Mr. Gil Clausen reports
COPPER MOUNTAIN MINING ANNOUNCES Q1 2019 FINANCIAL RESULTS
Copper Mountain Mining Corp. has released its first quarter financial results. All results are reported on a 100-per-cent basis. The company's financial statements and management discussion and analysis (MD&A) are available at the company's website and on SEDAR.
First quarter 2019 highlights:
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Production for the first quarter of 2019 was 22.3 million pounds of copper equivalent (comprising 18.6 million pounds of copper, 7,127 ounces of gold and 62,280 ounces of silver).
- Revenue for the first quarter of 2019 was $86.9-million, 11 per cent higher than the first quarter of 2018, from the sale of 19.3 million pounds of copper, 7,026 ounces of gold and 64,992 ounces of silver, net of pricing adjustments.
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C1 cash cost per pound of copper produced was $1.77 (U.S.) for the first quarter of 2019, a 9.7-per-cent reduction from the first quarter of 2018.
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Earnings per share were seven cents and adjusted earnings per share were three cents for the first quarter of 2019.
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Cash flow from operations for the first quarter of 2019 was $23.7-million, increasing tenfold from $2.0-million in the first quarter of 2018.
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The company announced a new integrated production plan for the Copper Mountain mine, which includes a planned modest mill expansion to 45,000 tonnes per day and integrates production from the nearby New Ingerbelle pit that has higher gold grades. The integrated plan results include a 102-per-cent increase in mineral reserves, a 12-year extension in mine life to 26 years, a 27-per-cent increase in average annual copper equivalent production to 116 million pounds (over the first 10 years) and C1 cash costs of $1.74 (U.S.) per pound of copper (over the first 10 years).
"We started the year solidly, posting higher revenue, earnings and cash flow compared to the first quarter last year," commented Gil Clausen, Copper Mountain's president and chief executive officer. "Production and costs were in line with our targets and we are maintaining our annual production guidance. Further, our C1 cash costs and all-in sustaining costs were markedly lower year over year. This solid operating base, along with our new life-of-mine plan integrating the New Ingerbelle pit, provides a strong foundation for us to grow our business in Canada and Australia."
SUMMARY OF OPERATING RESULTS
Copper Mountain mine (100% basis) Q1 2019 Q1 2018
Mine
Total tonnes mined (000) 17,454 16,584
Ore tonnes mined (000) 2,814 6,518
Waste tonnes (000) 14,640 10,066
Stripping ratio 5.20 1.54
Mill
Tonnes milled (000) 3,550 3,492
Feed grade (Cu %) 0.29 0.33
Recovery (%) 81.6 78.7
Operating time (%) 92.9 92.5
Tonnes milled (tpd) 39,440 38,800
Production
Copper (000 lb) 18,610 19,906
Gold (oz) 7,127 6,070
Silver (oz) 62,280 77,909
Sales
Copper (000 lb) 19,348 21,741
Gold (oz) 7,026 6,491
Silver (oz) 64,992 80,569
Cost and prices
C1 cash cost per pound of copper produced (US$) $1.77 $1.96
All-in sustaining cost (AISC) per pound of copper produced (US$) 1.87 2.14
Cost of sales per pound of copper (US$/lb sold (net)) 1.97 2.21
Average realized copper price (US$) 2.85 3.17
In the first quarter of 2019, the Copper Mountain mine produced 18.6 million pounds of copper, 7,127 ounces of gold and 62,280 ounces of silver compared with 19.9 million pounds of copper, 6,070 ounces of gold and 77,909 ounces of silver in the first quarter of 2018. This represents a decrease of 7 per cent and 20 per cent for copper and silver, respectively, and a 17-per-cent increase in gold. Overall copper feed grade was down 12 per cent in the first quarter of 2019 from the first quarter of 2018, but was as planned. However, this decrease was offset by higher throughput and recoveries in both copper and gold. In the first quarter of 2019 approximately 700,000 tonnes of ore that was fed to the mill came from the ore stockpile and was included in the average feed grade for the quarter. Increased gold production can be attributed to higher head grades and improved recoveries.
C1 cash cost per pound of copper produced for the first quarter of 2019 was $1.77 (U.S.), which is 9.7 per cent lower than the first quarter of 2018 of $1.96 (U.S.). C1 cash cost was positively impacted by the cost associated with stripping in excess of the average life-of-mine strip ratio. This excess stripping cost in the period was treated as capital expenditures as required under IFRS (international financial reporting standards). The overall strip ratio for 2019 is expected to be approximately 2.5:1, and, as planned, was higher in the first quarter of 2019 as the mine started a new development pushback of pit No. 3. The total cash value of deferred stripping in the first quarter of 2019 was $13.6-million, compared with nil in the first quarter of 2018.
Site cash costs for the first quarter of 2019 were $45.7-million and C1 cash costs were $43.9-million, both in line with the previous eight quarters. The consistency in costs over the past quarters demonstrates reliable production and operation at the Copper Mountain mine quarter after quarter.
