VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 03/20/13 -- (All US$ unless otherwise specified)
Mercator Minerals Ltd (TSX: ML) ("Mercator" or the "Company") today announced its financial results for the three months and year ended December 31, 2012. For 2012 the Company reported revenues of $262.6 million, an operating profit of $24.7 million before the El Creston asset impairment charge(i), a net loss of $128.7 million (loss of $0.48 per share, basic) or an adjusted net loss(i) of $1.2 million ($nil per share). Included in the net loss is the $119.8 million (or $0.44 per share) non-cash accounting charge for the impairment of the El Creston project. Cash flow from operations, before non-cash working capital changes, was $20.6 million in 2012. For the fourth quarter of 2012, the Company reported revenues of $77.6 million, with operating profit of $10.6 million before the El Creston asset impairment charge(i), net loss of $115.2 million ($0.43 per share, basic) or income of $4.4 million ($0.02 per share) on an adjusted net income(i) basis. The net loss recorded during the fourth quarter includes the previously mentioned write-down of the El Creston project. Cash flow from operations before non-cash working capital changes were $9.8 million in the fourth quarter of 2012.
"During 2012 we delivered consistent quarter over quarter production improvements which, combined with cash generated at the operations and our improved financial position, should provide the momentum for a stronger 2013," commented Bruce McLeod, President and CEO of Mercator. "We are focussed on delivering shareholder value by executing our plan of continual improvement through increased production and reduced costs at Mineral Park while pursuing value-accretive options to build our El Pilar SX/EW copper project."
YEAR ENDED 2012 HIGHLIGHTS AND SIGNIFICANT ITEMS-- Implemented a safety program called "Safe Production" which has significantly improved safety at Mineral Park - the mine has now achieved 472 consecutive days without a lost time accident.-- Achieved record molybdenum and record copper equivalent(ii) production: -- 87.5 million pounds of copper equivalent(ii) production for the year, comprised of 40.9 million pounds of copper in concentrates and cathode, 10.3 million pounds of molybdenum in concentrates and 677,498 ounces of silver.-- Comparing the year ended 2012 to 2011, Mineral Park has: -- Achieved sustained, quarter-on-quarter improvements in copper equivalent(ii) production, mill throughput and metal recoveries; -- Increased copper and molybdenum recoveries to 79.9% and 79.5% respectively, for gains of 4% and 13%, respectively; -- Increased average throughput by 28% to 45,570 tons per day ("tpd"); -- Increased total material mined by 27% to 29.5 million tons; and -- Reduced onsite operating costs by 7% to $10.29 per ton milled.-- Working capital position as at year-end 2012 was $2.0 million, which includes a current liability of $15.2 million for the Company's 2013 copper forward sales, and considered discounts that will be applied to future revenues. Also included in working capital is $27.7 million of cash and current restricted cash.-- Based primarily on the decline in molybdenum prices since the June 2011 acquisition, the Company has elected to defer development of the El Creston project and therefore has reviewed its estimated net present value of future cash flows. The review has resulted in a non-cash accounting charge of $119.8 million which was recorded in the fourth quarter of 2012. The reduced carrying value does not alter the importance of El Creston for the Company's long-term future.-- In October 2012, the Company increased its financial flexibility and enhanced its financial position through the restructuring of the Mineral Park credit facilities, a $29 million private placement, replaced the expiring El Pilar pre-construction facility with a new three-year facility and repaid overdue trade payables.-- In 2011 and 2012, Mercator has repaid $48.6 million in total debt principal and reduced its forward sales commitments on its copper hedges by 50%.-- In October 2012, the Company reported the results of an optimized 2012 Feasibility Study on the El Pilar project ("Project"), which further enhanced the Project's already robust economics from the 2011 Feasibility Study.FOURTH QUARTER 2012 HIGHLIGHTS AND SIGNIFICANT ITEMS-- Production for the fourth quarter of 2012 was a record for a single quarter and totaled 23.8 million copper equivalent(ii) pounds, comprised of 10.9 million pounds of copper in concentrates and cathode, 2.9 million pounds of molybdenum in concentrates and 156,985 ounces of silver.-- During the quarter, the Company achieved recoveries of 83.1% and 85.5%, for copper and molybdenum, which, for the third consecutive quarter, was above design rates of 80% and 75% respectively.-- Average throughput was a record of 44,978 tpd.-- Mineral Park generated stand-alone cash flows from operations before non-cash working capital changes of $14.3 million.OVERVIEW--------------------------------------------------------------------------- Three months ended Year ended December 31, December 31, ------------------------------$ millions unless otherwise noted 2012 2011 2012 2011---------------------------------------------------------------------------Revenues 77.6 70.7 262.6 263.0---------------------------------------------------------------------------Operating profit before the El Creston asset impairment charge(i) 10.6 9.3 24.7 42.7---------------------------------------------------------------------------El Creston asset impairment charge (119.8) - (119.8) ----------------------------------------------------------------------------Net (loss) income (115.2) (32.9) (128.7) 91.7(Loss) earnings per share (basic) $(0.43) $(0.13) $(0.48) $ 0.41---------------------------------------------------------------------------Adjusted net income(i) 4.4 1.5 (1.2) 8.0Adjusted earnings per share(i) (basic) $0.02 $nil $nil $0.04---------------------------------------------------------------------------Cash flow from operations, before non-cash working capital changes 9.8 7.2 20.6 18.6---------------------------------------------------------------------------Production (million pounds) - Copper 10.9 11.3 40.9 42.4 - Molybdenum 2.9 2.3 10.3 7.0 - Copper equivalent(ii) 23.8 21.7 87.5 74.1---------------------------------------------------------------------------Throughput (tons per day) 44,978 44,264 45,570 35,503---------------------------------------------------------------------------Recoveries (%) - Copper 83.1 80.1 79.9 77.2 - Molybdenum 85.5 71.6 79.5 70.1---------------------------------------------------------------------------On-site operating costs ($/ton milled) 10.83 9.62 10.29 11.04---------------------------------------------------------------------------Cash costs(i) on a co-product basis ($/lb) - Copper 2.56 2.23 2.48 2.32 - Molybdenum 9.52 10.43 10.37 11.58---------------------------------------------------------------------------Average realized prices ($/lb) - Copper (excluding hedges) 3.52 3.60 3.64 3.89 - Molybdenum 11.35 13.44 12.21 14.90---------------------------------------------------------------------------
