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Copper Mountain Mining Announces Q2 2018 Financial Results

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Copper Mountain Mining Announces Q2 2018 Financial Results

PR Newswire

VANCOUVER, Aug. 7, 2018 /PRNewswire/ - Copper Mountain Mining Corporation (TSX:CMMC, ASX:C6C)) (the "Company" or "Copper Mountain") announces second 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

Second quarter 2018 highlights:

  • Production at the Copper Mountain Mine was 23.1 million pounds of copper equivalent in the second quarter of 2018, which includes 20.0 million pounds of copper, 6,500 ounces of gold and 68,400 ounces of silver.
  • Revenue for the second quarter of 2018 was $84.2 million, from the sale of 19.9 million pounds of copper, 6,300 ounces of gold, and 70,000 ounces of silver, net of pricing adjustments.
  • Cash flow from operations for the second quarter of 2018 was $40.1 million.
  • EBITDA of $22.6 million for the second quarter of 2018.
  • Site cash costs for the second quarter of 2018 were US$1.40 per pound of copper produced net of precious metal credits.
  • Total cash costs for the second quarter of 2018 were US$1.80 per pound of copper sold net of precious metal credits and all off-site charges.

Gil Clausen, President and CEO of Copper Mountain, remarked, "2018 continues to be a solid year for Copper Mountain. We had another strong quarter with revenue up 25% and cash flow up 55% year over year.  Production was up 16% and we are on track to achieve our annual guidance. We ended the quarter with a robust cash position and our focus remains on protecting our balance sheet while advancing our organic growth."

Mr. Clausen continued, "In the second quarter we commenced our phase 2 drilling program at New Ingerbelle, which has already returned very encouraging results.  We intend to complete an updated mineral resource at New Ingerbelle following the drilling campaign in the third quarter.  The third quarter will also have other value-enhancing catalysts including an updated reserve, resource and production plan at the Copper Mountain Mine and an update on our Eva Copper Project, located in Queensland, Australia."

Summary Financial Results





Three months ended

June 30,

Six months ended

June 30,

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

2018

$

2017

$

2018

$

2017

$






Revenue

84,204

67,146

162,150

141,242

Cash flow from operations before working capital changes

27,754

18,786

45,837

39,629

Cash flow from operations 

40,121

25,870

42,139

28,270

Gross profit                                        

20,672

8,321

26,984

19,532

Operating income

16,700

6,413

20,032

14,384

EBITDA1

22,552

25,186

34,037

48,005

Adjusted EBITDA

21,830

19,108

50,383

35,138

Adjusted earnings2

2,916

4,033

13,518

4,361

Adjusted earnings per share3

0.02

0.03

0.08

0.03






Cash and cash equivalents



72,090

37,104

Accounts receivable



15,849

17,001

Total cash and cash equivalents and accounts receivable



87,939

54,105

Equity



328,195

213,857






Total pounds of copper sold (000's lbs)

19,900

17,600

41,600

36,600

Total ounces of gold sold (oz)

6,300

6,300

12,800

12,300

Total ounces of silver sold (oz)

70,000

62,700

150,600

126,700






Average realized copper price (US$) 

3.12

2.58

3.15

2.62







_____________________

1

Earnings before interest, taxes, depreciation and amortization. Refer to the Non-GAAP Performance measures section in the Company's Q2 2018 MD&A.

2

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.

3

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

During the quarter, the Company completed a total of three shipments of copper concentrate containing approximately 19.9 million pounds of copper, 6,300 ounces of gold, and 70,000 ounces of silver which generated over $84 million in revenue net of treatment and refining charges and pricing adjustments, a 25% increase over Q2 2017.  Site cash costs were US$1.40 per pound of copper produced and total cash costs were US$1.80 per pound sold, net of precious metal credits for the three months ended June 30, 2018.

Mining activities for the second quarter of 2018 were mainly focused in the Pit #2, Saddle and the Oriole areas. During the quarter a total of 19.5 million tonnes of material was mined, including 4.0 million tonnes of ore and 15.5 million tonnes of waste for a strip ratio of 3.8:1.  During the quarter mining rates of 215,000 tonnes per day moved were achieved.

