International Minerals Reports Operating Achievements and Financial Results for Fiscal Year Ended June 30, 2012
29.09.2012 | Marketwired
SCOTTSDALE, AZ -- (Marketwire) -- 09/28/12 -- International Minerals Corporation (TSX: IMZ) (SWISS: IMZ) (the "Company" or "IMZ") is pleased to report its operating achievements and financial results for the fiscal year ended June 30, 2012.
All dollar amounts in this news release are reported in US Dollars, unless otherwise noted.
Significant Achievements for Fiscal Year Ended June 30, 2012
- Together with its partner, Hochschild Mining plc ("Hochschild"), IMZ completed a positive feasibility study on the 40%-owned Inmaculada property (Hochschild: 60% owner and operator) in Peru and commenced development of the mine, with a targeted production date of December 2013, subject to the receipt of final construction permits.
- Completed a positive feasibility study for its 100%-owned Gemfield gold deposit on the Goldfield property in Nevada and is successfully advancing permitting, with a goal of commencing mine construction by mid calendar year 2014 and production in mid calendar year 2015.
- IMZ received significant cash distributions during the fiscal year ended June 30, 2012 (the "Current Year") of $40.0 million from its 40%-owned Pallancata Mine in Peru, compared to $46.0 million for the fiscal year ended June 30, 2011 ("the Prior Year").
- In May 2012, IMZ sold its 3% net smelter return ("NSR") royalty on production from Barrick's Ruby Hill gold mine in Nevada for $38 million (net of taxes) and recorded a gain on the sale of $27.9 million.
- The Company completed a Normal Course Issuer Bid share repurchase program and repurchased 3.0 million of its common shares through the Toronto Stock Exchange at a cost of Cdn$17.1 million.
- Also in May 2012, the Company redeemed with $39.6 million cash, at maturity, its convertible debentures, while still maintaining a strong cash and equivalents position of $81.2 million at the end of the Current Year compared to $85.8 million at the end of the Prior Year.
- Released a positive preliminary economic assessment (or scoping study) at the 100%-owned Converse property in Nevada.
- Reported, for the first time, proven and probable reserves at both the Gemfield deposit and the Inmaculada property.
Financial Performance for Fiscal Year Ended June 30, 2012:
The Company:
- Reported cash flow from continuing operations for the Current Year of $29.1 million compared to $35.9 million for the Prior Year.
- Reported cash flow from discontinued operations of $5.3 million for the Current Year compared to $3.8 million for Prior Year; these amounts, however, do not include the $38 million received from the sale of the Ruby Hill royalty, which is classified as proceeds from investing activities.
- Ended the Current Year with approximately $81.2 million in cash and equivalents (Prior Year $85.8 million) and total assets of approximately $336.2 million. Total assets decreased from $369.7 million at fiscal year end June 30, 2011 primarily due to the $53.2 million write-down of the carrying value of the resource properties in Ecuador.
- Reported net income from continuing operations after tax of $28.0 million for the Current Year, or $0.23 per share, compared to $56.7 million for the Prior Year or $0.48 per share.
- Reported a gain and income from discontinued operations related to the Ruby Hill royalty of $30.0 million for the Current Year, or $0.25 per share, compared to $3.6 million for the Prior Year, or $0.03 per share.
- Reported a loss from discontinued operations related to the resource properties in Ecuador of $53.2 million for the Current Year, or a loss of $0.44 per share, as a result of the decision to seek alternatives to maximize the value of these assets.
- Reported net income and comprehensive income after tax of $4.8 million, or $0.04 per share, compared to net income and comprehensive income after tax of $60.3 million, or $0.51 per share for the Prior Year.
- Ended the Current Year with working capital of $126.7 million compared to $50.4 million at fiscal year end June 30, 2011. This working capital includes $40 million in estimated proceeds, net of selling costs, from the potential disposition of the resource properties in Ecuador.
