Copper Mountain Mining Announces Q1 2019 Financial Results
VANCOUVER, April 29, 2019 /CNW/ - Copper Mountain Mining Corporation (TSX: CMMC | ASX:C6C) (the "Company" or "Copper Mountain") announces first quarter financial results. All currency is in Canadian dollars, unless otherwise stated. All results are reported on a 100% basis. The Company's Financial Statements and Management Discussion & Analysis ("MD&A") are available at www.CuMtn.com and www.sedar.com.
FIRST QUARTER 2019 HIGHLIGHTS
- Production for the first quarter of 2019 was 22.3 million pounds of copper equivalent (comprised of 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% 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.
- C1 cash cost per pound of copper produced was US$1.77 for the first quarter of 2019, a 9.7% reduction from the first quarter of 2018.
- Earnings per share was $0.07 and adjusted earnings per share was $0.03 for the first quarter of 2019.
- Cash flow from operations for the first quarter of 2019 was $23.7 million, increasing ten-fold from $2.0 million in the first quarter of 2018.
- Announced a new Integrated Production Plan (the "Integrated Plan") for the Copper Mountain Mine, which includes a planned modest mill expansion to 45,000 tpd and integrates production from the nearby New Ingerbelle pit that has higher gold grades. The Integrated Plan results include a 102% increase in Mineral Reserves, a 12-year extension in mine life to 26 years, a 27% increase in average annual copper equivalent production to 116 million pounds (over the first ten years) and C1 cash costs of US$1.74 per pound of copper (over the first ten years).
"We started the year solidly, posting higher revenue, earnings and cash flow compared to Q1 last year." commented Gil Clausen, Copper Mountain's President and CEO. "Production and costs were in line with our targets and we are maintaining our annual production guidance. Further, our C1 cash costs and all-in sustaining costs were markedly lower year-over-year. This solid operating base, along with our new life of mine plan integrating the New Ingerbelle Pit, provides a strong foundation for us to grow our business in Canada and Australia."
SUMMARY OF OPERATING RESULTS
Copper Mountain Mine (100% Basis) | 2019 | 2018 |
Mine | ||
Total tonnes mined (000s) | 17,454 | 16,584 |
Ore tonnes mined (000s) | 2,814 | 6,518 |
Waste tonnes (000s) | 14,640 | 10,066 |
Stripping ratio | 5.20 | 1.54 |
Mill | ||
Tonnes milled (000s) | 3,550 | 3,492 |
Feed Grade (Cu%) | 0.29 | 0.33 |
Recovery (%) | 81.6 | 78.7 |
Operating time (%) | 92.9 | 92.5 |
Tonnes milled (TPD) | 39,440 | 38,800 |
Production | ||
Copper (000s lb) | 18,610 | 19,906 |
Gold (oz) | 7,127 | 6,070 |
Silver (oz) | 62,280 | 77,909 |
Sales | ||
Copper (000s lb) | 19,348 | 21,741 |
Gold (oz) | 7,026 | 6,491 |
Silver (oz) | 64,992 | 80,569 |
Cost and Prices | ||
C1 cash cost per pound of copper produced (US$)(1)(2) | 1.77 | 1.96 |
All-in-sustaining cost (AISC) per pound of copper produced (US$)(1)(2) | 1.87 | 2.14 |
Cost of Sales per pound of copper (US$/lb sold (net)) | 1.97 | 2.21 |
Average realized copper price (US$) | 2.85 | 3.17 |
(1) | Non-GAAP performance measure. See MD&A for details. |
(2) | Cash costs have been updated to industry recognized metrics of total operating costs (C1) and with the addition of All in Sustaining Costs per pound of copper produced the Company believes this disclosure will present the full cost of copper production associated with the Copper Mountain mine and take steps in further supporting peer group comparability. See the non-GAAP performance measures section in the MD&A for details of these calculations. |
In Q1 2019, the Copper Mountain mine produced 18.6 million pounds of copper, 7,127 ounces of gold, and 62,280 ounces of silver compared to 19.9 million pounds of copper, 6,070 ounces of gold, and 77,909 ounces of silver in Q1 2018. This represents a decrease of 7% and 20% for copper and silver, respectively, and a 17% increase in gold. Overall copper feed grade was down 12% in Q1 2019 from Q1 2018, but was as planned. However this decrease was offset by higher throughput and recoveries in both copper and gold. In Q1 2019 approximately 0.7 million 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 Q1 2019 was US$1.77, which is 9.7% lower than Q1 2018 of US$1.96. 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. The overall strip ratio for 2019 is expected to be approximately 2.5 to 1, and, as planned, was higher in Q1 2019 as the mine started a new development pushback of Pit #3. The total cash value of deferred stripping in Q1 2019 was $13.6 million, compared to Nil in Q1 2018.
