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VANCOUVER,
BRITISH COLUMBIA--(Marketwire - Aug. 14,
2009) - Imperial Metals Corporation (TSX:III) reports comparative
financial results for the three and six months ended June 30, 2009 and
June 30, 2008 are summarized below and discussed in detail in the Management's
Discussion and Analysis.
--------------------------------------------------------------------------- Three Months Ended Six Months Ended June 30 June 30 --------------------------------------------------------------------------- (unaudited) in thousands except per share amounts 2009 2008 2009 2008 --------------------------------------------------------------------------- Revenues $ 48,897 $ 124,911 $ 83,795 $ 181,508 Operating Income $ 856 $ 62,257 $ 3,449 $ 85,335 Net (Loss) Income $ (6,562) $ 44,236 $ (13,900) $ 45,901 Net (Loss) Income Per Share $ (0.20) $ 1.35 $ (0.43) $ 1.40 Adjusted Net Income(1) $ 2,575 $ 42,571 $ 13,856 $ 54,617 Adjusted Net Income Per Share(1) $ 0.09 $ 1.30 $ 0.43 $ 1.67 Cash Flow(1) $ 15,484 $ 66,124 $ 20,171 $ 85,653 Cash Flow Per Share(1) $ 0.48 $ 2.02 $ 0.62 $ 2.62 ---------------------------------------------------------------------------
Revenues
were $48.9 million in the June 2009 quarter compared to $124.9 million
in the 2008 quarter.
Concentrate inventory levels were substantially higher than normal at
June 30 with each mine having a concentrate shipment of about 10,000
tonnes at port and ready for shipment at quarter end. As a result, both
Mount Polley
and Huckleberry had concentrate shipments in July. 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 June 2009 decreased to $0.9
million from $62.3 million in the June 2008 quarter.
Net loss was $6.6 million in the June 2009 quarter compared to net
income of $44.2 million in the 2008 quarter. Adjusted net income in the
quarter was $2.6 million or $0.09 per share, versus $42.6 million or
$1.30 per share in the June 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.
The Company realized gains on derivative instruments of $4.7 million in
the quarter compared to a realized loss of $2.1 million in the 2008
quarter. The increase in copper prices since December 31, 2008 resulted
in unrealized losses of $13.9 million in the June quarter compared to
unrealized gains of $1.7 million in the June 2008 quarter. In total the
Company recorded losses on derivative instruments of $9.2 million in
2009 versus $0.4 million in 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 decreased to $15.5 million in the June 2009 quarter compared
to $66.1 million in the 2008 quarter. The $50.6 million decrease is
primarily the result of reduced operating margins at Mount Polley and
Huckleberry, and large period end concentrate inventory.
Capital expenditures decreased to $6.0 million from $13.7 million in
the comparative 2008 quarter. Expenditures in the June 2009 quarter
were financed from cash flow from the Mount Polley and
Huckleberry mines. At June 30, 2009 the Company had $14.7 million in
cash, cash equivalents and short term investments.
During the June 2009 quarter the Company made no purchases under the
Normal Course Issuer Bid.
Mount Polley Mine
--------------------------------------------------------------------------- Production Six Months Ended June 30 --------------------------------------------------------------------------- (unaudited) 2009 2008 --------------------------------------------------------------------------- Ore milled (tonnes) 3,456,269 3,268,958 Ore milled per calendar day (tonnes) 19,095 17,961 Grade % - Copper 0.393 0.552 Grade g/t - Gold 0.309 0.308 Recovery % - Copper 57.19 78.36 Recovery % - Gold 66.04 71.53 Copper produced (lbs) 17,135,481 31,185,087 Gold produced (oz) 22,667 23,171 Silver produced (oz) 114,511 262,257 ---------------------------------------------------------------------------
Mill
throughput and copper head grade averaged 20,706 tonnes per day, up 15%
from the first quarter throughput of 17,467 tonnes per day. Copper
production was up 30% to 9.7 million pounds, as a result of the
additional throughput and increased recovery, 59% compared to 55% in
the first quarter. Gold production also increased from 9,937 troy
ounces in the first quarter to 12,728 troy ounces. The majority of ore
delivered to the mill was from the Springer pit. The remaining ore was
delivered from the Wight and Southeast pits to blend with the oxidized
Springer ore.