- At the Pallancata Mine in Peru:
- The Company's 40% share of the equity income from the Pallancata Mine was approximately $43.0 million compared to $56.8 million for the Prior Year. Cash distributions for the Current Year totaled $40.0 million compared to $46.0 million for the Prior Year. An additional $6.0 million was received in July, 2012, which was a receivable at June 30, 2012;
- For the Current Year, production (on a 100% basis) was approximately 8.2 million ounces of silver (Prior Year: 9.5 million ounces) and 29,689 ounces of gold (Prior Year: 34,517 ounces).The Company's 40% share was approximately 3.3 million ounces of silver (Prior Year: 3.8 million ounces) and 11,876 ounces of gold (Prior Year: 13,807 ounces). The decrease in gold and silver production compared to the Prior Year was due primarily to a decrease in the grades of both silver and gold processed because (a) higher metal prices allowed lower-grade material to be mined profitably, and (b) the mine experienced an increase in mining dilution due to the narrower veins being mined and c) the mine experienced operational scheduling constraints which restricted mine development and backfill placement; and
- For the Current Year, direct onsite cash costs were $3.31 per ounce of silver produced after gold by- product credit (Prior Year: $2.21 per ounce) and total cash costs (as defined by the Gold Institute) were $7.37 per ounce of silver produced (Prior Year: $6.04 per ounce) after gold by-product credit. Costs per ounce of silver net of gold by-product credit increased in the Current Year primarily because of (a) lower silver and gold production, (b) lower gold by-product credit (c) an increase in mining costs associated with the preparation of stopes exploiting the narrower veins, and, (d) increased Peruvian mining taxes (under the newly-enacted law in late 2011, which replaced the existing government royalty with an operating-profit based tax).
- The Company's 40% share of the equity income from the Pallancata Mine was approximately $43.0 million compared to $56.8 million for the Prior Year. Cash distributions for the Current Year totaled $40.0 million compared to $46.0 million for the Prior Year. An additional $6.0 million was received in July, 2012, which was a receivable at June 30, 2012;
Financial Performance for the Three-Month Period Ended June 30, 2012:
The Company:
- Reported cash flow from continuing operations for the quarter ended June 30, 2012 (the "Current Quarter") of $8.4 million compared to $15.1 million for the quarter ended June 30, 2011 (the "Prior Year's Quarter").
- Reported cash flow from discontinued operations of $1.0 million for the Current Quarter compared to $1.4 million for Prior Year's Quarter; these amounts, however, do not include the $38 million received from the May 2012 sale of the Ruby Hill royalty, which is classified as proceeds from investing activities.
- Reported a net loss after tax from continuing operations of $2.4 million for the Current Quarter, or a loss of $0.02 per share, compared to net income from continuing operations after tax of $19.4 million for the Prior Year's Quarter or $0.16 per share.
- Reported a gain from discontinued operations related to the sale of the Ruby Hill royalty of $27.9 million for the Current Quarter, or $0.24 per share, compared to $1.7 million for the Prior Year's Quarter, or $0.01 per share.
- Reported a loss from discontinued operations related to the resource properties in Ecuador of $53.2 million for the Current Quarter, or a loss of $0.45 per share, as a result of the Company's decision to seek alternatives to maximize the value of these assets.
- Reported a net and comprehensive net loss after tax of $27.7 million, or a loss of $0.23 per share for the Current Quarter compared to net and comprehensive income of $21.2 million, or $0.18 per share for the Prior Year's Quarter, due primarily to the write-down of the Rio Blanco and Gaby properties.
