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Copper Mountain Mining Announces Q3 2018 Financial Results

Vancouver, British Columbia – October 31, 2018 – Copper Mountain Mining Corporation (TSX: CMMC | ASX:C6C) (the “Company” or “Copper Mountain” - https://www.commodity-tv.net/c/search_adv/?v=298551 )announces third quarter 2018 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

Third quarter 2018 highlights:

  • Production at the Copper Mountain Mine was 22.0 million pounds of copper equivalent in the third quarter of 2018, which includes 18.3 million pounds of copper, 7,500 ounces of gold and 64,900 ounces of silver and in line with expectations.
  • Company on track to achieve 2018 annual production guidance of 80 million pounds of copper (+/-5%) with  the expectation of a strong fourth quarter.
  • Revenue for the third quarter 2018 was $60.7 million, from the sale of 17.6 million pounds of copper, 6,300 ounces of gold, and 62,500 ounces of silver, net of pricing adjustments.
  • Increased mineral reserves at the Copper Mountain Mine to 210 million tonnes0F grading 0.26% copper, 0.08 grams per tonne gold, and 0.89 grams per tonne silver for 1.2 billion pounds of copper, 504,000 ounces of gold and 6.0 million ounces of silver.
  • Positive feasibility study results for the Eva Copper Project demonstrated an after-NPV of US$256 million at an 8% discount rate and total copper production of 959 million pounds over a 12-year mine life.   
  • Robust preliminary economic assessment (PEA) results for New Ingerbelle demonstrated an after-tax Net Present Value (NPV) of US$394 million at an 8% discount rate and total copper production of 768 million pounds over a 12-year mine life.   

Gil Clausen, President and CEO of Copper Mountain, remarked “This quarter was an exceptionally busy quarter for Copper Mountain as we delivered on all of the project milestones as promised.  We completed the phase 2 drilling program at New Ingerbelle and subsequently announced an updated mineral resource along with a base case mine development and production PEA which demonstrated strong economics.  We also announced solid feasibility study results for our Eva Copper Project in Australia, which exhibited robust economics and is expected to produce over 120 million pounds of copper annually in the early years of its mine life. “

Mr. Clausen added, “We will continue to focus on ensuring Copper Mountain produces predictably and reliably as it has year to date.  Production in the fourth quarter is forecast to be strong as we get back to mining higher grade ore, reduce stripping and we do not anticipate any of the non-recurring items that impacted the third quarter.”

Summary Financial Results

0BQuarter Results & Highlights (100%)

1BThree months ended

2BSeptember 30,

3BNine months ended

4BSeptember 30,

5B(In thousands of CDN$, other than per share and per pound amounts)

 2018

$

7B2017

$

8B2018

$

2017
$

 

 

 

 

 

9BRevenue

10B60,720

11B77,151

12B222,870

13B218,393

14BCash flow from operations before working capital changes

15B1,189

16B31,570

17B47,206

18B71,199

19BGross profit (Loss)                            

20B(9,574)

21B19,550

22B17,410

23B39,082

24BEBITDA1F

6,882

42,934

25B40,919

26B90,939

27BAdjusted earnings (loss)2F

28B(8,310)

29B11,051

30B5,208

31B15,412

32BAdjusted earnings (loss) per share3F

33B(0.04)

34B0.08

35B0.03

36B0.12

37BCash and cash equivalents

 

 

38B41,690

39B43,645

40BAccounts receivable

 

 

41B26,130

42B20,336

43BTotal cash and cash equivalents and accounts receivable

 

 

44B67,820

45B63,981

46BEquity

 

 

47B319,951

48B241,039

49BTotal pounds of copper sold (000’s lbs)

50B17,600

51B19,300

52B59,200

53B55,900

54BTotal ounces of gold sold (oz)

55B6,300

56B6,500

57B19,100

58B18,800

59BTotal ounces of silver sold (oz)

60B62,500

61B72,700

62B213,100

63B199,400

 

 

 

 

 

64BAverage realized copper price (US$) 

65B2.77

66B2.91

67B3.03

68B2.72

 

The Company recognized revenue of $60.7 million in Q3 2018 on the sale of copper concentrates net of treatment charges. Third quarter revenue was impacted by a shipping delay at the Port of Vancouver over the quarter-end which resulted in 1.1 million pounds of copper, 440 ounces of gold, and 4,000 ounces of silver not being recorded in Q3 2018. This revenue will be recognized in Q4 2018.  The decrease in revenue in the third quarter was also the result of lower realized copper prices, lower quantities of metal sold and negative provisional pricing adjustments. Pricing adjustments totaled negative $2.4 million and reflects a weakening of copper prices during the quarter and resulted in downward adjustments for shipments not yet finalized at the period end. This decrease was partly offset by a higher gold grade and recovery during the quarter.  

