Copper Mountain Q3 2016 Financial Results

Web Site: www.CuMtn.com
TSX: CUM

VANCOUVER, Nov. 7, 2016 /CNW/ - Copper Mountain Mining Corporation (TSX: CUM) (the "Company" or "Copper Mountain") announces third quarter revenues of $72.2 million after pricing adjustments and treatment charges from the sale of 29.5 million pounds of copper equivalent (including 23.5 million pounds of copper, 8,600 ounces of gold, and 75,700 ounces of silver).  Total cash cost for the quarter ended September 30, 2016 was US$1.45 per pound of copper sold, net of precious metals credits and the Company ended the quarter with $25 million in cash.

Highlights (10% Basis)

  • Copper, gold and silver production for the third quarter of 2016 at Copper Mountain Mine was 22 million pounds of copper, 8,200 ounces of gold and 81,500 ounces of silver.
  • Revenue for the period was $72.2 million, from the sale of 23.5 million pounds of copper, 8,600 ounces of gold, and 75,700 ounces of silver, net of pricing adjustments.
  • Cash flow from operations for the quarter was $15.9 million.
  • Cash balance at the quarter end was $25 million, an increase of $20 million from June 30, 2016
  • Adjusted EBITDA was $16.6 million for the quarter.
  • Site cash costs for the 2016 third quarter were US$0.97 per pound of copper produced net of precious metal credits.
  • Total cash costs for the quarter were US$1.45 per pound of copper sold net of precious metal credits and after all off-site charges.
  • Realized prices on metal sales in the quarter were US$2.15 per pound of copper, US$1,337 per ounce of gold and US$19.54 per ounce of silver.

 

Jim O'Rourke, President and CEO of Copper Mountain, remarked "During the third quarter of 2016, Copper Mountain achieved new production records at the mine, with Mill throughput averaging 39,980 tpd during the quarter. The mine continues to focus on cost controls and production efficiencies.  Total cash costs for the quarter decreased 16% to US$1.45 per pound of copper sold net of precious metal credits from US1.72, Q3 2015 total cash costs. Open pit mining averaged 173,100 tonnes of material per day during the third quarter, bringing the year to date average to 187,200 tonnes of material per day, 7% ahead of plan."

Mr. O'Rourke continued, "The increased production has produced an increase in capital resources.  At the end of the quarter the Company had a total of $41 million of capital resources in the form of $25 million in cash and cash equivalents, $11 million in concentrate sales receivables, and $5.0 million of concentrate inventory waiting at the port to be shipped. We will continue to focus on cost control and operational improvements to further strengthen the Company's balance sheet." 

Summary Financial Results





Three months ended

September 30,

Nine months ended
September 30,

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

2016

$

2015

$

2016

$

2015

$






Revenues

72,195

63,702

193,473

191,969

Gross profit (loss)

4,188

(2,085)

10,069

5,818

Net income (loss) and comprehensive income (loss)

(7,937)

(28,121)

8,716

(57,052)

Adjusted earnings (loss)1

(1,332)

2,035

(12,568)

9,824

Adjusted earnings (loss) per share2

(0.01)

0.02

(0.10)

0.08

EBITDA3

10,006

(15,472)

57,090

(18,327)

Adjusted EBITDA

16,611

14,684

35,806

48,549

Cash flow from operating activities

15,862

4,774

24,419

18,131






Cash and cash equivalents



24,734

18,478






Equity



192,337

222,529






Copper produced (000's lbs)

22,000

20,400

62,100

58,200

Gold produced (oz)

8,200

6,300

23,780

21,900

Silver produced (oz)

81,500

64,900

220,800

216,300






Copper sold (000's lbs)

23,500

21,900

61,700

61,800

Gold sold (oz)

8,600

7,800

22,700

21,700

Silver sold (oz)

75,700

65,300

200,600

224,700

Site cash costs per pound of copper produced

(net of gold, silver credits) (US$)

