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May 12, 2008
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Imperial Reports 2008 First Quarter Financial Results
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VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 12, 2008) - Imperial Metals Corporation (TSX:III) reports comparative financial results for the three months ended March 31, 2008 and March 31, 2007, summarized below and discussed in detail in the Management's Discussion and Analysis of the First Quarter Report.
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Three Months
Ended March 31
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(unaudited) in thousands except per share amounts 2008 2007
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Revenues $ 56,597 $ 54,246
Operating Income $ 23,078 $ 13,733
Net Income (Loss) $ 1,665 $ (1,922)
Net Income (Loss) Per Share $ 0.05 $ (0.06)
Adjusted Net Income (1) $ 12,046 $ 10,708
Adjusted Net Income Per Share (1) $ 0.37 $ 0.35
Cash Flow (1) $ 18,529 $ 22,185
Cash Flow Per Share (1) $ 0.57 $ 0.72
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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 $56.6 million in the March 2008 quarter compared to $54.2 million in the 2007 quarter. At quarter end concentrate inventory was at higher than normal levels, with ocean shipments being made from both mines early in April. 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 March 31, 2008 increased to $23.1 million from $13.7 million in the March 2007 quarter. Due to the large increase in the copper price during the first quarter of 2008, the Company realized an additional $12.4 million in revenue on final settlement of shipments from 2007, boosting operating income.
Net income was $1.7 million in the March 2008 quarter compared to a net loss of $1.9 million in the 2007 quarter. Adjusted net income in the quarter was $12.0 million or $0.37 per share, versus $10.7 million or $0.35 per share in the March 2007 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. 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.
Rising copper prices led to losses on derivative instruments of $21.8 million in the quarter compared to a loss of $15.9 million in the 2007 quarter, the majority of which was unrealized.
Cash flow decreased to $18.5 million in the March 2008 quarter compared to $22.2 million in 2007. The $3.7 million decrease is the result of higher realized losses on derivative instruments.
Capital expenditures were $8.9 million, about the same as the $9.0 million spent in the comparative 2007 quarter.
Expenditures in the March 2008 quarter were financed from cash flow from the Mount Polley and Huckleberry mines and proceeds from a $30.0 million short term credit facility. At March 31, 2008 the Company had $24.2 million in cash, cash equivalents and short term investments.
Mount Polley Mine
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Three Months
Mine Production Ended March 31
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(unaudited) 2008 2007
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Ore milled (tonnes) 1,482,532 1,434,514
Ore milled per calendar day (tonnes) 16,292 15,939
Grade % - Copper 0.504 0.478
Grade g/t - Gold 0.305 0.285
Recovery % - Copper 83.19 83.54
Recovery % - Gold 73.55 73.71
Copper produced (lbs) 13,703,424 12,640,575
Gold produced (oz) 10,679 9,685
Silver produced (oz) 111,666 87,752
----------------------------------------------------------------------Mount Polley metal production increased to 13.7 million pounds during the first quarter compared to 12.6 million pounds in the first quarter of 2007. The work on unloading the highwall of the Wight pit was completed in late February. Thereafter, copper production improved with about 6 million pounds produced monthly during March and April 2008. Mill throughputs also improved averaging 20,363 tonnes per day in March and 19,835 tonnes per day in April.
Exploration drilling resumed during the quarter with one drill rig working on the Boundary and Springer areas.
Imperial's 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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Three Months
Mine Production Ended March 31
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(100% - Imperial owns 50%) (unaudited) 2008 2007
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Ore milled (tonnes) 1,440,513 1,543,945
Ore milled per calendar day (tonnes) 15,830 17,155
Grade (%) - Copper 0.295 0.556
Grade (%) - Molybdenum 0.007 0.016
Recovery (%) - Copper 87.9 87.9
Recovery (%) - Molybdenum 23.4 26.9
Copper produced (lbs) 8,201,814 16,628,371
Gold produced (oz) 739 1,666
Silver produced (oz) 53,173 56,980
Molybdenum produced (lbs) 54,233 149,361
----------------------------------------------------------------------Copper and molybdenum production at Huckleberry's mining operation has moved from the East zone to the Main Zone Extension. The ore in this area is of lower grade and harder to mill. However, the grade is improving with the March average copper grade being 0.306% copper.
Exploration work planned at Huckleberry includes completing assessment of the data obtained from the area south of the Main Zone Extension, drilling in the Upper Ridge zone at Whiting Creek and further geochemical and other work on three targets to follow up on 2007 exploration work.
Imperial holds 50% interest in Huckleberry Mines Ltd., the owner and operator of the Huckleberry open pit copper/molybdenum mine located 123 kilometres southwest of Houston, British Columbia.
Sterling
At Sterling, the 3,352 foot decline was completed to provide access to the 144 zone. Two exploration drifts off the main decline below the 144 zone and drill stations that will provide for detailed drilling of the 144 zone from underground are also complete.
Underground diamond drilling to delineate the 144 zone began in January 2008 and to date 50 holes totaling 13,158 feet have been completed. Diamond drilling has been completed both to the east and west of a latite dyke that previously defined the eastern boundary of the 144 zone. Results have been released for the first 20 drill holes and include hole SU08-16 which returned 0.30 ounces per ton (10.28 g/t) gold over 15 feet, with the entire hole returning 0.13 ounces per ton (4.46 g/t) gold over 79.5 feet. Hole SU08-15, drilled from the same location with a steeper dip, returned 0.15 ounces per ton (5.28 g/t) gold over 38.7 feet. The entire 264 foot length of SU08-15 was in breccia grading 0.07 ounces per ton (2.40 g/t) gold. Hole SU08-12, drilled from the same location but to the south of the decline, returned 0.17 ounces per ton (5.83 g/t) gold over 11.2 feet, within a longer interval returning 0.10 ounces per ton (3.43 g/t) gold over 56.2 feet.
The wholly owned Sterling gold property is located 185 kilometres northwest of Las Vegas, Nevada.
Red Chris
Work was commenced in the first quarter on an exploration trail to the Red Chris deposit, which included construction of a bridge spanning Coyote Creek. The 15 kilometre exploration trail will be completed this summer, allowing drilling equipment to be driven to the site for completion of additional geotechnical and exploration drilling. Road access will result in lower cost drill programs and safer working conditions, as helicopter support will not be necessary.
The appeal of the Federal Court decision ruling the Canadian Environmental Assessment Act of Red Chris to be procedurely incorrect is scheduled to be heard on May 15, 2008.
The Red Chris property is located in northwest British Columbia, 18 kilometres southeast of the village of Iskut and 80 kilometres south of Dease Lake on the north facing Todagin Plateau.
Outlook
Imperial will focus exploration activity in 2008 on four key projects: Red Chris, Mount Polley, Sterling and Huckleberry.
Detailed financial information is provided in Management's Discussion and Analysis in the First Quarter Report available on the Company's website and on SEDAR (www.sedar.com).
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