Mr. Gil Clausen reports
COPPER MOUNTAIN MINING ANNOUNCES Q3 2018 FINANCIAL RESULTS
Copper Mountain Mining Corp. has released its third quarter 2018 financial results. All results are reported on a 100-per-cent basis. The company's financial statements and management discussion and analysis are available on the company's website and SEDAR.
Third quarter 2018 highlights:
-
Production at the Copper Mountain mine was 22.0 million pounds of copper equivalent in the third quarter of 2018, which includes 18.3 million pounds of copper, 7,500 ounces of gold and 64,900 ounces of silver and in line with expectations.
-
The company is on track to achieve 2018 annual production guidance of 80 million pounds of copper (plus or minus 5 per cent) with the expectation of a strong fourth quarter.
-
Revenue for the third quarter 2018 was $60.7-million, from the sale of 17.6 million pounds of copper, 6,300 ounces of gold and 62,500 ounces of silver, net of pricing adjustments.
-
Increased mineral reserves at the Copper Mountain mine to 210 million tonnes grading 0.26 per cent copper, 0.08 gram per tonne gold and 0.89 gram per tonne silver for 1.2 billion pounds of copper, 504,000 ounces of gold and 6.0 million ounces of silver.
-
Positive feasibility study results for the Eva copper project demonstrated an after-tax net present value of $256-million (U.S.) at an 8-per-cent discount rate and total copper production of 959 million pounds over a 12-year mine life.
-
Robust preliminary economic assessment (PEA) results for New Ingerbelle demonstrated an after-tax net present value of $394-million (U.S.) at an 8-per-cent discount rate and total copper production of 768 million pounds over a 12-year mine life.
Gil Clausen, president and chief executive officer of Copper Mountain, remarked: "This quarter was an exceptionally busy quarter for Copper Mountain as we delivered on all of the project milestones as promised. We completed the phase 2 drilling program at New Ingerbelle and subsequently announced an updated mineral resource, along with a base-case mine development and production PEA, which demonstrated strong economics. We also announced solid feasibility study results for our Eva copper project in Australia, which exhibited robust economics and is expected to produce over 120 million pounds of copper annually in the early years of its mine life."
Mr. Clausen added: "We will continue to focus on ensuring Copper Mountain produces predictably and reliably as it has year to date. Production in the fourth quarter is forecast to be strong as we get back to mining higher-grade ore, reduce stripping and we do not anticipate any of the non-recurring items that impacted the third quarter."
QUARTER RESULTS AND HIGHLIGHTS (100 PER CENT)
(in thousands of dollars, other than per-share and per-pound amounts)
Three months ended Nine months ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2018 2017 2018 2017
Revenue $ 60,720 $ 77,151 $ 222,870 $ 218,393
Cash flow from operations
before working capital changes 1,189 31,570 47,206 71,199
Gross profit (loss) (9,574) 19,550 17,410 39,082
EBITDA 6,882 42,934 40,919 90,939
Adjusted earnings (loss) (8,310) 11,051 5,208 15,412
Adjusted earnings (loss) per share (0.04) 0.08 0.03 0.12
Cash and cash equivalents 41,690 43,645
Accounts receivable 26,130 20,336
Total cash and cash equivalents
and accounts receivable 67,820 63,981
Equity 319,951 241,039
Total pounds of copper sold (000s lb) 17,600 19,300 59,200 55,900
Total ounces of gold sold (oz) 6,300 6,500 19,100 18,800
Total ounces of silver sold (oz) 62,500 72,700 213,100 199,400
Average realized copper price (US$) 2.77 2.91 3.03 2.72
Summary financial results
The company recognized revenue of $60.7-million in Q3 2018 on the sale of copper concentrates net of treatment charges. Third quarter revenue was impacted by a shipping delay at the Port of Vancouver over the quarter-end, which resulted in 1.1 million pounds of copper, 440 ounces of gold and 4,000 ounces of silver not being recorded in Q3 2018. This revenue will be recognized in Q4 2018. The decrease in revenue in the third quarter was also the result of lower realized copper prices, lower quantities of metal sold and negative provisional pricing adjustments. Pricing adjustments totalled negative $2.4-million and reflects a weakening of copper prices during the quarter and resulted in downward adjustments for shipments not yet finalized at the period-end. This decrease was partly offset by a higher gold grade and recovery during the quarter.
At the end of Q3 2018, the company recorded an increase in accounts receivable primarily attributable to a shipping delay at the Port of Vancouver over the quarter-end, for which the company did not receive payment of $19.2-million from the September shipment until Oct. 3, 2018. This cash, if received in the quarter, would have increased the quarter-end cash balance to $60.9-million.
The company recorded higher Q3 2018 operating costs as a result of increased cost of sales of $70.3-million. The increase is largely due to a $5.3-million inventory adjustment to the low-grade stockpile. This adjustment was necessary to record the low-grade stockpile at net realizable value due to the decline in copper price. Additionally, Q3 2018 operating costs reflect increases mainly associated with timing of planned major mine maintenance, fuel unit costs and other consumable unit costs as compared with Q3 2017.
Exploration expenditures for the quarter were $2.9-million, which includes both exploration in Australia and British Columbia.