At the end of Q3 2018, the Company recorded an increase in accounts receivable primarily attributable to a shipping delay at the Port of Vancouver over the quarter-end for which the Company did not receive payment of $19.2 million from the September shipment until October 3, 2018. This cash, if received in the quarter, would have increased the quarter-end cash balance to $60.9 million.

The Company recorded higher Q3 2018 operating costs as a result of increased cost of sales of $70.3 million. The increase is largely due to a $5.3 million inventory adjustment to the low-grade stockpile. This adjustment was necessary to record the low-grade stockpile at net realizable value due to the decline in copper price. Additionally, Q3 2018 operating costs reflect increases mainly associated with timing of planned major mine maintenance, fuel unit costs, and other consumable unit costs as compared to Q3 2017.    

Exploration expenditures for the quarter were $2.9 Mio, which includes both exploration in Australia and British Columbia. 

The Copper Mountain Mine produced 22.0 million pounds of copper equivalent which is comprised of 18.3 million pounds of copper, 7,500 ounces of gold and 64,900 ounces of silver during Q3 2018. Lower copper production in Q3 2018 was as forecast and within expectations of the 2018 production plan.  Gold production was higher quarter-over-quarter and year-over-year on higher gold grades and improved recoveries after installation of a flash flotation circuit in the concentrator.  Copper grades and therefore copper production is expected to improve in the fourth quarter of 2018.

Site cash costs for Q3 2018 were US$1.78 per pound of copper produced, net of precious metal credits, and total cash costs were US$2.25 per pound sold, net of precious metal credits. Site cash costs and total cash costs were higher primarily due to lower copper production and sales as a result of lower head grades in the quarter, as planned, the $5.3 million inventory adjustment to the low-grade stockpile, and the shipping delay at the Port of Vancouver which decreased metal sales by 1.1 million pounds of copper, 440 ounces of gold, and 4,000 ounces of silver.  As production and sales are expected to be higher in the fourth quarter of 2018, site cash costs and total cash costs are expected to decrease.

The Company is on track to meet full year guidance for copper production as year-to-date production has been in-line with the plan and production is expected to be strong in the fourth quarter. The Company maintains 2018 annual production guidance of 80 million pounds of copper (+/- 5%).   

The following table provides a summary of the operating results from the mine for the three and nine months ended September 30, 2018: 

69BMine Production Information

Three months ended
 September 30,

Nine months ended September 30,

70BCopper Mountain Mine (100% Basis)

71B2018

72B2017

73B2018

74B2017

 

 

 

 

 

75BMine:

 

 

 

 

   Total tonnes mined (000’s4F)

77B18,503

78B17,431

79B54,606

80B53,600

   Ore tonnes mined (000’s)

82B5,612

83B6,843

84B16,159

85B18,835

   Waste tonnes (000’s)

87B12,891

88B10,587

89B38,446

90B34,765

   Stripping ratio

92B2.30

93B1.55

94B2.38

95B1.87

 

 

 

 

 

96BMill:

 

 

 

 

   Tonnes milled (000’s)

98B3,802

99B3,787

100B10,661

101B10,394

   Feed Grade (Cu%)

103B0.28

104B0.32

105B0.31

106B0.31

   Recovery (%)

108B79.1

109B77.3

110B79.4

111B77.9

   Operating time (%)

113B92.7

114B93.5

115B91.5

116B89.3

   Tonnes milled (TPD5F)

118B41,300

119B41,200

120B39,100

121B38,100

 

 

 

 

 

122BProduction:

 

 

 

 

   Copper production (000’s lbs)

124B18,300

125B20,900

126B58,200

127B56,200

   Gold production (oz)

129B7,500

130B6,700

131B20,100

132B18,500

   Silver production (oz)

134B64,900

135B79,300

136B211,200

137B206,800

 

 

 

 

 

138BSite cash costs per pound of copper produced (net of precious metal credits) (US$)

139B1.78

140B1.25

141B1.53

142B1.31

143BTotal cash costs per pound of copper sold (net of precious metal credits) (US$)

2.25

1.62

144B1.96

145B1.74

 

Q3 2018 Financial and Operating Results Conference Call and Webcast
The Company will hold a conference call on Wednesday, October 31, 2018 at 7:30 am (Pacific Standard Time) for management to discuss the Q3 2018 financial and operating results.

