Chronicle Journal: Finance

Copper Mountain Mining Announces Q1 2020 Financial Results

VANCOUVER, April 27, 2020 /PRNewswire/ - Copper Mountain Mining Corporation (TSX: CMMC | ASX:C6C) (the "Company" or "Copper Mountain") announces first quarter 2020 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.

HIGHLIGHTS

  • Implemented revised mine plan on March 10th in reaction to the global COVID-19 pandemic with the objective of maintaining solid positive margins and cash flow.
  • During the quarter the Company and Mitsubishi Materials Corporation reached an agreement to extend the maturity of the funding advances received to date and shown as a related party current liability to a longer-term related party debt due June 30, 2023. This has the effect of improving the Company's working capital by the same $135.7 million.
  • Cash and cash equivalents at the end of the first quarter was $36.2 million.
  • Cash flow from operations for the first quarter of 2020 was $16.3 million.
  • Loss per share of $0.17 for the first quarter of 2020 was primarily due to the inclusion of a non-cash unrealized foreign exchange loss equating to $0.14 on a per share basis related to the Company's debt that is denominated in US dollars. On an adjusted basis, earnings per share for Q1 2020 was $0.01.
  • Revenue for the first quarter of 2020 was $49.6 million, from the sale of 17.9 million pounds of copper, 6,364 ounces of gold and 78,572 ounces of silver, net of pricing adjustments.
  • Production for the first quarter of 2020 was 21.8 million pounds of copper equivalent (comprised of 17.5 million pounds of copper, 6,139 ounces of gold and 80,016 ounces of silver).
  • For the first quarter of 2020 C1 cash costs per pound of copper produced was US$2.01, all in sustaining cost (AISC) per pound of copper was US$2.14.

"The most important highlight is that we have had no confirmed or presumptive cases of the COVID-19 virus at any of our operations or offices and the Copper Mountain mine is operating normally under COVID-19 protocols," commented Gil Clausen, Copper Mountain's President and CEO. "Our top priority is maintaining the health and safety of our employees and local communities."

Mr. Clausen added, "We rapidly responded to the potential market impacts of COVID-19 in early March with our announcement of a revised mine plan in light of copper price uncertainty. With these first quarter results we remain comfortable with our production guidance of 70 to 75 million pounds of copper for 2020. While this mine plan has now been fully implemented and the Company is efficaciously reducing expenditures, unit costs remained higher in the early part of the quarter as we were still operating under the previous mine plan. However, further cost reductions are expected through lower diesel fuel costs and the benefits of the BC Hydro power cost deferral program, which allows for the deferral of a major portion of its power costs. With the reduced Canadian dollar to U.S. dollar exchange rate, we are reiterating our all-in cost guidance of US$2.20 to $2.35 per pound for the year announced on March 10th."

SUMMARY OF OPERATING RESULTS

Mine Production Information



Copper Mountain Mine (100% Basis)

Q1 2020

Q1 2019

Mine



Total tonnes mined (000s)

14,919

17,454

Ore tonnes mined (000s)

3,678

2,814

Waste tonnes (000s)

11,241

14,640

Stripping ratio

3.06

5.20




Mill



Tonnes milled (000s)

3,538

3,550

Feed Grade (Cu%)

0.30

0.29

Recovery (%)

75.3

81.6

Operating time (%)

92.3

92.9

Tonnes milled (TPD)

38,879

39,444




Production



Copper (000s lb)

17,472

18,610

Gold (oz)

6,139

7,127

Silver (oz)

80,016

62,280




Sales



Copper (000s lb)

17,862

19,348

Gold (oz)

6,364

7,026

Silver (oz)

78,572

64,992




C1 cash cost per pound of copper produced (US$)(1)

2.01

1.77

AISC per pound of copper produced (US$)(1)

2.14

1.87

AIC per pound of copper produced (US$)(1)

2.47

2.44

Average realized copper price (US$/lb)

2.58

2.85

(1)

Non-GAAP performance measure. See MD&A for details.

 

As announced on March 10th, the Company implemented a revised mine plan in reaction to the global COVID-19 pandemic and the resulting lower copper price environment. The focus of the mine plan is to maintain positive margins and cash flow, which resulted in the deferral of capital related to the installation of Ball Mill #3, resequencing short term production to lower cost mining phases in order to reduce operating costs, and rescheduling the higher grade ore in pit #3 scheduled for mining in 2020 to 2021 in order to better match higher metal prices in the future. Notably, the revised mine plan and the associated cost benefits started to come into effect in March.

