PDG Pendragon Plc

Placer Dome reports earnings of $229 million and 15% reserve growth in 2003 (all figures in U.S.$ in accordance with U.S. GAAP, unless otherwise specified) VANCOUVER, Feb. 26 /PRNewswire-FirstCall/ -- Placer Dome Inc. (NYSE, TSX, ASX: PDG) announces2003 results, including record gold production of 3.9 million ounces and net earnings of $229 million, the highest net earnings from mining activities in the company's history. Gold mineral reserves increased by 7.7 million ounces, or 15%, to 60.5 million ounces. President and CEO Jay Taylor said the 2003 results are evidence of the company's sound strategy and ability to execute successfully. "For the past three years we have focused on adding high quality new assets through exploration and acquisitions and applying innovation and technology to improve the way we run the business. The result is that we are maximizing value from our existing assets and setting a solid foundation for the future." 2003 Highlights Placer Dome's gold production reached 3,861,000 ounces in 2003, an increase of 37% over 2002. Copper production in 2003 was 425 million pounds, relatively unchanged from the previous year. The increase in gold production was due to the acquisition of AurionGold Limited in the fourth quarter of 2002, the acquisition of East African Gold Mines Limited in July 2003, and increased production from the Golden Sunlight, Porgera, Turquoise Ridge and South Deep mines. This was partially offset by decreased production at the Granny Smith and Bald Mountain mines. Net earnings totalled $229 million, or $0.56 per share, on the strength of increased production and higher commodity prices. Mine operating earnings were $406 million, and cash flow from operations reached $329 million. Placer Dome's precious metals sales program contributed a premium of $17 per ounce over the average spot price in 2003. During the year, Placer Dome reduced the maximum committed ounces under its gold sales program by 2.9 million ounces, excluding the 0.8 million ounces from the East African Gold Mines Limited acquisition. The maximum committed ounces now total 10.5 million ounces, or 17% of gold mineral reserves. Cash and total gold production costs for 2003 totalled $218 and $274 per ounce, respectively, increasing by 22% and 19%, respectively, over 2002. Throughout the year, costs were higher primarily due to the appreciation of foreign currencies against the U.S. dollar ($15 per ounce); the inclusion of the relatively higher-cost AurionGold mines acquiredin the fourth quarter of 2002 ($10 per ounce); and increased global energy costs ($6 per ounce). Cash and total copper production costs for 2003 totalled $0.52 and $0.67 per pound, respectively, both increasing by 16% over 2002 due to higher energy costs, the appreciation of the Australian dollar and Chilean peso against the U.S. dollar and higher acid and maintenance costs at the Zaldivar mine. Corporate development highlights of 2003 included the acquisition of East African Gold Mines Limited, which owned the North Mara open pit gold mine in northern Tanzania through a wholly owned subsidiary. North Mara consists of two open pit mining operations feeding an adjacent two million tonne per year processing plant, as well as a third deposit under development. Since the acquisition, exploration work has increased mineral reserves by 30%, and a mill expansion was initiated that is expected to increase production by 40% to approximately 280,000 ounces on an annualized basis by the end of 2004. Alsoin 2003, mining began at the Turquoise Ridge gold mine on the Getchell property. In December 2003, a joint venture was formed with Newmont that eliminates a 2% net smelter royalty, reduces capital and operating costs, and improves recoveries. Placer Dome owns 75% of the joint venture and is the operator. Newmont will purchase up to 2,000 tonnes per day of joint venture ore and process it at cost at their nearby Twin Creeks mill. Full production of approximately 300,000 ounces on an annualized basis is expected by the end of 2004. Fourth Quarter 2003 Highlights Gold production in the fourth quarter was 1.04 million ounces, marking the highest quarterly production in the company's history. The average realized price of gold during the quarter was $402 per ounce, resulting in sales of $492 million. Net earnings in the fourth quarter totalled $81 million, or $0.20 per share. Mine operating earnings reached $128 million and cash flow from operations was $61 million. Cash and total gold costs in thefourth quarter were $229 and $284 per ounce respectively. ------------------------------------ December 31 ------------------------------------ Fourth Quarter Twelve Months ------------------------------------ 2003 2002 2003 2002 ------------------------------------------------------------------------- Financial ($millions) Sales 492 355 1,763 1,209 Mine operating earnings Gold (ii) 112 72371 282 Copper 22 17 55 53 Other (6) (6) (20) (11) ------------------------------------------------------------------------- 128 83 406 324 ------------------------------------------------------------------------- Net earnings (i) (ii) 81 6 229 116 Per share 0.20 0.02 0.56 0.33 Cash flow from operations (iii) 61 47 329 320 Per share 0.14 0.12 0.80 0.92 ------------------------------------------------------------------------- Operations - Gold (000s oz) Production (Placer Dome's share) 1,039 917 3,861 2,823 Production (consolidated) 1,011 896 3,785 2,756 Sales (consolidated) 1,006 832 3,829 2,716 Cash production costs ($/oz) (iii) 229 180 218 178 Total production costs ($/oz) (iii) 284 241 274 231 Sales price realized 402 336 380 342 London spot price 391 322 363 310 ------------------------------------------------------------------------- Operations - Copper (000s lbs) Production 111.1 107.8 425.4 427.5 Sales 103.3 107.1 412.0 431.2 Cash production costs ($/lb) (iii) 0.53 0.47 0.52 0.45 Total production costs ($/lb) (iii) 0.67 0.56 0.67 0.58 Sales price realized 0.90 0.73 0.80 0.71 London spot price 0.93 0.70 0.81 0.71 ------------------------------------------------------------------------- (i) With the finalization of the AurionGold purchase price allocation in the fourth quarter of 2003, there have been several adjustments to the fair values assigned to the acquired assets and liabilities from the initial purchase price allocation. Accordingly, the results for the first three quarters of 2003 and the 2002 consolidated balance sheet has been restated to reflect these changes. In particular, the allocation to mineral properties and mine development decreased by $280 million and the residual goodwill amount increased by $230 million to $430 million. The net allocation of value attributed to other assets increased by $80 million. The key factors that gave rise to the changes are increased mine operating and capital costs together with an increase in understanding of the acquired resources base resulting in lower confidence of conversion of 2002 reported resources to mineral reserves at Kalgoorlie West. (ii) On January 1, 2003Placer Dome adopted a new accounting standard, SFAS 143, "Accounting for Asset Retirement Obligations" which requires that the fair value of liabilities for asset retirement obligations be recognized in the period in which they are incurred. The cumulative non-cash effect of the change through January 1, 2003, which was booked in the first quarter, was $17 million ($0.04 per share). (iii) These are non-GAAP measures that do not have any standardized meaning as prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other entities. See the "Non-GAAP Measures" section of this report. Cash and total production costs are Placer Dome's share. Mineral Reserve and Mineral Resource Estimates Proven and probable gold mineral reserves increased in 2003 by 7.7 million ounces to an estimated 60.5 million ounces, a 15% increase over 2002. The growth was due to the net acquisition of 2.2 million ounces, exploration additions of 8.5 million ounces, and an increase of 1.9 million ounces as a result of the change in gold price assumption from $300 per ounce to $325 per ounce. The reserve additions were offset by depletion of 4.5 millionounces and a 0.4 million-ounce reduction of mineral reserves at Granny Smith. Specifically, the increase in gold mineral reserves before depletion reflects the acquisition of the North Mara mine, where 2.8 million ounces were acquired and 1.1 million ounces were added during the year, and the Cortez Hills discovery, which added 3.2 million ounces. It also reflects success at Porgera, where 1.4 million ounces were added, and Turquoise Ridge, where exploration in the N Zone, lower costs related to theformation of the joint venture, and a higher gold price assumption added mineral reserves of 1.1 million ounces. On a 100% basis, Cortez Hills now contains 5.25 million ounces of proven and probable mineral reserves (37.5 million tonnes at 4.36 grams per tonne), 0.5 million ounces of measured and indicated mineral resources (3.6 million tonnes at 4.73 grams per tonne) and 1.0 million ounces of inferred mineral resources (7.4 million tonnes at 4.30 grams per tonne). The deposit remains open on strike and at depth. At South Deep, mineral reserve and resource estimates and the life of mine plan are being updated. Initial indications are that there will be a reduction in the mineral resource. See the Review of Mining Operations section for complete details. Proven and probable copper mineral reserve estimates decreased by 6% in 2003 due to depletion. Measured and indicated gold resource estimates at operating mines and exploration and development properties also increased by 15% in 2003, rising from 74.8 million ounces at the end of 2002 to 85.8 million ounces at the end of 2003. Outlook for 2004 Placer Dome expects to produce approximately 3.6 