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VANCOUVER,
BRITISH COLUMBIA--(Marketwire - May 12, 2010) - Imperial Metals
Corporation (TSX:III) reports comparative financial results for the
three months ended March 31, 2010 and March 31, 2009 are summarized
below and discussed in detail in the Management's Discussion and
Analysis.
--------------------------------------------------------------------------- Three Months Ended Mar 31 --------------------------------------------------------------------------- (unaudited) in thousands except per share amounts 2010 2009 --------------------------------------------------------------------------- Revenues $ 69,371 $ 34,898 Operating Income $ 1,939 $ 2,593 Net Loss $ (2,489) $ (7,338) Net Loss Per Share $ (0.07) $ (0.23) Adjusted Net Income (1) $ 6,852 $ 11,099 Adjusted Net Income Per Share (1) $ 0.20 $ 0.35 Cash Flow (1) $ 10,059 $ 4,687 Cash Flow Per Share (1) $ 0.29 $ 0.15 ---------------------------------------------------------------------------
Revenues
were $69.4 million in the March 2010 quarter compared to $34.9 million
in the 2009 quarter. There were two shipments of concentrate from the
Mount Polley operations in the 2010 period compared to one shipment in
the 2009 period. 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 2010 decreased to
$1.9 million from $2.6 million in the March 2009 quarter.
The Company recorded a net loss of $2.5 million in the March 2010
quarter compared to net loss of $7.3 million in the 2009 quarter. Adjusted
net income in the quarter was $6.9 million or $0.20 per share, versus
$11.1 million or $0.35 per share in the March 2009 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 and foreign exchange 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.
Losses on derivative instruments were $1.1 million in the March 2010
quarter compared to losses of $12.2 million in the March 2009 quarter
including unrealized net gains on copper and currency derivatives of
$0.5 million in the March quarter compared to unrealized losses of
$26.3 million in the March 2009 quarter when copper prices increased
significantly. The Company realized losses of $1.5 million on copper
and currency derivatives in the March 2010 quarter compared to gains of
$14.1 million in the 2009 quarter when copper prices were recovering
from the lows of 2008.
(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.
Cash flow increased to $10.0 million in the
March 2010 quarter compared to $4.7 million in the 2009 quarter. The
$5.3 million increase is primarily the result of improved operating
margins at Mount Polley and Huckleberry mines. Capital expenditures
increased to $8.8 million from $4.5 million in the comparative 2009
quarter. Expenditures in the March 2010 quarter were financed from cash
flow from the Mount Polley and Huckleberry mines. In addition, in the
March 2010 quarter the Company purchased $0.8 million of mobile mining
equipment financed by long term debt. At March 31, 2010 the Company had
$25.6 million in cash, cash equivalents and short term investments.
During the March 2010 quarter the Company did not purchase any common
shares for cancellation.
Mount Polley Mine
--------------------------------------------------------------------------- Production Three Months Ended March 31 --------------------------------------------------------------------------- (unaudited) 2010 2009 --------------------------------------------------------------------------- Ore milled (tonnes) 1,824,269 1,572,015 Ore milled per calendar day (tonnes) 20,270 17,467 Grade % - Copper 0.318 0.392 Grade g/t - Gold 0.306 0.312 Recovery % - Copper 62.20 54.73 Recovery % - Gold 71.20 63.08 Copper produced (lbs) 7,945,511 7,430,959 Gold produced (oz) 12,769 9,938 Silver produced (oz) 32,524 46,290 ---------------------------------------------------------------------------
Mill throughput averaged 20,270 tonnes per
day for the quarter, a record for a first quarter at Mount Polley. As a
result of higher throughput and better recoveries, both copper and gold
production were up, even though head grades were lower. Copper
production for the March 2010 quarter was 7.9 million pounds, an
increase of 0.5 million pounds from the March 2009 quarter total of 7.4
million pounds. Gold production also benefitted from increased
throughput totaling 12,769 troy ounces, up from 9,938 troy ounces in
the same period in 2009.
Exploration drilling resumed in late January 2010. Exploration this
year will include driving a 500 metre underground ramp from the Wight
pit to the Boundary zone, intersecting it approximately 250 metres
below surface. Work on collaring the portal for the ramp began in
April.
Exploration expenditures at Mount Polley were $1.1 million in the March
2010 quarter compared to $0.9 million in the March 2009 quarter. Two
drills are on site and focused on expanding the Junction zone
mineralization.
The wholly owned Mount Polley open pit copper/gold mine is located 56
kilometres northeast of Williams Lake, British Columbia.
Huckleberry Mine
--------------------------------------------------------------------------- Production Three Months Ended March 31 --------------------------------------------------------------------------- (100% - Imperial owns 50%) (unaudited) 2010 2009 --------------------------------------------------------------------------- Ore milled (tonnes) 1,368,600 1,443,300 Ore milled per calendar day (tonnes) 15,206 16,037 Grade (%) - Copper 0.376 0.351 Grade (%) - Molybdenum 0.008 0.006 Recovery (%) - Copper 91.0 90.6 Copper produced (lbs) 10,326,000 10,117,000 Gold produced (oz) 716 842 Silver produced (oz) 47,819 60,697 Molybdenum produced (lbs) 21,793 3,843 ---------------------------------------------------------------------------
Copper
production was up slightly to 10.3 million pounds compared to the March
2009 quarter. Mine planning is underway to investigate the feasibility
of an expansion of the Main zone.
Imperial owns 50% of the Huckleberry open pit copper/molybdenum mine
located 123 kilometres southwest of Houston, British Columbia.
Red Chris
In January the Supreme Court of Canada decision confirmed that Red
Chris has completed the necessary Environmental Review process and may
proceed toward development of the project.
Exploration and development expenditures at Red Chris were $2.8 million
in the March 2010 quarter compared to $0.3 million in the March 2009
quarter.
The 2010 exploration program will focus on the delineation of the
mineralization beneath the Main and East zone pits, up to 1,000 metres
below surface. Mines Act permitting through the Northwest Mine
Development Review Committee is underway. Phase one of the geotechnical
and condemnation drilling in the tailings impoundment area was
initiated in early February, and completed in early April. Four drill
rigs are currently on site, and plans to mobilize another two rigs are
underway.
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
Red Chris access trail.
Sterling
The results of the 2009 drilling and ongoing underground development
will be incorporated into the geologic model of the 144 zone at which
time the gold resource estimate will be updated, followed by a study to
investigate whether the resource is sufficient to reopen the Sterling
gold mine. The site has been permitted and bonding has been put in
place to allow for a restart of mine operations.
The Sterling gold property is located 185 kilometres northwest of Las
Vegas, Nevada.
Catface
A diamond drilling program is planned for 2010 to further define and
extend the Cliff zone, which hosts all the resource outlined to date, and
to test the Irishman Creek zone and the area between these two zones.
The Catface copper/molybdenum property is located on Catface Peninsula,
on the west coast of Vancouver Island, west of Port Alberni, British
Columbia.
Outlook
Drilling at Red Chris continues to increase the large copper/gold
resource, and metallurgical testwork is indicating the deep
mineralization will have better recoveries and will produce cleaner,
higher grade concentrates compared to the near surface mineralization
that was tested as part of the 2005 Feasibility Study. The copper/gold
resource at Red Chris now dwarfs the resources at Huckleberry and Mount
Polley.
Operations at Mount Polley were excellent achieving a record mill
throughput for a first quarter and improving metal recoveries. With
cash flow from operations funding the expanded drill program at Red
Chris we look forward to continued expansion of the Red Chris resource.
Detailed financial information is provided in the 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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