Site cash costs for Q1 2019 were $45.7 million and C1 cash costs were $43.9 million, both in line with the previous eight quarters. The consistency in costs over the past quarters demonstrates reliable production and operation at the Copper Mountain mine quarter-after-quarter.
SUMMARY OF FINANCIAL RESULTS
Results and Highlights (100%) | Three months ended | |||
(In thousands of CDN$, except for per share amounts) | 2019 $ | 2018 $ | ||
Revenue | 86,870 | 77,946 | ||
Gross profit | 23,276 | 6,312 | ||
Gross profit before depreciation(1) | 29,615 | 21,768 | ||
Net income (loss) | 17,826 | (6,466) | ||
Earnings (loss) per share – basic | 0.07 | (0.04) | ||
Adjusted net income(1) | 6,036 | 11,587 | ||
Adjusted earnings per share – basic | 0.03 | 0.09 | ||
EBITDA(1) | 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 | ||
(1) Non-GAAP performance measure. See MD&A for details. |
In Q1 2019, revenue increased 12% to $86.9 million, net of pricing adjustments and treatment charges, compared to $77.9 million in Q1 2018. Q1 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 and on an average realized copper price of US$2.85 per pound. This compares to 21.7 million pounds of copper, 6,491 ounces of gold and 80,569 ounces of silver sold in Q1 2018 and an average realized copper price of US$3.17 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 Q1 2019 compared to negative $9.8 million in Q1 2018, a net difference of $15.9 million in the quarter.
Cost of sales in Q1 2019 were $63.6 million as compared to $71.6 million for Q1 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 were US$1.97 per pound of copper sold, net of precious metals credits for Q1 2019, as compared to US$2.21 per pound of copper sold, net of precious metals credits for Q1 2018.
Gross profit in Q1 2019 was $23.3 million, 270% higher when compared to Q1 2018 gross profit of $6.3 million. Net income for Q1 2019 was $17.8 million, compared to a net loss of $6.5 million in Q1 2018. The increase in net income was a result of: 1) a $6.1 million positive mark to market adjustment included in revenue; 2) lower depreciation of $6.3 million in Q1 2019 cost of sales compared to $15.4 million for Q1 2018 as a result of an increased reserve base in 2018 over which these costs are depreciated; and, 3) the inclusion of a non-cash unrealized foreign exchange gain of $6.1 million as compared to a non-cash unrealized foreign exchange loss of $8.1 million in Q1 2018, a differential of approximately $14.2 million, which was primarily related to the Company's debt that is denominated in US dollars.
Q1 2019 FINANCIAL AND OPERATING RESULTS CONFERENCE CALL AND WEBCAST
The Company will hold a conference call on Monday, April 29, 2019 at 7:30 am (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 | |
To participate in the webcast live via computer go to: | ||
Replay Call Information | ||
Toronto and international: | 1 (416) 849-0833 | Passcode: 8687741 |
North America (toll-free): | 1 (855) 859-2056 | Passcode: 8687741 |
The conference call replay will be available from 10:30 am (Pacific Time) on April 29, 2019 until 8:59 pm (Pacific Time) on May 6, 2019. An archive of the audio webcast will also be available on the company's website at http://www.cumtn.com.
About Copper Mountain Mining Corporation
Copper Mountain's flagship asset is the 75% 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 average annual production expected to increase to over 110 million pounds of copper equivalent in 2020. Copper Mountain also has the permitted, development-stage Eva Copper Project in Queensland, Australia and an extensive 4,000 km2 highly prospective land package in the Mount Isa area. Copper Mountain trades on the Toronto Stock Exchange under the symbol "CMMC" and Australian Stock Exchange under the symbol "C6C".
Additional information is available on the Company's web page at www.CuMtn.com.
On behalf of the Board of
COPPER MOUNTAIN MINING CORPORATION
"Gil Clausen"
Gil Clausen, P.Eng.
