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VANCOUVER,
BRITISH COLUMBIA--(Marketwire - May 11, 2009) - Imperial Metals
Corporation (TSX:III) reports comparative financial results for the
three months ended March 31, 2009 and March 31, 2008 are summarized
below and discussed in detail in the Management's Discussion and
Analysis.
--------------------------------------------------------------------------- Three Months Ended March 31 --------------------------------------------------------------------------- (unaudited) in thousands except per share amounts 2009 2008 --------------------------------------------------------------------------- Revenues $ 34,898 $ 56,597 Operating Income $ 2,593 $ 23,078 Net (Loss) Income $ (7,338) $ 1,665 Net (Loss) Income Per Share $ (0.23) $ 0.05 Adjusted Net Income (1) $ 11,099 $ 12,046 Adjusted Net Income Per Share (1) $ 0.35 $ 0.37 Cash Flow (1) $ 4,687 $ 18,529 Cash Flow Per Share (1) $ 0.15 $ 0.57 --------------------------------------------------------------------------- (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 $34.9 million in the March
2009 quarter compared to $56.6 million in the 2008 quarter.
Concentrate inventory levels were higher than normal at March 31, 2009
as timing of shipments resulted in a ship leaving port 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, 2009 decreased to
$2.6 million from $23.1 million in the March 2008 quarter.
Net loss was $7.3 million in the March 2009 quarter compared to net
income of $1.7 million in the 2008 quarter. Adjusted net income in the quarter
was $11.1 million or $0.35 per share, versus $12.0 million or $0.37 per
share in the March 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.
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.
Copper prices in the March 2009 quarter were below the put and forward
sale strike prices resulting in the Company realizing gains on
derivative instruments of $14.1 million in the quarter compared to a
loss of $4.2 million in the 2008 quarter. The increase in copper prices
since December 31, 2008 resulted in unrealized losses of $26.3 million
in the March quarter compared to unrealized losses of $17.6 million in
the March 2008 quarter.
Cash flow decreased to $4.7 million in the March 2009 quarter compared
to $18.5 million in the 2008 quarter. The $13.8 million decrease is
primarily the result of increased cash income taxes.
Capital expenditures decreased to $4.5 million from $8.9 million in the
comparative 2008 quarter. Expenditures in the March 2009 quarter were
financed from cash flow from the Mount Polley and Huckleberry mines. At
March 31, 2009 the Company had $21.7 million in cash, cash equivalents
and short term investments.
During the March 2009 quarter the Company made no purchases under the
Normal Course Issuer Bid.
Mount Polley Mine --------------------------------------------------------------------------- Three Months Production Ended March 31 --------------------------------------------------------------------------- (unaudited) 2009 2008 --------------------------------------------------------------------------- Ore milled (tonnes) 1,572,015 1,482,532 Ore milled per calendar day (tonnes) 17,467 16,292 Grade % - Copper 0.392 0.504 Grade g/t - Gold 0.312 0.305 Recovery % - Copper 54.73 83.19 Recovery % - Gold 63.08 73.55 Copper produced (lbs) 7,430,959 13,703,424 Gold produced (oz) 9,938 10,679 Silver produced (oz) 46,290 111,666 ---------------------------------------------------------------------------
Mill through-put and copper head grade
averaged 17,467 tonnes per day at 0.392% copper during the first
quarter. Although the tonnes of ore milled increased, copper production
was lower as lower grade and more oxidized ore was delivered to the
mill from the Springer pit, compared to the first quarter of 2008.
Copper recovery for the three months in 2009 is down about 28.5%
compared to the 2008 quarter, 54.7% versus 83.2%. With virtually all
mill feed coming from the highly oxidized Springer pit, the copper
oxide ratio for the first three months of 2009 has been 29.4%, up from
9.1% in the same period in 2008. The copper oxide ratio negatively
impacts copper recovery as copper oxide minerals have poor flotation
recoveries. As mining progresses to the lower benches in the Springer,
oxide ratios will drop and recovery will increase.
The recovery from the Wight pit of 140,000 tonnes, grading 1.32%
copper, 0.28 g/t gold and 11.7 g/t silver from a slash in the pit wall,
and 260,000 tonnes from mining of the ramp is expected to be completed
in the second quarter. As this ore is of higher grade and less
oxidized, higher copper production is expected in the second quarter.
A small pit in the Pond zone has been designed and plans are to mine
1.37 million tonnes, grading 0.476% copper, 0.27 g/t gold and 6.89 g/t
silver, in 2009. Good copper recovery is expected as this ore is not
oxidized.
Exploration expenditures at Mount Polley were $0.9 million in the March
2009 quarter compared to $0.2 million in the March 2008 quarter.
