ENP Newswire -
Release date- 15082014 -
The increase in revenue in the
The London Metals Exchange cash settlement copper price per pound averaged
The CDN Dollar compared to the US Dollar averaged about 6.6% lower in the
Revenue in the
Income from mine operations increased to
Net income for the
The net impact of the
The decrease in the copper and gold price compared to the price in the derivative contracts resulted in a
The Company recorded
Income and mining tax expense increased by
Cash flow increased to
Capital expenditures, inclusive of capitalized interest, were
The Company had no short term debt at
The Company reports four non-IFRS financial measures: Adjusted net income, Adjusted EBITDA, cash flow and cash cost per pound of copper produced which are described in detail under the heading Non-IFRS measures in the MD&A for the year ended
Adjusted Net Income
Adjusted net income in the
Adjusted net income is calculated by removing the gains or losses, net of related income taxes, resulting from mark to market revaluation of derivative instruments not related to the current period, net of taxes, and unrealized foreign exchange gains or losses on non-current debt, net of tax, as further detailed below.
Adjusted EBITDA is not necessarily comparable to similarly titled measures used by other companies. We believe that the presentation of Adjusted EBITDA is appropriate to provide additional information to investors about certain non-cash or unusual items that we do not expect to continue at the same level in the future, or other items that we do not believe to be reflective of our ongoing operating performance.
We further believe that our presentation of this non-IFRS financial measure provides information that is useful to investors because it is an important indicator of our operations and the performance of our core business.
Adjusted EBITDA is not a measurement of operating performance or liquidity under IFRS and should not be considered as a substitute for earnings from operations, net income or cash generated by operating activities computed in accordance with IFRS. Adjusted EBITDA has limitations as an analytical tool and therefore Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business.
Cash Flow and Cash Flow 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. Cash flow is defined as cash flow from operations before the net change in non-cash working capital balances, income and mining taxes, and interest paid and cash flow per share is the same measure divided by the weighted average number of common shares outstanding during the period.
Cash Cost Per Pound of Copper Produced
The cash cost per pound of copper produced is a non-IFRS financial measure that does not have a standardized meaning under IFRS, and as a result may not be comparable to similar measures presented by other companies. Management uses this non-IFRS financial measure to monitor operating costs and profitability. The Company is primarily a copper producer and therefore calculates this non-IFRS financial measure individually for its two copper producing mines,
The method of calculating the cash cost per pound of copper produced are described in detail under the heading Non-IFRS measures in the MD&A for the year ended
In the three month period ending
These amounts include realized gains of under
The Company utilizes a variety of derivative instruments including the purchase of puts, forward sales and the use of min/max zero cost collars. The Company's income or loss from derivative instruments may be very volatile from period to period as a result of changes in the copper and gold prices and CDN/US exchange rated compared to the copper and gold prices and CDN/US exchange rate at the time when these contracts were entered into and the type and length of time to maturity of the contracts.
Unrealized derivative instruments for
Based on the
Future changes in the CDN/US Dollar exchange rate could have a material impact on the derivative instruments related to the swap however a significant portion of this gain or loss will be offset by the foreign exchange gain or loss on the Notes.
DEVELOPMENTS DURING THE
MOUNT POLLEY MINE OPERATIONS
Open pit mining activity for the 2014 second quarter continued to focus on providing mill feed from the Springer Phase 3 pit, while stripping the Cariboo pit. Mining in both the Springer and Cariboo pits continued with the planned completion of Springer Phase 3 by the end of the year, and transition of mill feed to the Cariboo pit in the 2014 fourth quarter, however the tailings dam breach will result in the loss of mine production for an indeterminate period of time.
Mining productivity increased in the second quarter with a total of 9,396,162 tonnes, or 103,255 tonnes per day mined from the pits.
The underground mine achieved significant milestones in the second quarter, with the completion of the ventilation system and the underground blasting infrastructure. The first production blasts were shot in May in the Boundary zone 'A' stopes. Production levels made steady increases through the quarter with approximately 16,000 tonnes mined in June. In June, mine activities shifted to focus primarily on hauling ore. Blasthole and definition drilling continued throughout the quarter, by both Boart Longyear and
HUCKLEBERRY MINE OPERATIONS
Throughput for the 2014 second quarter averaged 15,213 tonnes per calendar day, down from the 16,909 tonnes achieved in the comparative 2013 quarter due.
