| November 13, 2009 |
| Imperial Reports 2009 Third Quarter Financial Results |
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 13, 2009) - Imperial Metals Corporation (TSX:III) reports comparative financial results for the three and nine months ended September 30, 2009 and September 30, 2008 are summarized below and discussed in detail in the Management's Discussion and Analysis.
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Three Months Ended Nine Months Ended
Sept 30 Sept 30
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(unaudited) in thousands
except per share amounts 2009 2008 2009 2008
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Revenues $ 53,788 $ 53,642 $ 137,583 $ 235,150
Operating Income $ 17,609 $ 9,885 $ 21,058 $ 95,220
Net Income (Loss) $ 4,544 $ 23,452 $ (9,356) $ 69,353
Net Income (Loss) Per Share $ 0.14 $ 0.72 $ (0.29) $ 2.13
Adjusted Net Income (1) $ 8,812 $ 5,361 $ 23,668 $ 59,978
Adjusted Net Income Per
Share (1) $ 0.31 $ 0.17 $ 0.74 $ 1.84
Cash Flow (1) $ 15,856 $ 7,891 $ 36,027 $ 92,544
Cash Flow Per Share (1) $ 0.49 $ 0.24 $ 1.12 $ 2.84
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(1) Adjusted Net Income, Adjusted Net Income Per Share, Cash Flow and Cash
Flow Per Share are measures used by the Company to evaluate its
performance; however, they are not terms recognized under generally
accepted accounting principles. Adjusted Net Income is defined as net
income adjusted for certain items of a non-operational nature that
pertain to future periods as described in further detail in the
Management's Discussion and Analysis under the heading Adjusted Net
Income. Cash Flow is defined as cash flow from operations before net
change in working capital balances. Adjusted Net Income and Cash Flow
Per Share are the same measures divided by the weighted average number
of common shares outstanding during the period.
The Company believes these measures are useful to investors because
they are included in the measures that are used by management in
assessing the financial performance of the Company.
Revenues were $53.8 million in the September 2009 quarter compared to $53.6 million in the 2008 quarter.
Concentrate inventory levels were high at Mount Polley with approximately 10,000 tonnes at port and ready for shipment at quarter end. Mount Polley made a concentrate shipment in early October. Variations in quarterly revenue attributed to the timing of concentrate shipments can be expected in the normal course of business.
Operating income for the three months ended September 2009 increased to $17.6 million from $9.9 million in the September 2008 quarter.
Net income was $4.5 million in the September 2009 quarter compared to net income of $23.4 million in the 2008 quarter. Adjusted net income in the quarter was $9.8 million or $0.31 per share, versus $5.4 million or $0.17 per share in the September 2008 quarter. Adjusted net income is calculated by removing the unrealized gains and losses, net of related income taxes, resulting from mark to market revaluation of copper hedging and removing the unrealized share based compensation expense, net of taxes and certain other items, net of taxes. Adjusted net income is not a term recognized under generally accepted accounting principles however it does show the current period financial results excluding the effect of items not settling in the current period.
The Company realized gains on derivative instruments of $1.4 million in the quarter compared to a realized loss of $1.4 million in the 2008 quarter. The increase in copper prices since June 30, 2009 resulted in unrealized losses of $12.1 million in the September quarter compared to unrealized gains of $30.4 million in the September 2008 quarter when copper prices declined. In total, the Company recorded losses on derivative instruments of $10.6 million in 2009 versus gains of $29.0 million in 2008.
Cash flow increased to $15.9 million in the September 2009 quarter compared to $7.9 million in the 2008 quarter. The $8.0 million increase is primarily the result of improved operating margins at Huckleberry.
Capital expenditures decreased to $7.3 million from $17.2 million in the comparative 2008 quarter. Expenditures in the September 2009 quarter were financed from cash flow from the Mount Polley and Huckleberry mines. In addition, in the September 2009 quarter the Company purchased $1.1 million of mobile mining equipment financed by long term debt. At September 30, 2009 the Company had $29.6 million in cash, cash equivalents and short term investments.
During the September 2009 quarter the Company purchased for cancellation 88,300 common shares at a cost of $0.5 million under the Normal Course Issuer Bid.
Mount Polley Mine
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Production Nine Months Ended September 30
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(unaudited) 2009 2008
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Ore milled (tonnes) 5,217,744 5,138,147
Ore milled per calendar day (tonnes) 19,113 18,752
Grade % - Copper 0.389 0.561
Grade g/t - Gold 0.319 0.304
Recovery % - Copper 58.66 74.08
Recovery % - Gold 67.63 69.09
Copper produced (lbs) 26,262,166 47,080,160
Gold produced (oz) 36,196 34,694
Silver produced (oz) 173,534 406,420
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Mill throughput has averaged 19,113 tonnes per day for the year, up over last year. Copper production for the third quarter was 9.1 million pounds, down from the 2009 second quarter total of 9.7 million pounds. Gold production was 13,529 troy ounces, up from the 2009 second quarter total of 12,728 troy ounces. Recoveries from the high oxide Springer ore continue to be low, but are increasing with copper recovery going from 59.24% in the second quarter to 61.71% in the current quarter, and gold recovery going from 68.53% in the second quarter to 70.45% in the current quarter. The majority of ore delivered to the mill was from the Springer pit, along with smaller amounts from the Southeast and Wight pits. The last of the Wight pit ore was milled in the September quarter.