million ounces of gold in 2004, down from 2003 due to the closure of Misima and the temporary cessation of milling at Golden Sunlight while stripping of Stage 5B is completed. Copper production for 2004 is forecast at approximately 400 million pounds. Cash and total production costs for gold are forecast in the range of $225 to $230 per ounce and $290 to $295 per ounce, respectively. Cash and total costs for copper are forecast at $0.51 and $0.67 per pound, respectively. Capital expenditures in 2004 are expected to be $295 million, excluding pre and deferred stripping. This estimate consists of $42 million at South Deep (including $9 million in capitalized interest) for completion of the shaft project and underground development, $35 million for mobile equipment and leach pad expansion at Cortez, $27 million at Porcupine for the development of the Pamour open pit mine and underground development at the Hoyle Pond mine, $19 million for the expansion of the North Mara plant, $15 million to bring Turquoise Ridge to full mine production, and $12 million for underground development at Kalgoorlie West. The increase from the previously disclosed $275 million was due to the approval, in early 2004, of Placer Dome's share of capital expenditures for the Pamour project. In addition, Placer Dome's share of pre-stripping and deferred stripping expenditures in 2004 are forecast at $30 million and $55 million respectively. Exploration expenditures are forecast at $75 million, about $50 million of which will be allocated to exploration activities within an economic radius of existing mine sites. Placer Dome also plans to spend approximately $55 million in 2004 on mineral resource development, technology advancement, gold marketing and other related items. In 2004, Placer Dome expects to reduce its committed ounce position of its precious metals salesprogram to nine million ounces of gold by delivering into contracts and closing out positions as market conditions allow. In accordance with Placer Dome's accounting policies, a non-cash charge of $34 million, previously recognized in accumulated comprehensive income, relating to the cumulative foreign exchange translation loss on its investment in Misima will be recognized on cessation of commercial production from the property. This is currently expected to be in the second quarter of 2004. Sensitivities The sensitivity of 2004 net earnings to key metal price changes based on metal prices of $350 per ounce for gold and $0.90 per pound for copper and projected 2004 sales volumes is estimated as follows: ------------------------------------------------ Price change Change in net Change in net $ earnings earnings ($millions) ($/share) ------------------------------------------------------------------------- Gold 25.00/oz 39 0.10 Copper 0.05/lb 10 0.03 ------------------------------------------------------------------------- The sensitivity of 2004 net earnings to foreign exchange fluctuations with respect to mine operating costs of the Australian dollar, the Canadian dollar, the Chilean peso, the Papua New Guinean kina and the South African rand to the U.S. dollar for projected 2004 sales volumes is estimated as follows: ---------------------------------------------------- Change in Change in Exchange Fluctuation net earnings net earnings ($ millions) ($/share) ---------------------------------------------------- December 31, 2003 % ------------------------------------------------------------------------- Australian dollar 1.3355 10% 9 0.02 Canadian dollar 1.2924 10% 5 0.01 Chilean peso 593 10% 6 0.01 Papua New Guinean kina 3.27 10% 1 - South African rand 6.69 10% 3 0.01 ------------------------------------------------------------------------- Exploration and Development Projects On April 14, 2003, the Special Lease Agreement for the Pueblo Viejo Project was ratified by the Congress of the Dominican Republic. During 2003, Placer Dome's work at Pueblo Viejo focused on scoping studies to confirm the geology and evaluate processing alternatives. A new mineral resource model was formulated which forms the basis for the current indicated mineral resource estimate of approximately 17.5 million ounces of gold that are refractory in nature and associated with zinc and copper mineralization. Based on the success of scoping study work completed to date, Placer Dome is continuing pre- feasibility studies that are to be completed in the second half of 2004. As a result of encouraging results from the autoclave test work, the focus in 2004 will be on refining the autoclaving process, completing an 11,000-metre infill drill program to further delineate the higher-grade resource areas, and finalizingconcepts for waste rock impoundment. The budget for 2004 activities is estimated to be $15 million. The project studies remain on track for completion of a bankable feasibility study and production decision in the first half of 2005. Placer Dome controls 51% of the Cerro Casale project in north-central Chile. Its share of the project contains an estimated 13 million ounces of measured and indicated gold mineral resources and an estimated 3.3 billion pounds of measured and indicated copper mineral resources. In 2000, a feasibility study was completed on the project and necessary environmental permits and water rights were obtained. Due to the low prices of metals at that time, it was decided not to proceed with construction of the project. In November 2003, the joint venture announced it was updating the feasibility study due to stronger metal prices and the time lapse from the original study. The feasibility study, updated for contemporary economic assumptions and capital and operating costs, ison schedule for delivery to the partners in early March 2004. The joint venture will then meet and assess the updated findings. Placer Dome is evaluating options and assessing the ability to obtain senior project financing for Cerro Casale. Under the terms of the joint venture agreement, Placer Dome is required to arrange $1.3 billion in financing, including contributing $200 million in equity on behalf of the joint venture partners, and provide a pre-completion guarantee for an amount not greater than $1.1 billion in senior and subordinated loans. The senior loans are required to be an amount which is not less than 50% of the initial project capital requirements. Once financeable, Placer Dome will make a decision on development. In February 2003,Placer Dome exercised its option to become joint venture manager and has the right to earn an additional 40% interest, for a total of 70%, in the Donlin Creek project from NovaGold Resources Inc. In order to do this, Placer Dome must expend $32 million, complete a feasibility study and make a positive construction decision for a mine that would produce at least 600,000 ounces of gold per annum. If Placer Dome chooses not to complete the earn-in, the company retains a 30% interest. Located in Alaska, U.S., Donlin Creek (100% basis) hosts an estimated 11 million ounce measured and indicated mineral resource and an estimated 14.3 million ounce inferred mineral resource, making it one of the largest undeveloped gold resources in North America. Work in 2003 focused on identifying acceptable alternatives for project access, power supply, and local sources of key consumables. Plans for 2004 include additional test work to further refine the flow sheet, completion of a pre-feasibility study and continuing the environmental baseline studies required for permitting. Pending a positive pre-feasibility assessment, the permitting process would begin in the fourth quarter of 2004 and run concurrently with the development of the final feasibility study. The project budget for 2004 is $6 million. Detailed Review of Financial Results Earnings Consolidated net earnings for the year and three months ended December 31, 2003 were $229 million or $0.56 per share and $81 million or $0.20 per share, respectively. This compared with earnings of $116 million or $0.33 per share and $6 million or $0.02 per share for the same periods in 2002. Placer Dome's 2003 net earnings were positively impacted by an after-tax unrealized non-hedge derivative gain of $30 million and the recognition of non- cash tax assets totalling $111 million for previously unrecorded tax benefits related to its U.S. operations. The recognition of the tax asset reflects a more positive outlook for Placer Dome's U.S. operations, including improved gold prices and increased production from the Golden Sunlight and Bald Mountain mines and the Cortez Hills deposit. This was partially offset by a $17 million after-tax charge to earnings relating to the adoption of a new accounting standardfor post-mining related asset retirement obligations, a $24 million unrealized foreign exchange loss on net non-tax monetary liabilities denominated in foreign currencies that appreciated against the U.S dollar, and the recording of provisions for known tax contingencies where, in Placer Dome's judgment, it was probable that a liability had been incurred. The cumulative effect of these items increased reported after-tax net earnings by approximately $45 million. Placer Dome's net earnings for the fourth quarter 2003 were positively impacted by the recognition of a non-cash tax asset totalling $72 million for previously unrecorded tax benefits related to its U.S. operations. This was offset by unrealized foreign exchange losses on net non-tax monetary liabilities denominated in foreign currencies that appreciated against the U.S dollar and the recording of provisions for known tax contingencies where, in Placer Dome's judgment, a liability had been incurred. The cumulative effect of these items increased reported after-tax net earnings by approximately $20 million. Cash Flow from Operations Cash flow from operations for the year and three months ended December 