Huckleberry mill operations resumed
A replacement bull gear and two pinion gears for the SAG mill have been ordered and are expected to arrive on-site late this year. Until then, monthly inspections are being performed to monitor the status of the damaged teeth on the bull gear.
Forecast production for 2014 from Huckleberry was 42.0 million pounds copper and 200,000 ounces silver, but as a result of the milling time lost, the revised production estimate is approximately 36.0 million pounds copper and 175,000 ounces silver.
RED CHRIS CONSTRUCTION UPDATE
The BC Hydro 287kv Northwest Transmission Line (NTL) was energized between the Skeena and
These sleeves are used to splice the conductor and dead end assemblies at the towers. The redesigned implosion sleeves were delivered at the end of July. Stringing operations are now approximately 1/3 complete. The conductor stringing, sagging and clipping is planned through August and September.
The 16 kilometre 287kv power line from Tatogga to the mine site is complete. The 25kv site distribution power line is complete except for tie-ins to transformers. On-site construction at Red Chris is well advanced. Interior steel, mechanical installation, and the tailings and reclaim water systems are 93% complete.
Piping and electrical work has progressed 70% and is expected to be completed on time for the commissioning and start-up of milling operations at Red Chris. Pre-commissioning activities for the crusher and conveyors will be commencing next week. Mining operations have commenced at Red Chris with the first excavation of ore grade material from the East zone. This material is being stockpiled for commencement of milling operations.
A geotechnical drilling program in June delineated an additional glacial till borrow in the Tailings Impoundment Area. This till and associated sand and gravel will be used to raise the
The forecast net construction cost of the Red Chris mine is now estimated to be
STERLING MINE OPERATIONS
Mining in the 2014 second quarter focused on the north limb of the 144 zone. Stoping occurred on two levels; 3320, and 3275. A total of 125 feet of drifting was completed on the 3260 and 3180 level.
Mining operations were temporarily suspended on
Exploration and development expenditures at
The Ruddock Creek Joint Venture initiated the 2014 program of additional metallurgical testing on a new sample which will be collected from the Upper E zone, additional geotechnical drilling and groundwater well installations, and ongoing baseline data collection for future permitting requirements. Surface exploration in the 2014 field season will include detailed geological and structural mapping in a number of areas.
The tailings dam breach at the
The Company is also projecting an additional
The redesigned implosion sleeves used to splice conductors on the
The Company has secured additional financing in the amount of
I would like to give my thanks to all our people and other stakeholders who have helped us at
The Company intends to issue, on a non-brokered private placement basis, an aggregate of
Interest will be payable semi-annually, with the first payment due on
To the extent that the maximum issuance of Convertible Debentures is not achieved, Edco has committed to purchasing 6-year Non-convertible Debentures bearing interest at 12% in the event of the shortfall to ensure that the total amount raised will be
Closing of these transactions is scheduled to occur on or before
The material change report in relation to this transaction will be filed less than 21 days before closing as the Company intends to complete this transaction as soon as is commercially feasible.
Imperial is an exploration, mine development and operating company based in
Chief Financial Officer
Cautionary Note Regarding 'Forward-Looking Information'
The information in this press release is a review of the Company's operations and financial position as at and for the period ended
When we discuss: mine plans; our costs and timing of current and proposed exploration; development; production and marketing; capital expenditures; the 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; or other things that have not yet happened in this review we are making statements considered to be forward-looking information or forward-looking statements under Canadian and
We refer to them in this review as forward-looking information.
The forward-looking information in this review typically includes words and phrases about the future, such as: plan, expect, forecast, intend, anticipate, estimate, budget, scheduled, believe, may, could, would, might, will. We can give no assurance that 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 return to operations of the Company's mining operations, the successful commissioning of the Red Chris mine, no material adverse change in the market price of commodities and exchange rates, and the Red Chris mine will be completed in accordance with its current estimate and achieve expected production outcomes, volatility in the Company's share price 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 risk; financing risk; environmental risk; foreign activities; legal proceedings and other risks that are set out in our annual information form and below.
If our assumptions prove to be incorrect or risks materialize, our actual results and events may vary materially from what we currently expect as set out in this review.
We recommend that you review our annual information form and this MD&A, which include a 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.
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