Copper Mountain Mining Announces Q3 Financial 2017 Results
Web Site: www.CuMtn.com
TSX: CMMC
VANCOUVER, Nov. 6, 2017 /CNW/ - Copper Mountain Mining Corporation (TSX: CMMC) (the "Company" or "Copper Mountain") announces third quarter revenues of $77.1 million after pricing adjustments and treatment charges from the sale of 22.6 million pounds of copper equivalent, including 19.3 million pounds of copper, 6,500 ounces of gold, and 72,700 ounces of silver. Total cash cost for the quarter ended September 30, 2017 was US$1.62 per pound of copper sold, net of precious metals credits.
| Highlights (100% Basis) |
| • Copper, gold and silver production for the third quarter of 2017 at Copper Mountain Mine was 24.4 million pounds of copper equivalent which includes 20.9 million pounds of copper, 6,700 ounces of gold and 79,300 ounces of silver.
• Revenues for the third quarter of 2017 were $77.1 million from the sale of 19.3 million pounds of copper, 6,500 ounces of gold, and 72,700 ounces of silver, net of pricing adjustments.
• EBITDA was $42.9 million for the quarter.
• Net income for the quarter was $26 million or $0.15 per share.
• Cash Flow from operations for the quarter was $31.6 million before working capital changes.
• Cash balance at the the end of Q3 was $43.6 million.
• Mill throughput averaged 41,158 tpd during the quarter, setting a new quarterly throughput record.
• Site cash costs for the quarter were US$1.25 per pound of copper produced, net of precious metal credits.
• Total cash costs for the quarter were in line with expectations at US$1.62 per pound of copper sold, net of precious metal credits and after all off-site charges. • Realized prices on metal sales for Q3 2017 were US$2.91 per pound of copper, US$1,286 per ounce of gold and US$17.05 per ounce of silver. |
Jim O'Rourke, President and CEO of Copper Mountain, remarked "During the third quarter of 2017, Copper Mountain continued to mine at rates well above our guidance levels. Mill throughput averaged 41,158 tpd, 8.4% above forecast and in line to meet our 2017 guidance. The coarser grind from the higher tonnage continues to result in a slightly lower recovery, but copper production remains on target". Mr. O'Rourke continued, "We remain bullish on the outlook for the copper market and with our production on target we are well positioned to benefit from a strong copper price environment. During the first three quarters of 2017 the Company has paid down a total of $43.8 million in principle and interest on project debt and leases. We continue to focus on cost control and operational improvements to further strengthen the Company's balance sheet."
| Summary Financial Results |
||||
| Three months ended September 30, |
Nine months ended September 30, |
|||
| (In thousands of CDN$, other than per share and per pound amounts) |
2017 $ |
2016 $ |
2017 $ |
2016 $ |
| Revenues |
77,151 |
72,195 |
218,393 |
193,473 |
| Gross profit |
19,550 |
4,188 |
39,082 |
10,069 |
| Operating income (loss) |
17,894 |
523 |
32,278 |
(1,240) |
| Net income (loss) |
26,573 |
(7,937) |
43,801 |
8,716 |
| Net income (loss) per share |
0.15 |
(0.05) |
0.24 |
0.05 |
| Adjusted earnings (loss)1 |
11,051 |
(1,332) |
15,412 |
(12,568) |
| Adjusted earnings (loss) per share2 |
0.08 |
(0.01) |
0.12 |
(0.10) |
| EBITDA3 |
42,934 |
10,006 |
90,939 |
57,090 |
| Adjusted EBITDA |
27,412 |
16,611 |
62,550 |
35,806 |
| Cash flow from operations |
11,109 |
15,862 |
39,829 |
24,419 |
| Total pounds of copper sold (000's lbs) |
19,300 |
23,500 |
55,900 |
61,700 |
| Total ounces of gold sold (oz) |
6,500 |
8,600 |
18,800 |
22,700 |
| Total ounces of silver sold (oz) |
72,700 |
75,700 |
199,400 |
200,600 |
| Cash and cash equivalents |
43,645 |
24,734 |
||
| Working capital (incl. $42,977 due to related party (2016 - $21,893) |
(7,165) |
(11,853) |
||
| Equity |
241,039 |
192,337 |
||
| Site cash costs per pound of copper produced (net of precious metal credits) (US$) |
1.25 |
0.97 |
1.31 |
1.06 |
| Total cash costs per pound of copper sold (net of precious metal credits) (US$) |
1.62 |
1.45 |
1.74 |
1.49 |
| Realized Copper Price (US$) |
2.91 |
2.15 |
2.72 |
2.13 |
________________________________________________
| 1 Adjusted earnings (loss) is a non-GAAP financial measure which removes unrealized gains/losses on interest rate swaps, pricing adjustments on concentrate metal sales and foreign currency gains/losses. |
|
| 2 Calculated by dividing the total adjusted earnings by the weighted average number of shares outstanding under the basic method. |