31, 2003 were $329 million and $61 million, respectively, compared with $320 million and $47 million for the same periods in 2002. Excluding the impact of non-cash working capital, cash flow from operations were $353 million and $83 million in 2003 compared with $335 million and $68 million for the same periods in 2002. The increase of 5% and 22%, respectively, from the 2002 periods primarily reflected higher cash mine operating earnings, partially offset by increased expenditures on deferred stripping, taxes and non-mine operating costs (including exploration and resource development, technology and other). Forward Sales Under Placer Dome's precious metals sales program, the company realized an average price of $380 per ounce of gold in 2003, and $402 per ounce in the fourth quarter of 2003, a premium of $17 and $11 per ounce, respectively, over the average spot price during the periods. During 2003, Placer Dome reduced the maximum committed ounces under its gold sales program by 2.9 million ounces, excluding the 0.8 million ounces from the East African Gold acquisition. At December 31, 2003, Placer Dome's maximum committed ounces under its gold sales program were 10.5 million ounces, or 17% of 2003 year-end gold mineral reserves. On December 31, 2003, based on the closing spot price of gold of $417 per ounce and an Australian to U.S. dollar exchange rate of $1.3319, the mark-to-market value of the precious metals sales and derivative program was negative $705 million. Other Income Statement Items Costs related to general and administrative, exploration, technology, resource development and other totalled $191 million and $46 million in the year and three month periods ended December 31, 2003, respectively, an increase of $44 million and a decrease of $14 million from the prior comparative periods. The $24 million increase in exploration in 2003 compared to 2002 was due to additional mine site exploration. The $9 million increase in 2003 for resource development, technology and other was due to increased costs at development properties and Placer Dome's enterprise-wide business process improvements initiative. The $17 million decrease in the fourth quarter for resource development, technology and other was primarily due to a reduction of $9 million in the fair value of the Turquoise Ridge reclamation accrual and an accrual in the fourth quarter of 2002 for additional capital expenditures to upgrade water treatment facilities at the closed Equity Silver mine. The increase in general and administration costs during 2003 was primarily due to costs associated with the integration of the AurionGold and East African Gold operations and the weakening of the U.S. dollar. Fourth Quarter 2003 Mine operating earnings for the fourth quarter of 2003 were $128 million, an increase of 54% or $45 million over the comparative 2002 period due primarily to higher contributions from both gold and copper. Gold operating earnings were $112 million in the fourth quarter of 2003 compared with $72 million in the fourth quarter of 2002 due to higher sales volumes and a higher average realized price, partially offset by higher unit costs. Gold sales revenue for the quarter was $401 million compared with $280 million in the prior year period, an increase of 43% reflecting a 21% increase in sales volume and a $66 per ounce increasein the average realized price. Consolidated gold production in the fourth quarter increased by 13% to 1,010,832 ounces from 895,538 ounces in 2002, reflecting the inclusion of the acquisitions of AurionGold effective October 31, 2002, and the acquisition of East African Gold effective July 23, 2003, as well as increased production from the Porcupine, Turquoise Ridge and La Coipa mines. This was partially offset by decreased production at the Granny Smith, Bald Mountain and Cortez mines. Placer Dome's share of cash and total production costs per ounce for the fourth quarter of 2003 were $229 and $284, respectively, compared with $180 and $241 in 2002. The increase in cash costs per ounce was due primarily to the inclusion of the relatively higher cost AurionGold mine interests acquired in the fourth quarter of 2002 ($7 per ounce), and the impact of the following items on Placer Dome's other mining operations: the appreciation of foreign currencies against the U.S. dollar ($22 per ounce); and higher global energy costs ($2 per ounce). The average exchange rate of the Canadian and Australian dollars, Papua New Guinean kina, Chilean peso and South African rand to the U.S. dollar appreciated 19%, 28%, 22%, 16% and 44%, respectively, from the fourthquarter of 2002 to the fourth quarter of 2003. Copper operating earnings of $22 million in the fourth quarter of 2003 were 29% higher than the prior year period due to a 23% higher realized price per pound, partially offset by decreased sales volume and increased costs. Copper sales revenue for the quarter was $89 million compared with $75 million in the 2002 period, reflecting the increase in the average realized price partially offset by a 4% decrease in sales volume. Consolidated copper production in the fourth quarter of 2003 was 111.1 million pounds (50,395 tonnes), 3% greater than the prior year period as increased production at Zaldivar was partially offset by lower production at Osborne. Consolidated cash and total production costs per pound of copper for the period were $0.53 and $0.67, respectively, compared with $0.47 and $0.56, respectively, in 2002. The increase was due to higher energy costs, the appreciation of the Australian dollar and the Chilean peso against the U.S. dollar, and higher acid expenditures and unplanned maintenance costs at Zaldivar. With the finalization of the AurionGold purchase price allocation in the fourth quarter of 2003, there have been several adjustments to the fair values assigned to the acquired assets and liabilities from the initial purchase price allocation. Accordingly, the results for the first three quarters of 2003 and the 2002 consolidated balance sheet has been restated to reflect these changes. In particular, the allocation to mineral properties and mine development decreased by $280 million and the residual goodwill amount increased by $230 million to $430 million. The net allocation of value attributed to other assets increased by $80 million. The key factors that gave rise to the changes are increased mine operating and capital costs together with an increase in understanding of the acquired resources base resulting in lower confidence of conversion of 2002 reported resources to mineral reserves at Kalgoorlie West. Review of Mining Operations ------------------------------------------------------------------------- ------------------------------------------------------------------------- PRODUCTION AND OPERATING SUMMARY ------------------------------------------------------------------------- ------------------------------------------------------------------------- For the year ended December 31 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Placer Dome's Share Placer Mine ---------------------------------- Dome's share operating Millfeed Mine (% of mine earnings (000s Grade Recovery production) (1) tonnes) (g/t,%) (%) ------------------------------------------------------------------------- ------------------------------------------------------------------------- GOLD Canada Campbell 100% 2003 $ 21 363 17.6 96.1 2002 $ 12 357 17.5 96.1 ------------------------------------------------------------------------- Musselwhite 68% 2003 4 905 5.5 95.5 2002 1 787 5.9 95.3 ------------------------------------------------------------------------- Porcupine (3) 51% 2003 22 2,106 3.7 92.4 2002 2 1,095 3.2 91.6 ------------------------------------------------------------------------- Dome (3) 100% 2002 (3) 1,673 2.4 91.8 ------------------------------------------------------------------------- ------------------------------------------------------------------------- United States Bald Mountain (4) 100% 2003 8 4,125 0.7 - 2002 19 5,265 1.1 - ------------------------------------------------------------------------- Cortez (4),(5) 60% 2003 114 14,398 1.8 - 2002 86 8,624 2.7 - ------------------------------------------------------------------------- Golden Sunlight 100% 2003 52 2,245 4.0 82.1 2002 - 2,271 2.0 78.4 ------------------------------------------------------------------------- Turquoise Ridge (6) 100% 2003 8 - - - 2002 2 - - - ------------------------------------------------------------------------- ------------------------------------------------------------------------- Australia Granny Smith (7) 100% 2003 11 3,955 2.5 88.8 100%/60% 2002 46 2,505 4.3 92.5 ------------------------------------------------------------------------- Henty (7) 100%2003 3 289 11.4 95.6 2002 (1) 43 7.4 93.7 ------------------------------------------------------------------------- Kalgoorlie West (7) 100% 2003 (4) 3,438 3.8 95.2 2002 (2) 516 4.0 93.9 ------------------------------------------------------------------------- Kanowna Belle (7) 100% 2003 21 1,909 4.9 89.0 2002 1 326 5.7 90.1 ------------------------------------------------------------------------- Osborne (8) 100% 2003 - 1,485 1.0 80.5 2002 - 1,461 1.0 79.9 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Papua New Guinea Misima (9)80% 2003 4 4,471 0.7 87.6 2002 14 4,757 0.9 88.4 ------------------------------------------------------------------------- Porgera (7) 75% 2003 42 4,242 5.3 87.6 75%/50% 2002 10 2,437 5.2 84.7 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Chile La Coipa (10) 50% 2003 10 3,208 1.2 83.6 2002 1 3,172 1.1 84.7 ------------------------------------------------------------------------- South Africa South Deep 50% 2003 4 979 7.2 96.9 2002 13 889 7.1 96.4 ------------------------------------------------------------------------- Tanzania North Mara (11) 100% 