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Copper Mountain Mining Announces Q1 2019 Financial Results

April 29, 2019

Canada NewsWire

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
Q1

2018
Q1

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
March 31,

(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:
https://cumtn.com/investors/events/2019/

   

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,
2019

$

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

 

View original content to download multimedia: http://www.newswire.ca/en/releases/archive/April2019/29/c2736.html

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