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 computer visit the Company’s website at www.cumtn.com or https://event.on24.com/wcc/r/1833337/29A6E0EF562FD710672ED8952756F33F

Replay information
Toronto and international: 416-849-0833
Passcode: 9499185
North America (toll-free): 1-855-859-2056
Passcode: 9499185

The conference call replay will be available from 10:30 am (PST) on October 31, 2018 until 20:59 pm PST on November 7, 2018. An archive of the audio webcast will also be available on the company’s website at www.cumtn.com.

About Copper Mountain Mining Corporation
ViewCopper 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 produces about 100 million pounds of copper equivalent per year with a large resource that remains open laterally and at depth. Copper Mountain also has the permitted, development stage Eva Copper Project in Queensland, Australia and an extensive 397,000 hectare highly prospective land package in the Mount Isa area.

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

For further information, please contact:
Letitia Wong, Vice President Corporate Development & Investor Relations
604-682-2992 Email: letitia.wong@cumtn.com  or
Dan Gibbons, Investor Relations 604-682-2992 ext. 238 Email: Dan@CuMtn.com
Website: www.CuMtn.com

In Europe:
Swiss Resource Capital AG
Jochen Staiger
info@resource-capital.ch
www.resource-capital.ch

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 relase 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.


Includes low-grade stockpile. 

Earnings before interest, taxes, depreciation and amortization. Refer to the Non-GAAP Performance measures section of this MD&A.

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.

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

Excludes ore re-handle from stockpile

Tonnes per calendar day

 

Copper Mountain Mining Corporation
Condensed Consolidated Interim Statements of Financial Position
(Unaudited in thousands of Canadian dollars)

 

 

September 30,
2018
$

December 31,
2017
$

 

 

 

Assets

 

 

 

 

 

Current assets

 

 

Cash and cash equivalents

41,690

45,133

Accounts receivable and prepaid expenses

26,130

29,314

Inventory

58,034

68,135

 

 

 

 

125,854

142,582

 

 

 

Deferred acquisition costs

-

1,121

Reclamation bonds

8,744

8,228

Deferred tax assets

14,097

10,956

Property, plant and equipment

446,591

414,041

Low grade stockpile

105,860

91,021

 

 

 

 

701,146

667,949

Liabilities

 

 

 

 

 

Current liabilities

 

 

Accounts payable and accrued liabilities

27,313

42,122

Amounts payable to related parties

67,751

43,633

Current portion of long-term debt

55,127

48,649

Current tax liability

13

1,285

 

150,204

135,689

 

 

 

Provisions

6,540

6,521

Interest rate swap liability

696

2,081

Long-term debt

223,755

258,373

 

381,195

402,664

 

 

 

Equity
Attributable to shareholders of the Company:

 

 

 

 

 

Share capital

262,622

195,670

Contributed surplus

16,918

15,724

Accumulated other comprehensive loss

(3,219)

-

Accumulated deficit

(33,044)

(25,693)

 

243,277

185,701

Non-controlling interest

76,674

79,584

Total equity

319,951

265,285

 

 

 

 

701,146

667,949

 

 

 

Copper Mountain Mining Corporation
Condensed Consolidated Interim Statements of Income (Loss) and Comprehensive Income (Loss)
For the Three and Nine Months Ended September 30, (Unaudited in thousands of Canadian dollars, except for earnings per share) 

View

 

Three months ended September 30,

    Nine months ended  September 30,

 

2018
$

2017
$

2018
$

2017
$

 

 

 

 

 

Revenue

60,720

77,151

222,870

218,393

Cost of sales

(70,294)

(57,601)

(205,460)

(179,311)

Gross profit (loss) 

(9,574)

19,550

17,410

39,082

 

 

 

 

 

Other income and expenses

 

 

 

 

General and administration

(2,160)

(1,307)

(8,225)

(5,647)

Exploration and evaluation

-

-

-

(35)

Share based compensation

(387)

(349)

(1,274)

(1,122)

