Market Overview

Copper Mountain Announces Positive Q3 2015 Results

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Web Site: www.CuMtn.com

TSX:CUM



This release should be read with the unaudited financial statements and management's discussion and analysis available at www.cumtn.com and filed on www.sedar.com. Our financial results are prepared in accordance with IFRS and expressed in Canadian dollars, unless otherwise noted. Sales and production volumes for the Company's 75%-owned Copper Mountain mine are presented on a 100% basis unless otherwise indicated.

VANCOUVER, Nov. 9, 2015 /CNW/ - Copper Mountain Mining Corporation (TSX: CUM) (the "Company" or "Copper Mountain") announces third quarter revenues of $63.7 million after pricing adjustments and treatment charges from the sale of 21.9 million pounds of copper, 7,800 ounces of gold, and 65,300 ounces of silver. Total cash cost for the quarter ended September 30, 2015 was US$1.72 per pound of copper sold, net of precious metals credits.



Highlights (100 Basis)



  • Copper, gold and silver production for the third quarter of 2015 at Copper Mountain Mine was 20.4 million pounds of copper, 6,300 ounces of gold and 64,900 ounces of silver, or 58.2 million pounds of copper, 21,900 ounces of gold and 216,300 ounces of silver for the nine months ended September 30, 2015.
  • Revenues for the third quarter of 2015 were $63.7 million from the sale of 21.9 million pounds of copper, 7,800 ounces of gold, and 65,300 ounces of silver, net of pricing adjustments, bringing nine month revenues to $192 million from the sale of 61.8 million pounds of copper, 21,700 ounces of gold, and 224,700 ounces of silver, net of pricing adjustments.
  • Adjusted EBITDA was $14.7 million for the quarter; and $48.5 million for the nine months ended September 30, 2015.
  • Adjusted earnings were $2.0 million for the quarter; and $9.8 million for the nine months ended September 30, 2015.
  • Cash flow from operations was $4.7 million for the quarter; and $18.1 million for the nine months ended September 30, 2015.
  • Cash on hand at the end of the quarter was $18.5 million. 
  • Mine production continued at a mining rate of 160,000 tpd moved during the quarter.
  • SAG mill achieved an all-time monthly throughput record of 39,100 tpd during the month of July and averaged 37,400 tpd during the quarter.
  • Site cash costs for the quarter were US$1.21 per pound of copper produced net of precious metal credits, a reduction of 11% over Q2 site cash costs.
  • Total cash costs for the quarter were in-line with expectations at US$1.72 per pound of copper sold net of precious metal credits and after all off-site charges, a reduction of 5% over Q2 total cash costs.
  • Realized prices on metal sales for Q3 2015 were US$2.39 per pound of copper, US$1,118 per ounce of gold and US$14.70 per ounce of silver.

Jim O'Rourke, President and CEO of Copper Mountain, remarked "We are very pleased to see another consecutive quarter of mill throughput improvements that have been made possible by the addition of secondary crushing.  During the quarter the mill achieved a record quarterly average throughput of 37,400 tpd, 7% above our design capacity of 35,000 tpd. The 39,100 tpd average mill throughput achieved in July provides management encouragement for further improvements. We continue to focus on maximizing production while minimizing all costs.  Recent modifications have provided further gains and we are confident these gains are sustainable."

Mr. O'Rourke continued, "Copper Mountain Mining generated positive free cash flow during the third quarter.  In keeping with this trend, no major capital expenditures are planned for balance of 2015 and production improvements are expected to continue through to the end of the year. Mine plans are continuously being reviewed and optimized to best address current market conditions."







Summary Financial Results



















Three months ended

September 30,

Nine months ended

September 30,

(CDN$, except for cash cost data in US$)

2015

$

2014

$

2015

$

2014

$











Revenues

63,701,608

82,546,359

191,968,622

211,762,279

Gross profit (loss)

(2,085,460)

18,826,834

5,818,290

30,315,546

Operating income (loss)

(3,767,978)

16,715,400

(675,320)

22,513,131

Adjusted earnings 1

2,034,651

18,178,961

9,823,532

23,109,580

Adjusted earnings per share2

0.02

0.15

0.08

0.20

EBITDA

(15,472,385)

12,253,673

(18,327,092)

32,335,360

Adjusted EBITDA

14,683,665

34,406,602

48,549,098

61,730,848

Cash Flow from operating activities before working capital items

4,773,700

17,792,717

18,131,891

29,787,238











Cash and cash equivalents





18,477,393

17,831,158

Working capital





6,606,786

20,802,619

Equity





222,529,151

295,884,130











Copper produced (lbs)

20,400,000

21,682,000

58,200,000

60,647,000

Gold produced (oz)

6,300

6,100

21,900

16,600

Silver produced (oz)

64,900

124,100

216,300

342,600











Copper sold (lbs)

21,900,000

25,300,000

61,800,000

63,100,000

Gold sold (oz)

