Copper Mountain Mining Announces Q2 2019 Financial Results
VANCOUVER, Aug. 1, 2019 /PRNewswire/ - Copper Mountain Mining Corporation (TSX: CMMC | ASX:C6C) (the "Company" or "Copper Mountain") announces second quarter 2019 financial and operating 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.
SECOND QUARTER 2019 HIGHLIGHTS
- Production for the second quarter of 2019 was 22.1 million pounds of copper equivalent (comprised of 18.4 million pounds of copper, 6,922 ounces of gold and 65,707 ounces of silver).
- Revenue for the second quarter of 2019 was $65.1 million, from the sale of 17.9 million pounds of copper, 7,044 ounces of gold and 55,276 ounces of silver, net of pricing adjustments.
- C1 cash cost per pound of copper produced was US$1.74 and all-in sustaining cost (AISC) per pound of copper produced was US$1.85.
- Earnings per share was $0.01 and adjusted earnings per share was $0.00 for the second quarter of 2019.
- Cash flow from operations for the second quarter of 2019 was $23.7 million.
- Cash and cash equivalents at the end of the second quarter of 2019 was $43.9 million.
"The second quarter was another consistent operating quarter," commented Gil Clausen, Copper Mountain's President and CEO. "We maintained our cash position, paid down our debt and continued to advance our growth opportunities while achieving predictable and reliable results quarter in and quarter out."
He added, "We expect production to be stronger in the second half of 2019 as we move into higher grade ore, and we remain on track to achieve our annual 2019 production guidance."
SUMMARY OF OPERATING RESULTS
Three months ended |
Six months ended |
|||
Copper Mountain Mine (100% Basis) |
2019 |
2018 |
2019 |
2018 |
Mine |
||||
Total tonnes mined (000s) |
16,139 |
19,520 |
33,593 |
36,104 |
Ore tonnes mined (000s) |
3,007 |
4,030 |
5,821 |
10,548 |
Waste tonnes (000s) |
13,132 |
15,490 |
27,772 |
25,555 |
Stripping ratio |
4.37 |
3.84 |
4.77 |
2.42 |
Mill |
||||
Tonnes milled (000s) |
3,764 |
3,368 |
7,314 |
6,860 |
Feed Grade (Cu%) |
0.28 |
0.34 |
0.29 |
0.33 |
Recovery (%) |
78.2 |
80.5 |
79.9 |
79.6 |
Operating time (%) |
95.0 |
89.2 |
94.0 |
90.9 |
Tonnes milled (TPD) |
41,363 |
37,011 |
40,409 |
37,901 |
Production |
||||
Copper (000s lb) |
18,450 |
20,030 |
37,060 |
39,936 |
Gold (oz) |
6,922 |
6,524 |
14,049 |
12,594 |
Silver (oz) |
65,707 |
68,404 |
127,987 |
146,313 |
Sales |
||||
Copper (000s lb) |
17,931 |
20,411 |
37,279 |
42,152 |
Gold (oz) |
7,044 |
6,484 |
14,070 |
12,975 |
Silver (oz) |
55,276 |
71,269 |
120,268 |
151,838 |
C1 cash cost per pound of copper produced (US$)(1) |
1.74 |
1.56 |
1.75 |
1.76 |
All-in-sustaining cost (AISC) per pound of copper produced (US$)(1) |
1.85 |
1.78 |
1.86 |
1.96 |
Cost of Sales per pound of copper (US$/lb sold (net)) |
2.06 |
1.98 |
2.01 |
2.07 |
Average realized copper price (US$) |
2.72 |
3.12 |
2.79 |
3.15 |
(1) Non-GAAP performance measure. See MD&A for details. |
||||
In Q2 2019, the Copper Mountain Mine produced 18.4 million pounds of copper, 6,922 ounces of gold, and 65,707 ounces of silver compared to 20.0 million pounds of copper, 6,524 ounces of gold, and 68,404 ounces of silver in Q2 2018. This represents a decrease of 8% and 4% for copper and silver respectively and a 6% increase in gold. During the quarter, the mine processed a total of 3.8 million tonnes of ore at an average feed grade of 0.28% Cu and with a copper recovery of 78.2%. The slightly lower recovery during the quarter was due to mining some oxidized ore but was more than offset by the increased mill availability which averaged 95%. The Copper Mountain Mine remains on track to achieve production guidance for the year.
In Q2 2019, approximately 1.5 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 in Q2 2019 can be attributed to higher head grades as compared to Q2 2018.