- At the Pallancata Mine:
- The Company's 40% share of the equity income from the Pallancata Mine was approximately $3.2 million for the Current Quarter compared to $13.3 million for the Prior Year's Quarter. Cash distributions for the Current Quarter totaled $12.0 million compared to $26.0 million in the Prior Year's Quarter;
- For the Current Quarter, production (on a 100% basis) was approximately 1.8 million ounces of silver (Prior Year's Quarter: 2.2 million ounces) and 6,402 ounces of gold (Prior Year's Quarter: 8,427 ounces). The Company's 40% share was approximately 730,150 ounces of silver (Prior Year's Quarter: 867,970 ounces) and 2,561 ounces of gold (Prior Year's Quarter: 3,371 ounces). The reasons for the decrease in gold and silver production compared to the Prior Year's Quarter are the same as previously explained in the fiscal year end disclosure; and
- For the Current Quarter direct onsite cash costs were $5.36 per ounce of silver produced after gold by-product credit (Prior Year's Quarter: $2.87 per ounce) and total cash costs (as defined by the Gold Institute) were $9.08 per ounce of silver produced (Prior Year's Quarter: $7.89 per ounce) after gold by-product credit. Costs per ounce of silver net of gold by-product credit increased in the Current Quarter primarily because of (a) lower silver and gold production, (b) lower gold by-product credit, and (c) increased mine site operating costs as explained previously in the fiscal year end disclosure.
- The Company's 40% share of the equity income from the Pallancata Mine was approximately $3.2 million for the Current Quarter compared to $13.3 million for the Prior Year's Quarter. Cash distributions for the Current Quarter totaled $12.0 million compared to $26.0 million in the Prior Year's Quarter;
Operating Statistics for the Pallancata Mine (100% project basis).
The table below reports key operating and cost statistics for the Pallancata Mine for the fiscal quarters ended June 30, 2012 and 2011 and for the fiscal years ended June 30, 2012 and 2011.
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Fiscal Fiscal
Quarter Quarter Year Year
Ended Ended Ended Ended
06/30/2012 06/30/2011 06/30/2012 06/30/2011
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Ore mined (tonnes) 259,421 256,048 1,041,857 1,069,428
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Ore processed (tonnes) 270,961 266,673 1,090,033 1,063,008
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Head grade- Silver (grams/tonne) 250 295 280 324
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Head grade- Gold (grams/tonne) 1.08 1.3 1.2 1.4
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Concentrate produced (tonnes) 2,006 2,071 8,380 8,622
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Silver production (ounces) 1,825,387 2,169,924 8,185,244 9,461,573
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Gold production (ounces) 6,402 8,427 29,689 34,517
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Silver sold (ounces) 1,730,300 2,165,600 8,127,900 9,531,300
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Gold sold (ounces) 5,950 7,942 28,766 32,824
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IMZ direct site costs (US$) 5.36 2.87 3.31 2.21
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IMZ total cash costs (US$) 9.08 7.89 7.37 6.04
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Notes:
1. The reported head grades for silver and gold are based on the overall metallurgical balance for the process plant.
2. The difference between "produced" metal ounces and "sold" metal ounces is in-process concentrate. Numbers for gold and silver ounces in the sold category have been rounded.
3. Silver and gold ounces sold are now reported as gross ounces. IMZ has also restated the previously reported sales, which had been reported as net payable ounces.
4. Direct site costs per ounce silver and total cash costs per ounce silver reflect a "mined ore inventory adjustment". IMZ believes that this calculation more accurately matches costs with ounces of production (see notes 5 and 6 below).
5. Direct site costs per ounce silver comprise direct mining costs, mined ore inventory adjustment, toll processing costs and. mine general and administrative costs. The cost per ounce is net of by-product credit, with by-product gold revenue offsetting operating costs.
6. Total cash costs, using the Gold Institute definition, comprise: mine operating costs, mined ore inventory adjustment, toll processing costs, mine general and administrative costs, Hochschild management fee, concentrate transportation and smelting costs, and government royalty (currently approximately 3% of gross revenue for Pallancata). The cost per ounce is net of by-product credit, with by-product gold revenue offsetting operating costs.
Investor Relations Update
In August 2012, the Company engaged the services of Renmark Financial Communications (www.renmarkfinancial.com) of Montreal and Toronto, Canada, to assist the Company in developing an expanded audience within the retail investor market in Canada. Renmark has been providing investor services for 14 years and currently assists over 40 Canadian mining companies.
In July 2012, IMZ engaged the services of Madaus Capital Partners GmbH of Munich, Germany as marketing consultants to introduce the Company to institutions, high net worth individuals and other interested participants in the financial industry in Germany.
