Placer Dome sees higher costs in 2005 (December 20, 2004)

Vancouver — Placer Dome (PDG-T) predicts higher production costs for its gold and copper operations in 2005, owing to a weak U.S. dollar, and only a slight increase in metal production. However, strong gold and copper prices should enable the company to maintain its financial performance in the upcoming year.

The Vancouver-based major plans to produce 3.7 million oz. gold in 2005, or 2.7% more than the 3.6 million oz. forecast for 2004. The increase reflects the resumption of milling at the Golden Sunlight mine in Montana and higher output from the North Mara mine in Tanzania and the Granny Smith mine in Australia.

On the downside, production is expected to decrease at the Cortez mine in Nevada.

The higher production costs are a reflection of foreign currencies relative to the U.S. dollar.

Company-wide cash costs will likely rise to US$250-260 per oz., with total costs pegged at US$315-325 per oz. The figures represent increases of 10% and 11%, respectively, over year-earlier forecasts.

The company sees its copper production increasing to 430 million lbs., 3.6% above the 415 million lbs. forecast in 2004, thanks to Zaldivar in Chile and Osborne in Australia.

The company expects cash costs of 60-65 per lb. and total costs of 75-80 per lb. — roughly 20% and 17% higher than reported for the nine months ended Sept. 30, 2004.

Placer Dome plans to spend US$250 million in 2005, including US$90 million on exploration, compared with US$75 million in 2004.