Placer Dome has bright second quarter

Vancouver – Mine operating earnings for Placer Dome’s (PDG-T) second quarter doubled to US$137 million over the same period last year thanks to stronger gold and copper prices. Cash from operations rose to US$107 million compared with US$58 million. The company reported earnings of US$33 million or 8 per share for the second quarter compared with US$58 million (15 per share) for the same period last year – the earnings included a US$34 million charge from foreign exchange losses on the company’s Misima mine where commercial production was halted.

The company produced 908,000 ounces of gold in the quarter compared with 905,000 oz. in the second quarter last year. Placer realized an average price US$386 per ounce versus an average spot price of US$393 per ounce in the second quarter. The company reduced its hedging by 310,000 ounces, to a maximum commitment of 9.75 million oz.

The recently acquired North Mara mine in Tanzania added to gold production in the first half of the year. Increased gold production at Porgera and Henty mines partially offset the closure at Golden Sunlight and reduced production from Kalgoorlie West and Granny Smith. Copper production rose 4% to 218 million pounds, from the same period in 2003 due to increased production from the Zaldivar mine.

Placer’s cash costs over the six months ended June 30, were US$230, up 7% from last year and total costs were 4% higher at US$284 per ounce. The increase was primarily due to the weakness of the U.S. dollar against foreign currencies.

Meanwhile, copper cash and production costs were about 4% lower at 51 and 65 per pound in the first half thanks to stronger copper production.

The company reported an increase in reserve and resource estimates for the Cortez JV which gives Placer Dome’s 9 million oz. of gold, up from 7.6 million; this includes proven and probable reserves of 4.5 million oz. (up from 3.2 million) at Cortez Hills. The company plans to keep drilling at Cortez Hills for the rest of the year, to expand the mineral resource which is still open along strike to the south and down plunge.

A feasibility study on the Cortez Hills area has begun and will entail plans for mine development and optimal processing arrangements for the property considering the existing Pipeline – South Pipeline complex and the Cortez Hills – Pediment complex.

Placer also reported an updated mineral resource and reserve estimate for South Deep in South Africa with its share of proven and probable gold reserves estimated at 27.9 million ounces. The South Deep Twin Shaft is scheduled for completion and commissioning in late 2004.