Company Outlook
During the 2013 calendar year, the Company's exploration and development efforts are expected to focus primarily on:
- At the Pallancata Silver Mine (40% IMZ) in Peru:
- Working with Hochschild to produce approximately 7.8 million ounces of silver and 32,000 ounces of gold, in calendar 2012 (the Company's estimate on a 100% project basis).
- Increasing mineral resources and reserves to extend the existing mine life (approximately 4.0 years based on current reserves).
- Working with Hochschild to produce approximately 7.8 million ounces of silver and 32,000 ounces of gold, in calendar 2012 (the Company's estimate on a 100% project basis).
- At the Inmaculada gold-silver project (40% IMZ), also in Peru:
- Working with Hochschild to continue with mine development, permitting and construction with production targeted to commence prior to the end of calendar year 2013, but subject to the receipt of final construction permits.
- Continuing with an aggressive exploration program in order to expand reserves and resources.
- Working with Hochschild to continue with mine development, permitting and construction with production targeted to commence prior to the end of calendar year 2013, but subject to the receipt of final construction permits.
- At the Goldfield gold project (100% IMZ) in Nevada: advancing the Gemfield deposit to construction in 2014, following the completion of permitting, with the goal of potential production in mid-calendar year 2015.
- At the Converse gold project (100% IMZ), also in Nevada: commencing a feasibility study at the end of calendar year 2012, if metallurgical testwork justifies such a study.
- At the Rio Blanco gold-silver project (100% IMZ) and the Gaby gold project (approximately 60% IMZ) in Ecuador, implementing its strategy to maximize their value, including their sale.
- Continuing to seek investment opportunities in precious metals properties in low political risk countries in the Americas, where the Company believes it can increase the value of such properties using its exploration, development, financing and administrative abilities to enhance value.
Hochschild Mining plc does not accept any responsibility for the adequacy or inadequacy of the disclosure made in this news release and any such responsibility is hereby disclaimed in all respects.
The Company's Financial Statements and Management's Discussion and Analysis (MD&A) are posted on the Company's website at: www.intlminerals.com/investors/financial-reports or at www.sedar.com under the Company's name.
Cautionary Statement:
The Gold Institute calculation of Direct Site Costs and Total Cash Costs are non-IFRS financial measures, which Company management believes are useful in measuring operational performance. Some of the statements contained in this release are "forward-looking statements" within the meaning of Canadian securities law requirements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements in this release include statements regarding, production expectations, drilling and development programs on the Company's projects, timing of completion of economic studies, construction and production, the timing related to completing a sale of Rio Blanco and Gaby and, obtaining any required environmental, construction and production permits. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties such as: risks relating to obtaining mining and environmental permits; delays in completing economic studies mining and development risks; financing risks; risk of commodity price fluctuations; the uncertainty in estimating and then obtaining the fair market value of the Rio Blanco and Gaby properties, political and regulatory risks; risks related to the new mining law in Ecuador, and other risks and uncertainties detailed in the Company's Annual Information Form for the year ended June 30, 2012, which is available at www.sedar.com under the Company's name. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
INTERNATIONAL MINERALS CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Expressed in United States dollars)
June 30, June 30, July 1,
2012 2011 2010
------------ ------------ ------------
ASSETS
Current
Cash and equivalents $ 81,243,474 $ 85,839,236 $ 29,031,435
Receivables 79,105 2,847,666 3,682,704
Due from related party 6,210,377 557,367 -
Prepaid expenses and deposits 35,373 81,357 116,324
Investments 2,557,195 4,437,839 3,082,317
Discontinued operations - Ecuador
