Toronto, Canada, September 22, 2004 - Breakwater Resources Ltd.'s ("Breakwater") (TSX: BWR) earnings, cash flows and common share price are highly sensitive to the price of zinc in particular and commodity prices in general.
Following the acquisition of the Myra Falls operation, management has calculated the sensitivity of Breakwater's earnings and cash flow to changes in metal prices and in the US$/C$ exchange rate based on production estimates for 2005.
The following table illustrates these sensitivities.
|
|
Sensitivities as reported in the
2003 Annual Report for 2004
(Cdn$ thousands) |
Sensitivities for 2005
(Cdn$ thousands) |
|
Zinc (US$0.01/pound) |
3,010 |
3,202 |
|
Lead (US$0.01/pound) |
315 |
284 |
|
Copper (US$0.01/pound) |
72 |
311 |
|
Silver (US$0.10/ounce) |
174 |
291 |
|
Gold (US$10.00/ounce) |
436 |
725 |
|
Exchange rate (US$0.01/Cdn$)* |
763 |
1,342 |
*When the Canadian dollar weakens against the US dollar earnings would increase.
The Company expects to produce 403 million pounds of zinc in concentrate this year, 360 million pounds in 2005 and 404 million pounds in 2006. The 2005 production estimate anticipates the closure of both the Bouchard-Hébert and Bougrine mines and the 2006 production estimate anticipates the start-up of Langlois.
This news release contains forward-looking statements within the meaning of the United States Private Securities Legislation Reform Act of 1995. When used in this news release the words "anticipate", "believe", "intend ", "estimate", "plans", "projects", "expect", "will", " budget", "could", "may", and similar expressions are intended to identify forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from those currently anticipated are described in the Company's most recent Annual Report on Form 20-F under "Risk Factors" on file with the U.S. Securities and Exchange Commission and Canadian provincial securities regulatory authorities. The Company disclaims any obligation to update or revise any forward-looking statements whether as a result of new information, events or otherwise.
For further information please contact:
Richard R. Godfrey
Vice President and Chief Financial Officer
(416) 363-4798 Ext. 276
E. Ann Wilkinson
Corporate Secretary and Investor Relations Officer
(416) 363-4798 Ext. 277
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