International Minerals Reports Operating Achievements and Financial Results for First Fiscal Quarter Ended September 30, 2012
15.11.2012 | Marketwired
SCOTTSDALE, AZ -- (Marketwire) -- 11/14/12 -- International Minerals Corporation (TSX: IMZ) (SWISS: IMZ) ("Company" or "IMZ") is pleased to report its operating achievements and financial results for the first fiscal quarter ended September 30, 2012.
All dollar amounts in this news release are reported in US Dollars, unless otherwise noted.
Significant Achievements for the First Fiscal Quarter Ended September 30, 2012 (the "Current Quarter"):
- The Company received a $6.0 million cash distribution from the Pallancata Mine in July 2012, bringing the Company's 40%-share (Hochschild Mining plc "Hochschild" 60%-owner and operator) of cumulative cash distributions from Pallancata to $115.7 million since August 2009. The Company has also been advised by the Suyamarca Board of Directors that it should expect to receive a further cash distribution of $4.0 million from Pallancata in December 2012.
- At the 40%-owned Inmaculada development project also in Peru (Hochschild 60%-owner and operator), development is progressing on schedule and Hochschild has completed its $100 million contractual development cost commitment. In September 2012, the Peruvian government approved the Environmental Impact Study for Inmaculada, achieving a critical milestone in the project's development.
- At the 100%-owned Goldfield property in Nevada, the Company has engaged the services of M3 Engineering and Technology Corporation ("M3") of Tucson, Arizona to manage the Engineering, Procurement and Construction Management ("EPCM") activities relating to the design and construction of the Gemfield project heap leach gold mine. M3 has commenced the detailed design activities for this project. SRK Consulting of Reno Nevada has been contracted to complete the project Plan of Operations ("PoO") which will be used in the preparation of the Environment Impact Statement and permitting. The PoO is expected to be filed with the US Bureau of Land Management ("BLM") in December of 2012. Permitting is expected to commence in the first calendar quarter of 2013 and is expected to take approximately 18 months from approval of the PoO.
- Also at the Gemfield project, the Company continues with on-going process optimization studies and step-out drilling in the recently discovered Gemfield Southeast area. In addition, results of the recent metallurgical test work have illustrated that a larger crush size could possibly allow for a 25% increase in plant throughput (to 7,500 tpd) with no significant decrease in recoveries. This could mean that estimated processing operating costs may be reduced by 11% from $6.36 per tonne to $5.65 per tonne and G&A costs may be reduced by 20% from $2.92 per tonne to $2.34 per tonne; a combined potential reduction of approximately 14% in total operating costs. Additional metallurgical testwork, however, will be required to confirm the recoveries from the larger crush size.
Financial Performance for the First Fiscal Quarter Ended September 30, 2012:
The Company:
- Reported net income from continuing operations after tax for the first fiscal quarter ended September 30, 2012 of $10.7 million or $0.09 per share compared to net income from continuing operations after tax of $14.5 million or $0.12 per share for the fiscal quarter ended September 30, 2011 (the "Prior Year's Quarter), reflecting in both periods the earnings from the Pallancata Mine.
- Reported cash flow from continuing operations of $6.0 million for the Current Quarter compared to $18.2 million for Prior Year's Quarter, with the change representing the difference in the cash distributions from the Pallancata Mine during the respective quarters.
- Reported a net loss from discontinued operations after tax of $1.1 million for the Current Quarter compared to net income from discontinued operations after tax of $0.7 million for the Prior Year's Quarter. The loss from discontinued operations in the Current Quarter represents on-going maintenance costs in Ecuador while the contribution to income in the Prior Year's Quarter was income from the Ruby Hill mine royalty.
- Reported net and comprehensive income after tax of $9.6 million or $0.08 per share, for the Current Quarter compared to net and comprehensive income of $15.2 million or $0.13 per share, for the Prior Year's Quarter. The most significant reason for the decline in earnings was because of a reduction in earnings from the Pallancata Mine that was a result of lower metal production and a decline in the prices of gold and silver.
- At the Pallancata Mine:
i. The Company's 40% share of the equity income from the Pallancata Mine
was approximately $10.7 million for the Current Quarter compared to
$15.1 million for the Prior Year's Quarter. Cash distributions paid to
the Company for the Current Quarter totaled $6.0 million compared to $16
million in the Prior Year's Quarter;
ii. Production for the Current Quarter (on a 100% basis) was approximately
1.9 million ounces of silver (Prior Year's Quarter: 2.3 million ounces)
and 6,814 ounces of gold (Prior Year's Quarter: 9,370 ounces). The
Company's 40% share was approximately 757,310 ounces of silver (Prior
Year's Quarter: 916,322 ounces) and 2,726 ounces of gold (Prior Year's
Quarter: 3,748 ounces). The reasons for the decrease in gold and silver
production were lower ore grades and metallurgical recoveries compared
to the Prior Year's Quarter.
iii. For the Current Quarter, direct site cash costs were $4.69 per ounce of
silver produced after gold by-product credit (Prior Year's Quarter:
$1.01 per ounce) and total cash costs after gold by-product credit (as
defined by the Gold Institute) were $8.49 per ounce of silver produced
(Prior Year's Quarter: $5.44 per ounce). For the Current Quarter
compared to the Prior Year's Quarter total cash operating costs, before
by-product credit, decreased by 3% and, therefore, both direct site and
total cash costs per ounce reported increased because of lower by-
product credits and a decrease in silver production.
