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VANCOUVER,
BRITISH COLUMBIA--(Marketwire - Aug. 13, 2010) - Imperial Metals
Corporation (TSX:III) reports comparative financial results for the
three and six months ended June 30, 2010 and June 30, 2009 as
summarized below and discussed in detail in the Management's Discussion
and Analysis.
---------------------------------------------------------------------------- Three Months Ended June 30 Six Months Ended June 30 ---------------------------------------------------------------------------- (unaudited) in thousands except per share amounts 2010 2009 2010 2009 ---------------------------------------------------------------------------- Revenues $ 53,528 $ 48,897 $ 122,899 $ 83,795 Operating Income $ 5,372 $ 856 $ 7,311 $ 3,449 Net Income (Loss) $ 12,956 $ (6,562) $ 10,467 $ (13,900) Net Income (Loss) Per Share $ 0.36 $ (0.20) $ 0.29 $ (0.43) Adjusted Net Income (1) $ 1,175 $ 2,575 $ 8,027 $ 13,856 Adjusted Net Income Per Share (1) $ 0.03 $ 0.09 $ 0.23 $ 0.43 Cash Flow (1) $ 7,971 $ 15,484 $ 18,030 $ 20,171 Cash Flow Per Share (1) $ 0.22 $ 0.48 $ 0.51 $ 0.62 ---------------------------------------------------------------------------- (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 quarters 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 quarter.
Revenues were $53.5 million in the June
2010 quarter compared to $48.9 million in the 2009 quarter. There were
two concentrate shipments from Mount Polley in both the 2010 and 2009
second quarters ending June 30. The copper price dropped during the
June 2010 quarter resulting in a negative revenue adjustment of $11.3
million, while increasing prices during the 2009 quarter resulted in a
positive adjustment of $6.1 million.
Operating income for the three months ended June 2010 increased to $5.4
million from $0.9 million in the June 2009 period due to a recovery of
share based compensation expense and lower foreign exchange losses.
The Company recorded net income of $13.0 million in the June 2010
quarter compared to net loss of $6.6 million in the 2009 quarter.
Derivative instrument gains in the current quarter compared to losses
in the prior year had a major impact on the net income. Adjusted net
income in the quarter was $1.2 million or $0.03 per share, versus $2.6
million or $0.09 per share in the June 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 quarter financial results excluding the effect
of items not settling in the current quarter.
Gains on derivative instruments were $11.1 million in the June 2010
quarter compared to losses of $9.2 million in the June 2009 quarter
including unrealized net gains on copper and currency derivatives of
$12.1 million in the June quarter compared to unrealized losses of
$13.9 million in the June 2009 quarter when copper prices increased
significantly. The Company realized losses of $1.0 million on copper
and currency derivatives in the June 2010 quarter compared to gains of
$4.7 million in the 2009 quarter when copper prices were recovering
from the lows of 2008.
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 decreased to $8.0 million in the June 2010 quarter compared
to $15.5 million in the 2009 quarter. The $7.5 million decrease is
primarily the result of decreased operating margins at the Huckleberry
mine, realized losses on derivative instruments in 2010 compared to
realized gains in 2009, and increased general and administration costs.
Capital expenditures increased to $12.0 million from $6.0 million in
the comparative 2009 quarter. Expenditures in the June 2010 quarter
were financed from cash flow from the Mount Polley and Huckleberry
mines. At June 30, 2010 the Company had $25.9 million in cash and cash
equivalents.
During the June 2010 quarter the Company did not purchase any common
shares for cancellation.
Mount Polley Mine
---------------------------------------------------------------------------- Production Six Months Ended June 30 ---------------------------------------------------------------------------- (unaudited) 2010 2009 ---------------------------------------------------------------------------- Ore milled (tonnes) 3,868,170 3,456,269 Ore milled per calendar day (tonnes) 21,371 19,095 Grade % - Copper 0.323 0.393 Grade g/t - Gold 0.300 0.309 Recovery % - Copper 63.4 57.19 Recovery % - Gold 67.5 66.04 Copper produced (lbs) 17,442,703 17,135,481 Gold produced (oz) 25,160 22,667 Silver produced (oz) 83,289 114,511 ----------------------------------------------------------------------------
Mill throughput averaged 22,460 tonnes per
day during the second quarter, which is a record quarterly average throughput
for the Mount Polley concentrator.