Summary of financial results
RESULTS AND HIGHLIGHTS (100 PER CENT)
(in thousands, except for per-share amounts)
Three months ended March 31
2019 2018
Revenue $86,870 $77,946
Gross profit 23,276 6,312
Gross profit before depreciation 29,615 21,768
Net income (loss) 17,826 (6,466)
Earnings (loss) per share -- basic 0.07 (0.04)
Adjusted net income 6,036 11,587
Adjusted earnings per share -- basic 0.03 0.09
EBITDA 31,864 11,485
Adjusted EBITDA 20,074 29,538
Cash flow from operations 23,689 2,018
Cash and cash equivalents -- end of period 51,947 42,568
In the first quarter of 2019, revenue increased 12 per cent to $86.9-million, net of pricing adjustments and treatment charges, compared with $77.9-million in the first quarter of 2018. First quarter 2019 revenue is based on the sale of 19.3 million pounds of copper, 7,026 ounces of gold and 64,992 ounces of silver with an average realized copper price of $2.85 (U.S.) per pound. This compares with 21.7 million pounds of copper, 6,491 ounces of gold and 80,569 ounces of silver sold in the first quarter of 2018 with an average realized copper price of $3.17 (U.S.) per pound. Revenue was higher despite shipping fewer tonnes of concentrate and realizing a lower copper price during the quarter as a result of a positive mark-to-market adjustment of $6.1-million in the first quarter of 2019 compared with negative $9.8-million in the first quarter of 2018, a net difference of $15.9-million in the quarter.
Cost of sales in the first quarter of 2019 were $63.6-million as compared with $71.6-million for the first quarter of 2018. The decrease in cost of sales is a result of selling fewer pounds of copper and the deferral of some of the stripping costs during the quarter. Unit cost of sales was $1.97 (U.S.) per pound of copper sold, net of precious metals credits for the first quarter of 2019, as compared with $2.21 (U.S.) per pound of copper sold, net of precious metals credits for the first quarter of 2018.
Gross profit in the first quarter of 2019 was $23.3-million, 270 per cent higher when compared with first quarter 2018 gross profit of $6.3-million. Net income for the first quarter of 2019 was $17.8-million, compared with a net loss of $6.5-million in the first quarter of 2018. The increase in net income was a result of: a $6.1-million positive mark-to-market adjustment included in revenue; lower depreciation of $6.3-million in first quarter 2019 cost of sales compared with $15.4-million for the first quarter of 2018 as a result of an increased reserve base in 2018 over which these costs are depreciated; and the inclusion of a non-cash unrealized foreign exchange gain of $6.1-million as compared with a non-cash unrealized foreign exchange loss of $8.1-million in the first quarter of 2018, a differential of approximately $14.2-million, which was primarily related to the company's debt that is denominated in U.S. dollars.
First quarter 2019 financial and operating results conference call and webcast
The company will hold a conference call on Monday, April 29, 2019, at 7:30 a.m. Pacific Time for senior management to discuss the first quarter 2019 financial and operating results.
Dial-in information:
Toronto and international:
1-647-427-7450
North America (toll-free):
1-888-231-8191
Replay call information:
Toronto and international: 1-416-849-0833
Pass code: 8687741
North America (toll-free): 1-855-859-2056
Pass code: 8687741
The conference call replay will be available from 10:30 a.m. Pacific Time on April 29, 2019, until 8:59 p.m. Pacific Time on May 6, 2019. 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 currently produces approximately 90 million pounds of copper equivalent, with production increasing to over 100 million pounds of copper equivalent a year in 2020. Copper Mountain also has the permitted, development-stage Eva copper project in Queensland, Australia, and an extensive 4,000-square-kilometre 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 number of and earnings per share)
2019 2018
Revenue $86,870 $77,946
(Cost) of sales (63,594) (71,634)
Gross profit 23,276 6,312
Other income and expenses
General and administration (expenses) (2,761) (2,474)
Share-based compensation (loss) (661) (506)
Operating income 19,854 3,332
Finance income 103 136
Finance (expense) (3,799) (3,514)
Unrealized (loss) gain on interest rate swap (394) 773
Foreign exchange gain (loss) 6,065 (8,076)
Income (loss) before tax 21,829 (7,349)
Current tax (expense) (513) (345)
Deferred income and resource tax (expense) recovery (3,490) 1,228
Net income (loss) 17,826 (6,466)
Other comprehensive (loss) income
Foreign currency translation adjustment (803) -
Comprehensive income (loss) 17,023 (6,466)
Net income (loss) attributable to
shareholders of the company 12,500 (5,251)
Net income (loss) attributable to
non-controlling interest 5,326 (1,215)
Income (loss) per share
Basic (loss) $0.07 ($0.04)
Diluted (loss) $0.07 ($0.04)
We seek Safe Harbor.
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