Clearing work has begun at the Pond zone pit which contains
approximately 1.37 million tonnes grading 0.476% copper, 0.27 g/t gold
and 6.89 g/t silver. We expect to begin receiving ore from this pit in
2009. Good copper recovery is expected as this ore is not oxidized.
Exploration expenditures at Mount
Polley
were $1.4 million in the June 2009 quarter compared to $1.0 million in
the June 2008 quarter. The 2009 drill program has focused on the Boundary
zone. Highlights include drill hole ND09-79 which intersected 157.0 metres
grading 1.73% copper, 1.11 g/t gold and 10.53 g/t silver starting at 158.1 metres
below surface. This area is being explored for underground mineable
mineralization that is too deep to be captured in the current open pit
design. A 500
metre long underground ramp, to provide access
from the Wight pit to the Boundary zone, has been designed and
submitted for approval. The ramp will be used to conduct further
exploration and to provide access for potential underground mining of
this zone.
Exploration has also been conducted in the Springer and other zones on
the property, as well as the Pond zone where the objective is to
delineate high grade mineralization below the designed open pit which
may be amenable to underground mining. Drill hole
PZ09-35 returned 71.3
metres grading 0.57% copper, 0.22 g/t gold and
6.81 g/t silver but more notably included a 4.4 metre section
of 4.20% copper, 1.03 g/t gold and 52.31 g/t silver. Drill hole PZ09-43
also proved fruitful with an intercept of 9.3 metres
grading 6.40% copper, 0.89 g/t gold and 67.68 g/t silver. The 2009
drill program at the Pond zone will explore the portion of skarn mineralization that carries the highest
grades discovered to date.
The Mount
Polley
open pit copper/gold mine, located 56 kilometres
northeast of Williams Lake, British Columbia, is wholly owned by
Imperial.
Huckleberry Mine
--------------------------------------------------------------------------- Production Six Months Ended June 30 --------------------------------------------------------------------------- (100% - Imperial owns 50%) (unaudited) 2009 2008 --------------------------------------------------------------------------- Ore milled (tonnes) 3,007,400 2,901,749 Ore milled per calendar day (tonnes) 16,616 15,944 Grade (%) - Copper 0.359 0.303 Grade (%) - Molybdenum 0.006 0.007 Recovery (%) - Copper 90.8 88.6 Recovery (%) - Molybdenum (i) 23.9 Copper produced (lbs) 21,622,000 17,191,001 Gold produced (oz) 1,667 1,456 Silver produced (oz) 127,785 113,145 Molybdenum produced (lbs) 10,227 102,123 --------------------------------------------------------------------------- (i) molybdenum circuit was only run for a few days during period due to low grades and prices
Copper production increased during the
first six months compared to the same 2008 period. Throughput, grade
and recovery all improved. Molybdenum was produced only for a few days
when higher grades were intersected in the pit.
In the second quarter Huckleberry approved an extension of the mine
plan, which includes the Saddle zone resource, and will provide for
mill feed to extend milling operations to the end of 2011. Annual
estimated copper production will be about 40 million pounds per year. The
Saddle zone resource, located between the Main Zone pit and the Main
Zone Extension pit, has a high potential to provide additional
extensions to the mine life depending on the copper price.
Imperial owns 50% of the Huckleberry open pit copper/molybdenum mine
located 123
kilometres southwest of Houston, British Columbia.
Red Chris
Exploration at the Red Chris property was restarted during the second
quarter. The current planned program includes an expanded and deep
penetrating geophysical program, shallow reconnaissance drilling to map
the till covered plateau area, and the restart of a deep diamond drill
program to further explore the depth potential of the Red Chris
deposit.
The Red Chris copper/gold property is located 80 kilometres
south of Dease
Lake in northwest British Columbia.
Sterling
A program of diamond drilling from underground workings was begun in
the second quarter. The program is ongoing, with 27 holes totaling 8,435 feet drilled to date. Underground
diamond drilling has targeted the 144 zone to the north, west and
south, and mineralization in the latite dike
that divides the 144 zone from its east extension.
The wholly owned Sterling gold property is located 185 kilometres
northwest of Las Vegas,
Nevada.
Outlook
With the copper price climbing, and the production at Mount Polley increasing during the
current quarter, we increased the pace of exploration at Red Chris and Sterling. We are
excited about the potential of Mount Polley's Boundary zone to provide higher grade material
to supplement the lower grade Springer ores, and to begin an underground
access ramp this year.
Recently we have taken advantage of the higher copper prices to hedge a
portion of Mount
Polley
copper to September 2010, establishing a floor price of US$2.20 per
pound of copper for about 40% of our expected production.
As always, we look to grow our Company. Subsequent to the quarter end
we announced a proposed business combination with Selkirk Metals Corp. Selkirk
will bring several British
Columbia mineral properties to the combined
company including the Ruddock Creek lead/zinc property and the Catface copper property. These and several other
properties will add to Imperial's large resource base in British Columbia,
and we are keen to utilize our experience and proven mine development
skills to advance these properties.
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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