7,800

7,800

21,700

20,600

Silver sold (oz)

65,300

133,800

224,700

327,400

Site cash costs per pound of copper produced (net of gold, silver credits) (US$)

1.21

1.19

1.26

1.48

Total cash costs per pound of copper sold (net of gold, silver credits) (US$)

1.72

1.73

1.76

2.00











Realized Copper Price (US$)

2.39

3.17

2.57

3.15

During the quarter, the company completed four shipments of concentrate containing approximately 21.9 million pounds of copper, 7,800 ounces of gold, and 65,300 ounces of silver to Japan for smelting and recorded revenues, net of smelter charges and pricing adjustments, of $63.7 million.  The total cash cost of copper sold for the quarter ended September 30, 2015 was reduced to US$1.72 per pound of copper net of gold and silver by-product credits as a result of ongoing cost cutting measures taken at the mine site.

During the quarter the Company continued with mining ore mainly from the Pit #2 area where a majority of ore will be mined from for the balance of 2015.  At the same time the Company continued with the Phase 3 pushback on the west side of Pit #3.  During the quarter the Company received approval from the BC Government to incorporate the Virginia and Oriole deposits into the mine plan.  Mining from the Virginia area has commenced with overburden removal, while the Oriole deposit will be incorporated into the mine plan once the Virginia pit is completed.  Management is now planning on first ore delivery to the concentrator from Virginia in December as a result of the delay in receiving the mine permit amendment that was submitted to government last October.  Both of these deposits will provide small volumes of higher grade ore that will be blended into the mill feed.  Copper head grade for the year will average about 0.33% copper or approximately 0.41% copper equivalent.  During the quarter a total of 14.7 million tonnes of material was mined, including 5.4 million tonnes of ore and 9.3 million tonnes of waste for a strip ratio of 1.73:1.  The mining rate at the end of the period was in the range of 160,000 tonnes per day moved.

Mill throughput from the concentrator continued to improve month-over-month, averaging 37,400 tpd during the third quarter, which is an improvement over Q2-2015 and about 7% above design capacity of 35,000 tpd.  This improvement included an average throughput of 39,100 tpd for the month of July, thus providing management with the confidence that the budget rate of 37,500 tpd is very achievable on a consistent basis.  The increase in throughput is directly attributable to the installation of the permanent secondary crusher and mine site management's ability to optimize the crushing and grinding circuit. 

During the quarter the mill processed a total of 3.4 million tonnes of ore at an average grade of 0.33% copper to produce 20.4 million pounds of copper, 6,300 ounces of gold, and 64,900 ounces of silver.  Sag mill availability was 93.4% during the third quarter and copper recovery averaged 82.4% which was in line with the Company's plan. Throughout the quarter management remained focused on cost reduction and capital discipline.

The following table sets out the major operating parameters for the mine for the three and nine months ended September 30, 2015. 



Mine Production Information

Three months

ended 

Nine months

ended



September 30

September 30

Copper Mountain Mine (100% Basis)

2015

2014

2015

2014











Mine:











Total tonnes mined (000's3)

14,708

15,282

43,607

44,940



Ore tonnes mined (000's)

5,381

4,514

16,734

13,232



Waste tonnes (000's)

9,327

10,769

26,874

31,708



Stripping ratio

1.73

2.39

1.61

2.40











Mill:











Tonnes milled (000's)

3,437

2,817

9,671

8,223



Feed Grade (Cu%)

0.33

0.42

0.33

0.40



Recovery (%)

82.36

82.91

81.79

83.45



Operating time (%)

93.18

90.48

92.39

90.42



Tonnes milled (TPD4)

37,345

30,691

35,402

30,241











Production:











Copper production (000's lbs)

20,400

21,700

58,200

60,600



Gold production (oz)

6,300

6,100

21,900

16,600



Silver production (oz)

64,900

124,100

216,300

342,600











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

1.21

$1.19

1.26

$1.48











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

1.72

$1.73

1.76

$2.00

Listed below is a summarized balance sheet and income statement as well as details for our conference call schedule:



Summarized Balance Sheet















September 30,

2015

$

December  31,

2014

 $

Assets





Cash

18,477,393

21,600,228

Accounts Receivable and prepaids

11,898,021

6,886,175

Inventory

38,796,663

44,420,673

Property, plant and equipment

529,682,361

559,118,221

Other Assets

80,599,487

60,637,691



679,453,925

692,662,988

Liabilities





Current liabilities

62,565,291

54,876,398

Decommissioning and restoration provision

7,825,440

7,797,154

Interest rate swap liability

9,801,938

7,180,836

Long-term debt

371,116,640

332,902,291

Deferred tax liability

5,615,465

9,766,301



456,924,774

412,522,980

Equity





Share capital

188,306,341

188,306,341

Contributed surplus

12,704,912

11,818,044

Retained earnings (deficit)

(47,758,403)

(2,928,184)

