Imperial Reports 2013 Third Quarter Financial Results

Imperial Reports 2013 Third Quarter Financial Results 
VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 11/13/13 -- Imperial
Metals Corporation (TSX:III) - reports comparative financial results
for the three and nine months ended September 30, 2013 and 2012 are
summarized 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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In thousands of CDN$ except per      Three months ended   Nine months ended 
 share amounts                          September 30        September 30    
                                         2013       2012      2013      2012
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Revenues                            $  51,668  $  29,682 $ 143,851 $ 140,826
Income from mine operations         $  25,194  $  11,144 $  52,012 $  38,213
Equity income (loss) in Huckleberry $    (345) $     564 $   3,868 $   3,813
Net Income                          $  14,721  $   4,343 $  32,883 $  20,908
Net Income Per Share                $    0.20  $    0.06 $    0.44 $    0.28
Adjusted Net Income (1)             $  16,641  $   7,432 $  32,826 $  26,172
Adjusted Net Income Per Share (1)   $    0.22  $    0.10 $    0.44 $    0.35
Cash Flow (1)                       $  28,639  $  11,508 $  61,126 $  45,228
Cash Flow Per Share (1)             $    0.38  $    0.15 $    0.82 $    0.61
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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 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 and  
before net change in working capital balances, income and mining taxes paid,
and interest paid. 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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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. In the nine months ended September 30,
2013 a total of 5,049 ounces gold were sold and the sale proceeds
from the 2,743 ounces related to the period prior to commercial
production was applied to the carrying value of the mineral property
with the sales proceeds of the 2,267 ounces recorded in the Statement
of Income and the balance of 39 ounces held in inventory. 
Revenues were $51.7 million in the September 2013 quarter compared to
$29.7 million in the 2012 quarter primarily due to increased sales
volumes in the current quarter. There were two shipments in the 2013
quarter compared to one shipment in the 2012 quarter.  
The Company recorded net income of $14.7 million in the September
2013 quarter compared to net income of $4.3 million in the 2012
quarter. Adjusted net income in the quarter was $16.6 million or
$0.22 per share, versus $7.4 million or $0.10 per share in the
September 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 gold
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 recorded $1.4 million unrealized losses on copper
derivatives in the September 2013 quarter compared to a net realized
and unrealized loss of $2.1 million in the comparative quarter. The
Company had no realized losses or gains on copper or gold derivatives
in the September 2013 quarter compared to realized gains of $0.1
million in the September 2012 quarter.  
Cash flow increased to $28.6 million in the three months ended
September 30, 2013 from $11.5 million in the comparative quarter. The
increase of $17.5 million is primarily due to the increase of
concentrate shipments over the comparative quarter.  
Capital expenditures increased to $137.9 million from $46.3 million
in the comparative 2012 quarter. Expenditures were financed from cash
flow from the Mount Polley mine, current and non-current term debt in
addition to $9.6 million of non-current debt for equipment financed
in the current quarter. At September 30, 2013 the Company had $4.9
million in cash.  
During the September 2013 quarter the Company did not purchase any
common shares for cancellation. 


 
Mount Polley Mine operations                                                
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Production                         Three months ended    Nine months ended  
                                      September 30         September 30     
                                        2013      2012       2013       2012
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Ore milled (tonnes)                2,105,459 2,049,547  6,083,103  6,136,202
Ore milled per calendar day                                                 
 (tonnes)                             22,885    22,278     22,282     22,395
Grade % - copper                       0.311     0.279      0.295      0.274
Grade g/t - gold                       0.275     0.318      0.267      0.303
Recovery % - copper                    76.33     68.17      73.93      65.70
Recovery % - gold                      71.15     66.18      67.91      65.00
Copper (lbs)                      11,021,476 8,593,838 29,264,291 24,390,575
Gold (oz)                             13,231    13,869     35,475     38,917
Silver (oz)                           33,253    30,592     95,119     85,620
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Quarterly copper production was 11,021,476 pounds, up 28% from the
comparable quarter in 2012. The increase in copper production is the
result of the higher copper grade and better recovery, more than
offsetting the slightly lower throughput. Gold production for the
quarter was down 5% due to lower gold grade ore being treated. 
The majority of mill feed for the quarter came from the Phase 3
Springer pit, however small amounts of Cariboo ore are now being
delivered as the pushback of the Cariboo pit continues. Boundary zone
underground work continues with 360 metres of ramping, cross-cutting
and raising completed in the quarter.  