2003 7 869 3.4 93.5 ------------------------------------------------------------------------- Metal hedging revenue 2003 54 2002 82 ------------------------------------------------------------------------- TOTAL GOLD 2003 $ 371 2002 $ 282 ------------------------------------------------------------------------- ------------------------------------------------------------------------- COPPER Osborne (8) 100% 2003 4 1,485 3.0 96.0 2002 10 1,461 3.3 96.0 ------------------------------------------------------------------------- Zaldivar (4) 100% 2003 56 16,942 1.1 - 2002 42 15,961 1.0 - ------------------------------------------------------------------------- Metal hedging revenue 2003 (5) 2002 1 ------------------------------------------------------------------------- TOTAL COPPER 2003 $ 55 2002 $ 53 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Other (1) 2003 (20) 2002 (11) ------------------------------------------------------------------------- ------------------------------------------------------------------------- CONSOLIDATED MINE OPERATING 2003 $ 406 EARNINGS (1) 2002 $ 324 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- PRODUCTION AND OPERATING SUMMARY ------------------------------------------------------------------------- ------------------------------------------------------------------------- For the year ended December 31 Estimated annual 2004 -------------------------------------------------------- Placer Placer Dome's Share Dome's --------------------------------------------------- Share Production Cost per Cost per (% of -------------- unit(2) Production unit(12) mine (ozs, % ($/oz, $/lb) (ozs, ($/oz, $/lb) Mine production) 000s lbs) change Cash Total 000s lbs) Cash Total ------------------------------------------------------------------------- ------------------------------------------------------------------------- GOLD Canada Campbell 100% 2003 197,114 +2% 202 264 208,000 230 300 2002 193,150 172 244 ------------------------------------------------------------------------- Musselwhite 68% 2003 151,422 +6% 250 330 157,000 240 320 2002 142,579 219 292 ------------------------------------------------------------------------- Porcupine (3) 51% 2003 233,101 n/a 206 262 193,000 230 300 2002 101,919 230 285 ------------------------------------------------------------------------- Dome (3) 100% 2002 118,663 245 328 - - - ------------------------------------------------------------------------- ------------------------------------------------------------------------- United States Bald Moun- tain (4) 100% 2003 90,601 -47% 228 279 83,000 140 250 2002 172,328 152 203 ------------------------------------------------------------------------- Cortez (4),(5) 60% 2003 639,241 -2% 135 172 563,000 170 220 2002 649,006 129 168 ------------------------------------------------------------------------- Golden Sunlight 100% 2003 234,946 +110% 143 151 - - - 2002 111,806 279 305 ------------------------------------------------------------------------- Turquoise Ridge (6) 100% 2003 92,965 n/a 215 220 173,000 210 230 2002 54,806 107 179 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Australia Granny Smith (7) 100% 2003 280,129 -14% 246 320 286,000 310 370 100%/60% 2002 326,894 124 161 ------------------------------------------------------------------------- Henty (7) 100% 2003 102,070 n/a 204 308 104,000 220 340 2002 7,963 323 414 ------------------------------------------------------------------------- Kalgoorlie West (7) 100% 2003 396,254 n/a 271 364 245,000 320 390 2002 61,841 201 330 ------------------------------------------------------------------------- Kanowna Belle (7) 100% 2003 262,889 n/a 204 283 245,000 240 330 2002 69,337 147 269 ------------------------------------------------------------------------- Osborne(8) 100% 200337,357 -2% - - 40,000 - - 2002 38,149 - - ------------------------------------------------------------------------- ------------------------------------------------------------------------- Papua New Guinea Misima (9) 80% 2003 94,837 -18% 276 310 25,000 300 310 2002 115,638 196 213 ------------------------------------------------------------------------- Porgera (7) 75% 2003 638,940 +73% 256 301 678,000 210 260 75%/50% 2002 368,769 216 265 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Chile La Coipa (10) 50% 2003 99,637 +4% 208 291 81,000 240 320 2002 95,989 224 306 ------------------------------------------------------------------------- South Africa South Deep 50% 2003220,371 +13% 301 342 248,000 320 370 2002 194,238 204 241 ------------------------------------------------------------------------- Tanzania North Mara (11) 100% 2003 89,525 n/a 225 301 215,000 240 300 ------------------------------------------------------------------------- Metal hedging revenue 2003 2002 ------------------------------------------------------------------------- TOTAL GOLD 2003 3,861,399 +37% 218 274 3,525,000- 225- 290- 3,575,000 230 295 2002 2,823,075 178 231 ------------------------------------------------------------------------- ------------------------------------------------------------------------- COPPER Osborne(8) 100% 2003 93,638 -8% 0.56 0.69 90,000 0.57 0.69 2002 101,652 0.47 0.58 ------------------------------------------------------------------------- Zaldivar (4) 100% 2003 331,720 2% 0.51 0.66 315,000 0.50 0.66 2002 325,825 0.45 0.59 ------------------------------------------------------------------------- Metal hedging revenue 2003 2002 ------------------------------------------------------------------------- TOTAL COPPER 2003 425,358 -0% 0.52 0.67 400,000- 0.51 0.67 2002 427,477 0.45 0.58 410,000 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Other (1) 2003 2002 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CONSOLIDATED MINE OPERATING 2003 EARNINGS (1) 2002 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- PRODUCTION AND OPERATING SUMMARY ------------------------------------------------------------------------- ------------------------------------------------------------------------- For the Fourth Quarter ------------------------------------------------------------------------- ------------------------------------------------------------------------- Placer Dome's Share Placer Mine ---------------------------------- Dome's shareoperating Millfeed Mine (% of mine earnings (000s Grade Recovery production) (1) tonnes) (g/t,%) (%) ------------------------------------------------------------------------- ------------------------------------------------------------------------- GOLD Canada Campbell 100% 2003 $ 9 96 16.5 96.9 2002 $ 3 96 16.1 95.8 ------------------------------------------------------------------------- Musselwhite 68% 2003 2 241 5.5 95.2 2002 1 241 6.1 95.3 ------------------------------------------------------------------------- Porcupine (3) 51% 2003 8 519 4.0 92.1 2002 2 550 3.5 91.3 ------------------------------------------------------------------------- United States Bald Mountain (4) 100% 2003 3 117 0.7 - 2002 2 2,109 0.7 - ------------------------------------------------------------------------- Cortez (4),(5) 60% 2003 27 4,223 1.4 - 2002 21 2,324 2.7 - ------------------------------------------------------------------------- Golden Sunlight 100% 2003 16 502 4.3 79.7 2002 5 599 3.4 81.7 ------------------------------------------------------------------------- Turquoise Ridge (6) 100% 2003 5 - - - 2002 2 - - - ------------------------------------------------------------------------- ------------------------------------------------------------------------- Australia Granny Smith (7) 100% 2003 - 1,028 2.8 90.5 100%/60% 2002 10 727 4.3 90.8 ------------------------------------------------------------------------- Henty(7) 100% 2003 1 70 14.2 97.2 2002 (1) 43 7.4 93.7 ------------------------------------------------------------------------- Kalgoorlie West (7) 100% 2003 1 819 4.4 95.2 2002 (2) 516 4.0 93.9 ------------------------------------------------------------------------- Kanowna Belle (7) 100% 2003 7501 4.9 88.7 2002 1 326 5.7 90.1 ------------------------------------------------------------------------- Osborne (8) 100% 2003 - 360 1.3 82.1 2002 - 359 1.0 80.8 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Papua New Guinea Misima (9) 80% 2003 3 1,183 0.4 87.6 2002 3 1,249 0.9 87.8 ------------------------------------------------------------------------- Porgera (7) 75% 2003 17 1,108 5.0 87.6 75%/50% 2002 11 974 6.0 83.8 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Chile La Coipa (10) 50% 2003 6 858 1.7 81.4 2002 2 825 1.1 85.0 ------------------------------------------------------------------------- South Africa South Deep 50% 2003 (1) 272 6.2 96.9 2002 4 234 7.7 95.8 ------------------------------------------------------------------------- Tanzania North Mara (11) 100% 2003 6 518 3.5 92.9 ------------------------------------------------------------------------- Metal hedging revenue 2003 7 2002 10 ------------------------------------------------------------------------- TOTAL GOLD 2003 $ 112 2002 $ 72 ------------------------------------------------------------------------- ------------------------------------------------------------------------- COPPER Osborne (8) 100% 2003 2 360 3.3 96.7 2002 3 359 3.4 96.1 ------------------------------------------------------------------------- Zaldivar (4) 50% 2003 25 3,875 1.2 - 2002 13 4,178 0.9 - ------------------------------------------------------------------------- Metal hedging revenue 2003 (5) 2002 1 ------------------------------------------------------------------------- TOTAL COPPER 2003 $ 22 2002 $ 17 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Other (1) 2003 (6) 2002 (6) ------------------------------------------------------------------------- ------------------------------------------------------------------------- CONSOLIDATED MINE OPERATING 2003 $ 128 