resource properties 39,976,344 - -
------------ ------------ ------------
Current assets 130,101,868 93,763,465 35,912,780
Non-current
Property, plant and equipment 359,724 250,789 209,649
Investment in associate 133,146,660 120,133,542 36,666,973
Investment in resource properties 72,401,093 56,814,136 121,277,222
Reclamation bonds 185,100 135,100 138,000
Discontinued operations - mine
royalty - 13,152,415 13,897,695
Discontinued operations - Ecuador
resource properties - 85,451,660 81,457,321
------------ ------------ ------------
Non-current assets 206,092,577 275,937,642 253,646,860
------------ ------------ ------------
Total assets $336,194,445 $369,701,107 $289,559,640
============ ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable $ 1,397,461 $ 700,771 $ 2,602,807
Accrued severance and payroll costs 736,500 652,708 1,226,778
Due to related parties 17,649 62,079 11,819
Accrued interest payable on
convertible debentures - 187,661 174,869
Convertible debentures - 40,944,188 -
Discontinued operations - mine
royalty 113,152 - -
Discontinued operations - Ecuador
resource properties 1,103,150 872,566 1,604,175
------------ ------------ ------------
Current liabilities 3,367,912 43,419,973 5,620,448
Non-current
Convertible debentures - - 36,646,543
Deferred income tax liability 8,160,000 8,000,000 8,000,000
Discontinued operations - mine
royalty - - 600,000
------------ ------------ ------------
Non-current liabilities 8,160,000 8,000,000 45,246,543
------------ ------------ ------------
Shareholders' equity
Capital stock 240,784,904 245,260,695 217,204,514
Reserves 4,869,396 4,774,831 7,100,512
Equity component of convertible
debentures - 4,945,008 4,945,008
Equity gain on carried interest 16,782,196 - -
Retained earnings 62,230,037 63,300,600 2,666,515
------------ ------------ ------------
Capital and reserves attributable
to the shareholders of the
Company 324,666,533 318,281,134 231,916,549
------------ ------------ ------------
Non-controlling interest in
subsidiary - - 6,776,100
------------ ------------ ------------
Total liabilities and shareholders'
equity $336,194,445 $369,701,107 $289,559,640
============ ============ ============
Nature and continuance of operations
Commitments
Subsequent Events
Approved on September 27, 2012 by the
Directors:
"Stephen J. Kay" Director "W. Michael Smith" Director
--------------------------------------- ------------------
Stephen J. Kay W. Michael Smith
The accompanying notes are an integral part of the consolidated financial statements. See full financial statements on the Company's website at:
www.intlminerals.com/investors/financial-reports
INTERNATIONAL MINERALS CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Expressed in United States dollars)
YEAR ENDED JUNE 30
2012 2011
------------- -------------
Revenue $ - $ -
Income from associate 42,952,390 56,788,504
Other income/(loss) (1,178,435) 12,206,564
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Total income 41,773,955 68,995,068
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Expenses
Amortization and depreciation (776,985) (761,063)
Salaries and employee benefits (3,387,372) (2,848,555)
Administrative costs (3,374,828) (2,098,400)
Stock-based compensation (627,506) (662,768)
Financing expense (2,427,346) (3,801,160)
Write-downs (739,566) (2,134,102)
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Total expenses (11,333,603) (12,306,048)
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Income from continuing operations before taxes 30,440,352 56,689,020
Deferred income taxes (160,000) -
Income taxes (2,292,474) -
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Net income from continuing operations after
taxes 27,987,878 56,689,020
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Discontinued operations net of taxes
Disposal gain and income from mine royalty 30,042,021 3,632,190
Write-down of discontinued operations -
Ecuador resource properties (53,238,265) -
------------- -------------
Income/(loss) from discontinued operations (23,196,244) 3,632,190
------------- -------------
Net income and comprehensive income after
taxes $ 4,791,634 $ 60,321,210
============= =============
Net income from continuing operations after
taxes per common share
Basic $ 0.23 $ 0.48
Diluted $ 0.23 $ 0.48
Income/(loss) from discontinued operations
after taxes per common share
Basic $ (0.19) $ 0.03
Diluted $ (0.19) $ 0.03