Operating Statistics for the Pallancata Mine (100% project basis).
The table below reports key operating and cost statistics for the Pallancata Mine for the fiscal quarters ended September 30, 2012 and 2011 and for the fiscal years ended June 30, 2012 and 2011.
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Quarter Quarter Fiscal Fiscal
Ended Ended Year Ended Year Ended
09/30/2012 09/30/2011 06/30/2012 06/30/2011
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Ore mined (tonnes) 276,459 269,273 1,041,857 1,069,428
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Ore processed (tonnes) 277,092 268,673 1,090,033 1,063,008
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Head grade- Ag (grams/tonne) 257 313 280 324
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Head grade- Au (grams/tonne) 1.2 1.4 1.2 1.4
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Concentrate produced (tonnes) 2,073 2,266 8,380 8,622
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Silver production (ounces) 1,893,274 2,290,805 8,185,244 9,461,573
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Gold production (ounces) 6,814 9,370 29,689 34,517
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Silver sold ( ounces) 1,651,900 1,935,300 8,127,900 9,531,300
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Gold sold (ounces) 5,870 8,017 28,766 32,824
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IMZ direct site costs (US$) 4.69 1.01 3.31 2.21
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IMZ total cash costs (US$) 8.49 5.44 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.
Company Outlook
During the 2013 fiscal year, the Company's exploration and development efforts are expected to focus primarily on:
- At the 40%-ownedPallancata Silver Mine in Peru:
- Working with Hochschild to continue production at the 3,000 tpd mining rate 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) and increasing mineral resources and reserves to extend the existing mine life (approximately 4.0 years based on current reserves).
- At the 40%-ownedInmaculada gold-silver project, 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, subject to the timely receipt of final construction permits, and continuing with an aggressive exploration program in order to expand reserves and resources.
- At the 100%-ownedGoldfield property in Nevada: advancing the Gemfield project to construction in 2014, following the completion of permitting, with the goal of potential production in mid-calendar year 2015.
- At the 100%-ownedConverse gold project, also in Nevada: continuing with additional technical studies depending upon the results of on-going metallurgical testwork.
- Finalize the sale of the 100%-owned Rio Blanco gold-silver project and the approximately 60%-owned Gaby project in Ecuador.
- Continuing to seek investment opportunities in precious metals properties in low political risk jurisdictions 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, metallurgical recoveries and operating costs, drilling and development programs on the Company's projects, timing relating to the completion of the sale of Rio Blanco and Gaby projects, and timing of completion of economic studies, construction and production, 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; the uncertainty in estimating and then obtaining the fair market value of the Rio Blanco and Gaby properties, financing risks; risk of commodity price fluctuations; the uncertainty in estimating metallurgical recoveries and operating costs, political and regulatory risks; 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
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(Expressed in United States dollars) (Unaudited)
September 30, June 30,
2012 2012
------------- -------------
ASSETS
Current
Cash and equivalents $ 83,171,095 $ 81,243,474
Receivables 29,364 79,105
Due from related party 16,849 6,210,377
Prepaid expenses and deposits 42,963 35,373
Investments 2,162,496 2,557,195
Discontinued operations - Ecuador resource
properties 39,925,185 39,976,344
------------- -------------
Current assets 125,347,952 130,101,868
Non-current
Property, plant and equipment 28,001,043 359,724
Investment in associate 156,828,036 133,146,660
Investment in resource properties 48,739,759 72,401,093
Reclamation bonds 210,100 185,100
------------- -------------
Non-current assets 233,778,938 206,092,577
------------- -------------
Total assets $ 359,126,890 $ 336,194,445
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable $ 1,245,953 $ 1,397,461
Accrued severance and payroll costs 745,547 736,500
Due to related parties 35,429 17,649
Discontinued operations - mine royalty 113,152 113,152
Discontinued operations - Ecuador resource
properties 1,094,478 1,103,150
------------- -------------
Current liabilities 3,234,559 3,367,912
Non-current
Deferred income tax liability 8,160,000 8,160,000
------------- -------------
Non-current liabilities 8,160,000 8,160,000
------------- -------------
Shareholders' equity
Capital stock 240,817,227 240,784,904
Reserves 5,102,397 4,869,396
Equity gain on carried interest 29,962,332 16,782,196
Retained earnings 71,850,375 62,230,037
------------- -------------
Capital and reserves attributable to the
shareholders of the Company 347,732,331 324,666,533
------------- -------------
Total liabilities and shareholders' equity $ 359,126,890 $ 336,194,445
============= =============
Nature and continuance of operations
Approved on November 9, 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 these consolidated financial statements and can be found on the Company's website at: http://www.intlminerals.com/investors/financial-reports.
