Imperial Reports 2013 First Quarter Financial Results

Imperial Reports 2013 First Quarter Financial Results 
VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 05/14/13 -- Imperial
Metals Corporation (TSX:III) - reports comparative financial results
for the three months ended March 31, 2013 and March 31, 2012,
summarized in the table below, and discussed in detail in the
Management's Discussion and Analysis. The Company's financial results
are prepared in accordance with International Financial Reporting
Standards ("IFRS").  


 
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                                                 Three Months Ended March 31
In thousands of CDN$ except per share amounts             2013          2012
----------------------------------------------------------------------------
Revenues                                               $50,866       $60,261
Income from mine operations                            $13,546       $13,782
Net Income                                             $10,621       $ 4,599
Net Income Per Share                                   $  0.14       $  0.06
Adjusted Net Income (1)                                $10,217       $ 8,205
Adjusted Net Income Per Share (1)                      $  0.14       $  0.11
Cash Flow (1)                                          $16,451       $17,895
Cash Flow Per Share (1)                                $  0.22       $  0.24
                                                                            
(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 IFRS in Canada.  
 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, excluding mining and income taxes and 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.       
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Effective January 1, 2013 the Company adopted IFRS11 Joint
Arrangements which establishes the core principle that a party to a
joint arrangement determines the type of joint arrangement in which
it is involved by assessing its rights and obligations and accounts
for those rights and obligations in accordance with that type of
joint arrangement. The Company has reviewed its joint arrangements
and concluded that its investment in the Huckleberry Mines Ltd. joint
venture should be accounted for on the equity basis. The Ruddock
Creek Joint Venture and the Porcher Island Joint Venture continue to
be accounted for as joint operations whereby the assets, liabilities,
revenues and expenses of these entities will be proportionately
consolidated. As a result of the change in the requirements for the
application of the equity method when accounting for investments in
associates and joint ventures from proportionate consolidation for
Huckleberry the comparative consolidated financial statements have
been restated. Refer to Note 28 of the condensed consolidated interim
financial statements for the three months ended March 31, 2013 for
details of the changes to the comparative financial statements. 
The Sterling mine recommenced operations on July 2012 and reached
commercial production in March 2013. In accordance with the Company's
accounting policy, all revenue and related operating costs prior to
commercial production are applied to the carrying value of the
Sterling mineral property.  
Revenues were $50.9 million in the March 2013 quarter compared to
$60.3 million in the 2012 quarter. There were two concentrate
shipments from the Mount Polley mine in each of the 2013 and 2012
quarters.  
The Company recorded net income of $10.6 million in the March 2013
quarter compared to net income of $4.6 million in the 2012 quarter.
Adjusted net income in the quarter was $10.2 million or $0.14 per
share, versus $8.2 million or $0.11 per share in the March 2012
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 derivative
instruments. Adjusted net income is not a measure recognized under
IFRS in Canada. It is intended to show the current period financial
results excluding the effect of items not settling in the current
period.  
The Company had unrealized net gains on copper derivatives of $0.5
million in the March 2013 quarter compared to $2.2 million of
unrealized losses in the comparative quarter. The Company had no
realized losses or gains on copper derivatives in the 2013 quarter,
and minimal gains in the 2012 quarter.  
Cash flow decreased to $16.5 million in the three months ended March
31, 2013 from $17.9 million in the comparative quarter. The $1.4
million decrease is primarily the result of lower cash flow from
operations and higher administration costs. 
Capital expenditures increased to $58.3 million from $12.8 million in
the comparative 2012 quarter. Expenditures were financed from cash
flow from the Mount Polley mine and from short term debt. At March
31, 2013 the Company had $0.1 million in cash.  
During the March 2013 quarter the Company did not purchase any common
shares for cancellation. 
Mount Polley Mine operations 


