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Message: Imperial Reports 2009 First Quarter Financial Results
| May 11, 2009 | |||
| Imperial Reports 2009 First Quarter Financial Results | |||
VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 11, 2009) - Imperial Metals Corporation (TSX:III) reports comparative financial results for the three months ended March 31, 2009 and March 31, 2008 are summarized below and discussed in detail in the Management's Discussion and Analysis.---------------------------------------------------------------------------
Three Months
Ended March 31
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(unaudited) in thousands except per share amounts 2009 2008
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Revenues $ 34,898 $ 56,597
Operating Income $ 2,593 $ 23,078
Net (Loss) Income $ (7,338) $ 1,665
Net (Loss) Income Per Share $ (0.23) $ 0.05
Adjusted Net Income (1) $ 11,099 $ 12,046
Adjusted Net Income Per Share (1) $ 0.35 $ 0.37
Cash Flow (1) $ 4,687 $ 18,529
Cash Flow Per Share (1) $ 0.15 $ 0.57
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(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.
Concentrate inventory levels were higher than normal at March 31, 2009 as timing of shipments resulted in a ship leaving port early in April. 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 31, 2009 decreased to $2.6 million from $23.1 million in the March 2008 quarter. Net loss was $7.3 million in the March 2009 quarter compared to net income of $1.7 million in the 2008 quarter. Adjusted net income in the quarter was $11.1 million or $0.35 per share, versus $12.0 million or $0.37 per share in the March 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. Copper prices in the March 2009 quarter were below the put and forward sale strike prices resulting in the Company realizing gains on derivative instruments of $14.1 million in the quarter compared to a loss of $4.2 million in the 2008 quarter. The increase in copper prices since December 31, 2008 resulted in unrealized losses of $26.3 million in the March quarter compared to unrealized losses of $17.6 million in the March 2008 quarter. Cash flow decreased to $4.7 million in the March 2009 quarter compared to $18.5 million in the 2008 quarter. The $13.8 million decrease is primarily the result of increased cash income taxes. Capital expenditures decreased to $4.5 million from $8.9 million in the comparative 2008 quarter. Expenditures in the March 2009 quarter were financed from cash flow from the Mount Polley and Huckleberry mines. At March 31, 2009 the Company had $21.7 million in cash, cash equivalents and short term investments. During the March 2009 quarter the Company made no purchases under the Normal Course Issuer Bid. Mount Polley Mine
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Three Months
Production Ended March 31
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(unaudited) 2009 2008
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Ore milled (tonnes) 1,572,015 1,482,532
Ore milled per calendar day (tonnes) 17,467 16,292
Grade % - Copper 0.392 0.504
Grade g/t - Gold 0.312 0.305
Recovery % - Copper 54.73 83.19
Recovery % - Gold 63.08 73.55
Copper produced (lbs) 7,430,959 13,703,424
Gold produced (oz) 9,938 10,679
Silver produced (oz) 46,290 111,666
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Copper recovery for the three months in 2009 is down about 28.5% compared to the 2008 quarter, 54.7% versus 83.2%. With virtually all mill feed coming from the highly oxidized Springer pit, the copper oxide ratio for the first three months of 2009 has been 29.4%, up from 9.1% in the same period in 2008. The copper oxide ratio negatively impacts copper recovery as copper oxide minerals have poor flotation recoveries. As mining progresses to the lower benches in the Springer, oxide ratios will drop and recovery will increase. The recovery from the Wight pit of 140,000 tonnes, grading 1.32% copper, 0.28 g/t gold and 11.7 g/t silver from a slash in the pit wall, and 260,000 tonnes from mining of the ramp is expected to be completed in the second quarter. As this ore is of higher grade and less oxidized, higher copper production is expected in the second quarter. A small pit in the Pond zone has been designed and plans are to mine 1.37 million tonnes, grading 0.476% copper, 0.27 g/t gold and 6.89 g/t silver, in 2009. Good copper recovery is expected as this ore is not oxidized. Exploration expenditures at Mount Polley were $0.9 million in the March 2009 quarter compared to $0.2 million in the March 2008 quarter. Exploration at Mount Polley is focused on locating high grade ore to replace the Wight pit mill feed that has been available at Mount Polley for the last three years. Drilling at the Boundary, Southeast and Northeast zones returned significant intervals of high