Minto Metals Delivers A Record First Quarter With 9.1 Million Lbs Of Copper Production And An Adjusted Ebitda[1] Of $19.2 Million
WHITEHORSE, May 26, 2022 - Minto Metals Corp. (TSXV: MNTO) ("Minto" or the "Company") is pleased to announce the Company's financial and operating results for the three months ended March 31, 2022 ("QTR 1 2022") for the Minto Mine located within the Selkirk First Nation's Territory in the central Yukon, Canada. Copper Production totaled 9.1 million pounds of copper, a 70.7% increase over Quarter 1, 2021, at a consolidated cash cost of USD $2.44 per payable pound produced.
First Quarter Highlights:
- Copper sales increased 70.7% to 9.1 million pounds compared to 5.3 million pounds in Quarter 1 2021.
- Revenue grew 109.0% to $53.3 million, a $27.8 million increase from $25.5 million in Quarter 1, 2021.
- Net Operating Cash flow generated was $15.0 million, an increase of $8.0 from $7.0M in Quarter 1, 2021
- Improved operating results
- Mill Feed for Quarter 1 was 237,239 dry metric tonnes (dmt), an 11.7% increase from 212,329 dry metric tonnes (dmt) in Quarter 1 2021.
- Operating cash costs per pound sold2 averaged USD $2.44/lb, a 31.3% decrease from USD $3.55/lb in Quarter 1 2021.
- All-In Sustaining Costs ("AISC")2 per pound sold1 averaged USD $3.44/lb, a 15.9% decrease from USD $4.09/lb in Quarter 1 2021.
- Qualified exploration investment totaled $1.8 million in Quarter 1 or 29% of our 2021 Flow-Through Share commitment.
- Adjusted EBITDA1 totaled $19.2 million, a $20.1 million increase from a loss of $0.9 million in Quarter 1 2021.
- Fully diluted Earnings per Share total $0.20 cents, a $0.24 increase from a loss of ($0.04) in Quarter 1 2021.
- Minto reiterates the previous 2022 forecasted guidance.
- Refers to Adjusted Earnings before Interest, Taxes, Depreciation, and Amortization "Alternative Performance Measures" on page 18 of the Company's Q1 2022 MD&A.
- Refers to Cash Costs and All-In Sustaining Costs "Alternative Performance Measures" on page 19 of the Company's Q1 2022 MD&A.
"Our excellent operating performance and cost containment in a higher copper price environment has surpassed our expectations. Our team has strong momentum and has delivered a positive performance for the second consecutive quarter", said Chris Stewart, President & Chief Executive Officer of Minto Metals.
"Our Quarter 1, Adjusted EBITDA improved to $19.2 million dollars compared to a loss of $0.9 million dollars a year ago. These great results highlight the extraordinary performance and are a testament to the drive and passion to win shown by everyone who works here at Minto." Stewart added.
Q1 2022 Financial Highlights
Adjusted EBITDA1 Reconciliation to Net Income
| Q1 2022 | Q1 2021 | |||
| Net income (loss) and comprehensive | $ 14,536 | $ (2,765) | ||
| Finance costs | 2,064 | 1,106 | ||
| Depletion and amortization | 3,166 | 2,386 | ||
| Income tax expense (recovery) | 258 | (250) | ||
| EBITDA | $ 20,024 | $ 477 | ||
| Share-based compensation expense | 90 | - | ||
| Unrealized foregin exchange loss (gain) | 538 | (627) | ||
| Mark-to-market revenue adjustments | (960) | (908) | ||
| Amortization of flow thru shares benefit | (485) | - | ||
| Loss on lease termination | - | 192 | ||
| Adjusted EBITDA | $ 19,207 | $ (866) |
- Refers to Adjusted Earnings before Interest, Taxes, Depreciation, and Amortization "Alternative Performance Measures" on page 18 of the Company's Q1 2022 MD&A.
