Copper Mountain Mining Announces Q2 2019 Financial Results

(firmenpresse) -
Vancouver, British Columbia - August 1, 2019 - Copper Mountain Mining Corporation (TSX: CMMC | ASX:C6C) (the Company or Copper Mountain - https://www.commodity-tv.net/c/search_adv/?v=298887 ) announces second quarter 2019 financial and operating results. All currency is in Canadian dollars, unless otherwise stated. All results are reported on a 100% basis. The Companys Financial Statements and Management Discussion & Analysis (MD&A) are available at www.CuMtn.com and www.sedar.com.

SECOND QUARTER 2019 HIGHLIGHTS

- Production for the second quarter of 2019 was 22.1 million pounds of copper equivalent (comprised of 18.4 million pounds of copper, 6,922 ounces of gold and 65,707 ounces of silver).
- Revenue for the second quarter of 2019 was $65.1 million, from the sale of 17.9 million pounds of copper, 7,044 ounces of gold and 55,276 ounces of silver, net of pricing adjustments.
- C1 cash cost per pound of copper produced was US$1.74 and all-in sustaining cost (AISC) per pound of copper produced was US$1.85.
- Earnings per share was $0.01 and adjusted earnings per share was $0.00 for the second quarter of 2019.
- Cash flow from operations for the second quarter of 2019 was $23.7 million.
- Cash and cash equivalents at the end of the second quarter of 2019 was $43.9 million.

The second quarter was another consistent operating quarter, commented Gil Clausen, Copper Mountains President and CEO. We maintained our cash position, paid down our debt and continued to advance our growth opportunities while achieving predictable and reliable results quarter in and quarter out.
He added, We expect production to be stronger in the second half of 2019 as we move into higher grade ore, and we remain on track to achieve our annual 2019 production guidance.

SUMMARY OF OPERATING RESULTS

Three months Six months
ended ended

June 30, June 30,
Copper Mountain Mine 2019 2018 2019 2018
(100% Basis)
Mine
Total tonnes mined (000s) 16,13919,520 33,593 36,104
Ore tonnes mined (000s) 3,007 4,030 5,821 10,548
Waste tonnes (000s) 13,13215,490 27,772 25,555
Stripping ratio 4.37 3.84 4.77 2.42

Mill
Tonnes milled (000s) 3,764 3,368 7,314 6,860
Feed Grade (Cu%) 0.28 0.34 0.29 0.33
Recovery (%) 78.2 80.5 79.9 79.6
Operating time (%) 95.0 89.2 94.0 90.9
Tonnes milled (TPD) 41,36337,011 40,409 37,901

Production
Copper (000s lb) 18,45020,030 37,060 39,936
Gold (oz) 6,922 6,524 14,049 12,594
Silver (oz) 65,70768,404 127,987146,313

Sales
Copper (000s lb) 17,93120,411 37,279 42,152
Gold (oz) 7,044 6,484 14,070 12,975
Silver (oz) 55,27671,269 120,268151,838

C1 cash cost per pound of 1.74 1.56 1.75 1.76
copper produced
(US$)
(1)
All-in-sustaining cost (AISC) 1.85 1.78 1.86 1.96
per pound of copper produced
(US$)
(1)
Cost of Sales per pound of 2.06 1.98 2.01 2.07
copper (US$/lb sold
(net))

Average realized copper price 2.72 3.12 2.79 3.15
(US$)


(1) Non-GAAP performance measure. See MD&A for details.

In Q2 2019, the Copper Mountain Mine produced 18.4 million pounds of copper, 6,922 ounces of gold, and 65,707 ounces of silver compared to 20.0 million pounds of copper, 6,524 ounces of gold, and 68,404 ounces of silver in Q2 2018. This represents a decrease of 8% and 4% for copper and silver respectively and a 6% increase in gold. During the quarter, the mine processed a total of 3.8 million tonnes of ore at an average feed grade of 0.28% Cu and with a copper recovery of 78.2%. The slightly lower recovery during the quarter was due to mining some oxidized ore but was more than offset by the increased mill availability which averaged 95%. The Copper Mountain Mine remains on track to achieve production guidance for the year.

In Q2 2019, approximately 1.5 million tonnes of ore that was fed to the mill came from the ore stockpile and was included in the average feed grade for the quarter. Increased gold production in Q2 2019 can be attributed to higher head grades as compared to Q2 2018.

