PRESS RELEASE - Antam's nine month earnings, sales up sharply

PT Antam is pleased to announce unaudited consolidated net income of Rp 303 billion (approximately US$37 million) for the first nine months of 2000. The 135% increase over the same period in 1999 comes on the back of a net sales increase to Rp1,097b, buoyed in particular by a higher nickel sales price and almost twice the revenues from gold.

The realized average selling price for nickel over the first nine months of the year increased by 65% to $4.00/lb and for nickel ore, the increase was even larger. The nickel price increase reversed in the third quarter however, falling by 8% compared to the previous quarter. Nickel makes up two thirds of Antam' s revenues.

Gold sales, providing over a quarter of Antam's net revenues, almost doubled to US$29 million due to production increases following the resolution of technical issues and the near elimination of problems associated with illegal miners. As well, third quarter local gold sales enjoyed a 111% increase over 2Q00.

Said Antam's President Director, D. Aditya Sumanagara:

"Net income increased 135% over the same period in 1999 (Rp 129b) and is 42% higher than as at the end of this year's first half (Rp 213b). We are happy with the results and more optimistic with achieving Vision 2010 to be a world-class mining company and lead the Indonesian mining industry. "

Meanwhile Antam's costs rose relatively less over the period, thereby increasing profitability. The company's nine-month profit margin increased by 27% over that of last year, with profits representing 28% of net sales.

The cost of goods sold increased by 57% to Rp 573b largely due to costs associated with the employee stock allocation plan, early retirement and salary increases. Still the cost increases were not enough to offset higher earnings as upwards of 98% of the Company's sales revenues are US Dollar denominated.

The nine-month net sales total of Rp 1,097b exceeds the total realized sales revenue for 1999 by 13%, with cash receipts helping operating cash flow increase by 320%. This comes as Antam's exploration expenditure of Rp 14b increased by 757% over the same period last year.

Antam's Director of Finance, Ki Agus Umar Tochfa comments:

"The nickel and gold production levels approached normal capacity levels while their prices rose simultaneously. This enabled Antam to earn high net profits resulting in large cash flow for the Company. Operating cash flow reached Rp 611b. These conditions increasingly strengthen Antam's financial standing."

The production volumes for all of Antam's products rose except for low-grade nickel ore and iron sand. Ferronickel increased 18% over the same period last year to 7,480t contained nickel. Low-grade nickel ore decreased by 21% over the period due to regional security concerns in the second quarter affecting staff at the Company's Gebe mine, which has since normalized.

"All of our operations in the first nine-months of this year operated smoothly, in line with previously stated targets and for certain products they were surpassed. Hopefully production will improve further in the fourth quarter. Low grade nickel production from Gebe during the second quarter was only 182,279 wmt, however in third quarter production reached 293,985 wmt," comments Antam's Director of Operations Harsojo Dihardjo.

Antam is a diversified, vertically integrated mining company with nickel and gold as its main products and is one of Indonesia's leading mining operations. With over 30 years of mining experience, Antam is one of the world's lowest cost producers of its core products, nickel and gold. (*)