Net income after taxes per common share
Basic $ 0.04 $ 0.51
Diluted $ 0.04 $ 0.51
============= =============
Weighted average number of common shares
outstanding - basic 119,726,674 118,222,472
Weighted average number of common shares
outstanding - diluted 120,298,346 118,984,254
============= =============
The accompanying notes are an integral part of the consolidated financial statements. See full financial statements on the Company's website at:
www.intlminerals.com/investors/financial-reports
INTERNATIONAL MINERALS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in United States dollars)
YEAR ENDED JUNE 30
2012 2011
------------- -------------
CASH FLOWS FROM CONTINUING OPERATIONS
Net income for the year from continuing
operations $ 27,987,878 $ 56,689,020
Adjustments to net income:
Amortization and depreciation 776,985 761,063
Stock-based compensation 627,506 662,768
Unrealized foreign exchange (gain)/loss (1,358,469) 2,419,178
Realized gain on sale of investments (1,135,855) -
Unrealized loss/(gain) on investments 2,162,135 (1,259,424)
Write-downs 739,566 2,897,965
Financing expense 2,114,809 3,801,160
Equity income from investment in associate (42,952,390) (56,788,504)
Gain on sale of investment in associate - (12,487,218)
Interest income (283,071) (285,174)
Deferred income tax expense 160,000 -
Cash distributions received from
investment in associate 40,000,000 36,000,000
Changes in non-cash working capital items:
Decrease in receivables 183,220 3,532,287
Decrease in prepaid expenses and deposits 45,984 34,967
Increase (decrease) in accounts payable 358,323 (153,124)
Increase in due from related party (210,377) -
(Decrease) increase in accrued severance
and payroll costs (89,906) 16,865
(Decrease) increase in due to related
party (44,430) 50,260
------------- -------------
Net cash flow from continuing operations
provided by operating activities 29,081,908 35,892,089
Net (loss)/income for the year from
discontinued operations (23,196,244) 3,632,190
Discontinued operations - mine royalty (24,734,433) 145,280
Discontinued operations - Ecuador resource
properties 53,235,898 41,422
------------- -------------
Net cash flow provided by discontinued
operations 5,305,221 3,818,892
------------- -------------
Net cash provided by operating activities 34,387,129 39,710,981
------------- -------------
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Share issuance costs - (33,856)
Proceeds from the issuance of common shares 1,067,518 25,395,893
Convertible debenture interest payment (2,114,809) (2,205,099)
Convertible debenture payment (39,577,883) -
Repurchase of common shares (16,923,880) -
------------- -------------
Net cash flow (used in) provided by
financing activities (57,549,054) 23,156,938
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CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES
Resource property expenditures (15,148,669) (17,093,600)
Proceeds from sale of property ownership
interest 2,650,000 15,000,000
Purchase of investments (648,162) (148,054)
Sale of investments 1,295,517 -
Interest received 218,412 211,464
Purchase of property and equipment (221,934) (80,736)
Reclamation bonds (50,000) 2,900
Recovery of investment in resource
properties - 603,065
Discontinued operations - mine royalty 38,000,000 -
Discontinued operations - Ecuador resource
properties (7,529,001) (4,555,157)
------------- -------------
Net cash flow provided by (used in)
investing activities 18,566,163 (6,060,118)
------------- -------------
Change in cash and equivalents for the year (4,595,762) 56,807,801
Cash and equivalents, beginning of year 85,839,236 29,031,435
------------- -------------
Cash and equivalents, end of year $ 81,243,474 $ 85,839,236
============= =============
Supplemental disclosure with respect to cash flows
The accompanying notes are an integral part of the consolidated financial statements. See full financial statements on the Company's website at:
www.intlminerals.com/investors/financial-reports
For additional information, contact:
In North America:
Paul Durham
VP Corporate Relations
Tel: +1 480 483 9932
Renmark Financial Communications:
Christine Stewart
+1-416-644-2020
Email Contact
or
Robert Thaemlitz
+1-514-939-3989
Email Contact
In Europe:
Oliver Holzer
Marketing Consultant
+41 44 853 00 47
In Germany:
Thomas Landwehr
Madaus Capital Partners
+49-89-37-42-67-90
Or email us at: Email Contact
Internet Site: http://www.intlminerals.com