The Copper Mountain mine produced 22.0 million pounds of copper equivalent, which comprises 18.3 million pounds of copper, 7,500 ounces of gold and 64,900 ounces of silver during Q3 2018. Lower copper production in Q3 2018 was as forecast and within expectations of the 2018 production plan. Gold production was higher quarter over quarter and year over year on higher gold grades and improved recoveries after installation of a flash flotation circuit in the concentrator. Copper grades, and therefore copper production, are expected to improve in the fourth quarter of 2018.
Site cash costs for Q3 2018 were $1.78 (U.S.) per pound of copper produced, net of precious metal credits, and total cash costs were $2.25 (U.S.) per pound sold, net of precious metal credits. Site cash costs and total cash costs were higher primarily due to lower copper production and sales as a result of lower head grades in the quarter, as planned, the $5.3-million inventory adjustment to the low-grade stockpile, and the shipping delay at the Port of Vancouver, which decreased metal sales by 1.1 million pounds of copper, 440 ounces of gold and 4,000 ounces of silver. As production and sales are expected to be higher in the fourth quarter of 2018, site cash costs and total cash costs are expected to decrease.
The company is on track to meet full-year guidance for copper production as year-to-date production has been in line with the plan and production is expected to be strong in the fourth quarter. The company maintains 2018 annual production guidance of 80 million pounds of copper (plus or minus 5 per cent).
The attached table provides a summary of the operating results from the mine for the three and nine months ended Sept. 30, 2018.
MINE PRODUCTION INFORMATION
Three months ended Nine months ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2018 2017 2018 2017
Copper Mountain mine (100-per-cent basis)
Mine
Total tonnes mined (000s) 18,503 17,431 54,606 53,600
Ore tonnes mined (000s) 5,612 6,843 16,159 18,835
Waste tonnes (000s) 12,891 10,587 38,446 34,765
Stripping ratio 2.30 1.55 2.38 1.87
Mill
Tonnes milled (000s) 3,802 3,787 10,661 10,394
Feed grade (Cu %) 0.28 0.32 0.31 0.31
Recovery (%) 79.1 77.3 79.4 77.9
Operating time (%) 92.7 93.5 91.5 89.3
Tonnes milled (tpd) 41,300 41,200 39,100 38,100
Production
Copper production (000s lb) 18,300 20,900 58,200 56,200
Gold production (oz) 7,500 6,700 20,100 18,500
Silver production (oz) 64,900 79,300 211,200 206,800
Site cash costs per pound of
copper produced (net of precious
metal credits) (US$) 1.78 1.25 1.53 1.31
Total cash costs per pound of
copper sold (net of precious
metal credits) (US$) 2.25 1.62 1.96 1.74
Q3 2018 financial and operating results conference call and webcast
The company will hold a conference call on Wednesday, Oct. 31, 2018, at 7:30 a.m. Pacific Standard Time, for management to discuss the Q3 2018 financial and operating results.
Live dial-in information
Toronto and international: 647-427-7450
North America (toll-free): 1-888-231-8191
To participate in the webcast live by computer, visit the company's website.
Replay information
Toronto and international: 416-849-0833
Passcode: 9499185
North America (toll-free): 1-855-859-2056
Passcode: 9499185
The conference call replay will be available from 10:30 a.m. PST on Oct. 31, 2018, until 8:59 p.m. PST on Nov. 7, 2018. An archive of the audio webcast will also be available on the company's website.
About Copper Mountain Mining Corp.
Copper Mountain's flagship asset is the 75-per-cent-owned Copper Mountain mine located in Southern British Columbia near the town of Princeton. The Copper Mountain mine produces about 100 million pounds of copper equivalent per year with a large resource that remains open laterally and at depth. Copper Mountain also has the permitted, development-stage Eva copper project in Queensland, Australia, and an extensive 397,000-hectare highly prospective land package in the Mount Isa area.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
(in thousands of dollars, except for earnings per share)
Three months ended Sept. 30, Nine months ended Sept. 30,
2018 2017 2018 2017
Revenue $ 60,720 $ 77,151 $ 222,870 $ 218,393
Cost of sales (70,294) (57,601) (205,460) (179,311)
Gross profit (loss) (9,574) 19,550 17,410 39,082
Other income and expenses
General and administration (2,160) (1,307) (8,225) (5,647)
Exploration and evaluation - - - (35)
Share-based compensation (387) (349) (1,274) (1,122)
Operating (loss) income (12,121) 17,894 7,911 32,278
Finance income 134 4 476 360
Finance expense (3,602) (2,968) (10,963) (9,702)
Unrealized gain (loss) on interest rate swap 195 77 1,197 (697)
Foreign exchange gain (loss) 5,419 12,353 (9,042) 22,820
Income (loss) before tax (9,975) 27,360 (10,421) 45,059
Current resource tax recovery (expense) 59 (787) (608) (1,258)
Deferred income and resource tax recovery 4,850 - 3,135 -
Net income (loss) (5,066) 26,573 (7,894) 43,801
Other comprehensive (loss)
Foreign currency translation adjustment (2,684) - (3,219) -
Total comprehensive income (loss) (7,750) 26,573 (11,113) 43,801
Net income (loss) attributable to
Shareholders of the company (4,289) 19,538 (7,351) 31,484
Non-controlling interest (777) 7,035 (543) 12,317
(5,066) 26,573 (7,894) 43,801
Earnings (loss) per share
Basic (0.02) 0.15 (0.04) 0.24
Diluted (0.02) 0.14 (0.04) 0.23
We seek Safe Harbor.
© 2024 Canjex Publishing Ltd. All rights reserved.