C1 cash cost per pound of copper produced for Q2 2019 was US$1.74, as compared to US$1.56 realized in Q2 2018. The increase in cost per pound was primarily a result of lower production in Q2 2019 as compared to Q2 2018. In addition, increased costs were incurred for planned maintenance of the shovels and haul trucks. C1 cash cost was positively impacted by the cost associated with stripping in excess of the average life of mine strip ratio. The total cash value of deferred stripping in Q2 2019 was $10.7 million, compared to $12.5 million in Q2 2018.

Site cash costs for Q2 2019 were $46.9 million and C1 cash costs were $42.8 million, both in line with the previous eight quarters. The consistency in costs over the past quarters demonstrates reliable production and operation at the Copper Mountain Mine quarter-after-quarter.

SUMMARY OF FINANCIAL RESULTS

Results and Highlights (100%) Three months Six months
ended ended


June 30, June 30,
(In thousands of CDN$, except for 2019 2018 2019 2018
per share $ $ $ $
amounts)

Financial
Revenue 65,144 84,204 152,014162,150
Gross profit 1,636 20,672 24,912 26,984
Gross profit before depreciation(1)6,801 32,680 36,416 54,448
Net income (loss) 2,529 3,638 20,355 (2,828)
Earnings (loss) per share - basic 0.01 0.01 0.07 (0.02)
Adjusted earnings (1) 917 11,095 5,119 22,682
Adjusted earnings per share - 0.00 0.06 0.03 0.08
basic


EBITDA(1) 10,257 22,552 42,121 34,037
Adjusted EBITDA 6,811 30,009 26,885 59,547
Cash flow from operations 23,685 40,121 47,374 42,139
Cash and cash equivalents - end of 43,896 72,090
period

(1) Non-GAAP performance measure. See MD&A for details.

In Q2 2019, revenue was $65.1 million, net of pricing adjustments and treatment charges, compared to $84.2 million in Q2 2018. Q2 2019 revenue is based on the sale of 17.9 million pounds of copper, 7,044 ounces of gold, and 55,276 ounces of silver and on an average realized copper price of US$2.72 per pound. This compares to 20.4 million pounds of copper, 6,484 ounces of gold and 71,269 ounces of silver sold in Q2 2018 and an average realized copper price of US$3.12 per pound. Revenue was lower as a result of selling fewer pounds of copper and realizing a lower copper price during the quarter as compared to Q2 2018. Further, revenue in Q2 2019 included a negative mark to market adjustment of $3.2 million as compared to a negative mark to market adjustment of $1.3 million for Q2 2018.

Cost of sales in Q2 2019 was $63.5 million as compared to $63.5 million for Q2 2018. Unit cost of sales was US$2.06 per pound of copper sold, net of precious metals credits for Q2 2019, as compared to US$1.98 per pound of copper sold, net of precious metals credits for Q2 2018. The increase in unit cost of sales is a result of selling fewer pounds of copper during the quarter as compared to Q2 2018.

Gross profit for Q2 2019 was $1.6 million as compared to $20.7 million for Q2 2018 and net income was $2.5 million for Q2 2019 as compared to $3.6 million for Q2 2018. The decrease in net income for Q2 2019, as compared to the net income for Q2 2018, was a result of: 1) lower revenue due to fewer pounds of copper sold and a lower realized copper price; 2) a negative mark to market adjustment of $3.2 million included in revenue in Q2 2019 as compared to a negative mark to market adjustment of $1.3 million for Q2 2018; 3) cost of sales including lower depreciation of $5.2 million for Q2 2019 compared to $12 million for Q2 2018 as a result of an increased reserve base in 2018 over which these costs are depreciated; and 4) the inclusion of a non-cash unrealized foreign exchange gain of $6.7 million in Q2 2019 as compared to a non-cash unrealized foreign exchange loss of $6.4 million in Q2 2018, a differential of approximately $13 million, which was primarily related to the Companys debt that is denominated in US dollars.

PROJECT DEVELOPMENT UPDATE

Copper Mountain Mill Expansion

During the quarter, the Company continued to advance its expansion of the existing Copper Mountain Mine mill, which is planned to increase throughput to 45,000 tonnes per day from 40,000 tonnes per day and also improve copper recovery. The expansion project includes the installation of a third ball mill that the Company has already purchased and is currently being stored overseas. The foundation design for the new ball mill is currently being completed and the Company plans to ship the ball mill in the third quarter to arrive at the mine site before year end. Final test work and design for the cleaner circuit was completed in the second quarter, in addition to the engineering required for the new mill maintenance shop. Subsequent to the end of the quarter, the new higher capacity SAG Mill screen was installed and tie-ins for the new ball mill were completed during a planned mill shutdown for re-lining existing mills in early July.