EARNINGS (1) 2002 $ 83 ------------------------------------------------------------------------- ---------------------------------------------------------------- ---------------------------------------------------------------- PRODUCTION AND OPERATING SUMMARY ---------------------------------------------------------------- ---------------------------------------------------------------- For the Fourth Quarter ------------------------------------- Placer Dome's Share Placer ------------------------------------- Dome's Production Cost per Share (% ----------------- unit (2)(12) of mine (ozs, % ($/oz, $/lb) Mine production) 000s lbs) change Cash Total ---------------------------------------------------------------- ---------------------------------------------------------------- GOLD Canada Campbell 100% 2003 49,487 +4% 211 246 2002 47,548 175 247 ---------------------------------------------------------------- Musselwhite 68% 2003 40,123 -13% 250 333 2002 46,256 209 292 ---------------------------------------------------------------- Porcupine (3) 51% 2003 61,031 +9% 189 239 2002 55,765 216 270 ---------------------------------------------------------------- ---------------------------------------------------------------- United States Bald Mountain (4) 100% 2003 16,725 -50% 188 261 2002 33,752 222 281 ---------------------------------------------------------------- Cortez (4),(5) 60% 2003 140,513 -8% 156 197 2002 153,424 123 162 ---------------------------------------------------------------- Golden Sunlight 100% 2003 53,812 +6% 136 148 2002 50,997 178 194 ---------------------------------------------------------------- Turquoise Ridge (6) 100% 2003 38,259 - 199 204 2002 - ---------------------------------------------------------------- ---------------------------------------------------------------- Australia Granny Smith (7) 100% 2003 78,425 -20% 269 366 100%/60% 2002 98,017 138 196 ---------------------------------------------------------------- Henty (7) 100% 2003 31,136 n/a 183 322 2002 7,963 323 414 ---------------------------------------------------------------- Kalgoorlie West (7) 100% 2003 105,292 n/a 277 361 2002 61,841 201 330 ---------------------------------------------------------------- Kanowna Belle (7) 100% 2003 75,342 n/a 209 293 2002 69,337 147 269 ---------------------------------------------------------------- Osborne (8) 100% 2003 12,059 +14% - - 2002 10,574 - - ---------------------------------------------------------------- ---------------------------------------------------------------- Papua New Guinea Misima (9) 80% 2003 23,226 -14% 288 319 2002 26,867 226 236 ---------------------------------------------------------------- Porgera (7) 75% 2003 172,945 -0% 267 306 75%/50% 2002 173,232 200 239 ---------------------------------------------------------------- ---------------------------------------------------------------- Chile La Coipa (10) 50% 2003 34,447 +21% 188 269 2002 28,567 209 291 ---------------------------------------------------------------- South Africa South Deep 50% 2003 54,280 +2% 365 406 2002 53,248 220 262 ---------------------------------------------------------------- Tanzania North Mara (11) 100% 2003 52,371 n/a 229 288 ---------------------------------------------------------------- Metal hedging revenue 2003 2002 ---------------------------------------------------------------- TOTAL GOLD 2003 1,039,473 +13% 229 284 2002 917,388 180 241 ---------------------------------------------------------------- ---------------------------------------------------------------- COPPER Osborne (8) 100% 2003 25,638 -5% 0.56 0.66 2002 27,008 0.45 0.51 ---------------------------------------------------------------- Zaldivar (4) 50%2003 85,425 +6% 0.52 0.67 2002 80,834 0.48 0.58 ---------------------------------------------------------------- Metal hedging revenue 2003 2002 ---------------------------------------------------------------- TOTAL COPPER 2003 111,063 +3% 0.53 0.67 2002 107,842 0.47 0.56 ---------------------------------------------------------------- ---------------------------------------------------------------- Other (1) 2003 2002 ---------------------------------------------------------------- ---------------------------------------------------------------- CONSOLIDATED MINE OPERATING 2003 EARNINGS (1) 2002 ---------------------------------------------------------------- Notes to the Production and Operating Summary Tables: (1) Mine operating earnings represent 100% of the results of mines owned by Placer Dome and its subsidiaries and a pro-rata share of joint ventures. "Consolidated operating earnings" (and the related sub- totals) in accordance with accounting principles generally accepted in the U.S. exclude the pro-rata share of La Coipa, a non-controlled incorporated joint venture. Mine operating earnings comprises sales, at the spot price, less cost of sales including reclamation costs, depreciationand depletion for each mine, in millions of U.S. dollars. Pursuant to SFAS 109 - Accounting for Income Taxes, on business acquisitions, where differences between assigned values and tax bases of property, plant and equipment acquired exist, Placer Dome gross' up the property, plant and equipment values to reflect the recognition of the deferred tax liabilities. Other mine operating earnings includes a charge of $9 million (2002 - $3 million) and $3 million (2002 - $3 million) for the 12 and three months ended December 31, 2003, respectively, related to the amortization of the property, plant and equipment allocation. (2) Components of Placer Dome's share of cash and total production costs in accordance with the Gold Institute Standard: ------------------------------------ December 31 ------------------------------------ Fourth Quarter Twelve Months ------------------------------------ 2003 2002 2003 2002 $/oz $/oz $/oz $/oz ------------------------------------------------------------------------- Direct mining expenses 230 170 208 164 Stripping and mine development adjustment (13) (1) (3) 2 Third party smelting, refining and transportation 1 1 1 1 By-product credits (2) (1) (1) (1) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Cash operating costs per ounce 216 169 205 166 ------------------------------------------------------------------------- Royalties 12 9 12 10 Production taxes 1 2 1 2 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total cash costs per ounce 229 180 218 178 ------------------------------------------------------------------------- Depreciation 37 51 34 44 Depletion and amortization 19 6 19 5 Reclamation and mine closure (1) 4 3 4 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total production costs per ounce 284 241 274 231 ------------------------------------------------------------------------- (3) Placer Dome completed an agreement with Kinross to form the Porcupine Joint Venture that combined the operations of the Dome Mine with certain operations of Kinross effective July 1, 2002. The 2002 Dome Mine reflects the results for the first six months of the year, and the Porcupine Mine reflects 51% of the combined operation from July 1, 2002 onwards. (4) Recovery percentage is not susceptible to accurate measurement at heap leach operations. (5) The Cortez mine processes material by way of carbon-in-leach ("CIL") and heap leaching. -------------------------------------- Millfeed Grade Recovery Production (000s (g/t) (%) ozs. tonnes) ------------------------------------------------------------------------- Carbon in leach For the 12 months ended December 31 2003 2,071 6.53 89.8 390,087 2002 2,041 7.43 88.6 431,429 For the fourth quarter of 2003 526 5.61 88.9 84,374 2002 520 6.13 88.0 90,276 ------------------------------------------------------------------------- Heap leach For the 12 months ended December 31 2003 12,049 0.85 Note 4 198,107 2002 6,407 1.03 Note 4 173,548 For the fourth quarter of 2003 3,697 0.78 Note 4 56,095 2002 1,755 1.54 Note 4 51,224 ------------------------------------------------------------------------- Sale of carbonaceous ore For the 12 months ended December 31 2003 278 6.71 85.1 51,047 2002 176 8.61 90.6 44,029 For the fourth quarter of 2003 - - - 44 2002 49 8.67 87.5 11,924 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total For the 12 months ended December 31 2003 14,398 1.78Note 4 639,241 2002 8,624 2.70 Note 4 649,006 For the fourth quarter of 2003 4,223 1.38 Note 4 140,513 2002 2,324 2.72 Note 4 153,424 ------------------------------------------------------------------------- (6) Production from Turquoise Ridge relates to third party ore sales. As a result of the joint venture agreement with Newmont completed in late December 2003, estimated annual 2004 production for Turquoise Ridge reflects Placer Dome's 75% share. The cash and total cost per ounce balances do not include the cost of processing the ore. (7) On October 22, 2002, Placer Dome gained control of AurionGold. This increased the company's ownership in Granny Smith Mine to 100% and Porgera Mine to 75% from 60% and 50%, respectively, and added the Henty, Kalgoorlie West and Kanowna Belle mines to Placer Dome's holdings. The additional 40% of Granny Smith and 25% of Porgera acquired contributed 30,689 ounces and 47,864 ounces, respectively in November and December, 2002. With the finalization of the AurionGold purchase price allocationin the fourth quarter of 2003, there have been several adjustments to the fair values assigned to the acquired assets and liabilities from the initial purchase price allocation. Accordingly, the results for the first three quartersof 2003 and the 2002 consolidated balance sheet has been restated to reflect these changes. In particular, the allocation to mineral properties and mine development decreased by $280 million. (8) Osborne produces copper concentrate with gold as a by-product. Therefore, gold unit costs are