C1 cash cost per pound of copper produced for Q2 2019 was US$1.74, as compared to US$1.56 realized in Q2 2018. The increase in cost per pound was primarily a result of lower production in Q2 2019 as compared to Q2 2018. In addition, increased costs were incurred for planned maintenance of the shovels and haul trucks. C1 cash cost was positively impacted by the cost associated with stripping in excess of the average life of mine strip ratio. The total cash value of deferred stripping in Q2 2019 was $10.7 million, compared to $12.5 million in Q2 2018.
Site cash costs for Q2 2019 were $46.9 million and C1 cash costs were $42.8 million, both in line with the previous eight quarters. The consistency in costs over the past quarters demonstrates reliable production and operation at the Copper Mountain Mine quarter-after-quarter.
SUMMARY OF FINANCIAL RESULTS
Results and Highlights (100%) |
Three months ended |
Six months ended |
||
(In thousands of CDN$, except for per share amounts) |
2019 $ |
2018 $ |
2019 $ |
2018 $ |
Financial |
||||
Revenue |
65,144 |
84,204 |
152,014 |
162,150 |
Gross profit |
1,636 |
20,672 |
24,912 |
26,984 |
Gross profit before depreciation(1) |
6,801 |
32,680 |
36,416 |
54,448 |
Net income (loss) |
2,529 |
3,638 |
20,355 |
(2,828) |
Earnings (loss) per share – basic |
0.01 |
0.01 |
0.07 |
(0.02) |
Adjusted earnings (1) |
917 |
11,095 |
5,119 |
22,682 |
Adjusted earnings per share – basic |
0.00 |
0.06 |
0.03 |
0.08 |
EBITDA(1) |
10,257 |
22,552 |
42,121 |
34,037 |
Adjusted EBITDA |
6,811 |
30,009 |
26,885 |
59,547 |
Cash flow from operations |
23,685 |
40,121 |
47,374 |
42,139 |
Cash and cash equivalents – end of period |
43,896 |
72,090 |
||
(1) Non-GAAP performance measure. See MD&A for details. |
||||
In Q2 2019, revenue was $65.1 million, net of pricing adjustments and treatment charges, compared to $84.2 million in Q2 2018. Q2 2019 revenue is based on the sale of 17.9 million pounds of copper, 7,044 ounces of gold, and 55,276 ounces of silver and on an average realized copper price of US$2.72 per pound. This compares to 20.4 million pounds of copper, 6,484 ounces of gold and 71,269 ounces of silver sold in Q2 2018 and an average realized copper price of US$3.12 per pound. Revenue was lower as a result of selling fewer pounds of copper and realizing a lower copper price during the quarter as compared to Q2 2018. Further, revenue in Q2 2019 included a negative mark to market adjustment of $3.2 million as compared to a negative mark to market adjustment of $1.3 million for Q2 2018.
Cost of sales in Q2 2019 was $63.5 million as compared to $63.5 million for Q2 2018. Unit cost of sales was US$2.06 per pound of copper sold, net of precious metals credits for Q2 2019, as compared to US$1.98 per pound of copper sold, net of precious metals credits for Q2 2018. The increase in unit cost of sales is a result of selling fewer pounds of copper during the quarter as compared to Q2 2018.
Gross profit for Q2 2019 was $1.6 million as compared to $20.7 million for Q2 2018 and net income was $2.5 million for Q2 2019 as compared to $3.6 million for Q2 2018. The decrease in net income for Q2 2019, as compared to the net income for Q2 2018, was a result of: 1) lower revenue due to fewer pounds of copper sold and a lower realized copper price; 2) a negative mark to market adjustment of $3.2 million included in revenue in Q2 2019 as compared to a negative mark to market adjustment of $1.3 million for Q2 2018; 3) cost of sales including lower depreciation of $5.2 million for Q2 2019 compared to $12 million for Q2 2018 as a result of an increased reserve base in 2018 over which these costs are depreciated; and 4) the inclusion of a non-cash unrealized foreign exchange gain of $6.7 million in Q2 2019 as compared to a non-cash unrealized foreign exchange loss of $6.4 million in Q2 2018, a differential of approximately $13 million, which was primarily related to the Company's debt that is denominated in US dollars.
PROJECT DEVELOPMENT UPDATE
Copper Mountain Mill Expansion
During the quarter, the Company continued to advance its expansion of the existing Copper Mountain Mine mill, which is planned to increase throughput to 45,000 tonnes per day from 40,000 tonnes per day and also improve copper recovery. The expansion project includes the installation of a third ball mill that the Company has already purchased and is currently being stored overseas. The foundation design for the new ball mill is currently being completed and the Company plans to ship the ball mill in the third quarter to arrive at the mine site before year end. Final test work and design for the cleaner circuit was completed in the second quarter, in addition to the engineering required for the new mill maintenance shop. Subsequent to the end of the quarter, the new higher capacity SAG Mill screen was installed and tie-ins for the new ball mill were completed during a planned mill shutdown for re-lining existing mills in early July.