Eva Copper Project

The Company is currently executing a drilling program to test additional exploration targets proximal to Eva Coppers main deposit, Little Eva, as well as to support metallurgical studies and down dip extensions of the Blackard deposit. Blackard is not currently included in the Eva Copper feasibility study and has the potential to add a material volume of high grade tonnage to the existing planned mill feed. Following completion of this years drill program and metallurgical testwork, the Company will incorporate the results into an updated Eva Copper feasibility study planned for announcement in Q1 2020.

Q2 2019 FINANCIAL AND OPERATING RESULTS CONFERENCE CALL AND WEBCAST

The Company will be hosting a conference call on Thursday, August 1, 2019 at 7:30 am (Pacific Time) for senior management to discuss the second quarter 2019 results.

Dial-in information:
Toronto and international: 1 (647) 427-7450
North America (toll-free): 1 (888) 231-8191
To participate in the webcast live via computer go to:
https://event.on24.com/wcc/r/2010157/A052FEC7A4C7DC35C45A6CCF8CA82B7C

Replay Call Information
Toronto and international: 1 (416) 849-0833 Passcode: 6689529
North America (toll-free): 1 (855) 859-2056 Passcode: 6689529

The conference call replay will be available from 10:30 am (PST) on Thursday, August 1, 2019 until 8:59 pm PST on Thursday, August 8, 2019. An archive of the audio webcast will also be available on the Companys website at http://www.cumtn.com.

About Copper Mountain Mining Corporation

Copper Mountains flagship asset is the 75% owned Copper Mountain mine located in southern British Columbia near the town of Princeton. The Copper Mountain mine currently produces approximately 90 million pounds of copper equivalent, with average annual production expected to increase to over 110 million pounds of copper equivalent. Copper Mountain also has the permitted, development-stage Eva Copper Project in Queensland, Australia and an extensive 4,000 km2 highly prospective land package in the Mount Isa area. Copper Mountain trades on the Toronto Stock Exchange under the symbol CMMC and Australian Stock Exchange under the symbol C6C.

Additional information is available on the Companys web page at www.CuMtn.com.

On behalf of the Board of

COPPER MOUNTAIN MINING CORPORATION
Gil Clausen-

Gil Clausen, P.Eng.
President and Chief Executive Officer

For further information, please contact:
Letitia Wong
Vice President Corporate Development & Investor Relations
Telephone: 604-682-2992
Email: Letitia.Wong(at)CuMtn.com

Dan Gibbons
Investor Relations
Telephone: 604-682-2992 ext. 238
Email: Dan.Gibbons(at)CuMtn.com

Website: www.CuMtn.com

In Europe:
Swiss Resource Capital AG
Jochen Staiger
info(at)resource-capital.ch
www.resource-capital.ch

Cautionary Note Regarding Forward-Looking Statements
This news release may contain forward-looking statements and forward-looking information (together, forward-looking statements) within the meaning of applicable securities laws. All statements, other than statements of historical facts, are forward-looking statements. Generally, forward-looking statements can be identified by the use of terminology such as plans, expects, estimates, intends, anticipates, believes or variations of such words, or statements that certain actions, events or results may, could, would, might, occur or be achieved. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results, performance and opportunities to differ materially from those implied by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include the successful exploration of the Companys properties in Canada and Australia, the reliability of the historical data referenced in this press release and risks set out in Copper Mountains public documents, including in each management discussion and analysis, filed on SEDAR at www.sedar.com. Although Copper Mountain believes that the information and assumptions used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Except where required by applicable law, Copper Mountain disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Copper Mountain Mining Corporation
Condensed Consolidated Interim Statements of Financial Position
(Unaudited in thousands of Canadian dollars)

June 30, December
2019 31,
$

2018
$

Assets

Current assets
Cash and cash equivalents 43,896 46,123
Accounts receivable and prepaid expenses 11,934 18,923
Inventory 41,890 55,801

97,720 120,847

Reclamation bonds 8,676 8,752
Transaction costs 850 -
Deferred tax assets 12,706 13,980
Property, plant and equipment 468,014 448,237
Low grade stockpile 112,437 109,846

700,403 701,662
Liabilities

Current liabilities
Accounts payable and accrued liabilities 35,384 37,494
Amounts payable to related parties 80,983 69,026
Current portion of long-term debt 56,008 52,956
Current tax liability 1,381 622
173,756 160,098

Provisions 7,434 6,571
Interest rate swap liability 573 601
Long-term debt 194,768 229,001
Deferred tax liability 2,159 2,135
378,690 398,406
Equity
Attributable to shareholders of the
Company:

263,863 263,822
Share capital
Contributed surplus 18,475 17,378
Accumulated other comprehensive loss (4,362) (1,655)
Accumulated deficit (34,428) (48,030)
243,548 231,515
Non-controlling interest 78,165 71,741
Total equity 321,713 303,256

700,403 701,662

Copper Mountain Mining Corporation
Condensed Consolidated Interim Statements of Income (Loss) and Comprehensive Income (Loss)
For the Three and Six Months Ended June 30
(Unaudited in thousands of Canadian dollars, except for number of and earnings per share)

Three months Six months ended
ended June 30,

June 30,
2019 2018 2019 2018
$ $ $ $

Revenue 65,144 84,204 152,014 162,150
Cost of sales (63,508)(63,532)(127,102)(135,166)
Gross profit 1,636 20,672 24,912 26,984

Other income and expenses
General and administration (2,631) (3,591) (5,392) (6,065)
Share based compensation (526) (381) (1,187) (887)
Operating income (loss) (1,521) 16,700 18,333 20,032

Finance income 151 206 254 342
Finance expense (4,442) (3,847) (8,241) (7,361)
Unrealized (loss) gain on (96) 229 (490) 1,002
interest rate
swap

Foreign exchange (loss) gain 6,709 (6,385) 12,774 (14,461)
Income (loss) before tax 801 6,903 22,630 (446)

Current tax expense (463) (322) (976) (667)
Deferred income and resource 2,191 (2,943) (1,299) (1,715)
tax

recovery (expense)
Net income (loss) 2,529 3,638 20,355 (2,828)

Other comprehensive income
(loss)

Foreign currency translation (1,904) (535) (2,707) (535)
adjustment

Total comprehensive income 625 3,103 17,648 (3,363)
(loss)




Net income (loss)
attributable
to:

Shareholders of the Company 1,102 2,189 13,602 (3,062)
Non-controlling interest 1,427 1,449 6,753 234
2,529 3,638 20,355 (2,828)
Earnings (loss) per share:
Basic 0.01 0.01 0.07 (0.02)
Diluted 0.01 0.01 0.07 (0.02)

Weighted average shares 188,216 177,440188,199 156,116
outstanding, basic
(thousands)

Weighted average shares 190,751 181,756 190,720 160,560
outstanding, diluted
(thousands)

Shares outstanding at end of 188,237 188,104 188,237 188,104
the period
(thousands)
Copper Mountain Mining Corporation
Condensed Consolidated Interim Statements of Cash Flows
For the Three and Six Months Ended June 30,
(Unaudited in thousands of Canadian dollars)

Three months Six months ended
ended June
30, June 30,

2019 2018 2019 2018
$ $ $ $
Cash flows from operating
activities

Net income (loss) for the pe2,529 3,638 20,355 (2,828)
riod


Adjustments for:
Depreciation 5,183 12,008 11,522 27,464
Unrealized foreign exchange (5,906)5,118 (9,588) 12,526
(gain) loss


Unrealized loss (gain) on 96 (229) 490 (1,002)
interest rate
swap

Deferred income and (2,191)2,991 1,299 1,708
resource tax
expense

Finance expense 4,442 3,847 8,241 7,361
Share based compensation 526 381 1,187 608
4,679 27,754 33,506 45,837
Net changes in working 19,006 12,367 13,868 (3,698)
capital items


Net cash from operating 23,685 40,121 47,374 42,139
activities


Cash flows from investing
activities

Cash acquired in - 29,115 - 29,115
acquisition of
Altona

Transaction costs (850) (763) (850) (2,237)
Share issue costs - (364) - (364)
Deferred stripping (10,744(12,463)(24,344)(12,463)
activities )

Purchase of property, plant (5,560)(10,532)(7,820) (11,871)
and
equipment

Net cash (used in) from (17,1544,993 (33,014)2,180
investing )
activities


Cash flows from financing
activities

Proceeds on exercise of 19 143 26 199
options and
warrants

Advances from - - 15,035 14,029
non-controlling
interest

Payments made to - (1,469) (329) (1,469)
non-controlling
interest

Loan principal paid (9,541)(9,515) (22,369)(21,893)
Interest paid (3,734)(3,818) (6,230) (5,782)
Finance lease payments (711) (1,532) (1,274) (3,989)
Net cash used in financing (13,967(16,191)(15,141)(18,905)
activities )


Effect of foreign exchange (615) 599 (1,446) 1,543
rate changes on cash and
cash
equivalents


(Decrease) Increase in cash (8,051)29,522 (2,227) 26,957
and cash
equivalents


Cash and cash equivalents - 51,947 42,568 46,123 45,133
Beginning of
period


Cash and cash equivalents - 43,896 72,090 43,896 72,090
End of
period

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