not applicable. (9) Silver is a by-product at the Misima Mine. For the 12 and three months ended December 31, 2003, Placer Dome's share of Misima's production was 433,000 and 85,000 ounces of silver, respectively, compared with 574,000 and 153,000 ounces for the respective prior year periods. (10) Gold and silver are accounted for as co products at La Coipa Mine. Gold equivalent ounces are calculated using a ratio of the silver market price to gold market price for purposes of calculating costs per equivalent ounce of gold. The equivalent ounces of gold produced at La Coipa were 154,519 and 44,463 ounces, respectively forthe 12 and three month periods ended December 31, 2003 and 149,285 and 42,741 ounces, respectively, for the comparative period year periods. At La Coipa, production for silver was 4.1 million and 0.8 million ounces for the 12 and three months ended December 31, 2003, respectively, and 3.6 million and 0.8 ounces for the comparative prior year periods. (11) On July 23, 2003, Placer Dome completed the acquisition of East African Gold, which owned 100% of the open pit North Mara mine in northern Tanzania. (12) Estimated 2004 annual unit costs for the Canadian, Australian, Papua New Guinean and South Deep mines are based on Canadian and Australian dollar, Papua New Guinean kina, Chilean peso and South African rand exchange rates to the U.S. dollar of 1.33, 1.30, 3.27, 670, and 7.00 to 1, respectively. Any change from these exchange rates would have an impact on the unit costs. At December 31, 2003 these exchange rates were 1.2924, 1.3355, 3.27, 593, and 6.69 to 1, respectively. Quarterly Review of Mining Operations Canada Production at the Campbell mine in the fourth quarter of 2003 was slightly higher than the prior year period dueto higher grades and recoveries. Cash costs per ounce increased 21% from the prior year primarily due to the stronger Canadian dollar. Gold production in 2004 is expected to be 6% higher than 2003 due to higher throughput as a result of a lowering of cut- off grades. Cash costs per ounce are expected to be 14% higher than 2003 levels due to lower cut-off grades and the continued strength of the Canadian dollar. Development work on Campbell's DC zone was initiated in 2003 to provide access to over 300,000 ounces of mineral resources and allow for exploration in surrounding areas. The development program calls for an overall investment of $19 million through 2005, $12 million of which was expended in 2003. The DC zone is a new mining area within theCampbell mine that lies between 5500 and 6300 feet below surface and is accessed by the bottom two levels of the Reid shaft. The development program is proceeding on plan and on budget with the structure being intersected ahead of schedule. Developmentalong the DC Zone commenced in December 2003. Placer Dome's share of production in the fourth quarter of 2003 for the Porcupine Joint Venture was 9% higher than the prior year period due to higher grades and recoveries partially offset by lower throughput. Cash costs per ounce were positively impacted by the higher production levels and lower costs due to the staff reduction in March 2003, partially offset by the stronger Canadian dollar and higher energy costs. Gold production in 2004 is expected to be 17% lower than 2003 due to the planned closure of the Dome underground in May 2004 and cash costs per ounce are expected to be 12% higher than in 2003 due to lower production levels and the continued strength of the Canadian dollar. During 2003, work continued on the optimization of the feasibility study for the Porcupine Joint Venture's proposed Pamour open pit mine. Following completion of the optimization study in early 2004, the project was approved by the management committee of the joint venture and Placer Dome, subject to the approval of the other joint venture partner, which approval is expected at the end of February. Overburden removal at the site is expected to commence in the third quarter of 2004 with gold production expected to start in the third quarter of 2005. The capital cost of the Pamour mine is estimated at $60 million (including deferred stripping costs), of which Placer Dome's share is $30 million. Pamour is expected to produce 1.6 million ounces of gold (Placer Dome share 800,000 ounces) over the next 10 years at estimated cash and total costs per ounce of $243 and $293, respectively. United States Placer Dome's share of production from the Cortez mine in the fourth quarter of 2003 was 8% lower than the prior yearperiod as there were no sales of carbonaceous ore in the quarter (restarted in 2004) and lower CIL production due to lower grades was only partially offset by increases in heap leach production due to increased tonnage. Cash costs per ounce were $156 per ounce or 27% higher than the prior year period due to decreased production and comparatively more mining of lower grade heap leach ore. The Cortez joint venture discovered a major new mineralized zone called the Cortez Hills deposit. Placer Dome's 60% share of the estimated proven and probable mineral reserve is 3.2 million ounces of gold (22.5 million tonnes with an average grade of 4.36 grams per tonne), its share of the additional estimated measured and indicated mineral resource is 0.3 millionounces of gold and its share of the additional estimated inferred mineral resource is 0.6 million ounces of gold. Exploration work at the deposit, which is open along strike and at depth, is ongoing. Gold production in 2004 is expected to be 12% lowerthan 2003 primarily due to lower CIL and heap leach grades. Cash and total productions costs are expected to rise by about 26% to $170 per ounce and 28% to $220 per ounce, respectively, compared with 2003 due to lower grade mill ore, increased cyanide costs due to higher heap leach tonnage treated, and higher electricity costs. At the Bald Mountain mine, production in fourth quarter of 2003 was 50% lower than in the prior year period as less ore was placed on the heap leach pad during the quarter. Activities at the site in the fourth quarter of 2003 were focused on pre-stripping of Stage 7 of Bald Mountain's Top Pit. Production at Stage 7 is scheduled to ramp up during 2004 and is expected to continue until the first quarter of 2007 with the heap leach pads expected to produce gold until 2009. As a result, gold production in 2004 is expected to be 8% lower than in 2003. Production at Turquoise Ridge during the fourth quarter of 2003 was 38,259 ounces from contract mining at the Getchell underground and development work at the Turquoise Ridge mine. Effective December 23, 2003, Placer Dome entered into a joint venture agreement with Newmont Mining Corporation at Turquoise Ridge. Placer Dome owns 75% of the joint venture and is the operator. Newmont acquired a 25% ownership position in the Turquoise Ridge and Getchell deposits. Under an ore sale agreement, Newmont will purchase up to approximately 2,000 tonnes per day of joint venture ore and process it at cost at its nearby Twin Creeks mill.As a result of the joint venture and ore sale agreement, Placer Dome anticipates realizing savings in the form of lower operating costs and improved recoveries, which are expected to reduce cash and total costs to approximately $190 and $230 per ounce, respectively, from the original estimates of $215 and $265 per ounce. The joint venture is also expected to reduce Placer Dome's life-of-mine capital investment in Turquoise Ridge by over $40 million as well as eliminate the $26 million in capital Placer Dome would have required to refurbish the existing mill on the Turquoise Ridge property. The formation of the joint venture also provides an opportunity to reduce the economic cut-off grade of the Turquoise Ridge deposit. This is expected to improve the continuity of the mineral resource, increase mineral reserves, and extend the life of the mine beyond the existing mine plan. The combination of additional drilling and a reduced cost structure due to the joint venture resulted in an increase in Turquoise Ridge's estimated proven and probable mineral reserves of 81% to 4.9 million ounces (Placer Dome's share 3.6 million ounces). Taking into account the start-up plan and the formation of the Turquoise Ridge Joint Venture, Placer Dome's share (75%)of gold production from the Turquoise Ridge and Getchell mines in 2004 is expected to be 225,000 ounces. Placer Dome's share of cash and total costs per ounce for the production of ore is $210 and $230, respectively, excluding ore processing costs. Australia and Papua New Guinea At the Porgera mine, Placer Dome's share of production in the fourth quarter of 2003 was unchanged from the prior year period. Cash costs per ounce were $267 or 34% higher than the prior year due to the strengthening Australian dollar and Papua New Guinean kina, as well as increased fuel and maintenance costs. During 2003, Placer Dome's share of estimated proven and probable mineral reserves, before mineral reserve depletion, increased by approximately 1.4 million ounces. The increase was attributable to underground mineral reserve delineation and cut-off grade optimization (0.3 million ounces), open pit modeling and pit design (0.7 million ounces), and an increase in stockpiles (0.4 million ounces). In 2004, Placer Dome's share of gold production is expected to be 678,000 ounces, a 6% increase over 2003 due to higher throughput as a result of the installation of a secondary crusher and higher grades. Unit cash costs are expected to decrease by approximately 18% in 2004 from 2003 due to higher production levels and reductions in operating costs, partially offset by the continued strength of the Australian dollar and Papua New Guinean kina. At the Granny Smith mine, Placer Dome's share of production in the fourth quarter of 2003 was 20% below that of the prior year period