Boliden Limited Reports Fourth Quarter 2000 Results

BOLIDEN LIMITED REPORTS FOURTH QUARTER 2000 RESULTS (All dollar amounts are in United States dollars) Overview * Continued improvement in operations, particularly mining operations. * Rönnskär +200 expansion project continues to ramp-up. Full production expected in March 2001. * Continued progress with Capital Management Program. After year-end: - Agreement of purchase and sale signed to sell 50% interest in Norzink. - Letter of intent signed to sell Lomas Bayas and Fortuna de Cobre. - Letter of intent signed to sell BCZ copper tubing business. - Agreement in principle reached to sell Gusum brass and copper tubing business. * $418.6 million ($382.6 million net of taxes) write-down and unusual charges related to investments in Lomas Bayas and Fortuna de Cobre and Fabrication business. * Refinancing discussions initiated with lenders under unsecured long- term debt facilities. * Thomas Cederborg appointed President and CEO. TORONTO, CANADA and STOCKHOLM, SWEDEN (March 13, 2001) - Boliden Limited today reported its operating results for the fourth quarter of 2000 and for the year ended December 31, 2000. The Company reported an operating loss of $411.4 million for the quarter and $656.1 million for the year ended December 31, 2000 compared with operating income of $5.5 million for the fourth quarter of 1999 and an operating loss of $59.4 million for the year ended December 31, 1999. The operating loss for the quarter compares with an operating loss of $203.6 million for the third quarter of 2000. The operating loss for the quarter and for the year ended December 31, 2000 includes $6.8 million in income to reflect reductions in the Company's obligations under its defined benefit plans for its Swedish employees. It also includes $418.6 million ($382.6 million net of taxes) of write-down and unusual charges related to the Company's investments in Lomas Bayas and Fortuna de Cobre and its Fabrication business. The operating loss for the third quarter of 2000 and for the year ended December 31, 2000 includes $2.7 million in income to reflect reductions in the Company's obligations under its defined benefit plans for its Swedish employees. It also includes $210.5 million of write-down and unusual charges related to the Company's investment in the Los Frailes mine in Spain, the restructuring charge on account of the downsizing at the Company's corporate offices in Toronto and Stockholm and at its mining operations and the financial statement recognition of accrued pension liabilities for Swedish mining employees. The write-down and unusual charges taken by the Company in the third and fourth quarters of 2000 are further steps in the strategic review of the Company's operations initiated earlier in the year and will facilitate the development of a revised long-term plan for the Company during 2001. Excluding pension income and write-down and unusual charges, the Company reported operating income of $0.4 million for the quarter and an operating loss of $36.5 million for the year ended December 31, 2000 compared with operating income of $5.5 million for the fourth quarter of 1999 and an operating loss of $59.4 million for the year ended December 31, 1999. The principal reasons for the change between the years ended December 31, 2000 and December 31, 1999 are higher metal prices and production. The operating income for the quarter compares with operating income of $4.2 million for the third quarter of 2000, excluding pension income and write-down and unusual charges. The principal reason for the change between the quarters is lower metal prices partially offset by higher metal production. After accounting for interest expense and income taxes, the Company reported a net loss of $407.5 million or $1.87 per common share for the quarter and $655.6 million or $3.45 per common share for the year ended December 31, 2000 compared with a net loss of $9.9 million or $0.11 per common share for the fourth quarter of 1999 and $68.2 million or $0.68 per common share for the year ended December 31, 1999. Cash provided by operations before non-cash working capital changes was $6.1 million or $0.03 per common share for the quarter and $25.1 million or $0.13 per common share for the year ended December 31, 2000 compared with cash provided by operations of $24.9 million or $0.23 per common share for the fourth quarter of 1999 and $15.9 million or $0.15 per common share for the year ended December 31, 1999. The cash provided by operations before non-cash working capital changes for the quarter compares with cash provided by operations of $23.5 million or $0.11 per common share for the third quarter of 2000. CAPITAL MANAGEMENT PROGRAM At the beginning of the third quarter of 2000, the Company initiated a Capital Management Program aimed at restoring its financial strength and operating flexibility. The capital management