|
VANCOUVER, BRITISH
COLUMBIA--(Marketwire - Nov. 15, 2010) - Imperial Metals Corporation
(TSX:III) reports comparative financial results for the three and nine
months ended September 30, 2010 and September 30, 2009 as summarized
below and discussed in detail in the Management's Discussion and
Analysis.
--------------------------------------------------------------------------- Three Months Ended Nine Months Ended Sept 30 Sept 30 --------------------------------------------------------------------------- (unaudited) in thousands except per share amounts 2010 2009 2010 2009 --------------------------------------------------------------------------- Revenues $ 68,692 $ 53,788 $191,591 $137,583 Operating Income $ 22,011 $ 17,609 $ 29,322 $ 21,058 Net Income (Loss) $ 7,051 $ 4,544 $ 17,518 $ (9,356) Net Income (Loss) Per Share $ 0.19 $ 0.14 $ 0.49 $ (0.29) Adjusted Net Income (1) $ 12,880 $ 9,812 $ 20,907 $ 23,668 Adjusted Net Income Per Share (1) $ 0.35 $ 0.31 $ 0.58 $ 0.74 Cash Flow (1) $ 25,885 $ 15,856 $ 43,915 $ 36,027 Cash Flow Per Share (1) $ 0.71 $ 0.49 $ 1.22 $ 1.12 --------------------------------------------------------------------------- (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. 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 $68.7 million
in the September 2010 quarter compared to $53.8 million in the 2009
quarter. There were two concentrate shipments from each of Mount Polley
and Huckleberry in the 2010 and 2009 quarters. The copper price
increased during the September 2010 quarter resulting in a positive
revenue adjustment of $8.8 million, while increasing prices during the
2009 quarter resulted in a positive adjustment of $5.8 million.
Operating income for the three months ended September 2010 increased to
$22.0 million from $17.6 million in the September 2009 quarter due to
improved operating margins resulting from higher copper prices.
The Company recorded net income of $7.1 million in the September 2010
quarter compared to net income of $4.5 million in the 2009 quarter.
Adjusted net income in the quarter was $12.9 million or $0.35 per
share, versus $9.8 million or $0.31 per share in the September 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. While
not a term recognized under generally accepted accounting principles
management believes that its calculation of adjusted net income is a
better reflection of operating performance in the quarter.
Losses on derivative instruments were $10.9 million in the September
2010 quarter compared to losses of $10.6 million in the September 2009
quarter. Unrealized losses on copper and currency derivatives of $8.2
million in the September 2010 quarter compared to unrealized losses of
$12.1 million in the September 2009 quarter. The Company realized
losses of $2.7 million on copper and currency derivatives in the
September 2010 quarter compared to gains of $1.4 million in the 2009
quarter.
Cash flow increased to $25.9 million in the September 2010 quarter
compared to $15.9 million in the 2009 quarter. The $10.0 million
increase is primarily the result of increased operating margins at the
Mount Polley and Huckleberry mines.
Capital expenditures increased to $13.9 million from $7.3 million in
the comparative 2009 quarter. Expenditures in the September 2010
quarter were primarily financed from cash flow from the Mount Polley
and Huckleberry mines.
At September 30, 2010 the Company had $35.7 million in cash and cash
equivalents and short term investments.
During the September 2010 quarter the Company did not purchase any
common shares for cancellation.
Mount Polley Mine
--------------------------------------------------------------------------- Production Nine Months Ended Sept 30 --------------------------------------------------------------------------- (unaudited) 2010 2009 --------------------------------------------------------------------------- Ore milled (tonnes) 5,943,967 5,217,744 Ore milled per calendar day (tonnes) 21,773 19,113 Grade % - Copper 0.324 0.389 Grade g/t - Gold 0.287 0.319 Recovery % - Copper 62.97 58.66 Recovery % - Gold 66.67 67.63 Copper produced (lbs) 26,701,243 26,262,166 Gold produced (oz) 36,571 36,196 Silver produced (oz) 142,182 173,534 ---------------------------------------------------------------------------
Mill throughput averaged
22,563 tonnes per day during the third quarter. With almost 6 million
tonnes milled to the end of the third quarter, a record annual mill
throughput is likely to be achieved in 2010. Copper and gold production
for the 2010 nine month period are both up slightly from the same
period in 2009.
A plant is being installed in the Mount Polley concentrator, which is
designed to recover fine magnetite from the tailings stream, which can
be sold as dense media for use in coal wash plants. This new addition
to the plant is expected to be completed during the 2010 fourth
quarter.
In the third quarter period, Mount Polley exploration focused on
expanding the WX zone and included drilling of 24 surface diamond drill
holes totaling 12,955 metres. The underground ramp, which will provide
access to more fully explore and to test mine higher grade
mineralization in the Boundary zone, had advanced 224.5 metres by the
end of September.