In Q1 2020, the Copper Mountain Mine produced 17.5 million pounds of copper, 6,139 ounces of gold, and 80,016 ounces of silver compared to 18.6 million pounds of copper, 7,127 ounces of gold, and 62,280 ounces of silver in Q1 2019. Production was lower in Q1 2020 compared to Q1 2019 as a result of processing a greater percentage of ore in Q1 2020 from ore domain areas that are made up of finer grained ore that results in lower recovery. Copper recovery was 75.3% in Q1 2020 as compared to 81.6% in Q1 2019. The Company continues to mine in the finer grained ore domains until the end of Q2 2020, following which recovery is expected to improve for the remainder of 2020. During the quarter, the mine processed a total of 3.5 million tonnes of ore at an average feed grade of 0.30% Cu. Copper grades for Q1 2020 were 2% higher than Q1 2019 with grade improvements expected to improve in the second half of 2020.

C1 cash cost per pound of copper produced for Q1 2020 was US$2.01, as compared to US $1.77 in Q1 2019. The increase in cost per pound in Q1 2020 was primarily the result of decreased production in Q1 2020. In addition, the Company capitalized $6.2 million more of stripping costs in Q1 2019 compared to Q1 2020. All-in sustaining costs per pound of copper produced (AISC) for Q1 2020 of US$2.14 was higher than Q1 2019 primarily as a result of producing fewer pounds of copper in Q1 2020, and marginally higher sustaining capital, lease and applicable administration expenditures in Q1 2020 than incurred in Q1 2019.

Total all-in costs per pound of copper produced (AIC), net of credits, for Q1 2020 was US$2.47 as compared to US$2.44 for Q1 2019. Adding together sustaining capital, lease and applicable administration expenditures, deferred stripping and low-grade stockpile mining costs the total all-in costs for Q1 2020 was $58.1 million as compared to $60.5 million in Q1 2019 and the slight decrease over the prior comparable period is a result of a higher gold price which produced $2 million more in precious metal credit during Q1 2020 as compared to Q1 2019. The consistency in all-in costs over the past quarters demonstrates the consistency of the operation at the Copper Mountain Mine quarter-after-quarter, with cost variances on a unit of copper basis primarily impacted by copper grade and recovery fluctuations. Subsequent to the implementation of the revised mine plan in March and as cost reduction initiatives continue to come into effect, the Company expects to see all-in costs to decrease throughout the year.

SUMMARY OF FINANCIAL RESULTS

Results and Highlights (100%)

Three months ended March 31,


2020

2019

(In thousands of CDN$, except for per share amounts)

$

$

Financial



Revenue

49,564

86,870

Gross (loss) profit

(14,949)

23,276

Gross (loss) profit before depreciation(1)

(8,841)

29,615

Net (loss) income

(43,458)

17,826

(Loss) income per share – basic

(0.17)

0.07

Adjusted earnings(1)

1,447

6,036

Adjusted earnings per share – basic

0.01

0.03

EBITDA(1)

(39,715)

31,864

Adjusted EBITDA

5,190

20,074

Cash flow from operations

16,340

23,689

Cash and cash equivalents – end of period

36,223

51,947

(1)

Non-GAAP performance measure. See MD&A for details.

 

In Q1 2020, revenue was $49.6 million, net of pricing adjustments and treatment charges, and is based on the sale of 17.9 million pounds of copper, 6,364 ounces of gold, and 78,572 ounces of silver and on an average realized copper price of US$2.58 per pound. Lower revenue is primarily a result of the $19.1 million negative mark to market and final adjustment from provisional pricing on concentrate sales in Q1 2020, as compared to a $9.9 million positive mark to market and final adjustment for Q1 2019, a differential of approximately $29 million, in addition to a 9% lower realized copper price and 8% lower copper sales and 9% lower gold sales in the period.

Cost of sales in Q1 2020 was $64.5 million as compared to $63.6 million for Q1 2019.  Despite a $4.6 million reduction in site costs, there was a marginal increase year over year, as Q1 2019 cost of sales was net of $13.6 million of deferred stripping costs, while Q1 2020 cost of sales was net of only $7.4 million of deferred stripping costs.