During the quarter the mill processed a total of 3.4 million tonnes of ore grading 0.34% copper to produce 20.0 million pounds of copper, which is 16% higher than the second quarter of 2017.  Gold and silver production in the second quarter was 6,500 ounces and 68,400 ounces, respectively. Mill head grade for the second quarter averaged 0.34% copper, above 2018 guidance of 0.31% copper. Copper recoveries were also above plan at 81%. Mill operating time during the quarter averaged 89% and the mill achieved an average throughput rate of 37,000 tonnes per calendar day during the quarter and 41,500 tonnes per operating day. The concentrator was down approximately five days due to the replacement of two mill transformers and a SAG mill liner change.

Exploration expenditures for the quarter were $899,335, which includes both exploration in Australia and British Columbia.  

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




Mine Production Information

Three months ended

 June 30,

Six months ended

June 30,

Copper Mountain Mine (100% Basis)

2018

2017

2018

2017






Mine:






Total tonnes mined (000's4)

19,519

18,207

36,103

36,169


Ore tonnes mined (000's)

4,030

6,293

10,548

11,991


Waste tonnes (000's)

15,490

11,914

25,555

24,178


Stripping ratio

3.84

1.89

2.42

2.03






Mill:






Tonnes milled (000's)

3,368

3,246

6,859

6,608


Feed Grade (Cu%)

0.34

0.31

0.33

0.31


Recovery (%)

81

78

80

78


Operating time (%)

89

82

91

87


Tonnes milled (TPD5)

37,000

35,700

37,900

36,500






Production:






Copper production (000's lbs)

20,000

17,200

39,900

35,300


Gold production (oz)

6,500

5,900

12,600

11,800


Silver production (oz)

68,400

63,200

146,300

127,500







Site cash costs per pound of copper produced6 (US$)

1.40

1.31

1.41

1.35

Total cash costs per pound of copper sold7 (US$)

1.80

1.74

1.83

1.80

______________________

4

Excludes ore re-handle from stockpile

5

Tonnes per day

6

Net of precious metals credits

7

Net of precious metals credits

Guidance
Production in the first half of 2018 was on track as planned.   Production in the third quarter is forecasted to be lower than the second quarter as a result of planned lower grades being mined while fourth quarter production is forecasted to be the strongest quarter in 2018. The Company's 2018 annual production guidance remains unchanged at 80 million pounds of copper (+/- 5%).  

Q2 2018 Financial and Operating Results Conference Call and Webcast
The Company will hold a conference call on Tuesday, August 7, 2018 at 7:30 am (Pacific Standard Time) for management to discuss the Q2 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 go to:
https://event.on24.com/wcc/r/1791161/D0B739B616FCF077D8F8CCDB33DAE1AA

Replay call information
Toronto and international: 416-849-0833 Passcode: 3669918
North America (toll-free): 1-855-859-2056 Passcode: 3669918

The conference call replay will be available from 10:30 am (PST) on August 7th, until 20:59 pm PST on August 14th, 2018.  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 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 379,000 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

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.

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






June 30, 2018

$

December 31, 2017

$




Assets






Current assets



Cash and cash equivalents

72,090

45,133

Accounts receivable and prepaid expenses

15,849

29,314

Inventory

56,757

68,135





144,696

142,582




Deferred acquisition costs

-

1,121

Reclamation bonds

8,356

8,228

Deferred tax assets

9,248

10,956

Property, plant and equipment

454,232

414,041

Low grade stockpile

103,619

91,021





720,151

667,949

Liabilities






Current liabilities



Accounts payable and accrued liabilities

30,946

42,122

Amounts payable to related parties

56,483

43,633

Current portion of long-term debt

48,620

48,649

Current tax liability

368

1,285


136,417

135,689




Provisions

6,397

6,521

Interest rate swap liability

827

2,081

Long-term debt

248,315

258,373


391,956

402,664




Equity

Attributable to shareholders of the Company:






Share capital

262,582

195,670

Contributed surplus

16,554

15,724

Accumulated other comprehensive loss

(535)

-

Accumulated deficit

(28,755)

(25,693)


249,846

185,701

Non-controlling interest

78,349

79,584

Total equity

328,195

265,285





720,151

667,949

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 earnings per share) 