 
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                                                 Three Months Ended March 31
Production                                                2013          2012
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Ore milled (tonnes)                                  1,969,909     1,924,701
Ore milled per calendar day (tonnes)                    21,888        21,151
Grade % - copper                                         0.267         0.268
Grade g/t - gold                                         0.255         0.289
Recovery % - copper                                       70.8         65.65
Recovery % - gold                                         63.7         63.42
Copper (lbs)                                         8,207,487     7,455,346
Gold (oz)                                               10,311        11,346
Silver (oz)                                             28,703        24,832
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Through-put for the first quarter 2013 averaged 21,888 tonnes per
calendar day, an increase from the 21,151 tonnes per day achieved in
the comparable 2012 quarter. Copper production was 10% higher
compared to the same quarter in 2012 from virtually the same grade,
with slightly more tonnes milled but much better copper recovery.
Copper recovery increased to 70.8% up from the 65.65% achieved in the
first quarter 2012, as lower copper oxide mineral content ore was
mined from deeper levels in the Springer pit. Waste stripping for
quarter ending March 31, 2013 focused on a pushback in the Cariboo
pit.  
Underground ramping and drifting in the Boundary zone continued with
340 metres completed in the first quarter 2013. 
Mount Polley exploration 
Surface drilling 
During the 2013 March quarter, two surface diamond drill holes were
completed for a total of 1,095 metres. The holes were drilled to
complete the designed program that was largely completed in the 2012
fourth quarter to test deep mineralization in the southeast area of
Springer zone. 
Underground drilling 
Underground diamond drilling resumed in the Boundary zone on February
1. During the first quarter 2013 a total of 41 holes were completed
totalling 3,415 metres of NQ diamond drilling. The drilling continued
into April to ensure all targets had been adequately tested.  
Huckleberry Mine operations 


 
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Production                                       Three Months Ended March 31
(stated 100% - Imperial's allocation= 50%)                2013          2012
----------------------------------------------------------------------------
Ore milled (tonnes)                                  1,480,669     1,446,300
Ore milled per calendar day (tonnes)                    16,452        15,893
Grade (%) - copper                                       0.326         0.291
Recovery (%) - copper                                     90.9          89.0
Copper (lbs)                                         9,679,968     8,269,000
Gold (oz)                                                  710           643
Silver (oz)                                             57,872        42,065
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Copper production for the first quarter 2013 increased 17% with
increases in through-put, recovery and grade compared to the first
quarter 2012. The major contributor to the higher production was
grade, as the majority of ore milled was from the Main Zone Extension
pit, not low grade stockpiles. 
Huckleberry exploration 
In February 2013 a comprehensive geophysical model of the mine site
area was completed, incorporating data from historical magnetometer
and IP surveys with data from Titan-24 DC-IP/MT surveys conducted in
2011 and 2012. Huckleberry staff is currently developing a drill
program for 2013 that will build off of this information and drill
results from 2012. Regional work in 2013 will include a soil sampling
program on the Huckleberry North claims, directed towards developing
new geophysical or drill targets for 2014/2015. 
Red Chris Construction Update  
Red Chris mine development is proceeding with 85% of the engineering
complete as of March 31, 2013. Start of commissioning is scheduled
for May 2014. The 287 kV Northwest Transmission Line (NTL) from
Skeena substation to Bob Quinn is under construction by BC Hydro with
a planned completion date of May 2014. A subsidiary of Imperial will
construct the 93 km extension (NTL Extension) from Bob Quinn to
Tatogga. The permit applications are with the provincial ministries
for review and consultation. Construction of power line structures
access will begin summer of 2013 upon receipt of permits, with
completion scheduled May 2014.  
Site work continued unhindered through the relatively mild winter
weather. Work items in the first quarter included: 


 
--  site clearing 
--  erection of a truck shop for the open pit equipment 
--  construction of a 2.7 km heavy haul road between the truck shop and
    primary crusher 
--  construction of a 2.5 km overland conveyor right of way and service road
    from the primary crusher to the coarse ore bin 
--  excavation for primary crusher and mechanically stabilized earth (MSE)
    wall at 95%, final blast scheduled for early May 
--  topsoil stripping in the tailings impoundment area 
--  installation of additional camp modules (camp facility capacity now 480
    persons) 