grade copper/gold mineralization. The Pond zone is one of the high grade discoveries expected to be in production by year end. Recent exploration at the Boundary zone has yielded a number of higher grade intercepts at depth. Drilling at the Boundary zone will be a high priority for exploration. Two holes were drilled in an area south of a fault which was believed to cut-off the Springer zone mineralization. Results for one of the holes have been received. Starting at 38.57 metres, hole WX09-01 intersected 8.93 metres of 0.37% copper and 0.81 g/t gold, and at 115.0 metres down the hole it intersected 45.0 metres grading 0.31% copper and 0.29 g/t gold. Follow up exploration on this area will be planned. Imperial owns 100% of the Mount Polley open pit copper/gold mine located 56 kilometres north east of Williams Lake, British Columbia. Huckleberry Mine
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Three Months
Production Ended March 31
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(100% - Imperial owns 50%) (unaudited) 2009 2008
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Ore milled (tonnes) 1,443,300 1,440,513
Ore milled per calendar day (tonnes) 16,037 15,830
Grade (%) - Copper 0.351 0.295
Grade (%) - Molybdenum 0.006 0.007
Recovery (%) - Copper 90.6 87.9
Recovery (%) - Molybdenum 2.1 23.4
Copper produced (lbs) 10,117,000 8,201,814
Gold produced (oz) 842 739
Silver produced (oz) 60,697 53,173
Molybdenum produced (lbs) 3,843 54,233
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An exploration program focusing on areas immediately adjacent to the mine is planned and expected to begin in the second quarter. Work continues on a new mine plan that could extend copper production into 2012 however, under the current mine plan milling operations will be suspended mid-2010. An expansion of the Main Zone Extension pit, called the "Saddle Plan", is largely dependent on copper price and a decision on the implementation of the Saddle Plan is expected to be made in the third quarter of 2009. Imperial owns 50% of the Huckleberry open pit copper/molybdenum mine located 123 kilometres southwest of Houston, British Columbia. Red Chris At the Red Chris property three holes of the 12 hole initial phase of the follow-up drill program were completed in 2008. A total of 2,220 metres were drilled in the East zone to follow up on 2007 drill hole 07-335 which returned 1,024.1 metres grading 1.01% copper, 1.26 g/t gold and 3.92 g/t silver. Drilling to depth proved difficult and only hole RC08-343 was successful in penetrating into the target area below previously known mineralization. RC08-343 was collared approximately 165 metres to the northwest of 07-335 in an area known from previous drilling to be barren near surface. Drill hole RC08-343 intersected the mineralized zone at 840.3 metres returning 362.2 metres grading 0.40% copper, 0.53 g/t gold and 1.27 g/t silver, including a 97.5 metre interval of 0.63% copper, 0.96 g/t gold and 1.89 g/t silver. Drill holes RC08-341 and RC08-342 were collared about 90 metres to the east of 07-335 and returned excellent grades over the entire length drilled but were lost prior to reaching their target depth of 1,500 metres due to drilling difficulty. The drill program designed to explore the depth extent of the Red Chris, will recommence this summer. The Red Chris copper/gold property is located 80 kilometres south of Dease Lake in northwest British Columbia. Sterling In the quarter, the excavation of a 190 foot extension of the north drift in the 144 zone was completed. This drift passed through the north limb of the 144 zone, and rib sampling of the zone at this point returned grades as high as 0.163 oz/t (5.57 g/t) gold. At the north end of this drift, a drill station was excavated and a 5,000 foot diamond drill program to extend the 144 zone to the north is underway. An operations plan has been submitted and approved, and the required bonding has been placed with the State of Nevada and the Bureau of Land Management that would permit the restart of mining and heap leach operations. The wholly owned Sterling gold property is located 185 kilometres northwest of Las Vegas, Nevada. Outlook Production in the first quarter was low at Mount Polley, but with two sources of unoxidized ore expected to be mined during the remainder of the year, we expect to meet our budget of 60 million pounds of equity share copper this year. With the copper price rebounding during the quarter, Imperial stepped up exploration activities with a second drill mobilized at Mount Polley, and underground development and drilling initiated at Sterling. We look forward to resuming drilling at both Huckleberry and Red Chris this summer. Detailed financial information is provided in 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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