Operating (loss) income

(12,121)

17,894

7,911

32,278

 

 

 

 

 

Finance income

134

4

476

360

Finance expense

(3,602)

(2,968)

(10,963)

(9,702)

Unrealized gain (loss) on interest rate swap

195

77

1,197

(697)

Foreign exchange gain (loss)

5,419

12,353

(9,042)

22,820

 Income (loss) before tax

(9,975)

27,360

(10,421)

45,059

 

 

 

 

 

Current resource tax recovery (expense)

59

(787)

(608)

(1,258)

Deferred income and resource tax recovery

4,850

-

3,135

-

Net income (loss)

(5,066)

26,573

(7,894)

43,801

 

 

 

 

 

Other comprehensive loss

 

 

 

 

Foreign currency translation adjustment

(2,684)

-

(3,219)

-

Total comprehensive income (loss)

(7,750)

26,573

(11,113)

43,801

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to:

 

 

 

 

Shareholders of the Company

(4,289)

19,538

(7,351)

31,484

Non-controlling interest

(777)

7,035

(543)

12,317

 

(5,066)

26,573

(7,894)

43,801

Earnings (loss) per share:

 

 

 

 

Basic

(0.02)

0.15

(0.04)

0.24

Diluted

(0.02)

0.14

(0.04)

0.23

 

 

 

 

 

Weighted average shares outstanding, basic (thousands)

188,116

133,298

166,939

133,070

Weighted average shares outstanding, diluted (thousands)

191,435

136,853

170,796

133,307

Shares outstanding at end of the period (thousands)

188,170

133,629

188,170

133,629

Copper Mountain Mining Corporation
Condensed Consolidated Interim Statements of Cash Flows
For the Three and Nine Months Ended September 30, (Unaudited in thousands of Canadian dollars)

 

Three months ended September 30,

Nine months ended September 30,

 

 

           2018
$

   2017
$

           2018
$

   2017
$

Cash flows from operating activities

 

 

 

 

Net (loss) income for the period

(5,066)

26,573

(7,894)

43,801

 
Adjustments for:

 

 

 

 

Gain on disposal of fixed assets

-

(4)

-

(25)

Depreciation

13,389

12,610

40,853

36,538

Unrealized foreign exchange (gain) loss

(6,079)

(10,849)

6,447

(20,636)

Unrealized (gain) loss on interest rate swap

(195)

(77)

(1,197)

697

Deferred income and resource tax expense

(4,849)

-

(3,141)

-

Finance expense

3,602

2,968

10,963

9,702

Share based compensation

387

349

995

1,122

 

1,189

31,570

47,026

71,199

       Net changes in working capital items

(20,839)

(20,461)

(24,537)

(31,370)

Net cash (used in) from operating activities

(19,650)

11,109

22,489

39,829

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Cash acquired in acquisition of Altona

-

-

29,115

-

Transaction costs

(54)

-

(2,291)

-

Share issue costs

-

-

(364)

-

Deferred stripping activities

(3,092)

-

(15,555)

(1,485)

Purchase of property, plant and equipment

(4,216)

(1,073)

(16,087)

(2,760)

(Purchase) refund of reclamation bond

(387)

-

(387)

-

Proceeds on disposal of fixed assets

-

-

-

52

Net cash used in investing activities

(7,749)

(1,073)

(5,569)

(4,193)

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Proceeds on exercise of options and warrants

26

387

224

691

Advances from non-controlling interest

14,383

13,574

28,412

21,618

Payments made to non-controlling interest

(899)

-

(2,367)

-

Loan principal paid

(12,427)

(11,981)

(34,320)

(29,064)

Interest paid

(2,275)

(1,944)

(8,057)

(8,441)

Finance lease payments

(1,277)

(2,195)

(5,266)

(6,232)

Net cash used in financing activities

(2,469)

(2,159)

(21,374)

(21,428)

 

 

 

 

 

Effect of foreign exchange rate changes on cash and cash equivalents

(532)

(1,336)

1,011

(1,972)

 

 

 

 

 

(Decrease) increase in cash and cash equivalents

(30,400)

6,541

(3,443)

12,236

 

 

 

 

 

Cash and cash equivalents - Beginning of period

72,090

37,104

45,133

31,409

 

 

 

 

 

Cash and cash equivalents - End of period

41,690

43,645

41,690

43,645

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PDAC 2019

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