Mr. Rod Shier reports
COPPER MOUNTAIN ANNOUNCES Q1 2015 FINANCIAL RESULTS
Copper Mountain Mining Corp. had revenues of $71.5-million after pricing adjustments and treatment charges for the quarter ended March 31, 2015, from the sale of 21.5 million pounds of copper, 7,600 ounces of gold and 92,700 ounces of silver.
Sales and production volumes for the company's 75-per-cent-owned Copper Mountain mine are presented on a 100-per-cent basis unless otherwise indicated.
First-quarter 2015 highlights (100-per-cent basis):
- Copper, gold and silver production for the first quarter of 2015 at Copper Mountain mine (100 per cent) was 18.4 million pounds of copper, 7,800 ounces of gold and 80,300 ounces of silver. Gold production was up 44 per cent over the first quarter of 2014;
- Revenues for the first quarter of 2015 were $71.5-million from metal sales;
- Gross profit for the quarter was $6.7-million;
- Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $18.4-million;
- Adjusted earnings per share of $4.3-million or four cents per share;
- Mine production continued at a mining rate of 165,000 tonnes per day mined;
- SAG mill throughput improved during the quarter by 13.5 per cent over the first quarter of 2014;
- In early April, 2015, SAG mill all time daily throughput record achieved of 45,939 tonnes;
- Permanent secondary crusher is operating as planned at 3,000 tonnes per operating hour and delivering minus-two-inch ore to the SAG mill;
- Site cash costs for the quarter were lower than planned at $1.21 (U.S.) per pound of copper produced net of precious metal credits;
- Total cash costs for the quarter were lower than planned at $1.77 (U.S.) per pound of copper sold net of precious metal credits and after all off-site charges;
- Realized prices on metal sales for the first quarter of 2015 was $2.64 (U.S.) per pound of copper, $1,220 (U.S.) per ounce of gold and $16.72 (U.S.) per ounce of silver.
Jim O'Rourke, president and chief executive officer of Copper Mountain, remarked: "We are very pleased with the increased SAG mill throughput being achieved with the finer feed from the new $40-million permanent secondary crusher. Mill throughput of 37,780 tonnes per day average for the first 22 days of April is a 29-per-cent increase in tonnage over the first quarter of last year and 14-per-cent improvement over the current quarter. The steady improvements in mill throughput and reduced site operating costs achieved this quarter position the company well going forward."
Mr. O'Rourke continued: "Looking forward, we see the next 12 months as a period of continued optimization to further strengthen our operating base. Production for 2015 will come mainly from the pit 2 area and therefore we are anticipating higher gold production. We have a strong operating team and I am confident that the mine will meet our production goals."
SUMMARY RESULTS
Three months ended March 31,
2015 2014
Copper produced (lb) 18,400,000 19,100,000
Gold produced (oz) 7,800 5,400
Silver produced (oz) 80,300 105,300
Copper sold (lb) 21,500,000 19,800,000
Gold sold (oz) 7,600 6,500
Silver sold (oz) 92,700 98,700
Site cash costs per pound of copper produced (net of gold, silver credits) (U.S.$) 1.21 1.62
Total cash costs per pound of copper sold (net of gold, silver credits) (U.S.$) 1.77 2.08
Average realized copper price (U.S.$) 2.64 3.19
Copper Mountain mine
During the quarter, the company completed four shipments of concentrate containing approximately 21.5 million pounds of copper to Japan for smelting and recorded revenues, net of smelter charges and pricing adjustments, of $71.5-million, realizing a gross profit of $6.7-million. The total cash cost of copper sold for the quarter ended March 31, 2015, were lower than planned at $1.77 (U.S.) per pound of copper net of gold and silver byproduct credits as a result of cost-cutting measures taken at the mine site.
Mining activities continued in the pit 2 and pit 3 areas throughout the quarter. Phase 2 of pit 3 was completed during the quarter and the start of the phase 3 pushback on the west side of pit 3 commenced. Mining in pit 2 area is progressing well and the majority of ore will be supplied from the pit 2 area for the balance of 2015. Copper head grade for the year is forecasted to be on average 0.33 per cent copper, but because of the higher gold content in the pit 2 ore the copper equivalent grade is approximately 0.41 per cent copper. The recently installed mine dispatch system continues to be a valuable tool to maximize haulage truck load factors and improve mining efficiencies. During the quarter a total of 14.7 million tonnes of material was mined, including 5.6 million tonnes of ore and 9.1 million tonnes of waste. The mining rate at the end of the period was in the range of 165,000 tonnes per day moved. As a result of cost-cutting measures taken early in the quarter site cash costs were lower than planned at $1.21 (U.S.) per pound of copper after gold and silver byproduct credits.
Mill throughput from the concentrator improved approximately 13.5 per cent during the quarter as compared with the first quarter of 2014. During the first quarter of 2015 the SAG mill throughput averaged 33,200 tonnes per day as compared with 29,300 tonnes per day for the first quarter of 2014. The increase in throughput is directly attributable to the installation of the new $40-million secondary crusher that is operating at its designed rate and crushing ore to minus two inches which allows the SAG mill to operate at rates above its designed capacity.