 
Huckleberry Mine operations                                                 
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Production                         Three months ended    Nine months ended  
                                      September 30         September 30     
(stated 100% - Imperial's                                                   
 allocation= 50%)                       2013      2012       2013       2012
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Ore milled (tonnes)                1,417,199 1,493,700  4,436,555  4,410,800
Ore milled per calendar day                                                 
 (tonnes)                             15,404    16,236     16,251     16,098
Grade (%) - copper                     0.364     0.285      0.344      0.299
Recovery (%) - copper                   92.2      89.8       91.6       89.8
Copper (lbs)                      10,472,302 8,436,000 30,833,374 26,096,000
Gold (oz)                                701       617      2,202      1,946
Silver (oz)                           61,323    45,958    179,639    139,155
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Throughput for the third quarter 2013 averaged 15,404 tonnes per
calendar day down from the 16,236 tonnes achieved in the third
quarter 2012 due to harder ore. Copper production was up over 24% on
higher grades and recovery. During the quarter virtually all ore
delivered to the mill came from the 946 to 934 benches within the MZX
pit. Stripping of the tailings and waste from the old Main zone pit
constituted the bulk of the waste mining. 
The new tailings storage facility (TMF-3) construction on the starter
and saddle dams, as well as the piping, pumping, cycloning and power
infrastructure required to operate the TMF3 was completed in August
and is now being operated. 
Huckleberry exploration 
A diamond drill program of approximately 3,462 metres over 11 holes
was drilled to expand several targets within the mine site area
outlined by 2011 and 2012 drilling. Core logging, assaying and QA/QC
are ongoing. In addition, 7 holes totalling 1,750 metres are planned
for completion in the fourth quarter. Huckleberry also completed a
soil sampling program within the nearby North Huckleberry claims to
test for new geophysical or drill targets. Assaying and analysis is
to be completed in the fourth quarter. 
Red Chris Construction Update  
Red Chris mine development is proceeding with 94% of the engineering
complete as of September 30, 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 is constructing the 93 kilometre extension
(Iskut Extension) from Bob Quinn to Tatogga. The power line
engineering design has reached 90% completion. Construction of access
roads and right of way clearing for the Iskut Extension which began
in July is 54% complete. A 100 person camp and laydown yards were
established along the route to store and assemble lattice structure
components. An experienced power line constructor has been retained
to install foundations, structures, hardware and conductor. 
The Red Chris site work continued through summer 2013. Work items in
the third quarter 2013 included: 


 
--  placing of 2,852 cubic metres of concrete in the primary crusher,
    overland conveyor transfer towers and bents; 
--  construction of the MSE wall at the primary crusher to approximately 60%
    complete; 
--  installation of transformer concrete foundations at the main electrical
    substation; 
--  installation of 16,396 cubic metres of concrete (project to date) in the
    process building and reclaim tunnel; 
--  erection of structural steel, cladding and roofing in the process
    building and multi-plate in the reclaim tunnel; 
--  setting the rougher tank cells, cleaner column cells, filter wash tank,
    filtrate tank, stock tank and thickener in the flotation bay; 
--  mechanical installation of the overland conveyor, pebble crusher,
    vertimill base, apron feeders, chutes and pump assemblies; 
--  placing and compaction of 1.3 million cubic metres of materials in the
    tailings storage facility; and 
--  construction of the tailings and reclaim lines. 

 
The first concrete pour in 2013 was on March 24. Concrete pours are
planned to early December 2013. The primary crusher, MSE wall,
overland conveyor and coarse ore reclaim tunnel are to be installed
this year. Construction has begun on the site electrical substation,
reagent building and booster pump house. On November 5, the roof and
virtually all the cladding for the process plant were in place,
providing a covered area for trades to work inside through the
winter. 
The North Starter Dam earthworks are ongoing in the tailings
impoundment area (TIA) utilizing a combination of equipment owned by
Red Chris, with support from the Tahltan Nation Development
Corporation and other contractors. A portion of the mining fleet
delivered during the third quarter, including four Caterpillar 793
trucks and a 994 loader, were used to construct the tailings storage
facility. 
The work at Red Chris to date has been funded by cash flow from
operations, equipment financed by non-current debt, the Company's
lines of credit with its bank and with a significant shareholder. The
latter was increased to $200.0 million from $130.0 million subsequent
to September 30, 2013 to provide further time in arranging long term
financing for Red Chris.  
Red Chris Exploration  
Exploration has been temporarily suspended while the Company
completes the development of the Red Chris mine.  
Sterling Mine Operations  
Sterling stoping operations from the 3292, 3260 and 3220 levels
produced 62,162 tons of ore. Development work of 125 feet produced
1,060 tons of ore and 620 tons of waste. Development included work on
3220 cross-cuts and a drift on the 3320 level to access to back end
of the stope. 
In the third quarter 2013 a total of 63,223 tons of ore, containing
5,362 ounces gold, were stacked onto the leach pad at an average
grade of 0.085 ounces per ton. 