|
| 3 Earnings before interest, taxes, depreciation and amortization. Refer to the Non-GAAP Performance measures section of this MD&A. |
Copper Mountain Mine
During the quarter, the Company completed a total of three shipments of copper concentrate containing approximately 19.3 million pounds of copper, 6,500 ounces of gold, and 72,700 ounces of silver which generated $77.1 million in revenue net of treatment and refining charges and pricing adjustments. Site cash costs were US$1.25 per pound of copper produced and total cash costs were US$1.62 per pound sold, net of precious metal credits for the three months ended September 30, 2017; compared to site cash costs of US$0.97 per pound of copper produced and total cash costs of US$1.45 per pound of copper sold, net of precious metal credits for the three months ended September 30, 2016. The increase in revenue is a result of stronger copper prices being realized during the quarter as compared to the same period last year, while the increase in unit costs is a result of the decreased pounds of copper produced due to a lower grade and reduced recoveries combined with a reduction in the precious metal credits as compared to the 2016 comparative period.
Mining activities continued to be focused in the Pit #2, Saddle and Oriole areas for the third quarter of 2017 with a majority of ore coming from the Pit #2 area. Oriole accounted for about 10% of the ore processed during the period. During the quarter, a total of 17.4 million tonnes of material was mined, including 6.8 million tonnes of ore and 10.6 million tonnes of waste for a strip ratio of 1.55:1. Mining costs per tonne during the quarter was $1.73 per tonne moved.
During the quarter, the mill processed a total of 3.8 million tonnes of ore grading 0.32% copper to produce 20.9 million pounds of copper, 6,700 ounces of gold, and 79,300 ounces of silver. Mill head grade was slightly above guidance for the quarter, while copper recoveries were slightly below plan at 77.3% for the quarter. The lower recoveries can be attributable to the coarser grind that resulted from processing more material and from processing some fine-grained ore in the Saddle area. Mill operating time during the quarter averaged 93.5% while mill tonnage averaged 41,158 tpd.
The Company currently has 455 operating employees engaged at the mine site and maintained its excellent safety record of no loss time accidents.
| Mine Production Information |
Three months ended |
Nine months ended |
||||
| Copper Mountain Mine (100% Basis) |
2017 |
2016 |
2017 |
2016 |
||
| Mine: |
||||||
| Total tonnes mined (000's4) |
17,431 |
15,920 |
53,600 |
51,303 |
||
| Ore tonnes mined (000's) |
6,843 |
5,949 |
18,835 |
17,348 |
||
| Waste tonnes (000's) |
10,587 |
9,972 |
34,765 |
33,955 |
||
| Stripping ratio |
1.55 |
1.68 |
1.87 |
1.96 |
||
| Mill: |
||||||
| Tonnes milled (000's) |
3,787 |
3,678 |
10,394 |
10,447 |
||
| Feed Grade (Cu%) |
0.32 |
0.33 |
0.31 |
0.33 |
||
| Recovery (%) |
77.3 |
82.9 |
77.9 |
82.4 |
||
| Operating time (%) |
93.5 |
92.2 |
89.3 |
91.6 |
||
| Tonnes milled (TPD5) |
41,200 |
39,980 |
38,100 |
38,100 |
||
| Production: |
||||||
| Copper production (000's lbs) |
20,900 |
22,000 |
56,200 |
62,100 |
||
| Gold production (oz) |
6,700 |
8,200 |
18,500 |
23,780 |
||
| Silver production (oz) |
79,300 |
81,500 |
206,800 |
220,800 |
||
| Site cash costs per pound of copper produced (net of precious metal credits) (US$) |
1.25 |
0.97 |
1.31 |
1.06 |
||
| Total cash costs per pound of copper sold (net of precious metal credits) (US$) |
1.62 |
1.45 |
1.74 |
1.49 |
||
_________________________________________________
| 4 Excludes ore re-handle from stockpile |
|
| 5 Tonnes per day |
Exploration Update:
The Company began a summer 10,000m exploration drilling program at the Copper Mountain Mine. The 2017 program is targeting to further extend Pit 2 to the West and to follow up on the pre-2012 drilling that intersected significant mineralization below Pit 2. Previous drilling by the Company in the Pit 2 Eastern zone intersected a 128m interval grading 1.01% Cu and 0.25g/t Au (including 39m grading 2.33% Cu and 0.38g/t Au) beginning approximately 90m below the current pit bottom in hole 10SD-64. In addition, hole number 10SD-68 intersected 173m interval grading 0.43% Cu and 0.15g/t Au, while hole number 12P2-19 intersected 123m interval grading 0.52% Cu and 0.27g/t Au. The exploration drilling is designed to better determine the trend and continuity for high-grade mineralization at depth under Pit2.
