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TORONTO, CANADA -- (Marketwire) -- 02/21/13 -- Inmet Mining Corporation (TSX: IMN) -
All amounts in US dollars unless indicated otherwise
Fourth quarter highlights
-- Strong earnings from operations Earnings from operations were $112 million compared to $89 million in the fourth quarter of 2011. This increase is due to the strong performance of our operations. Earnings were negatively affected by the timing of shipments at Cayeli and finalization adjustments, together totalling $11 million for the quarter or $0.15 per share.-- Copper and zinc production exceeded expectations Our operations produced 111,700 tonnes of copper and 66,300 tonnes of zinc in 2012, exceeding our target ranges for the year. Las Cruces has consistently achieved monthly design capacity of 6,000 tonnes of copper cathode since first crossing this threshold in April 2012.-- Increase in closure liabilities for closed properties We recognized a charge of $10 million in earnings from operations, or $0.14 per share, for an increase in estimated costs for post-closure obligations at our closed properties this quarter. This compares to a charge of $16 million recognized in the fourth quarter of 2011 primarily as a result of a decrease in the discount rates we applied in determining the liabilities at period end.-- Net income reduced by foreign exchange losses Net income of $38 million this quarter reflects after-tax foreign exchange losses of $19 million, or $0.27 per share, mainly on US dollar cash held in our euro-based entities. Our excess cash balances are held in US dollar funds as we plan to use these funds for the construction of Cobre Panama.-- Construction of Cobre Panama progressing By the end of the year, Minera Panama S.A. had entered into commitments for approximately $4.1 billion, representing 67 percent of estimated capital expenditures for the Cobre Panama project.-- Issuance of $500 million in senior unsecured notes On December 18, 2012, we issued $500 million in senior unsecured notes, the proceeds of which will be used to fund development of Cobre Panama. The notes bear a coupon rate of interest of 7.5 percent and mature on June 1, 2021.-- First Quantum offer On January 9, 2013, First Quantum Minerals Ltd. (First Quantum) commenced an unsolicited offer to acquire all of Inmet Mining's issued and outstanding common shares for consideration of cash or First Quantum shares or a combination of cash and First Quantum shares. Inmet's Board of Directors, on the recommendation of its Special Committee of the independent directors and with input from its, and the Special Committee's, financial and legal advisors, has recommended that Inmet shareholders reject this offer for reasons as set out in the Directors' Circular mailed to shareholders.Key financial data---------------------------------------------------------------------------- three months ended December 31(thousands, except per share amounts) 2012 2011 change----------------------------------------------------------------------------FINANCIAL HIGHLIGHTSSalesGross sales $259,868 $233,394 +11%Net incomeNet income from continuing operations $38,221 $46,544 -18%Net income from continuing operations per share $0.56 $0.67 -16%Net income from discontinued operations - - -Net income from discontinued operations per share - - -Net income attributable to Inmet shareholders $38,775 46,544 -17%Net income per share $0.56 $0.67 -16%Cash flowCash flow provided by operating activities $116,851 $70,768 +65%Cash flow provided by operating activities per share(1) $1.68 $1.02 +65%Capital spending(2) $342,467 $57,100 +500%----------------------------------------------------------------------------OPERATING HIGHLIGHTSProduction Copper (tonnes) 27,600 26,200 +5% Zinc (tonnes) 20,700 17,900 +16% Pyrite (tonnes) 222,500 210,500 +6%Copper cash cost (US $ per pound)(3) $0.85 $0.82 +4%-------------------------------------------------------------------------------------------------------------------------------------------------------- year ended December 31(thousands, except per share amounts) 2012 2011 change----------------------------------------------------------------------------FINANCIAL HIGHLIGHTSSalesGross sales $1,123,977 $947,911 +19%Net incomeNet income from continuing operations $330,076 $256,314 +29%Net income from continuing operations per share $4.78 $3.86 +24%Net income from discontinued operations - 80,786 -100%Net income from discontinued operations per share - $1.22 -100%Net income attributable to Inmet shareholders $331,211 $337,100 -2%Net income per share $4.78 $5.08 -6%Cash flowCash flow provided by operating activities $543,392 $391,976 +39%Cash flow provided by operating activities per share(1) $7.83 $5.90 +33%Capital spending(2) $785,761 $201,909 +289%----------------------------------------------------------------------------OPERATING HIGHLIGHTSProduction Copper (tonnes) 111,700 84,800 +32% Zinc (tonnes) 66,300 80,400 -18% Pyrite (tonnes) 891,700 804,900 +11%Copper cash cost (US $ per pound)(3) $0.88 $0.86 +2%---------------------------------------------------------------------------- as at December 31 as at December 31FINANCIAL CONDITION 2012 2011(US millions, except ratio)Current ratio 8.4 to 1 9.3 to 1Net working capital balance $2,358 $1,263Cash balance (including bonds and other securities; millions) $3,618 $1,655Gross debt(4) $1,960 $17Net debt (net cash)(5) ($1,658) ($1,639)Shareholders' equity attributable to Inmet shareholders $3,972 $3,306----------------------------------------------------------------------------(1) Cash flow provided by operating activities divided by average shares outstanding for the period.(2) The year ended December 31, 2012 includes capital spending of $713 million at Cobre Panama. The year ended December 31, 2011 includes capital spending of $129 million at Cobre Panama.(3) Copper cash cost per pound is a non-GAAP financial measure - see Supplementary financial information on pages 31 to 33.(4) Gross debt includes long-term debt and the current portion of long-term debt(5) Net debt (net cash) is a non-GAAP measure defined as long-term debt less cash and short-term investments, including bonds and other securities.