 
The first concrete pour in 2013 was on March 24. Concrete pours are
planned to mid-November 2013. The process plant building structural
steel has begun arriving on site for erection starting July 1 with
completion by October 31. The primary crusher, MSE wall, overland
conveyor and coarse ore reclaim tunnel are to be installed this year. 
Sediment control and water diversion structures are under
construction in the Tailings Impoundment Area (TIA) in preparation
for building the North Starter Dam. Earthworks in the TIA area are to
be completed utilizing a combination of equipment owned by Red Chris
with support from the Tahltan Nation Development Corporation.  
The work at Red Chris to date has been funded by cash flow from
operations and the expanded line of credit. Red Chris development
project has made expenditures and commitments totalling $258.2
million and has paid for $140.0 million of these to the end of March
2013. 
Red Chris Exploration Update 
The Red Chris exploration program was suspended in May 2012 when the
project focus shifted from exploration to mine development. 
Sterling Mine 
Stoping operations from the 3292 level produced 26,931 tons and
development of 744 feet of drift on the 3320, 3285, and 3260 levels
resulted in an additional 6,934 tons of ore. 
Improvements were made to the mine ventilation system by developing a
raise between the 3260 and 3320 levels, creating a less restrictive
pathway for providing fresh air to the 3260 level. Further changes
will be required once active mining resumes on the 3320 level, which
will include a drive-through ventilation curtain and/or door. 