The 2017 program was successful in intercepting the high grade mineralization at depth on the eastern end of Pit 2. Drilling south west of Pit 2 continued to intercept mineralization, but was intermittent as drilling moved outside of the western extremities of the current pit limits, indicating that additional drilling may be required.
With the strengthening of the commodity price over the last year, the Company conducted a review of historical data from the New Ingerbelle Pit. The work was encouraging, and therefore, the Company commenced a 5,000 meter drill program for New Ingerbelle deposit, located about 1km west of the Superpit. Drilling to date has been encouraging and will be completed by year end. The goal of the current drill program is to confirm the historical resource which has the potential to add an extra 10 years to the mine life of the operation.
Listed below is the balance sheet and income statement for Q3 2017 as well as details for our conference call schedule:
| Copper Mountain Mining Corporation |
||
| Condensed Consolidated Interim Statements of Financial Position |
||
| (Unaudited in thousands of Canadian dollars) |
||
| September 30, |
December 31, |
|
| Assets |
||
| Current assets |
||
| Cash and cash equivalents |
43,645 |
31,409 |
| Accounts receivable and prepaid expenses |
20,336 |
26,048 |
| Inventory |
56,601 |
48,465 |
| 120,582 |
105,922 |
|
| Reclamation bonds |
8,228 |
8,232 |
| Property, plant and equipment |
429,389 |
463,080 |
| Low grade stockpile |
92,093 |
70,556 |
| 650,292 |
647,790 |
|
| Liabilities |
||
| Current liabilities |
||
| Accounts payable and accrued liabilities |
35,434 |
36,488 |
| Amounts payable to related parties |
42,977 |
22,653 |
| Current portion of long-term debt |
48,341 |
46,415 |
| Current tax liability |
995 |
1,157 |
| 127,747 |
106,713 |
|
| Electricity deferral |
5,311 |
15,385 |
| Decommissioning and restoration provision |
5,836 |
6,312 |
| Interest rate swap liability |
3,427 |
4,088 |
| Long-term debt |
266,932 |
319,759 |
| 409,253 |
452,257 |
|
| Equity Attributable to shareholders of the Company: |
||
| Share capital |
195,071 |
194,208 |
| Contributed surplus |
15,615 |
14,773 |
| Accumulated deficit |
(42,172) |
(73,656) |
| 168,514 |
135,325 |
|
| Non-controlling interest |
72,525 |
60,208 |
| Total equity |
241,039 |
195,533 |
| 650,292 |
647,790 |
| Three months ended September 30, |
Nine months ended September 30, |
|||
| (In thousands of CDN$, other than per share amounts) |
2017 $ |
2016 $ |
2017 $ |
2016 $ |
| Revenues |
77,151 |
72,195 |
218,393 |
193,473 |
| Cost of sales7 |
(57,601) |
(68,007) |
(179,311) |
(183,404) |
| Gross profit |
19,550 |
4,188 |
39,082 |
10,069 |
| Other income and expenses |
||||
| General and administration |
(1,307) |
(1,465) |
(5,647) |
(4,444) |
| Exploration and evaluation |
- |
- |
(35) |
- |
| Low grade stockpile write-down |
- |
(2,020) |
- |
(6,239) |
| Share based compensation |
(349) |
(180) |
(1,122) |
(626) |
| Operating income (loss) |
17,894 |
523 |
32,278 |
(1,240) |
| Low grade stockpile write-down |
- |
2,020 |
- |
6,239 |
| Pricing adjustments on concentrate and metal sales |
(3,092) |
(383) |
(6,287) |
(7,907) |
| Finance income |
4 |
5 |
360 |
143 |
| Finance expense |
(2,968) |
(3,240) |
(9,702) |
(9,224) |
| Income tax expense |
(787) |
(257) |
(1,258) |
(579) |
| Adjusted (loss) earnings8 |
11,051 |
(1,332) |
15,412 |
(12,568) |
