Copper Mountain Mining Announces Q3 Financial 2017 Results

| Nov 06, 2017 | CNW

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

________________________________________________

 

1Adjusted 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.

2Calculated by dividing the total adjusted earnings by the weighted average number of shares outstanding under the basic method.

3Earnings 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
September 30,

Nine months ended
September 30,

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

_________________________________________________

 

4Excludes ore re-handle from stockpile

5Tonnes 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,
2017
$

December 31,
2016
$




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)

_________________________________________

 

7Cost 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.

8Adjusted 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.

Live Dial-in information
Toronto and international: 647-427-7450
North America (toll-free): 1-888-231-8191
To participate in the webcast live via your computer go to:

http://event.on24.com/r.htm?e=1523105&s=1&k=A43E370074B0D9D8449DB898A9ECA6F5

Replay call information
Toronto and international: 416.849.0833, passcode 96857152
North America (toll-free): 1.855.859.2056, passcode 96857152

The conference call replay will be available from 10:30 am (PDT) on November 6, 2017, until 11:59 pm PST on November 13, 2017. Participant audio webcast will also be available on the Company's website athttp://www.CuMtn.com

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

For further information: Dan Gibbons, Investor Relations, 604-682-2992 ext. 238, Email: Dan@cumtn.com; Rod Shier, Chief Financial Officer, 604-682-2992 ext.222, Email: Rod@CuMtn.com, Website: www.CuMtn.com

Related Links

http://www.CuMtn.com