program includes reducing costs, increasing productivity, postponing discretionary expenditures, securing partners for those operations that require non-discretionary expenditures and selling non-strategic assets. The following is a summary of developments in the Capital Management Program. Reducing Costs The Company is implementing its previously announced plan to transfer many of the activities carried out in its Toronto office to Sweden and many of the activities carried out at its Stockholm office to its operating units. These changes will be completed by the end of the third quarter of 2001. During the quarter, the Company established a new management structure for the Swedish mining operations and technology and exploration groups and began the process of downsizing the Boliden Area Operations and the office located in the Town of Boliden. A total of 116 employees will be affected by the downsizing which is expected to reduce costs by $10 million per year beginning in 2001. Increasing Productivity The Company has introduced new shift procedures at its Aitik and Garpenberg mines that will significantly increase effective worktime at the mines. Postponing Discretionary Expenditures The Company has deferred consideration of plans to expand the production capacity of the Aitik mine from 18 million to 24 million tonnes per year. Securing Partners for Operations that Require Non-Discretionary Expenditures The Company is continuing its efforts to secure an industry partner for its Myra Falls operation. Selling Assets After year-end, the Company's subsidiary, Boliden Mineral AB, and Rio Tinto signed a definitive agreement (implementing a letter of intent signed during the fourth quarter) to sell to Outokumpu Oyj their respective 50% interests in Norzink A/S, the owner and operator of the Norzink zinc smelter and refinery and aluminum floride plant located near Odda on the west coast of southern Norway, for a total cash purchase price of $180 million. Completion of the transaction is subject to usual closing conditions, including receipt of all required regulatory approvals which are expected to be received during the second quarter of 2001. Also, after year-end, the Company signed a letter of intent to sell its interests in Compañía Minera Lomas Bayas and Compañía Minera Boliden Westmin Chile Limitada, the owners of the Lomas Bayas SX-EW copper project and adjacent Fortuna de Cobre copper deposit located in Chile, to Noranda Inc. and Falconbridge Limited (Purchasers) for a purchase price of: (a) $175 million plus cash balances ($2.1 million) less outstanding third party debt obligations ($112.7 million); plus (b) $15 million if the Purchasers exercise their right to retain the Fortuna de Cobre copper deposit before the fifth anniversary of closing. The transaction is subject to completion of satisfactory due diligence, negotiation and settlement of satisfactory definitive agreements, receipt of all required regulatory and other third party consents and approval of the boards of directors of the Purchasers and the Company. Also, after year-end, the Company's subsidiary, Boliden Fabrication AB (Fabrication), signed a letter of intent to sell its interest in Boliden Cuivre & Zinc SA, the owner of a copper tubing production facility located in Liège, Belgium, and its marketing and sales subsidiaries (BCZ Group) to an industry participant for a purchase price equal to the consolidated shareholders equity of the BCZ Group (approximately $11 million as at December 31, 2000). As part of the transaction, the BCZ Group will repay the inter-company indebtedness owing by it to the Company and its subsidiaries (approximately $8 million as at December 31, 2000). The transaction is subject to completion of satisfactory due diligence, negotiation and settlement of satisfactory definitive agreements, receipt of all required regulatory and other third party consents and approval of the boards of directors of the purchaser and Fabrication. Also, after year-end, Fabrication reached an agreement in principle to sell its interest in Boliden Gusum AB (Gusum), the owner of a brass fabrication and copper tubing production facility located in Gusum, Sweden, and its marketing and sales subsidiary through a management buy- out for a purchase price of approximately $0.5 million. As part of the transaction, Gusum will repay the inter-company indebtedness owing by it to the Company and its subsidiaries (approximately $15 million as at December 31, 2000). The transaction is subject to negotiation and settlement of satisfactory definitive agreements and receipt of all required regulatory and other third party consents and approval of the boards of directors of the purchaser and Fabrication. ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/03/13/20010313BIT00350/bit0003.doc The Full Report http://www.bit.se/bitonline/2001/03/13/20010313BIT00350/bit0003.pdf The Full Report