Northern Orion Resources Inc.

Northern Orion Resources Inc.

March 09, 2005 09:00 ET

Northern Orion Reports 2004 EBITDA and Earnings


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: NORTHERN ORION RESOURCES INC.

TSX SYMBOL: NNO
AMEX SYMBOL: NTO

MARCH 9, 2005 - 09:00 ET

Northern Orion Reports 2004 EBITDA and Earnings

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 9, 2005) - Northern
Orion Resources Inc. (TSX:NNO)(AMEX:NTO)

2004 Alumbrera operations EBITDA - U.S.$58,243,000 ($0.53 per share)

Northern Orion Resources Inc.'s ("Northern Orion") highlights of the
fourth quarter and the year include (all figures are stated in U.S.
dollars):

- Attributable share of operating cash flow before interest, depletion,
depreciation, amortization and tax ("EBITDA") at Alumbrera was
$16,027,000 ($0.14 per share) for the fourth quarter of 2004, compared
to $14,989,000 ($0.14 per share) for the same period in 2003. EBITDA for
the year was $58,243,000 ($0.53 per share) compared to $23,625,000
($0.41 per share) for 2003. The Company acquired its 12.5% interest in
Alumbrera on June 24, 2003.

- Equity in earnings from Alumbrera was $9,275,000 ($0.08 per share) for
the fourth quarter of 2004, compared to $7,486,000 ($0.07 per share) for
the same period in 2003. For the year ended December 31, 2004, equity in
earnings was $32,659,000 ($0.30 per share), compared to $10,562,000
($0.19 per share) for 2003.

- Average realized copper price was $1.51 per pound and average realized
gold price was $451 per ounce for the quarter and $1.36 and $415
respectively for 2004. Copper and gold prices were $0.91 per pound and
$379 per ounce respectively, in the fourth quarter of 2003 and $0.85 per
pound and $371 per ounce, respectively for the year ended December 31,
2003.

- Cash costs (net of gold by-products) were negative $0.08 per pound of
copper during the quarter and negative $0.04 per pound for 2004,
compared to negative $0.05 per pound and $0.02 per pound respectively,
for the fourth quarter and year ended December 31, 2003.

- The Company received cash distributions from Alumbrera of $9,577,000
during the quarter and $42,144,000 during the year. Since the Company's
acquisition of its 12.5% interest in Alumbrera on June 24, 2003, it has
received cash distributions of $49,635,000 from Alumbrera. In addition,
the Company's proportional share of cash held by Minera Alumbrera Ltd.
is approximately $11 million at December 31, 2004. The Company expects
regular cash distributions from Alumbrera in 2005.

- Net earnings before write-downs was $5,732,000 ($0.05 per share) for
the fourth quarter of 2004, compared to $3,445,000 ($0.03 per share) for
the same period in 2003, and $23,438,000 ($0.21 per share) for 2004
compared to $2,356,000 ($0.04 per share) for 2003. In 2004, the Company
decided to write-down its non-Argentinean assets. A write-down of
$22,209,000 for the Mantua project was recorded in the fourth quarter,
resulting in a net loss of $16,477,000 ($0.15 per share) for the fourth
quarter of 2004 and net earnings of $1,229,000 ($0.01 per share) for the
year ended December 31, 2004.

- In March 2004, the Company entered into a $24.5 million term loan
facility with Bayerische Hypo-und Vereinsbank ("HVB"). The proceeds from
the term loan were used to pay the balance of the $25 million promissory
notes payable to BHP Billiton for the Alumbrera acquisition. The Company
has repaid $15,960,000 of the HVB loan, leaving a balance of $8,540,000
at March 9, 2005.

- At December 31, 2004, the Company had a cash position (including
temporary investments) of $45,689,000. At March 9, 2005, the Company's
cash position is over $130 million.

"We continue to see significant cash flow from Alumbrera. Combined with
our recent equity issue and cash balance of over $130 million, we have
effectively removed much of the equity risk from the development of our
Agua Rica copper-gold-moly project," said David Cohen, President and CEO
of Northern Orion. "We are now in a very strong financial position as we
move Agua Rica into development as one of the world's lowest cost
producers of copper."

Alumbrera operations

Alumbrera benefited from rising copper and gold prices in 2004, and as a
result, Alumbrera generated sufficient cash flows to enable it to repay
all of its outstanding external project debt in May 2004 and also repay
a significant amount of its shareholder loans. Strong copper and gold
prices are expected to continue through 2005 and beyond.

Production in 2004 was in line with the budgeted mine plan, which
allowed for lower production levels as a result of reduced grades of
both copper and gold as the planned open pit development was undertaken
in mid-2004. In mid-2004, the flotation plant upgrade was successfully
completed under budget leading to increased mill throughput. As a result
of the mine's profitability, Alumbrera expects that it will have to pay
Argentine taxes commencing in May 2005.



