endLAGUNA GOLD COMPANY
999 - 18th Street, Suite 1750
Denver, Colorado 80202
Tel: 303-766-9287
Fax: 303-766-9289