Three months ended June 30,

    Six months ended  June 30,


2018

$

2017

$

2018

$

2017

$






Revenue

84,204

67,146

162,150

141,242

Cost of sales

(63,532)

(58,825)

(135,166)

(121,710)

Gross profit

20,672

8,321

26,984

19,532






Other income and expenses






General and administration

(3,591)

(1,658)

(6,065)

(4,340)


Exploration and evaluation

-

-

-

(35)


Share based compensation

(381)

(250)

(887)

(773)

Operating income

16,700

6,413

20,032

14,384






Finance income

206

211

342

356

Finance expense

(3,847)

(3,298)

(7,361)

(6,734)

Unrealized gain (loss) on interest rate swap

229

(416)

1,002

(774)

Foreign exchange (loss) gain

(6,385)

7,297

(14,461)

10,467






Income (loss) before tax

6,903

10,207

(446)

17,699






Current resource tax expense

(322)

(96)

(667)

(471)

Deferred income and resource tax expense

(2,943)

-

(1,715)

-






Net income (loss)

3,638

10,111

(2,828)

17,228






Other comprehensive loss





Foreign currency translation adjustment

(535)

-

(535)

-

Total comprehensive income (loss)

3,103

10,111

(3,363)

17,228











Net income (loss) attributable to:






Shareholders of the Company

2,189

7,223

(3,062)

11,946


Non-controlling interest

1,449

2,888

234

5,282


3,638

10,111

(2,828)

17,228

Earnings (loss) per share:






Basic

0.01

0.05

(0.02)

0.09


Diluted

0.01

0.05

(0.02)

0.09






Weighted average shares outstanding, basic (thousands)

177,440

133,087

156,116

132,953

Weighted average shares outstanding, diluted (thousands)

181,756

135,284

160,560

136,752






Shares outstanding at end of the period (thousands)

188,104

133,087

188,104

133,087

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,


2018

$

2017

$

2018

$

2017

$

Cash flows from operating activities





Net income (loss) for the year

3,638

10,111

(2,828)

17,228






Adjustments for:






Gain on disposal of fixed assets

-

-

-

(21)


Depreciation

12,008

11,893

27,464

23,928


Unrealized foreign exchange loss (gain)

5,118

(7,197)

12,526

(9,787)


Unrealized (gain) loss on interest rate swap

(229)

416

(1,002)

774


Deferred income and resource tax expense

2,991

-

1,708

-


Finance expense

3,847

3,297

7,361

6,734


Share based compensation

381

266

608

773


27,754

18,786

45,837

39,629


Net changes in working capital items

12,367

7,084

(3,698)

(10,909)

Net cash from operating activities

40,121

25,870

42,139

28,720






Cash flows from investing activities





Cash acquired in acquisition of Altona

29,115

-

29,115

-

Transaction costs

(763)

-

(2,237)

-

Share issue costs

(364)

-

(364)

-

Deferred stripping activities

(12,463)

-

(12,463)

(1,485)

Purchase of property, plant and equipment

(10,532)

(1,055)

(11,871)

(1,692)

Refund of exploration bond

-

-

-

5

Proceeds on disposal of fixed assets

-

-

-

52

Net cash from (used in) investing activities

4,993

(1,055)

2,180

(3,120)






Cash flows from financing activities





Proceeds on exercise of options and warrants

143

-

199

304

Advances from non-controlling interest

-

-

14,029

8,044

Payments made to non-controlling interest

(1,469)

-

(1,469)

-

Loan principal paid

(9,515)

(10,699)

(21,893)

(17,083)

Interest paid

(3,818)

(4,270)

(5,782)

(6,497)

Finance lease payments

(1,532)

(2,428)

(3,989)

(4,037)

Net cash used in financing activities

(16,191)

(17,397)

(18,905)

(19,269)






Effect of foreign exchange rate changes on cash and cash equivalents

599

(441)

1,543

(636)






Increase in cash and cash equivalents

29,522

6,977

26,957

5,695






Cash and cash equivalents - Beginning of period

42,568

30,127

45,133

31,409






Cash and cash equivalents - End of period

72,090

37,104

72,090

37,104

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SOURCE Copper Mountain Mining Corporation

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