primarily due to lower grades and recovery due to harder ore as the Wallaby pit deepens and the use of low-grade ore to supplement mill feed. Cash costs per ounce were $269 or a 95% increase over the prior year period due to lower production, higher fuel costs and the appreciation of the Australian dollar against the U.S. dollar. In October, a feasibility study commenced to assess the potential for an underground mine to extract the mineralization that extends below the Wallaby open pit. The study will be completed in the first quarter of 2005, with the primary goal of justifying the exploitation of the Zone 60 ore body. Delineation drilling will be conducted from surface within the Wallaby open pit and from underground drill drives. The study will also include trial underground mining in the upper areas of the proposed underground. This trial is expected to result in the production of approximately 75,000 additional ounces in the period resulting in the feasibility study being cost neutral. In 2004, production is expected to be around 286,000 ounces with 33% expected to be in the first half of the year and 67% percent in the second half. Overall this is a 2% increase from 2003 due toincreased grades from Stage 3 of the Wallaby pit partially offset by decreased throughput as a result of harder ore. Unit cash costs are expected to increase by approximately 26% in 2004 due to higher mining costs associated with Stage 3, Wallaby underground mining costs, higher royalties and the continued strength of the Australian dollar. The mine was subject to severe weather in February 2004 that resulted in the suspension of milling for two days and flooding in the Wallaby open pit. While the event will not impact annual production, it interrupted first quarter mining activities, leading to a deferral of open pit ore, which was replaced by lower-grade ore from stockpiles. Production at Kalgoorlie West during the fourth quarter of 2003 was 105,292 ounces. The increase over the comparative period in 2002 was primarily due to the inclusion of the operation for the entire quarter in 2003 (it was acquired effective October 31, 2002), as well as higher grades and improved recoveries. Cash and total costs per ounce in the quarter were $277 and $361, respectively, a 38% and 9% increase from the 2002 period due to the use of low- grade ore to supplement mill feed, higher fuel costs and the appreciation of the Australian dollar against the U.S. dollar partially offset by a lower amortization per ounce. A detailed review of mineral resources in 2003 at Kalgoorlie West, including the application of current economic criteria and optimized pit shells, resulted in a reduction in the measured and indicated mineral resource estimate by 77% to 727,000 ounces and a reduction in the inferred mineral resource estimate by 22% to 2,086,000 ounces. In 2004, exploration efforts at Kalgoorlie West will focus on realizing the value of a significant land position and the extensive geological database, which has been compiled and validated over the past 12 months. This objective will be realized through the use of a regional 3D model and geochemical fingerprinting techniques to identify and test targets at depth. In December the development of Kalgoorlie West's Raleigh underground mine was approved subject to finalization of joint venture agreements. The underground mine will be an extension of the Raleigh open pit mine with production scheduled to commencein late 2004 and continue through 2008. The Raleigh mine is located partially on a mining lease owned 100% by Placer Dome and partially on a mining lease owned by a joint venture in which Placer Dome has a 51% interest. Placer Dome's share of the capital cost is estimated at $17 million, with $11 million to be spent in 2004, and its share of production over the six year mine life is expected to be approximately 250,000 ounces at estimated cash and total costs per ounce of $218 and $287, respectively.Joint venture negotiations are continuing, and should these extend beyond the first quarter of 2004, this schedule will be impacted. In 2004, production is expected to be about 245,000 ounces, a decrease of 38% from 2003 due to the closure of underground operations in the second half of 2003 and the completion of open pit operations at certain other deposits in 2003. Unit cash costs are expected to increase by approximately 18% in 2004 due to lower production levels and the continued strength of theAustralian dollar. At the Kanowna Belle mine, production for the fourth quarter of 2003 was 75,342 ounces, with the increase over prior year period production levels primarily due to the inclusion of the operation for the entire year (it was acquired effective October 31, 2002), partially offset by lower grades. Cash and total costs per ounce were $209 and $293, respectively, a 42% and 9% increase from the 2002 period due to the use of low-grade ore to supplement mill feed, higher fuel costs and theappreciation of the Australian dollar against the U.S. dollar partially offset by a lower amortization per ounce. In 2004, production is expected to be about 245,000 ounces, a decrease of 7% due to stope sequencing. Unit cash costs are expected to increase by approximately 18% due primarily to the continued strength of the Australian dollar. South Africa and Tanzania At the South Deep joint venture mine, Placer Dome's 50% share of production for the fourth quarter of 2003 was 54,280 ounces. This 2%increase over the prior year period was due to increased throughput mostly offset by lower grades. Unit cash and total production costs increased by 66% and 55%, respectively, due to a 40% appreciation in the average exchange rate of the rand for the U.S. dollar and higher energy, consumable and labour costs. During the quarter, work continued on the South Deep Twin Shaft project that, as announced last quarter, is now scheduled for completion by the end of 2004. A third party independent expert review of the schedule and remaining construction activities was completed in late November. The review confirmed the schedule developed by joint venture management and has resulted in no change to the announced completion time frame. Mineral resource andreserve estimates for South Deep as at December 31, 2003 are based on estimates as at December 31, 2000, depleted for production in 2001, 2002 and 2003. The December 31, 2000 estimates were prepared using appropriate cut-off grades associated with an average long-term gold price of $300 per ounce and an average long-term rand to U.S. dollar exchange rate of 7:1. The geological modeling has been refined since the creation of the disclosed mineral reserves and resources to better reflect the layered, discrete zones of mineralization becoming apparent in the deposit. Although a review of an updated mineral resource estimate is still being carried out by the joint venture, initial indications are that there will be a reduction in the mineral resource primarily in tonnage, and hence in contained ounces, compared to the currently disclosed mineral resource at a similar cut-off grade. A mineral reserve estimate will be completed on this mineral resource model. A review and update of the South Deep life of mine plan is currently under way by the joint venture, taking into account technical issues specific to the South Deep operation as well as current and anticipated costs of operating in the South African environment, including the strength of the rand, proposed royalties and social costs imposed by pending minerals legislation. It is anticipated that the completion of the above processes will result in a reduction in the contained mineral reserve ounces. Revised mineral reserve and mineral resourceestimates will be announced once the work is completed and reviewed by the joint venture participants, which is anticipated in the second half of 2004. The work currently being carried out with respect to the South Deep life of mine plan will result inrevised production and cost guidance being issued. On January 2, 2004, a rock fall occurred in the South Deep SV-1 sub vertical shaft between 60 and 63 levels. It is estimated that between 500 and 1,000 tonnes of rock and shaft liner dislodged and fell 320 metres to the bottom of the shaft. The fall caused extensive damage to the shaft and station steelwork, service air and water columns and other shaft infrastructure. Preliminary indications are that the shaft liner appears relatively intact with the exception of the point at which the rock fall originated. No conveyances or winding plant damages occurred. Mining operations at the SV-1 sub vertical shaft ceased in 1999. The SV-1 area is not a significant portion of the immediate mine plan and theimpact of the rock fall on longer-term production will be included in the review and update of the South Deep life of mine plan, which is currently under way. The insurance underwriters have been notified of the incident and an investigation by joint venture management to determine the extent of the damage is currently in process. In 2004, Placer Dome's share of gold production is expected to be approximately 248,000 ounces, a 13% increase over 2003 due to higher throughput, partially offset by lower grades. Unit cash costs are expected to increase by approximately 6% in 2004 from 2003 due to anticipated continued strength of the rand, partially offset by higher production levels. On July 23, 2003, Placer Dome completed the acquisition of the North Mara open pit gold mine in Northern Tanzania and accordingly, the results of operations of the North Mara mine have been included from that date forward. During the fourth quarter, the mine produced 52,371 ounces at cash and total costs per ounce of $229 and $288, respectively. An expansion of the site's nominal mill throughput from approximately 2.0 million to 2.8 million