The Company reported a gross loss of $14.9 million and a net loss of $43.5 million for Q1 2020, compared to $23.3 million and net income of $17.8 million, respectively, in Q1 2019. The variance in the net loss for Q1 2020, as compared to the net earnings for Q1 2019, was a result of several items including:

  • Revenue in Q1 2020 included a negative mark to market adjustment on concentrate sales compared to a positive mark to market adjustment in Q1 2019, as discussed above;
  • Revenue in Q1 2020 was further affected by an 8% decrease in copper sales and a 9% decrease in gold sales when compared to Q1 2019; and,
  • The inclusion of a non-cash unrealized foreign exchange loss of $26.9 million as compared to a non-cash unrealized foreign exchange gain of $6.1 million in Q1 2019, a differential of approximately $33 million, which was primarily related to the Company's debt that is denominated in US dollars.

On an adjusted basis, the Company recorded net earnings of $1.4 million for Q1 2020 compared to $6.0 million in Q1 2019.

PROJECT DEVELOPMENT UPDATE

Copper Mountain Mill Expansion

The Company has continued with the first stage of the expansion in the first quarter, which includes the installation of Direct Flotation Reactors (DFRs). The installation of the DFRs will increase the efficiency and the capacity of the current cleaner circuit, which is expected to increase copper concentrate grade from about 25% to 28%, resulting in lower concentrate transportation, smelting and refining costs. The installation of the DFRs is a low capital, high return project, and the remaining capital required to complete the installation of the DFRs is approximately US$2.3 million. Civil, structural, mechanical and piping engineering has been completed. The feed system splitter box with structural steel support has been installed and construction of the remaining components of the project are progressing on schedule and as planned. The DFR project is expected to be completed by early Q3 2020.

With the developments of COVID-19 and the associated drop in the copper price, the Company deferred all major capital spend and therefore halted work on the second stage of the Copper Mountain Ball Mill expansion plans, which consisted of installing the third ball mill, in order to preserve cash. The Ball Mill expansion is designed to increase throughput to 45,000 tonnes per day from 40,000 tonnes per day and improve copper recovery as a result of being able to achieve a finer grind of ore. Work has been reduced to completing commitments on the long lead items already ordered at the end of last year, which will allow the project to restart in an efficient manner once copper markets recover.

Eva Copper Project

During the quarter, the Company continued with work on updating the Eva Copper 2020 Bankable Feasibility Study which is planned for release shortly. This will include a new mine plan that incorporates the new Blackard deposit as well as flowsheet optimizations, production, and cost improvements.

OUTLOOK

Copper production in 2020 is expected to be between 70 to 75 million pounds of copper based on the Company's revised plan for 2020 in response to the COVID-19 pandemic. Copper production is expected to be more heavily weighted to the second half of the year, as a result of higher grades and as the mine begins to mine higher recovery domain areas. The Company is focused on unit cost reduction in the current commodity price environment to protect its margins and affirms that all-in costs are expected to be between US$2.20 to US$2.35 per pound. The Company remains on track to achieve its most recent production and all-in cost guidance, as announced on March 10th, despite the impact of the global COVID-19 pandemic.

Q1 2020 FINANCIAL AND OPERATING RESULTS CONFERENCE CALL AND WEBCAST

Copper Mountain will host a conference call on Monday, April 27, 2020 at 7:30 am (Pacific Time) for senior management to discuss the first quarter 2020 results.

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 go to:
https://produceredition.webcasts.com/starthere.jsp?ei=1300630&tp_key=a184b3c730 

Replay Call Information
Toronto and international: 416-849-0833, Passcode: 5958764
North America (toll-free): 1-855-859-2056, Passcode: 5958764

The conference call replay will be available until 8:59 pm (Pacific Time) on May 4, 2020. 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 approximately 120 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)