Eva Copper Project
The Company is currently executing a drilling program to test additional exploration targets proximal to Eva Copper's main deposit, Little Eva, as well as to support metallurgical studies and down dip extensions of the Blackard deposit. Blackard is not currently included in the Eva Copper feasibility study and has the potential to add a material volume of high grade tonnage to the existing planned mill feed. Following completion of this year's drill program and metallurgical testwork, the Company will incorporate the results into an updated Eva Copper feasibility study planned for announcement in Q1 2020.
Q2 2019 FINANCIAL AND OPERATING RESULTS CONFERENCE CALL AND WEBCAST
The Company will be hosting a conference call on Thursday, August 1, 2019 at 7:30 am (Pacific Time) for senior management to discuss the second quarter 2019 results.
Dial-in information: |
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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: |
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https://event.on24.com/wcc/r/2010157/A052FEC7A4C7DC35C45A6CCF8CA82B7C |
||
Replay Call Information |
||
Toronto and international: |
1 (416) 849-0833 |
Passcode: 6689529 |
North America (toll-free): |
1 (855) 859-2056 |
Passcode: 6689529 |
The conference call replay will be available from 10:30 am (PST) on Thursday, August 1, 2019 until 8:59 pm PST on Thursday, August 8, 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. 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.
President and 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) |
||
June 30, 2019 $ |
December 31, 2018 $ |
|
Assets |
||
Current assets |
||
Cash and cash equivalents |
43,896 |
46,123 |
Accounts receivable and prepaid expenses |
11,934 |
18,923 |
Inventory |
41,890 |
55,801 |
97,720 |
120,847 |
|
Reclamation bonds |
8,676 |
8,752 |
Transaction costs |
850 |
- |
Deferred tax assets |
12,706 |
13,980 |
Property, plant and equipment |
468,014 |
448,237 |
Low grade stockpile |
112,437 |
109,846 |
700,403 |
701,662 |
|
Liabilities |
||
Current liabilities |
||
Accounts payable and accrued liabilities |
35,384 |
37,494 |
Amounts payable to related parties |
80,983 |
69,026 |
Current portion of long-term debt |
56,008 |
52,956 |
Current tax liability |
1,381 |
622 |
173,756 |
160,098 |
|
Provisions |
7,434 |
6,571 |
Interest rate swap liability |
573 |
601 |
Long-term debt |
194,768 |
229,001 |
Deferred tax liability |
2,159 |
2,135 |
378,690 |
398,406 |
|
Equity Attributable to shareholders of the Company: |
||
Share capital |
263,863 |
263,822 |
Contributed surplus |
18,475 |
17,378 |
Accumulated other comprehensive loss |
(4,362) |
(1,655) |
Accumulated deficit |
(34,428) |
(48,030) |
243,548 |
231,515 |
|
Non-controlling interest |
78,165 |
71,741 |
Total equity |
321,713 |
303,256 |
700,403 |
701,662 |
|
Copper Mountain Mining Corporation |
||||
Condensed Consolidated Interim Statements of Income (Loss) and Comprehensive Income (Loss) |
||||
For the Three and Six Months Ended June 30 |
||||
(Unaudited in thousands of Canadian dollars, except for number of and earnings per share) |
||||
Three months ended June 30, |
Six months ended June 30, |
|||
2019 $ |
2018 $ |
2019 $ |
2018 $ |
|
Revenue |
65,144 |
84,204 |
152,014 |
162,150 |
Cost of sales |
(63,508) |
(63,532) |
(127,102) |
(135,166) |
Gross profit |
1,636 |
20,672 |
24,912 |
26,984 |
Other income and expenses |
||||
General and administration |
(2,631) |
(3,591) |
(5,392) |
(6,065) |
Share based compensation |
(526) |
(381) |
(1,187) |
(887) |
Operating income (loss) |
(1,521) |
16,700 |
18,333 |
20,032 |
Finance income |
151 |
206 |
254 |
342 |
Finance expense |
(4,442) |
(3,847) |
(8,241) |
(7,361) |