Copper production for the 2010 six month period increased slightly to
17.4 million pounds compared to 17.1 million pounds in the same period
in 2009. Gold production benefited from increased throughput totaling 25,160
troy ounces, an increase from 22,667 troy ounces in the first half of
2009.
In the second quarter, exploration at Mount Polley had two diamond
drills in operation. Work continued on an underground ramp to provide
access to more fully explore and to test mine higher grade
mineralization in the Boundary zone. Exploration expenditures at Mount
Polley were $1.5 million in the June 2010 quarter compared to $1.4
million in the June 2009 quarter.
The wholly owned Mount Polley open pit copper/gold mine is located 56
kilometres northeast of Williams Lake, British Columbia.
Huckleberry Mine
---------------------------------------------------------------------------- Production Six Months Ended June 30 ---------------------------------------------------------------------------- (100% - Imperial owns 50%) (unaudited) 2010 2009 ---------------------------------------------------------------------------- Ore milled (tonnes) 2,805,400 3,007,400 Ore milled per calendar day (tonnes) 15,500 16,616 Grade (%) - Copper 0.382 0.359 Grade (%) - Molybdenum 0.008 0.006 Recovery (%) - Copper 91.3 90.8 Copper produced (lbs) 21,564,000 21,622,000 Gold produced (oz) 1,536 1,667 Silver produced (oz) 96,269 127,785 Molybdenum produced (lbs) 58,958 10,227 ----------------------------------------------------------------------------
Copper
production for the 2010 six month period was down slightly to 21.5
million pounds compared to 21.6 million pounds in the 2009 six month
period.
A diamond drill program is underway to further test the Main zone
mineralization.
Imperial owns 50% of the Huckleberry open pit copper/molybdenum mine
located 123 kilometres southwest of Houston, British Columbia.
Red Chris
Exploration and development expenditures at Red Chris were $4.5 million
in the June 2010 quarter compared to $0.4 million in the June 2009
quarter due to the increase in the number of drills on the property,
and ramped up development work.
Exploration continued at Red Chris with five diamond drills in
operation, testing the deposit beneath the (2004) open pit design to a
depth of approximately one kilometre.
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.
Sterling
Since mid-February 2010 the 144 zone has been investigated with
underground development and sampling. Approximately 600 feet of
underground development has been completed to date, of which
approximately 343 feet is in the 144 zone mineralization. Information
from the rib and face sampling will be used to upgrade the resource
estimate. The material excavated from the 144 zone will also provide
additional samples for metallurgical testing.
The Sterling gold property is located 115 miles northwest of Las Vegas,
Nevada.
Catface
The 2010 diamond drill program at the Catface copper/molybdenum
property commenced in late May. The first drill hole, which tested the
copper/molybdenum mineralization of the Cliff zone in a north-south
direction, was completed during the second quarter. Drilling continues
with a total of six or seven holes planned to test the Cliff and
Irishman Creek zones.
The Catface property is located on Catface Peninsula on the west coast
of Vancouver Island, west of Port Alberni, British Columbia.
Ruddock Creek
The 2010 exploration program at Ruddock Creek commenced in early July
following the signing of a Memorandum of Understanding with Itochu
Corporation and Mitsui Mining and Smelting Co. Ltd., whereby
Itochu/Mitsui may earn up to a 50% interest in the property by
providing $20 million in exploration and development funding over three
years. The surface exploration program includes construction of access
roads to the Creek zone and surface diamond drilling to expand on the
known zinc/lead mineralization in this area. The initial underground
exploration program consists of de-watering the existing development
and extending the decline an additional 400 metres to provide access
for diamond drilling to extend the E zone to depth.
The Ruddock Creek zinc/lead property is located in the Scrip Range of
the Monashee Mountains in southeast British Columbia, approximately 155
kilometres northeast of Kamloops.
Outlook
Operations continue to be strong with excellent throughput achieved
from the concentrator at Mount Polley.
Copper prices, which dipped in the second quarter, have rebounded
significantly and cash flow from operations is funding extensive
exploration programs at Red Chris, Mount Polley, Sterling and Catface.
The mine development schedule of Red Chris is being planned to match
the schedule for the construction of the Northwest Transmission Line
(an extension to the BC Hydro grid to serve the northwestern corner of
British Columbia). The Company anticipates being the first customer to
connect to the Northwest Transmission Line.
Detailed financial information is provided in the Management's
Discussion and Analysis in the Second Quarter Report available on the
Company's website and on SEDAR (www.sedar.com).
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