During the quarter the mill processed a total of 2.9 million tonnes of ore at an average grade of 0.35 per cent copper to produce 18.4 million pounds of copper, 7,800 ounces of gold and 80,300 ounces of silver. SAG mill availability was 93.2 per cent during the first quarter, slightly above the company's 92 per cent target. Copper recovery averaged 80.6 per cent which was lower than plan, primarily due to outages of the regrind and one ball mill during part of the period. Once these limitations to processing were rectified in late March, the mill achieved an all time throughput record of 45,939 tonnes per day in early April, thus providing management with the confidence that the budget rate of 37,500 tonnes per day is achievable.
SUMMARIZED INCOME STATEMENT
Three months ended March 31,
2015 2014
Revenues $ 71,456,666 $ 61,182,272
Cost of sales (64,706,674) (60,086,196)
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Gross profit 6,749,992 1,096,076
Other income and expenses
General and administration (1,950,832) (1,627,662)
Share-based compensation (324,741) (1,406,560)
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Operating income (loss) 4,474,419 (1,938,146)
Pricing adjustments on concentrate and metal sales 1,880,440 9,864,933
Finance income 113,222 22,711
Finance expense (2,510,926) (2,058,711)
Current resource tax expense (364,826) (124,345)
Deferred income and resource tax recovery 720,022 957,687
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Adjusted earnings 4,312,351 6,724,129
Pricing adjustments on concentrate and metal sales (1,880,440) (9,864,933)
Unrealized gain (loss) on interest rate swap (1,991,188) (931,894)
Unrealized gain (loss) on foreign exchange (32,243,957) (11,547,094)
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Net income (loss) and comprehensive income (loss) for the period $(31,803,234) $(15,619,792)
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Net income (loss) and comprehensive income (loss) attributable to
Shareholders of the company (23,968,035) (12,154,340)
Non-controlling interest (7,835,199) (3,465,452)
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(31,803,234) (15,619,792)
Earnings (loss) per share (0.20) (0.10)
Adjusted earnings per share 0.04 0.07
Exploration update
At the Copper Mountain site the company completed a detailed helicopter-borne magnetics and radiometric geophysical survey over most of the mine property. Three-dimensional inversions of the magnetic data have recently been completed and these data are being compiled together with new geological mapping and the existing Titan 24 3-D chargeability data. The inversion technology is being used to provide a three-dimensional model of various rock units and alteration zones in order to help define and prioritize drill targets, particularly those targeting mineralization at depth. Additionally, petrographic and geochemical studies in conjunction with the mineral deposits research unit at the University of British Columbia have been carried out examining the mineralogical changes associated with mineralization and alteration. It is anticipated that this research will contribute to a better understanding of the both the geophysical and comminution characteristics of rocks within the ore zones.
During the fourth quarter, 2014 a 1,650-metre 55-hole shallow percussion drilling program was carried out in the Virginia pit area with results being received early in the first quarter of 2015. The drilling program was undertaken in order to: confirm resource estimation using a different drill orientation; test for surface oxidation; and obtain material for metallurgical testing in preparation for potential mining activities in this area. Drill holes were spaced on approximate 20-metre centres, inclined to the north and drilled on three different benches. Results confirm the resource estimation and indicate minimal levels of oxidation within the central pit area.
Conversion of inferred resources to reserve status is the major goal of the long-term exploration plan for the potential extension of the mine life. Discovery of new mineralized areas, both open pit and underground, is also a focus of the exploration program and a requirement for long-term mine planning.
2015 guidance
The 2015 guidance remains unchanged for the balance of 2015. It is based on mining at a rate of 180,000 tonnes per day to mine a total of 16.6 million tonnes of high-grade material, 13.8 million tonnes of low-grade material, 37 million tonnes of waste at a strip ratio of 1.22 to 1. Mining costs are estimated to be $1.75 per tonne mined. Mill production is based on achieving 37,500 tonnes per day through the mill at an average head grade of 0.33 per cent copper (0.41 per cent copper equivalent) and recoveries of 82 per cent to produce about 100 million pounds of copper equivalent which includes about 80 million pounds of copper, 35,000 ounces of gold and 290,000 ounces of silver.
The conference call has been changed by one business day from the original scheduled date to accommodate management's travel schedule. A conference call and audio webcast will now be held on Monday, April 27, 2015, at 7:30 a.m. (Pacific Time), for management to discuss the first-quarter 2015 results. This discussion will be followed by a question-and-answer period with investors.
Live dial-in information
Toronto and international: 416-764-8688
North America (toll-free): 888-390-0546
Replay call information
Toronto and international: 416-764-8677, passcode 898630
North America (toll-free): 888-390-0541, passcode 898630
The conference call replay will be available from 10 a.m. (PT) on April 27, 2015, until 11:59 p.m. PST, on May 11, 2015.
Participant audio webcast will also be available on the company's website.
We seek Safe Harbor.
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