Development of the Pond zone pit is underway. The first ore is expected to be delivered to the mill in the first quarter of 2010.
Exploration expenditures at Mount Polley were $1.4 million in the September 2009 quarter compared to $0.8 million in the September 2008 quarter. Drilling is being conducted in the Boundary zone, Pond zone, and to the northwest of the Springer pit. A permit has been received to drive an access ramp from the Wight pit to explore the Boundary zone with underground drilling. The excavation of this ramp is expected to begin in the second quarter of 2010. The Wight pit is currently being backfilled to provide access to the north wall of the pit for this ramp to be collared.
The wholly owned Mount Polley open pit copper/gold mine is located 56 kilometres northeast of Williams Lake, British Columbia.
Huckleberry Mine
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Production Nine Months Ended September 30
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(100% - Imperial owns 50%) (unaudited) 2009 2008
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Ore milled (tonnes) 4,498,800 4,457,955
Ore milled per calendar day (tonnes) 16,479 16,270
Grade (%) - Copper 0.374 0.313
Grade (%) - Molybdenum 0.006 0.006
Recovery (%) - Copper 90.60 88.50
Recovery (%) - Molybdenum 2.55 22.00
Copper produced (lbs) 33,607,000 27,246,753
Gold produced (oz) 2,583 2,305
Silver produced (oz) 197,541 182,696
Molybdenum produced (lbs) (i) 14,467 137,407
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(i) molybdenum circuit was only run for a few days during period due to low
grades and prices
Copper production increased during the first nine months compared to the same 2008 period. Throughput, grade and recovery all continued to improve as higher grade ore was delivered from the Main Zone Extension pit. Molybdenum continued to only be produced on days when higher molybdenum grade ore is delivered to the mill.
A drill program consisted of fourteen Diamond drill holes totaling about 4,000 meters is underway to further test the area between the Main Zone Extension and Main Zone pits to determine if it will be possible to further extend the life of the mine.
Imperial owns 50% of the Huckleberry open pit copper/molybdenum mine located 123 kilometres southwest of Houston, British Columbia.
Red Chris
In the 2009 deep drilling program, twelve 1,500 metre Diamond drill holes were planned to test the deep mineralization discovered in the East zone in 2007. To date, five of the planned holes have been completed and another three are expected to be completed by year end. All the holes assayed have returned long intervals of copper/gold mineralization, adding to the evolving model of deep mineralization in the East zone.
Recently released results from drill hole RC09-350 (NR:Nov 9/09), the eastern most drill hole in the current program, intercepted 152.5 metres grading 4.12% copper and 8/83 g/t gold starting at a depth of 540 metres. This is the highest grade intercept of that scale in the properties history.
During this past summer, in addition to the Diamond drilling, the following exploration programs were under taken: 31 line kilometres of deep penetrating induced polarization (IP) and magnetotelluric (MT) survey over the deposit and surrounding area, 166 short Diamond drill holes on a 400 metre grid to explore the till covered geology in the vicinity of the deposit, and an airborne magnetic survey covering the entire property. Staff geologists and consultants are working on development of a geologic model using all the information collected that will help explain the various characteristics of the deposit at depth, including the zones of high grade gold and high bornite content and focus further exploration at Red Chris.
The Red Chris copper/gold property in northwest British Columbia is 80 kilometres south of Dease Lake and 18 kilometres southeast of the village of Iskut. Access to the property from pavement at Highway 37 is six kilometres along the Ealue Lake Road, and 17 kilometres along the newly constructed Red Chris access road.
Sterling
The 2009 underground Diamond drilling program was completed in the third quarter. The 144 zone has been extended to the north, west and south, and high grade gold mineralization has been discovered in the latite dike that divides the 144 zone from its east extension. A total of 35 holes totaling 9,965 feet were drilled.
The results of this drill program will be incorporated into the geologic model of the 144 zone, followed by an update of the gold resource estimate. A study will then follow to investigate whether the resource is sufficient to reopen the Sterling gold mine. Our own crews are currently extending the underground workings to facilitate additional exploration and the start of mining.
The Sterling gold property is located 185 kilometres northwest of Las Vegas, Nevada.
Selkirk Metals Corp.
A business combination with Selkirk Metals Corp. was completed in early November, bringing a portfolio of BC early stage and advanced exploration properties to the combined company. We look forward to working with the Selkirk team to further explore and develop these assets. Imperial welcomes Mr. Ted Muraro to the Board of Directors. Mr. Muraro was a director of Selkirk. He has a long and distinguished career of over forty years in the mineral exploration industry.
Outlook
With favourable metal prices, tempered somewhat by a strengthening Canadian Dollar, Imperial has been able to generate cash flow to fund an aggressive exploration program which includes drilling at Red Chris, Mount Polley, Sterling and Huckleberry.
During the September quarter, the Government of Canada announced its commitment to invest, along with the Province of British Columbia, in the construction of the Northwest Transmission Line. The power line would run along Highway 37 and provide clean, affordable, grid power to northwestern British Columbia. More specific to Imperial, the construction of the Northwest Transmission Line will provide a key component required for the development of Red Chris.
Exploration work this year has been successful, especially with the exciting results from the deep drilling at Red Chris's East zone. We look forward to results from a continued and expanded exploration and development program at Red Chris in 2010.
Detailed financial information is provided in the Management's Discussion and Analysis in the Third Quarter Report available on the Company's website and on SEDAR (www.sedar.com). | |