Non-controlling interest

69,276,301

82,943,807

Total equity

222,529,151

280,140,008



679,453,925

692,662,988



Summarized Income Statement















Three months

Nine months



ended

ended



September 30,

September 30,

(CDN$)

2015

$

2014

$

2015

$

2014

$

Revenues

63,701,608

82,546,359

191,968,622

211,762,279

Cost of sales5

(65,787,068)

(63,719,525)

(186,150,332)

(181,446,733)

Gross profit (loss)

(2,085,460)

18,826,834

5,818,290

30,315,546











Other income and expenses









General and administration

(1,446,508)

(1,672,495)

(5,674,402)

(4,586,806)

Share based compensation

(236,010)

(438,939)

(819,208)

(3,215,609)

Operating income (loss)

(3,767,978)

16,715,400

(675,320)

22,513,131











Pricing adjustments on concentrate and metal sales

5,880,121

7,055,406

13,926,135

11,138,725

Finance income

12,824

33,921

211,961

190,908

Finance expense

(2,762,906)

(1,942,041)

(7,790,080)

(6,613,033)

Current resource tax expense

(120,604)

(446,352)

(587,816)

(836,408)

Deferred income and resource tax recovery (expense)

2,793,194

(3,237,373)

4,738,652

(3,283,743)

Adjusted earnings6

2,034,651

18,178,961

9,823,532

23,109,580











Pricing adjustments on concentrate and metal sales

(5,880,121)

(7,055,406)

(13,926,135)

(11,138,725)

Unrealized gain (loss) on interest rate swap

(2,313,173)

219,522

(3,938,002)

(2,285,418)

Unrealized gain (loss) on foreign exchange

(21,962,756)

(15,317,045)

(49,012,053)

(15,971,345)

Net loss and comprehensive loss for the period

(28,121,399)

(3,973,968)

(57,052,658)

(6,285,908)











Net income (loss) and comprehensive income (loss) attributable to:









Shareholders of the company

(21,059,135)

(2,820,267)

(43,385,152)

(5,516,252)

Non-controlling interest

(7,062,264)

(1,153,701)

(13,667,506)

(769,656)



(28,121,399)

(3,973,968)

(57,052,658)

(6,285,908)











Earnings (loss) per share

(0.18)

(0.02)

(0.37)

(0.05)

Adjusted earnings per share

0.02

0.15

0.08

0.20

The full set of financial statements and accompanying MD&A are posted on Sedar.com.

Exploration Update:

Exploration activities at the mine site during this period of low metal prices were minimized as part of the mine cost reduction plan. A relatively small, 4-hole, 1500m, diamond-drill program was undertaken to test for mineralization in an area immediately to the south of the Virginia deposit.  The drill-hole locations were planned to test for the potential extension of economic mineralization. No economic mineralization was encountered in the area adjacent to the southeast end of the Virginia Pit. One hole was extended to test the area below the Virginia deposit for high-grade underground minable mineralization.   Assay results are not yet complete but visual inspections suggests that no  economic mineralization extends to depth and at this point no further drilling is planned for this area.

A second drill program has recently been initiated to test the continuity of mineralization through the upper part of the saddle zone (the area between Pits 2 and 3).  The results from this drill program will provide the infill drill data for mine design. 

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 Company has a strategic alliance with Mitsubishi Materials Corporation who owns the remaining 25%. The Copper Mountain mine commenced production in the latter half of 2011, and has continued to improve its operations since start-up. The 18,000 acre site has a large resource of copper that remains open laterally and at depth. The mine has significant exploration potential that will need to be explored over the next few years to fully appreciate the property's full development potential.  Additional information is available on the Company's web page at www.CuMtn.com.



Conference Call Details:

A conference call and webcast will be held on Monday November 9th, 2015 at 7:30 am (Pacific Daylight Time) for management to discuss the results. This discussion will be followed by a question-and-answer period with investors.



Live Dial-in information

Toronto and international: 416-764-8688

North America (toll-free):    888-390-0546

To participate in the webcast live via your computer go to: http://event.on24.com/r.htm?e=1063363&s=1&k=C5D3C008E58CC5F87EE721C80003C639



Replay call information

Toronto and international: 416-764-8677, passcode 181686#

North America (toll-free):    888-390-0541,  passcode 181686#

The conference call replay will be available from 10:30  am (PST) on November 9, 2015, until 11:59 pm PST on November 23,  2015

Participant audio webcast will also be available on the company's website  http://www.cumtn.com



On behalf of the Board of

COPPER MOUNTAIN MINING CORPORATION

"Rod Shier"

Rodney A. Shier, 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.

_______________________

1 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.

2 Calculated based on weighted average number of shares outstanding under the basic method based on adjusted earnings.

3 Excludes ore re-handle from stockpile

4 Tonnes per day

5 Cost 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 costs.

6 Adjusted 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.

SOURCE Copper Mountain Mining Corporation

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