| Pricing adjustments on concentrate and metal sales |
3,092 |
383 |
6,287 |
7,907 |
| Unrealized (loss) gains on interest rate swap |
77 |
649 |
(697) |
(2,671) |
| Low grade stockpile write-down |
- |
(2,020) |
- |
(6,239) |
| Unrealized gain (loss) on foreign exchange |
12,353 |
(4,974) |
22,820 |
22,930 |
| Loss on sale of fixed asset |
- |
(643) |
(21) |
(643) |
| Net income (loss) and comprehensive income (loss) for the period |
26,573 |
(7,937) |
43,801 |
8,716 |
| Net income (loss) and comprehensive income (loss) attributable to: |
||||
| Shareholders of the company |
19,538 |
(6,098) |
31,484 |
5,625 |
| Non-controlling interest |
7,035 |
(1,839) |
12,317 |
3,091 |
| 26,573 |
(7,937) |
43,801 |
8,716 |
|
| Earnings (loss) per share |
0.15 |
(0.05) |
0.24 |
0.05 |
| Adjusted earnings (loss) per share |
0.08 |
(0.01) |
0.12 |
(0.10) |
_________________________________________
| 7 Cost of sales consists of direct mining and milling costs (which include mine site employee compensation and benefits, mine site general and administrative costs, non-capitalized stripping costs, maintenance and repair costs, operating supplies and external services), depreciation and offsite transportation and concentrate treatment costs. |
|
| 8 Adjusted earnings (loss) is a non-GAAP financial measure which excludes unrealized gains/losses on derivative instruments, changes in fair value of financial instruments, foreign currency gains/losses, pricing adjustments related to metal sales and non-recurring transactions |
The full set of financial statements and accompanying MD&A are posted on Sedar.com.
2017 Guidance:
The 2017 guidance remains unchanged at production of 75 million – 85 million lbs copper plus precious metal credits.
About Copper Mountain Mining Corporation:
Copper Mountain's flagship asset is the Copper Mountain mine located in southern British Columbia near the town of Princeton. The Company has a strategic alliance with Mitsubishi Materials Corporation who owns 25% of the mine. The Copper Mountain mine has a large resource of copper that remains open laterally and at depth. This significant exploration potential is being explored over the next few years in order to fully appreciate the property's full development potential. Additional information is available on the Company's web page at www.CuMtn.com.
| A conference call and audio webcast will be held on Monday, November 6, 2017 at 7:30 am (Pacific Daylight Time) for management to discuss the third quarter 2017 results. This discussion will be followed by a question-and-answer period with investors. |
On behalf of the Board of
COPPER MOUNTAIN MINING CORPORATION
"Rod Shier"
Rodney A. Shier, CPA,CA
Chief Financial Officer
Note: This release contains forward-looking statements that involve risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to the documents, filed by the Company on SEDAR at www.sedar.com, specifically the most recent reports which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. The Company undertakes no obligation to review or confirm analysts' expectations or estimates or to release publicly any revisions to any forward-looking statement.
SOURCE Copper Mountain Mining Corporation
Dan Gibbons, Investor Relations, 604-682-2992 ext. 238, Email: [email protected]; Rod Shier, Chief Financial Officer, 604-682-2992 ext.222, Email: [email protected], Website: www.CuMtn.com
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