0.97

1.21

1.06

1.26

Total cash costs per pound of copper sold

(net of gold, silver credits) (US$)

1.45

1.72

1.49

1.76

Realized Copper Price (US$)

2.15

2.39

2.13

2.57






______________________________

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

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

 

Copper Mountain Mine

During the quarter, the Company completed a total of three shipments of copper concentrate containing approximately 23.5 million pounds of copper, 8,600 ounces of gold, and 75,700 ounces of silver which generated $72.2 million in revenue net of treatment and refining charges and pricing adjustments.  Site cash costs were US$0.97 per pound of copper produced and total cash costs were US$1.45 per pound sold, net of precious metal credits for the three months ended September 30, 2016; compared to site cash costs of US$1.21 per pound of copper produced and total cash costs of US$1.72 per pound of copper sold, net of precious metal credits for the three months ended September 30, 2015. The increase in revenue is a result of stronger sales volumes as compared to the same period last year and a higher foreign exchange rate for the United States dollar.  Revenue was partially offset by a lower copper price realized during the quarter.

Mining activities continued from the Pit 2, Saddle and Virginia Pit areas during the quarter. A total of 15.9 million tonnes of material was mined, including 5.9 million tonnes of ore and 10 million tonnes of waste, resulting in a strip ratio of 1.68 to 1. High equipment mechanical availability was maintained during the quarter which helped contribute to the above average mining rates achieved during the quarter.  Mining of the Virginia Pit has now been completed.

During the quarter the mill processed a total of 3.7 million tonnes of ore grading 0.33% copper to produce 22 million pounds of copper, 8,200 ounces of gold, and 81,500 ounces of silver.  Mill recoveries were 83.0% for the quarter. 

Mill operating time during the quarter averaged 92.2%.  The mill achieved an average throughput rate of 39,980 tpd during the quarter.  The Company currently has 432 operating employees engaged at the mine site.

The following table sets out the major operating parameters for the mine for the three and nine months ended September 30, 2016. 




Mine Production Information

Three months ended

 September 30,

Nine months ended
September 30,

Copper Mountain Mine (100% Basis)

2016

$

2015

$

2016

$

2015

$






Mine:






Total tonnes mined (000's4)

15,920

14,708

51,303

43,607


Ore tonnes mined (000's)

5,949

5,381

17,348

16,734


Waste tonnes (000's)

9,972

9,327

33,955

26,874


Stripping ratio

1.68

1.73

1.96

1.61






Mill:






Tonnes milled (000's)

3,678

3,437

10,447

9,671


Feed Grade (Cu%)

0.33

0.33

0.33

0.33


Recovery (%)

82.9

82.4

82.4

81.8


Operating time (%)

92.2

93.2

91.6

92.4


Tonnes milled (TPD5)

39,980

37,345

38,100

35,402






Production:






Copper production (000's lbs)

22,000

20,400

62,100

58,200


Gold production (oz)

8,200

6,300

23,780

21,900


Silver production (oz)

81,500

64,900

220,800

216,300






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

0.97

1.21

1.06

1.26

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

1.45

1.72

1.49

1.76






_________________________________

4 Excludes ore re-handle from stockpile

5 Tonnes per day


 

Exploration – Mine Site

A 5,000 meter drill program was completed in the third quarter.  The drill program was designed to convert inferred resources into measured and indicated status on the western end of Pit 2.  The program was successful in converting blocks, increasing grade, lowering strip ratio, and extending mineralization further to the west.  Redesign of the open pit in the newly drilled area is scheduled for the fourth quarter and will result in an increase to the reserve base.

Exploration – Generative

A 570 line-km GEOTECH helicopter-borne Z-TEM survey was undertaken and completed over the Fenton project area as well as a number of other company owned properties in the region.  Results of the survey will help define target areas for further drill testing of the Fenton property, where previous exploration and preliminary drilling have identified large areas of intense alteration with significant enrichment of gold, silver, and zinc within a felsic flow-dome complex.  The survey will also help evaluate the exploration potential of our other early stage properties in the region, in conjunction with recently completed geochemical programs.  The targets on these properties range from large, bulk-tonnage gold-silver deposits to more compact, higher-grade polymetallic deposits. 