Exploration expenditures at Mount Polley were $2.9 million in the
September 2010 quarter compared to $1.4 million in the September 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 Nine Months Ended Sept 30 --------------------------------------------------------------------------- (100% - Imperial owns 50%) (unaudited) 2010 2009 --------------------------------------------------------------------------- Ore milled (tonnes) 4,156,900 4,498,800 Ore milled per calendar day (tonnes) 15,227 16,479 Grade (%) - Copper 0.378 0.374 Grade (%) - Molybdenum 0.007 0.006 Recovery (%) - Copper 91.30 90.60 Copper produced (lbs) 31,664,000 33,607,000 Gold produced (oz) 2,279 2,583 Silver produced (oz) 148,206 197,541 Molybdenum produced (lbs) 68,226 14,467 ---------------------------------------------------------------------------
Copper production for the 2010 nine month
period was 31.7 million pounds compared to 33.6 million pounds in the
same period in 2009. Huckleberry's production was impacted during the
quarter by wildfires. Mine and mill operations were temporarily
suspended for seven days beginning on August 16 as a precautionary
measure due to wildfires burning approximately 50 kilometres from the
plant site.
Huckleberry's exploration plans for 2010 included the drilling of 21
diamond drill holes totaling about 4,400 metres. To date 18 holes have
been completed. The remaining holes are expected to be completed by the
end of November. The holes have been designed to test the Main zone
perimeter and depth extent. The results will be added to the data base
and then used to investigate potential Main zone pit expansions.
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 the Red Chris copper/gold
property were $5.4 million in the September 2010 quarter compared to
$2.1 million in the September 2009 quarter.
Five deep capacity diamond drill rigs were in operation during the
quarter. The 2010 exploration program focused on drilling the Red Chris
mineralized system to at least 1,000 metres below surface in the area
of the proposed open pit. In the 2010 program, a total of 95 drill
holes totaling 43,523 metres, including 31 exploration, 23 condemnation
holes and 41 geotechnical holes at the proposed open pit, tailings
impoundment and plant site areas have been completed to September 30,
2010. Positive assay results were received, in particular from drill
hole RC10-393, which included 317.5 metres grading 1.08% copper, 1.46
g/t gold and 4.28 g/t silver within a 1,112.5 metre mineralized section
grading 0.54% copper, 0.61 g/t gold and 1.96 g/t silver. This is one of
the longest mineralized intercepts obtained to date at Red Chris.
RC10-388, one of the first holes in the deep Main zone since 2007, tested
the western edge of the known Main zone and intersected five intervals
of copper/gold mineralization including 380.0 metres grading 0.34%
copper and 0.50 g/t gold. Two holes were collared near the western rim
of the proposed open pit and add a significant dimension to the known
extent of Main zone mineralization. RC10-392 returned 232.5 metres
grading 0.39% copper and 0.48 g/t gold and RC10-388 returned 1,047.3
metres grading 0.22% copper and 0.34 g/t gold.
Mines Act permitting through the Northwest Mine Development Review
Committee is underway. Phase one of the geotechnical and condemnation
drilling in the tailings impoundment areas was completed in the
September 2010 quarter.
The Red Chris property in northwest British Columbia is 80 kilometres
south of Dease Lake and 18 kilometres southeast of the village of
Iskut.
Sterling
At the Sterling property, gold grades from face and wall sampling of
the 3220 level exceeded expectations and averaged 0.12 ounces per ton
gold over 368.5 feet. During the quarter, 381 feet of underground
drifting along the 3220 level was completed. The underground
development continues and information obtained will be used to confirm
mining methods, expected recoveries and minable reserves.
The Sterling property is located 115 miles northwest of Las Vegas,
Nevada.
Catface
The 2010 diamond drill program at the Catface copper/molybdenum
property was completed in late September. A total of 3,548 metres was
drilled in 13 holes to test the Cliff and Irishman Creek zones. Results
from the first hole, CF-10-56, confirmed the north south continuity of
the Cliff zone intercepting 755 metres grading 0.46% copper and 0.006%
molybdenum, including a higher grade section of 275.5 metres grading
0.60% copper and 0.014% molybdenum. Results from the remaining holes
which tested the Irishman Creek zone and the southern extent of the
Cliff zone are pending.
The Catface property is located on Catface Peninsula on the west coast
of Vancouver Island, west of Port Alberni, British Columbia.
Ruddock Creek
Exploration at the Ruddock Creek zinc/lead property restarted in early
July and included surface diamond drilling testing the Creek zone and
the installation and operation of a pumping system to dewater the E
zone decline. The Creek zone drilling finished in mid-October with 18
holes totaling 3583.6 metres completed. Assay results are pending. The
E zone decline is now dewatered. It
will be extended an additional 400 metres. This additional development
will provide access for underground diamond drilling to explore the E
zone to depth. The current program commenced 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 Ruddock Creek by providing $20.0 million in exploration and
development funding by March 31, 2013.
Ruddock Creek is located in the Scrip Range of the Monashee Mountains
in southeast British Columbia, approximately 155 kilometres northeast
of Kamloops.
Outlook
Strong copper and gold prices have allowed the Company to fund
extensive exploration programs from operating cash flow. Exploration at
Red Chris is on target to achieve 50,000 metres of core drilling this
year, and underground development work is underway at the Mount Polley,
Sterling and Ruddock Creek properties.
Throughput at Mount Polley continues to be excellent, and a newly
installed magnetite recovery circuit is in the final stage of
commissioning. This circuit will enable Mount Polley to produce dense
media for coal wash plants.
Detailed financial information is provided in the Management's
Discussion and Analysis in the Third Quarter Report available on the
Company's website and on SEDAR (www.sedar.com).
|