 
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Production                              Three months ended Nine months ended
                                           September 30      September 30   
                                             2013     2012     2013     2012
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Ore Stacked - tons                         63,223   14,577  140,023   64,505
Gold Grade - oz/ton                         0.085    0.083    0.081    0.083
Gold ounces - added to heap                 5,362    1,245   11,326    5,354
Gold ounces - in-process & poured           3,810    1,982    6,784    2,799
Gold shipped - ounces                       2,877    1,260    5,851    2,077
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Ruddock Creek 
The Ruddock Creek Joint Venture is owned by Imperial (50%), Mitsui
Mining and Smelting Co. Ltd. (30%) and Itochu Corporation (20%). The
Ruddock Creek zinc/lead property is located 155 kilometres northeast
of Kamloops in the Scrip Range of the Monashee Mountains in southeast
British Columbia. 
During the quarter the Joint Venture completed the 2013 field program
which included site infrastructure studies, metallurgical testing
including dense media separation, spiral, flotation, mineralogical,
acid base accounting, and humidity cell testing. The work included
collecting and testing mineralized material from each of the Lower E,
Creek and V zones, and collecting and testing representative samples
of each rock type identified on the property. The collection of
baseline environmental and geotechnical information included
trenching and geotechnical core drilling in order to provide data for
future permitting and engineering studies. Surface exploration
carried out during the quarter included detailed geological and
structural mapping in a number of areas, as well as the collection of
mineralized and non-mineralized rock samples for age-dating purposes.
A higher capacity water control structure for the underground
discharge was constructed. Ongoing consultations continued with area
First Nations. The camp has now been closed for the forthcoming
winter period. 
Outlook 
Mount Polley, Sterling, and Imperial's share of production from
Huckleberry to the end of the third quarter totalled 44.7 million
pounds copper, 43,400 ounces gold and 184,900 ounces silver. These
production levels put operations on target to meet the 2013
production guidance of 58.5 million pounds copper, 54,600 ounces gold
and 195,000 ounces silver. 
At Huckleberry, with the TMF-3 tailing impoundment now in service,
the focus is on removing tailings and waste rock from the old Main
zone pit so ore can be released from the expanded Main Zone
Optimization pit in 2014. 
At Mount Polley the majority of ore will continue to come from the
Phase 3 Springer pit, supplemented with minor ore production from the
pushback of the Cariboo pit and underground excavation in the
Boundary zone. 
With winter approaching at Red Chris, work on the North Starter Dam
has been suspended. The target elevation (1,097 metres) for the North
Starter Dam has been achieved, allowing sufficient water from the
spring run-off to be stored for startup of operations in 2014. 
Work on cladding and roofing of the main portions of the concentrator
building has been completed, and installation of equipment inside the
building has begun. Work inside the building will continue through
the winter. Construction of the Iskut Extension of the Northwest
Transmission Line is underway with 54% of the right of way clearing
and access road construction completed, and assembly of the tower
lattice structure has started. We continue to target the end of May
2014 for the start of commissioning at Red Chris. 
Sterling will continue stope production from the three active levels.
Development of the 3320 level, an additional ore zone identified by
underground core drilling, will be initiated. Underground core
drilling will continue to collect information on untested portions of
the 144 zone, as well as looking for possible fault off-sets of the
zone.  
Information Related to this Press Release 
Detailed financial information is provided in the Management's
Discussion & Analysis within the 2013 Third 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 September 30, 2013,
and plans for the future based on facts and circumstances as of
November 12, 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
 
 
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