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

Summarized Balance Sheet

(thousands of CAD $)





September 30,

2016

$

December  31,

2015

 $

Assets



Cash

24,734

12,190

Accounts Receivable and prepaids

16,461

11,990

Inventory

45,498

44,882

Property, plant and equipment

479,562

519,750

Other Assets

73,315

58,494


639,570

647,306

Liabilities



Accounts payable and accrued liabilities

28,241

42,399

Current portion of long-term debt

47,833

33,115

Other

22,472

8,913

Electrcity deferral

12,021

-

Decommissioning and restoration provision

7,154

7,787

Interest rate swap liability

7,295

7,061

Long-term debt

322,217

371,610


447,233

470,885

Equity



Share capital

193,998

188,306

Contributed surplus

14,668

12,929

Retained earnings (deficit)

(75,754)

(81,379)

Non-controlling interest

59,425

56,565

Total equity

192,337

176,421


639,570

647,306

 



Summarized Income Statement

(thousands of CAD $)



Three months ended

 September 30,

Nine months ended
September 30,


2016

$

2015

$

2016

$

2015

$

Revenues

72,195

63,702

193,473

191,969

Cost of sales6

(68,007)

(65,787)

(183,404)

(186,150)

Gross profit

4,188

(2,085)

10,069

5,818






Other income and expenses





General and administration

(1,465)

(1,447)

(4,444)

(5,674)

Low grade stockpile write-down

(2,020)

-

(6,239)

-

Share based compensation

(180)

(236)

(626)

(819)

Operating income

523

(3,768)

(1,240)

(675)






Finance income

5

13

143

212

Finance expense

(3,240)

(2,763)

(9,224)

(7,790)

Unrealized gain (loss) on interest rate swap

649

(2,313)

(2,671)

(3,938)

Unrealized gain (loss) on foreign exchange

(4,974)

(21,963)

22,930

(49,012)

Loss of sale on fixed asset

(643)

-

(643)

-

(Loss) income before tax

(7,680)

(30,794)

(9,295)

(61,203)






Current resource tax expense

(257)

(121)

(579)

(588)

Deferred income and resource tax recovery

-

2,794

-

4,739

Net income (loss) and comprehensive income (loss) for
the period

(7,937)

(28,121)

8,716

(57,053)






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





Shareholders of the company

(6,098)

(21,059)

5,625

(43,385)

Non-controlling interest

(1,839)

(7,062)

3,091

(13,667)


(7,937)

(28,121)

8,716

(57,052)






Earnings (loss) per share

(0.05)

(0.18)

0.05

(0.37)






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


______________________________

6 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.


 

2016 Guidance:

The 2016 guidance remains unchanged for the balance of 2016.   

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.


A conference call and audio webcast will be held on Monday, November 7, 2016 at 7:30 am (PST) for management to discuss the second quarter 2016 results. This discussion will be followed by a question-and-answer period with investors.


Live Dial-in information

Toronto and international:     (647) 427-7450

North America (toll-free):      (888) 231-8191

To participate in the webcast live via your computer go to:

http://event.on24.com/r.htm?e=1253968&s=1&k=F303E13481194B0FF30E12A194626D94


Replay call information

Toronto and international:     416.849.0833,  passcode  72541674

North America (toll-free):      1.855.859.2056,  passcode  72541674


The conference call replay will be available from 10:30 am (PST) on November 7, 2016, until 11:59 pm PST on November 15, 2016

Participant audio webcast will also be available on the Company's website at 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.

SOURCE Copper Mountain Mining Corporation

For further information: Dan Gibbons, Investor Relations 604-682-2992 ext. 238 Email: Dan@cumtn.com; Rod Shier, Chief Financial Officer 604-682-2992 ext.222 Email: Rod@CuMtn.com; Website: www.CuMtn.com

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