Chief Executive Officer
Cautionary Note Regarding Forward-Looking Statements
This news release may contain forward-looking statements and forward-looking information (together, "forward-looking statements") within the meaning of applicable securities laws. All statements, other than statements of historical facts, are forward-looking statements. Generally, forward-looking statements can be identified by the use of terminology such as "plans", "expects", "estimates", "intends", "anticipates", "believes" or variations of such words, or statements that certain actions, events or results "may", "could", "would", "might", "occur" or "be achieved". Forward-looking statements involve risks, uncertainties and other factors that could cause actual results, performance and opportunities to differ materially from those implied by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include the successful exploration of the Company's properties in Canada and Australia, the reliability of the historical data referenced in this press release and risks set out in Copper Mountain's public documents, including in each management discussion and analysis, filed on SEDAR at www.sedar.com. Although Copper Mountain believes that the information and assumptions used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Except where required by applicable law, Copper Mountain disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Copper Mountain Mining Corporation
Condensed Consolidated Interim Statements of Financial Position
(Unaudited in thousands of Canadian dollars)
March 31, $ | December 31, 2018 $ | |
Assets | ||
Current assets | ||
Cash and cash equivalents | 51,947 | 46,123 |
Accounts receivable and prepaid expenses | 24,638 | 18,923 |
Inventory | 49,452 | 55,801 |
126,037 | 120,847 | |
Reclamation bonds | 8,677 | 8,752 |
Deferred tax assets | 10,508 | 13,980 |
Property, plant and equipment | 458,069 | 448,237 |
Low grade stockpile | 110,555 | 109,846 |
713,846 | 701,662 | |
Liabilities | ||
Current liabilities | ||
Accounts payable and accrued liabilities | 35,902 | 37,494 |
Amounts payable to related parties | 82,178 | 69,026 |
Current portion of long-term debt | 61,048 | 52,956 |
Current tax liability | 1,136 | 622 |
180,264 | 160,098 | |
Provisions | 6,802 | 6,571 |
Interest rate swap liability | 785 | 601 |
Long-term debt | 203,219 | 229,001 |
Deferred tax liability | 2,153 | 2,135 |
393,223 | 398,406 | |
Equity Attributable to shareholders of the Company: | ||
Share capital | 263,832 | 263,822 |
Contributed surplus | 18,041 | 17,378 |
Accumulated other comprehensive loss | (2,458) | (1,655) |
Accumulated deficit | (35,530) | (48,030) |
243,885 | 231,515 | |
Non-controlling interest | 76,738 | 71,741 |
Total equity | 320,623 | 303,256 |
713,846 | 701,662 |
Copper Mountain Mining Corporation
Condensed Consolidated Interim Statements of Income (Loss) and Comprehensive Income (Loss)
For the Three Months Ended March 31
(Unaudited in thousands of Canadian 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 | (2,761) | (2,474) |
Share based compensation | (661) | (506) |
Operating income | 19,854 | 3,332 |
Finance income | 103 | 136 |
Finance expense (note 13) | (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) |
Non-controlling interest | 5,326 | (1,215) |
17,826 | (6,466) | |
Income (loss) per share: | ||
Basic | $0.07 | ($0.04) |
Diluted | $0.07 | ($0.04) |
Weighted average shares outstanding, basic | 188,170,359 | 134,311,879 |
Weighted average shares outstanding, diluted | 190,445,120 | 138,961,872 |
Shares outstanding at end of the period | 188,187,159 | 134,374,708 |
Copper Mountain Mining Corporation
Condensed Consolidated Interim Statements of Cash Flows
For the Three Months Ended March 31,
(Unaudited in thousands of Canadian dollars)
2019 $ | 2018 $ | |
Cash flows from operating activities | ||
Net income (loss) for the period | 17,826 | (6,466) |
Adjustments for: | ||
Depreciation | 6,339 | 15,456 |
Unrealized foreign exchange (gain) loss | (3,682) | 7,408 |
Unrealized loss (gain) on interest rate swap | 394 | (773) |
Deferred income and resource tax expense (recovery) | 3,490 | (1,283) |
Finance expense | 3,799 | 3,514 |
Share based compensation | 661 | 227 |
28,827 | 18,083 | |
Net changes in non-cash working capital items | (5,138) | (16,065) |
Net cash provided by operating activities | 23,689 | 2,018 |
Cash flows from investing activities | ||
Deferred stripping activities | (13,600) | - |
Deferred acquisition costs | - | (1,474) |
Development of property, plant and equipment | (2,335) | (1,339) |
Refund of exploration bond | 75 | - |
Net cash used in investing activities | (15,860) | (2,813) |
Cash flows from financing activities | ||
Common shares issued on exercise of options | 7 | 56 |
Contributions from non-controlling interest | 15,035 | 14,029 |
Payments to non-controlling interest | (329) | - |
Loan principal repaid | (12,828) | (12,378) |
Interest paid | (2,496) | (1,964) |
Finance lease payments | (563) | (2,457) |
Net cash used in financing activities | (1,174) | (2,714) |
Effect of foreign exchange rate changes on cash and cash equivalents | (831) | 944 |
Increase (decrease) in cash and cash equivalents | 5,824 | (2,565) |
Cash and cash equivalents - Beginning of period | 46,123 | 45,133 |
Cash and cash equivalents - End of period | 51,947 | 42,568 |
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SOURCE Copper Mountain Mining Corporation
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