March 31,
2020
$

December 31,
2019
$




Assets






Current assets



Cash and cash equivalents

36,223

32,126

Accounts receivable and prepaid expenses

5,820

27,947

Inventory

33,507

35,299





75,550

95,372




Reclamation bonds

3,740

3,740

Deferred tax assets

33,679

28,088

Property, plant and equipment

518,479

501,663

Low grade stockpile

65,521

64,978





696,969

693,841

Liabilities






Current liabilities



Accounts payable and accrued liabilities

45,195

41,366

Amounts payable to related parties

3,939

104,698

Current portion of long-term debt

66,526

60,260

Current tax liability

1,053

1,186


116,713

207,510




Provisions

19,500

18,104

Interest rate swap liability

135,701

-

Long-term debt

190,905

188,123

Deferred tax liability

2,196

2,203


465,015

415,940




Equity



Attributable to shareholders of the Company:






Share capital

266,663

266,663

Contributed surplus

19,240

18,623

Accumulated other comprehensive loss

(7,264)

(4,158)

Accumulated deficit

(102,850)

(70,516)


175,789

210,612

Non-controlling interest

56,156

67,289

Total equity

231,954

277,901





696,969

693,841

 

Copper Mountain Mining Corporation
Condensed Consolidated Interim Statements of Income (Loss) and Comprehensive Income (Loss)
For the Three Months Ended March 31
(Unaudited in thousands of Canadian dollars, except for number of and earnings per share)


2020

2019


$

$




Revenue

49,564

86,870

Cost of sales

(64,513)

(63,594)

Gross profit

(14,949)

23,276




Other income and expenses



General and administration

(2,446)

(2,761)

Share based compensation

(628)

(661)

Operating income

(18,023)

19,854




Finance income

74

103

Finance expense

(3,299)

(3,799)

Unrealized (loss) gain on interest rate swap

(942)

(394)

Foreign exchange gain (loss)

(26,858)

6,065




Income (loss) before tax

(49,048)

21,829




Current tax expense

(8)

(513)

Deferred income and resource tax (expense) recovery

5,598

(3,490)

Net income (loss)

(43,458)

17,826




Other comprehensive (loss) income



Foreign currency translation adjustment

(3,106)

(803)




Comprehensive income (loss)

(46,564)

17,023




Net income (loss) attributable to:



Shareholders of the Company

(32,334)

12,500

Non-controlling interest

(11,124)

5,326


(43,458)

17,826

Income (loss) per share:



Basic

$(0.17)

$0.07

Diluted

$(0.17)

$0.07




Weighted average shares outstanding, basic

191,331,053

188,170,359




Weighted average shares outstanding, diluted

192,277,666

190,445,120




Shares outstanding at end of the period

191,331,053

134,374,708

 

Copper Mountain Mining Corporation
Condensed Consolidated Interim Statements of Cash Flows
For the Three Months Ended March 31,
(Unaudited in thousands of Canadian dollars)


2020

2019


$

$

Cash flows from operating activities



Net income (loss) for the period

(43,458)

17,826




Adjustments for:



Depreciation

6,132

6,339

Unrealized foreign exchange (gain) loss

19,724

(3,682)

Unrealized loss (gain) on interest rate swap

942

394

Deferred income and resource tax expense (recovery)

(5,598)

3,490

Finance expense

3,299

3,799

Share based compensation

628

661


(18,331)

28,827

Net changes in non-cash working capital items

34,671

(5,138)

Net cash provided by operating activities

16,340

23,689




Cash flows from investing activities



Deferred stripping activities

(7,437)

(13,600)

Development of property, plant and equipment

(6,135)

(2,335)

Refund of exploration bond

-

75

Net cash used in investing activities

(13,572)

(15,860)




Cash flows from financing activities



Common shares issued on exercise of options

-

7

Contributions from non-controlling interest

24,223

15,035

Payments to non-controlling interest

-

(329)

Loan principal repaid

(22,699)

(12,828)

Interest paid

(1,732)

(2,496)

Finance lease payments

(865)

(563)

Net cash used in financing activities

(1,073)

(1,174)




Effect of foreign exchange rate changes on cash and cash equivalents

2,402

(831)




Increase in cash and cash equivalents

4,097

5,824




Cash and cash equivalents - Beginning of period

32,126

46,123




Cash and cash equivalents - End of period

36,223

51,947





 

Cision View original content:http://www.prnewswire.com/news-releases/copper-mountain-mining-announces-q1-2020-financial-results-301047300.html

SOURCE Copper Mountain Mining Corporation

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.