Unrealized (loss) gain on interest rate swap |
(96) |
229 |
(490) |
1,002 |
Foreign exchange (loss) gain |
6,709 |
(6,385) |
12,774 |
(14,461) |
Income (loss) before tax |
801 |
6,903 |
22,630 |
(446) |
Current tax expense |
(463) |
(322) |
(976) |
(667) |
Deferred income and resource tax recovery (expense) |
2,191 |
(2,943) |
(1,299) |
(1,715) |
Net income (loss) |
2,529 |
3,638 |
20,355 |
(2,828) |
Other comprehensive income (loss) |
||||
Foreign currency translation adjustment |
(1,904) |
(535) |
(2,707) |
(535) |
Total comprehensive income (loss) |
625 |
3,103 |
17,648 |
(3,363) |
Net income (loss) attributable to: |
||||
Shareholders of the Company |
1,102 |
2,189 |
13,602 |
(3,062) |
Non-controlling interest |
1,427 |
1,449 |
6,753 |
234 |
2,529 |
3,638 |
20,355 |
(2,828) |
|
Earnings (loss) per share: |
||||
Basic |
0.01 |
0.01 |
0.07 |
(0.02) |
Diluted |
0.01 |
0.01 |
0.07 |
(0.02) |
Weighted average shares outstanding, basic (thousands) |
188,216 |
177,440 |
188,199 |
156,116 |
Weighted average shares outstanding, diluted (thousands) |
190,751 |
181,756 |
190,720 |
160,560 |
Shares outstanding at end of the period (thousands) |
188,237 |
188,104 |
188,237 |
188,104 |
Copper Mountain Mining Corporation |
||||||
Condensed Consolidated Interim Statements of Cash Flows |
||||||
For the Three and Six Months Ended June 30, |
||||||
(Unaudited in thousands of Canadian dollars) |
||||||
Three months ended June 30, |
Six months ended June 30, |
|||||
2019 $ |
2018 $ |
2019 $ |
2018 $ |
|||
Cash flows from operating activities |
||||||
Net income (loss) for the period |
2,529 |
3,638 |
20,355 |
(2,828) |
||
Adjustments for: |
||||||
Depreciation |
5,183 |
12,008 |
11,522 |
27,464 |
||
Unrealized foreign exchange (gain) loss |
(5,906) |
5,118 |
(9,588) |
12,526 |
||
Unrealized loss (gain) on interest rate swap |
96 |
(229) |
490 |
(1,002) |
||
Deferred income and resource tax expense |
(2,191) |
2,991 |
1,299 |
1,708 |
||
Finance expense |
4,442 |
3,847 |
8,241 |
7,361 |
||
Share based compensation |
526 |
381 |
1,187 |
608 |
||
4,679 |
27,754 |
33,506 |
45,837 |
|||
Net changes in working capital items |
19,006 |
12,367 |
13,868 |
(3,698) |
||
Net cash from operating activities |
23,685 |
40,121 |
47,374 |
42,139 |
||
Cash flows from investing activities |
||||||
Cash acquired in acquisition of Altona |
- |
29,115 |
- |
29,115 |
||
Transaction costs |
(850) |
(763) |
(850) |
(2,237) |
||
Share issue costs |
- |
(364) |
- |
(364) |
||
Deferred stripping activities |
(10,744) |
(12,463) |
(24,344) |
(12,463) |
||
Purchase of property, plant and equipment |
(5,560) |
(10,532) |
(7,820) |
(11,871) |
||
Net cash (used in) from investing activities |
(17,154) |
4,993 |
(33,014) |
2,180 |
||
Cash flows from financing activities |
||||||
Proceeds on exercise of options and warrants |
19 |
143 |
26 |
199 |
||
Advances from non-controlling interest |
- |
- |
15,035 |
14,029 |
||
Payments made to non-controlling interest |
- |
(1,469) |
(329) |
(1,469) |
||
Loan principal paid |
(9,541) |
(9,515) |
(22,369) |
(21,893) |
||
Interest paid |
(3,734) |
(3,818) |
(6,230) |
(5,782) |
||
Finance lease payments |
(711) |
(1,532) |
(1,274) |
(3,989) |
||
Net cash used in financing activities |
(13,967) |
(16,191) |
(15,141) |
(18,905) |
||
Effect of foreign exchange rate changes on cash and cash equivalents |
(615) |
599 |
(1,446) |
1,543 |
||
(Decrease) Increase in cash and cash equivalents |
(8,051) |
29,522 |
(2,227) |
26,957 |
||
Cash and cash equivalents - Beginning of period |
51,947 |
42,568 |
46,123 |
45,133 |
||
Cash and cash equivalents - End of period |
43,896 |
72,090 |
43,896 |
72,090 |
||
SOURCE Copper Mountain Mining Corporation
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