Exploration at Mount Polley is focused on locating high grade ore to
replace the Wight pit mill feed that has been available at Mount Polley
for the last three years. Drilling at the Boundary, Southeast and
Northeast zones returned significant intervals of high grade
copper/gold mineralization. The Pond zone is one of the high grade
discoveries expected to be in production by year end. Recent
exploration at the Boundary zone has yielded a number of higher grade
intercepts at depth. Drilling at the Boundary zone will be a high
priority for exploration.
Two holes were drilled in an area south of a fault which was believed
to cut-off the Springer zone mineralization. Results for one of the
holes have been received. Starting at 38.57 metres,
hole WX09-01 intersected 8.93 metres of 0.37% copper and 0.81
g/t gold, and at 115.0
metres down the hole it intersected 45.0 metres
grading 0.31% copper and 0.29 g/t gold. Follow up exploration on this
area will be planned.
Imperial owns 100% of the Mount Polley open pit copper/gold mine
located 56
kilometres north east of Williams Lake, British
Columbia.
Huckleberry Mine --------------------------------------------------------------------------- Three Months Production Ended March 31 --------------------------------------------------------------------------- (100% - Imperial owns 50%) (unaudited) 2009 2008 --------------------------------------------------------------------------- Ore milled (tonnes) 1,443,300 1,440,513 Ore milled per calendar day (tonnes) 16,037 15,830 Grade (%) - Copper 0.351 0.295 Grade (%) - Molybdenum 0.006 0.007 Recovery (%) - Copper 90.6 87.9 Recovery (%) - Molybdenum 2.1 23.4 Copper produced (lbs) 10,117,000 8,201,814 Gold produced (oz) 842 739 Silver produced (oz) 60,697 53,173 Molybdenum produced (lbs) 3,843 54,233 ---------------------------------------------------------------------------
Copper
production increased during the first quarter compared to the 2008 same
quarter. Through-put, grade and recovery all improved. Grade is
improving as mining proceeds deeper into the Main Zone Extension pit,
and plant operation adjustments have increased through-put.
An exploration program focusing on areas immediately adjacent to the
mine is planned and expected to begin in the second quarter.
Work continues on a new mine plan that could extend copper production
into 2012 however, under the current mine plan milling operations will
be suspended mid-2010. An expansion of the Main Zone Extension pit,
called the "Saddle Plan", is largely dependent on copper
price and a decision on the implementation of the Saddle Plan is
expected to be made in the third quarter of 2009.
Imperial owns 50% of the Huckleberry open pit copper/molybdenum mine
located 123
kilometres southwest of Houston, British
Columbia.
Red Chris
At the Red Chris property three holes of the 12 hole initial phase of
the follow-up drill program were completed in 2008. A total of 2,220 metres
were drilled in the East zone to follow up on 2007 drill hole 07-335
which returned 1,024.1
metres grading 1.01% copper, 1.26 g/t gold and
3.92 g/t silver.
Drilling to depth proved difficult and only hole RC08-343 was
successful in penetrating into the target area below previously known
mineralization. RC08-343 was collared approximately 165 metres to
the northwest of 07-335
in an area known from previous drilling to be
barren near surface. Drill hole RC08-343 intersected the mineralized
zone at 840.3
metres returning 362.2 metres
grading 0.40% copper, 0.53 g/t gold and 1.27 g/t silver, including a 97.5 metre
interval of 0.63% copper, 0.96 g/t gold and 1.89 g/t silver.
Drill holes RC08-341 and RC08-342 were collared about 90 metres to the
east of 07-335 and returned excellent grades over the entire length
drilled but were lost prior to reaching their target depth of 1,500 metres
due to drilling difficulty. The drill program designed to explore the
depth extent of the Red Chris, will recommence this summer.
The Red Chris copper/gold property is located 80 kilometres
south of Dease Lake in northwest British Columbia.
Sterling
In the quarter, the excavation of a 190 foot extension
of the north drift in the 144 zone was completed. This drift passed
through the north limb of the 144 zone, and rib sampling of the zone at
this point returned grades as high as 0.163 oz/t (5.57 g/t) gold. At
the north end of this drift, a drill station was excavated and a 5,000 foot
diamond drill program to extend the 144 zone to the north is underway.
An operations plan has been submitted and approved, and the required
bonding has been placed with the State of Nevada and the Bureau of Land
Management that would permit the restart of mining and heap leach
operations.
The wholly owned Sterling gold property is located 185 kilometres
northwest of Las Vegas, Nevada.
Outlook
Production in the first quarter was low at Mount Polley, but with two
sources of unoxidized ore expected to be mined during the remainder of
the year, we expect to meet our budget of 60 million pounds of equity
share copper this year.
With the copper price rebounding during the quarter, Imperial stepped
up exploration activities with a second drill mobilized at Mount
Polley, and underground development and drilling initiated at Sterling.
We look forward to resuming drilling at both Huckleberry and Red Chris
this summer.
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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