--------------------------------------------------------------------
Company's 12.5% proportional share of Alumbrera operations
(Monetary amounts stated in U.S. dollars)
Fourth quarter Year ended December 31,
----------------------- -----------------------
2004 2003 2004 2003
-----------------------------------------------

EBITDA $16,027,000 $14,989,000 $58,243,000 $23,625,000
Equity in earnings $ 9,275,000 $ 7,486,000 $32,659,000 $10,562,000

EBITDA, per share $ 0.14 $ 0.14 $ 0.53 $ 0.41
Equity in earnings,
per share $ 0.08 $ 0.07 $ 0.30 $ 0.19

Sales -
Copper (pounds) 10,969,734 17,537,000 46,408,087 27,076,000
Gold (ounces) 17,301 27,200 75,507 41,116

Average realized price
Copper ($ per pound)$ 1.51 $ 0.91 $ 1.36 $ 0.85
Gold ($ per ounce) $ 451 $ 379 $ 415 $ 371

Copper cash costs
per pound, $ (0.08)$ (0.05)$ (0.04)$ 0.02
net of gold credits
--------------------------------------------------------------------


Outlook

Based on current commodity prices, market conditions and planned
production levels at Alumbrera, the Company expects to receive
significant cash flows from Alumbrera for the next eight years that
will, together with the Company's current cash resources, provide all or
a large part of the equity contribution necessary for the Company to
bring Agua Rica into production. With the ongoing success of Alumbrera,
the Company can focus on the continued development of Agua Rica in 2005.

The Company will continue to build upon its progress to date with a
strategy to advance Agua Rica so as to achieve maximum monetary returns
in the shortest time frame. In addition, the Company will continue to
review and evaluate accretive acquisitions that could provide the
Company with additional cash flow in the short to medium term.

Teleconference call details

Northern Orion will host a telephone conference call on Wednesday, March
9 at 1:30 p.m. Pacific Time (4:30 p.m. Eastern) to discuss these
results. The conference call may be accessed by dialing 1-800-387-6216
in Canada and the United States, or 1-416-405-9328 internationally.

The conference call will be archived for later playback until March 16,
2005 and can be accessed by dialing 1-800-408-3053 or 1-416-695-5800 and
entering the pass code 3137810#.



Selected Financial Information
(Stated in thousands of U.S. dollars, except per share data)

Consolidated balance sheets
---------------------------
December 31, December 31,
2004 2003
-------------------------
Cash, cash equivalents,
and temporary investments $ 45,689 $ 11,387
Other current assets 1,637 310
Mineral property interests and equipment 56,652 76,005
Equity investment in Minera Alumbrera Ltd. 85,100 94,585
-------------------------
Total assets $ 189,078 $ 182,287
-------------------------
-------------------------


Current liabilities $ 25,024 $ 941
Long-term debt 3,040 33,583
Future income taxes 20,370 18,885
Other 247 97
Shareholders' equity 140,397 128,781
-------------------------
Total liabilities and shareholders' equity $ 189,078 $ 182,287
-------------------------
-------------------------


--------------------------------------------------------------------
Consolidated statements of operations
Year ended
Fourth quarter December 31,
------------------ ------------------
2004 2003 2004 2003
-------- -------- -------- --------

Equity earnings of Minera
Alumbrera Ltd. $ 9,275 $ 7,481 $ 32,659 $ 10,562
Expenses
Financing costs (723) -- (1,036) --
Foreign exchange gains
(losses) (1,074) (774) (1,621) (436)
Office and administration (658) (236) (2,205) (812)
Professional and
consulting (939) (600) (1,989) (1,743)
Severance and
restructuring -- (97) -- (97)
Stock-based compensation (63) (2,426) (1,607) (5,043)
Interest and other income 222 362 366 438
Interest expense (308) (265) (1,129) (513)
-------- -------- -------- --------
Earnings (loss) before
write-downs 5,732 3,445 23,438 2,356
Write-down of mineral
property interests (22,209) -- (22,209) --
-------- -------- -------- --------
Earnings (loss) for the
period (16,477) 3,445 1,229 2,356
-------- -------- -------- --------
-------- -------- -------- --------

Earnings (loss) per share
- basic (0.15) 0.03 0.01 0.04
Earnings (loss) per share
- fully diluted (0.13) 0.02 0.01 0.04

Weighted average shares
outstanding ('000s)
Basic 110,285 106,112 109,214 57,014
Fully diluted 127,214 160,877 131,534 60,074
--------------------------------------------------------------------


David Cohen, President and CEO

Safe Harbor Statement under the United States Private Securities
Litigation Reform Act of 1995: Except for the statements of historical
fact contained herein, the information presented constitutes
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements, including but not limited to those with respect to the price
of gold, silver and copper, the timing and amount of estimated future
production, costs of production, reserve determination and reserve
conversion rates involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or
achievement of Northern Orion to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, risks
related to the integration of acquisitions, risks related to
international operations, risks related to joint venture operations, the
actual results of current exploration activities, actual results of
current reclamation activities, conclusions of economic evaluations,
changes in project parameters as plans continue to be refined, future
prices of gold, silver and copper, as well as those factors discussed in
the section entitled "Risk Factors" in the Form 40-F as on file with the
Securities and Exchange Commission in Washington, D.C. Although Northern
Orion has attempted to identify important factors that could cause
actual results to differ materially, there may be other factors that
cause results not to be as anticipated, estimated or intended. There can
be no assurance that such statements will prove to be accurate as actual
results and future events could differ materially from those anticipated
in such statements. Accordingly, readers should not place undue reliance
on forward-looking statements.

-30-

Contact Information