 
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                                       Three Months Ended         Year Ended
Production                                 March 31, 2013  December 31, 2012
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Ore Stacked - tons                                 29,688             77,944
Gold Grade - oz/ton                                 0.072              0.082
Gold ounces - added to heap                         2,138              6,393
Gold ounces - in-process & poured                   1,760              3,613
Gold shipped - ounces                                 769              2,852
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In the 2013 first quarter an additional 29,688 tons containing
approximately 2,138 ounces were stacked on the leach pad, of which
12,821 tons containing 1,068 ounces was stacked in March. With the
main 144 zone stope now well established, ore can be released at a
higher rate. A second underground haul truck is being acquired to
increase the mining rate. 
Ruddock Creek 
The Ruddock Creek Joint Venture is owned by Imperial (50%), Mitsui
Mining and Smelting Co. Ltd. (30%) and Itochu Corporation (20%).
During the March 2013 quarter, an updated resource calculation for
the Ruddock Creek property was completed.  
The Joint Venture is currently planning the 2013 program which will
include metallurgical testing of dense media separation, flotation,
acid base accounting, paste backfill, humidity cell testing and site
infrastructure studies. Metallurgical work will include the
collecting and testing of the Upper E, Lower E, Creek and V zones
separately. Also continuing is the collection of baseline
environmental and geotechnical information for future permitting and
engineering studies. 
Outlook 
Base and precious metals production allocable to Imperial in 2013
from the Mount Polley, Huckleberry and Sterling mines is anticipated
to be 58.5 million pounds copper, 54,600 ounces gold and 195,000
ounces silver.   
At Mount Polley the focus will be on increasing mining productivity
to ensure the stripping required by the new mine plan to access the
ore is completed in a timely and cost effective manner. The first
underground stoping operations in the Boundary zone are expected to
begin this year. Mount Polley is expected to produce 38.5 million
pounds copper, 43,000 ounces gold and 100,000 ounces silver in 2013.  
At Huckleberry the focus will be the completion and commissioning of
the new tailings storage facility, and on increasing mining
productivity to ensure the Main Zone Optimization pit is able to
supply mill feed when the Main Zone Extension pit is completed.
Huckleberry is expected to produce 40.0 million pounds copper, 3,200
ounces gold and 190,000 ounces silver in 2013.  
At Sterling the focus will be on mining the sub-level cave which was
started in January 2013. Pulling ore from this caving operation will
be key to achieving the 2013 production target of 10,000 ounces gold.
At Sterling, a record 12,821 tons containing 1,068 ounces of gold was
mined and stacked on the leach pad in March. To further increase the
mining rate an additional underground haulage truck is being acquired
to increase the mining rate, to our target of 18,000 tons per month.  
Engineering at Red Chris was 85% complete as of March 31, 2013. In
2013 the focus on-site will be the erection of the mill building and
to have the structure enclosed by October 2013. This will enable the
installation of equipment inside the building to proceed during the
winter of 2013-2014 and start commissioning in May 2014. Key to
meeting this schedule will be the completion of the 287kV Northwest
Transmission Line (NTL) from Skeena substation to Bob Quinn, and a 93
kilometre extension from Bob Quinn to Tatogga (NTL Extension). The
Company will need to secure further financing in 2013 to fund
construction costs at Red Chris. Completion of this funding is
expected by the summer of 2013.  
Ruddock Creek expenditures will be funded by Imperial and the joint
venture partners. The work at Ruddock Creek will include
metallurgical testing and environmental and engineering studies. 
Information Related to this Press Release  
Detailed financial information is provided in the Management's
Discussion & Analysis within the 2013 First Quarter Report available
on www.imperialmetals.com and on www.sedar.com. 
About Imperial  
Imperial is an exploration, mine development and operating company
based in Vancouver, British Columbia. The Company operates the Mount
Polley copper/gold mine in British Columbia and the Sterling gold
mine in Nevada. Imperial has 50% interest in the Huckleberry
copper/molybdenum mine and has 50% interest in the Ruddock Creek
lead/zinc property, both in British Columbia. The Company is in
development of its wholly owned Red Chris copper/gold property in
British Columbia.  
Cautionary Note Regarding "Forward-Looking Information" 
This information is a review of the Company's operations and
financial position as at and for the period ended March 31, 2013, and
plans for the future based on facts and circumstances as of May 14,
2013. Except for statements of historical fact relating to the
Company, including our 50% interest in Huckleberry, certain
information contained herein constitutes forward-looking information. 
When we discuss mine plans; costs and timing of current and proposed
exploration; development; production and marketing; capital
expenditures; construction of transmission lines; cash flow; working
capital requirements and the requirement for additional capital;
operations; revenue; margins and earnings; future prices of copper
and gold; future foreign currency exchange rates; future accounting
changes; future prices for marketable securities; future resolution
of contingent liabilities; receipt of permits; or other matters that
have not yet occurred, we are making statements considered to be
forward-looking information or forward-looking statements under
Canadian and United States Securities Law. We refer to them in this
press release as forward-looking information.  
The forward-looking information in this press release may include
words and phrases about the future, such as: plan, expect, forecast,
intend, anticipate, estimate, budget, scheduled, believe, may, could,
would, might or will. We can give no assurance the forward-looking
information will prove to be accurate. It is based on a number of
assumptions management believes to be reasonable, including but not
limited to: the continued operation of the Company's mining
operations, no material adverse change in the market price of
commodities or exchange rates, that the mining operations will
operate and the mining projects will be completed in accordance with
their estimates and achieve stated production outcomes and such other
assumptions and factors as set out herein.  
It is also subject to risks associated with our business, including
but not limited to: risks inherent in the mining and metals business;
commodity price fluctuations and hedging; competition for mining
properties; sale of products and future market access; mineral
reserves and recovery estimates; currency fluctuations; interest rate
risks; financing risks; regulatory and permitting risks;
environmental risks; joint venture risks; foreign activity risks;
legal proceedings; and other risks that are set out in the Company's
Management's Discussion & Analysis in the 2012 Annual Report.  
If our assumptions prove to be incorrect or risks materialize, our
actual results and events may vary materially from what we currently
expect as provided in this press release. We recommend you review the
Company's Management's Discussion & Analysis in the 2012 Annual
Report, which includes discussion of material risks that could cause
actual results to differ materially from our current expectations.
Forward-looking information is designed to help you understand
management's current views of our near and longer term prospects, and
it may not be appropriate for other purposes. We will not necessarily
update this information unless we are required to by securities laws.
Contacts:
Imperial Metals Corporation
Brian Kynoch
President
604.669.8959 
Imperial Metals Corporation
Andre Deepwell
Chief Financial Officer
604.488.2666 
Imperial Metals Corporation
Gordon Keevil
Vice President Corporate Development
604.488.2677 
Imperial Metals Corporation
Sabine Goetz
Shareholder Communications
604.488.2657
investor@imperialmetals.com
www.imperialmetals.com