tonnes per annum is under way at an estimated cost of $25 million. The expansion is scheduled for completion in the fourth quarter of 2004. At December 31, 2003, primarily as a result of additional drilling, after allowance for depletion the estimated mineral reserve for North Mara increased by 1.0 million ounces to 3.8 million ounces. Gold production in 2004 is expected to be approximately 215,000 ounces at cash and total costs per ounce of $240 and $300, respectively. Chile At the Zaldivar mine, copper production for the fourth quarter of 2003 was 85 million pounds (38,750 tonnes) a 6% increase from the prior year period due to higher grades, partially offset by decreased tonnage. Cash and total costs per pound during the quarter were $0.52 and $0.67, an increase of 8% and 16%, respectively over the prior year period, due to higher fuel costs and acid consumption along with unplanned maintenance costs and the strengthening of the Chilean peso, partially offset by higher production. In 2004, production is targeted at 315 million pounds (142,900 tonnes), 5% lower than 2003 due primarily to lower recoveries as a result of a planned higher percentage of slower leaching sulphide ore. Cash costs are expected to decrease to $0.50 per pound, reflecting lower acid and parts consumption, partially offset by lower production. Financial Condition, Liquidity and Capital Resources At December 31, 2003, Placer Dome had cash and short-term investments of $591 million resulting in working capital of $710 million, compared with $544 million and $291 million, respectively, at the beginning of the year. The increase in working capital is primarily attributable to financing activities including the repayment of current debt during 2003. Of Placer Dome's cash and short-term investments, $578 million was held by Placer Dome and its wholly owned subsidiaries, and $13 million was heldby other subsidiaries. At December 31, 2003, Placer Dome also had$781 million of undrawn bank lines of credit available. Cash flow used in investing activities included the $255 million to acquire East African Gold, net of that company's $2 million incash on completion of the transaction. Expenditures on property, plant and equipment in the year and three month periods ended December 31, 2003 amounted to $213 million and $63 million, respectively, increases of $86 million and $30 million compared with corresponding prior year periods. The expenditures for the year included outlays of $63 million for the main shaft and underground development at the South Deep Mine (2002 - $45 million), $23 million for processing enhancements and development at Zaldivar (2002 - $10 million), $22 million for development at Turquoise Ridge (2002 - nil) $18 million for Kalgoorlie West development and equipment enhancement, $9 million for DC Zone development at Campbell and a total of $20 million relating to development and equipment enhancement at the Henty, Kanowna Belle and North Mara properties. In 2002, investing activities included a net $47 million cash expenditure on the AurionGold acquisition ($76 million of acquisition costs, offset by $29 million in cash in AurionGold upon acquisition). Consolidated current and long-term debt balances at December 31, 2003, were $1,189 million, compared with $947 million at December 31, 2002. Significant financing activities during the years include: Cash (outflow)inflow from financing activity ------------------ ($millions) 2003 2002 ------------------------------------------------------------------------- Preferred Securities, 8.625% due in 2045 (185) - Unsecured bonds, 7.125% due in 2003 (200) - AurionGold debt, unsecured (139) - Dividends (44) (46) Other (11) (39) Common shares 31 23 Unsecured bonds, 6.375% due in 2033 200 - Unsecured bonds, 6.45% due in 2035 300 - Senior convertible debentures, 2.75% due in 2023 230 - Issue costs re Unsecured bond and Senior convertible debenture financings (15) Non-recourse debt assumed in East African Gold acquisition 43 - Unsecured debt assumed in AurionGold acquisition - 137 ------------------------------------------------------------------------- 210 75 ------------------------------------------------------------------------- At December 31, 2003, Placer Dome was in full compliance with all debt covenants and default provisions. Forward Sales, Options and Other Commitments Placer Dome enters into financial agreements with major international banks and other international financial institutions in order to manage underlying revenue and cost exposures arising from fluctuations in commodity prices and foreign currency exchange rates. Contracts include forward sales and options, which, with the exception of call options, commit counterparties to prices payable at a future date. There are no margin call provisions in any of Placer Dome's counterparty agreements. During the year and three months ended December 31, 2003, exclusive of the East African Gold committed ounces, Placer Dome reduced the maximum committed ounces under its precious metals sales program by 2.9 million ounces and 0.8 million ounces, respectively. Committed ounces were reduced during the year by delivering into hedge contracts, through conversion of existing forward sales to put options (by purchasing offsetting call options), and through early delivery of forward sales. This represents a cumulative decrease in maximum committed ounces of more than 23% for the year. The acquisition of East African Gold in the third quarter added 0.8 million ounces of fixed forward contracts to Placer Dome's precious metals sales program. Looking forward, Placer Dome expects to reduce its maximum committed ounces to nine million ounces by December 31, 2004 (including the East African Gold committed ounces). This would represent a cumulative decrease in maximum committed ounces of approximately 14% for the year. At December 31, 2003, Placer Dome had committed a maximum of 10.5 million ounces of gold under its precious metals sales program, or approximately 17% of reported December 31, 2003 mineral reserves, at an average expected realized price of approximately $393 per ounce for delivery over a period of 13 years. The maximum committed ounces include the ounces assumed as part of the East African Gold transaction. On December 31, 2003, based on spot prices of $417 per ounce for gold, $5.98 per ounce for silver and an Australian to U.S. dollar exchange rate of $1.3319, the mark-to-market value of Placer Dome's precious metals sales program was negative $705 million, a decrease of $605 million from the negative $100 million at the end of 2002 (at the then spot prices of $343 per ounce for gold and $4.67 per ounce for silver and an Australian to U.S. dollar exchange rate of $1.7649). The amount reflects the value that would have been paid to counterparties if the contracts were closed out on December 31, 2003 under prevailing market conditions without allowance for market illiquidity. The year-over-year change in the mark-to-market value of Placer Dome's precious metals sales program and the reconciliation to the unrealized mark-to- market value are detailed as follows: ------------ $millions ------------------------------------------------------------------------- Mark-to-market value at December 31, 2002 (100) Cash value realized (18) Change in spot price (693) Accrued contango 159 Change in Australian to U.S. dollar exchange rate, volatility, interest rates and gold lease rates 18 Inclusion of the East African Gold hedge book, at acquisition date(71) ------------------------------------------------------------------------- Mark-to-market value at December 31, 2003 (705) Provision included in Deferred Commodity and Currency Derivatives liability relating primarily to the value of the AurionGold and the East African Gold precious metal hedge books remaining from the acquisitions by Placer Dome 195 ------------------------------------------------------------------------- Net unrealized mark-to-market value at December 31, 2003 (510) ------------------------------------------------------------------------- The net unrealized mark-to-market value of negative $510 million reflects the incomestatement effect Placer Dome would expect to incur had it closed out its contracts on December 31, 2003 under metal price, foreign exchange rates, interest rates and volatilities prevailing at that time. This amount is the mark-to-market value of negative $705 million less the remaining amount of the deferred commodity derivative provision of $195 million recorded on Placer Dome's balance sheet at December 31, 2003 that is primarily related to the fair value of the AurionGold and East African Gold precious metal hedge books on the dates that Placer Dome acquired control of those companies. The mark-to-market and unrealized mark-to-market amounts are not estimates of future gains or losses which depend on various factors including contango and interest rates, gold lease rates and the then prevailing spot price. For the copper sales and currency derivative programs, the mark-to-market value of forward and option contracts on December 31, 2003, was negative $25 million (based on a spot copper price of $1.053 per pound) and positive $45 million (based on an Australian to U.S. dollar foreign exchange rate of 1.3319), respectively. FIRST AND FINAL ADD - TABULAR MATERIAL AND NOTES - TO FOLLOW DATASOURCE: Placer Dome Inc. CONTACT: For further information on this news release please contact: Investor Relations: Greg Martin 604-661-3795; Media Relations: Theresa Coles 604-661-1911; On the internet: http://www.placerdome.com/; For enquiries related to shares, transfers and dividends please contact: CIBC Mellon Trust Company, Toll-free within North America 800-387-0825, Collect calls accepted from outside North America 416-643-5500

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