INTERNATIONAL MINERALS CORPORATION
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME
(Expressed in United States dollars) (Unaudited)
2012 2011
------------- -------------
Revenue $ - $ -
Income from associate 10,681,607 15,089,200
Other income 1,547,592 1,265,048
------------- -------------
Total income 12,229,199 16,354,248
------------- -------------
Expenses
Amortization and depreciation (195,727) (191,958)
Salaries and employee benefits (590,099) (391,165)
Administrative costs (514,148) (580,080)
Stock-based compensation (254,579) (93,699)
Financing expense - (561,808)
------------- -------------
Total expenses (1,554,553) (1,818,710)
------------- -------------
Income from continuing operations before taxes 10,674,646 14,535,538
Income taxes - -
------------- -------------
Net income from continuing operations after
taxes 10,674,646 14,535,538
------------- -------------
Discontinued operations net of taxes
Income from mine royalty - 671,617
Costs of discontinued operations - Ecuador
resource properties (1,061,890) -
------------- -------------
Income (loss) from discontinued operations (1,061,890) 671,617
------------- -------------
Net income and comprehensive income after
taxes $ 9,612,756 $ 15,207,155
============= =============
Net income from continuing operations after
taxes per common share
Basic $ 0.09 $ 0.12
Diluted $ 0.09 $ 0.11
Income/(loss) from discontinued operations
after taxes per common share
Basic $ (0.01) $ 0.01
Diluted $ (0.01) $ 0.01
Net income after taxes per common share
Basic $ 0.08 $ 0.13
Diluted $ 0.08 $ 0.12
============= =============
Weighted average number of common shares
outstanding - basic 117,585,887 120,387,368
Weighted average number of common shares
outstanding - diluted 117,913,846 127,059,865
============= =============
The accompanying notes are an integral part of these consolidated financial statements and can be found on the Company's website at: http://www.intlminerals.com/investors/financial-reports.
INTERNATIONAL MINERALS CORPORATION
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(Expressed in United States dollars) (Unaudited)
2012 2011
------------- -------------
CASH FLOWS FROM CONTINUING OPERATIONS
Net income for the year from continuing
operations $ 10,674,646 $ 14,535,538
Adjustments to net income:
Amortization and depreciation 195,727 191,958
Stock-based compensation 254,579 93,699
Unrealized foreign exchange gain (66,197) (2,071,016)
Realized gain on sale of investments (200,456) -
Unrealized (gain) loss on investments (453,944) 693,518
Financing expense - 561,808
Equity income from investment in associate (10,681,607) (15,089,200)
Interest income (101,084) (154,857)
Cash distributions received from
investment in associate 6,000,000 16,000,000
Changes in non-cash working capital items:
Decrease in receivables 52,508 3,299,514
Increase in prepaid expenses and deposits (7,590) (85,360)
Increase in accounts payable 225,260 226,080
Decrease in due from related party
(excluding cash distribution) 193,528 -
(Decrease) increase in accrued severance
and payroll costs (54,772) 1,919
Increase (decrease) in due to related
party 17,780 (37,458)
------------- -------------
Net cash flow from continuing operations
provided by operating activities 6,048,378 18,166,143
Discontinued operations - mine royalty - 1,698,095
Discontinued operations - Ecuador resource
properties (1,019,403) (3,690)
------------- -------------
Net cash flow used in discontinued
operations (1,019,403) 1,694,405
------------- -------------
Net cash provided by operating activities 5,028,975 19,860,548
------------- -------------
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Proceeds from the issuance of common shares 18,327 307,388
------------- -------------
Net cash flow provided by financing
activities 18,327 307,388
------------- -------------
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES
Resource property expenditures (4,293,249) (4,291,335)
Purchase of investments - (157,165)
Sale of investments 1,115,193 -
Interest received 98,317 100,796
Purchase of property and equipment (14,942) (30,320)
Reclamation bonds (25,000) -
Discontinued operations - Ecuador resource
properties - (4,037,075)
------------- -------------
Net cash flow used in investing activities (3,119,681) (8,415,099)
------------- -------------
Change in cash and equivalents for the period 1,927,621 11,752,837
Cash and equivalents, beginning of period 81,243,474 85,839,236
------------- -------------
Cash and equivalents, end of period $ 83,171,095 $ 97,592,073
============= =============
The accompanying notes are an integral part of these consolidated financial statements and can be found on the Company's website at: http://www.intlminerals.com/investors/financial-reports.
For additional information, contact:
In North America:
Paul Durham
VP Corporate Relations
Tel: +1 203-940-2538
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
Or email us at: Email Contact
Internet Site: http://www.intlminerals.com