2022 Q1 Interim Consolidated Statements of Loss and Comprehensive Loss - Unaudited
| Three months ended | |||
| March 31, 2022 | March 31, 2021 | ||
| Revenue | $ 53,282 | $ 25,469 | |
| Production costs | (33,133) | (25,200) | |
| Royalty expense | (1,190) | (762) | |
| Depletion and amortization | (3,166) | (2,386) | |
| Income (loss) from mine operations | 15,793 | (2,879) | |
| Expenses | |||
| Related party management fees | - | (125) | |
| Stock-based compensation expense | (90) | - | |
| Other expenses | (38) | (263) | |
| Income (loss) from operations | 15,665 | (3,267) | |
| Other income | 1,193 | 1,358 | |
| Finance costs | (2,064) | (1,106) | |
| Income (loss) before income taxes | 14,794 | (3,015) | |
| Income tax (expense) recovery | (258) | 250 | |
| Net Income (loss) and comprehensive income (loss) | $ 14,536 | $ (2,765) | |
| Per share amounts | |||
| Basic and diluted | $ 0.20 | $ (0.04) | |
| Weighted Average Number of Common Shares Outstanding | 72,709,253 | 60,228,864 | |
2022 Q1 Interim Consolidated Statements of Financial Position - Unaudited
| As at | March 31, 2022 | December 31, 2021 | ||
| Assets | ||||
| Current assets | ||||
| Cash | $ | 11,872 | $ | 9,979 |
| Accounts Receivable | 25,617 | 20,762 | ||
| Inventories | 8,858 | 6,212 | ||
| Prepaid expenses | 3,857 | 2,855 | ||
| 50,204 | 39,808 | |||
| Non-current assets | ||||
| Mineral properties, plant and equipment | 56,281 | 53,702 | ||
| Right-of-use assets | 12,557 | 9,245 | ||
| Long-term deposits | 13,250 | 13,399 | ||
| Total assets | $ | 132,292 | $ | 116,154 |
| Liabilities | ||||
| Current liabilities | ||||
| Accounts payable and accrued liabilities | $ | 40,688 | $ | 36,370 |
| Current portion of Sumitomo loan | 6,595 | 10,221 | ||
| Current portion of Note payable to Pembridge | 6,248 | - | ||
| Current portion of Due to Pembridge | 4,246 | 4,000 | ||
| Current portion of lease liability | 6,169 | 5,436 | ||
| 63,946 | 56,027 | |||
| Non-current liabilities | ||||
| Lease liabilities | 5,715 | 3,895 | ||
| Due to Pembridge | - | 1,174 | ||
| Note payable to Pembridge | - | 6,368 | ||
| Long-term debt | 11,631 | 11,702 | ||
| Deferred revenue | 13,947 | 14,463 | ||
| Deferred income tax liabilities | 3,367 | 3,109 | ||
| Asset retirement obligation | 33,621 | 35,288 | ||
| Total liabilities | 132,227 | 132,026 | ||
| Shareholders' equity (deficiency) | ||||
| Share capital | 223,241 | 221,840 | ||
| Deficit | (223,176) | (237,712) | ||
| Total shareholders' equity (deficiency) | 65 | $ | (15,872) | |
| Total liabilities and shareholders' equity (deficiency) | $ | 132,292 | $ | 116,154 |
2022 Q1 Interim Consolidated Statements of Cash Flows - Unaudited
| Three months ended | ||
| March 31, 2022 | March 31, 2021 | |
| Operating activities | ||
| Net income (loss) for the period | $ 14,536 | $ (2,765) |
| Adjustments for the following items: | ||
| Depletion, depreciation and accretion | 3,166 | 2,386 |
| Finance costs | 2,064 | 401 |
| Other income (loss), net | (1,193) | 2 |
| Stock-based compensation expense | 90 | - |
| Amortization of deferred revenue | (786) | 311 |
| Income tax expense (recovery) | 258 | (250) |
| Change in non-cash working capital | (2,751) | 7,351 |
| 15,384 | 7,436 | |
| Interest paid | (384) | (483) |
| Net cash provided by operating activities | 15,000 | 6,953 |
| Investing activities | ||
| Additions to mineral properties, plant and equipment | (5,897) | (1,147) |
| Right-of-use asset additions | (768) | - |
| Net cash used in investing activities | (6,665) | (1,147) |
| Financing activities | ||
| Advances from Sumitomo | - | 3,784 |
| Repayments on Sumitomo loan | (3,525) | (585) |
| Payment of lease liabilities | (1,917) | (1,482) |
| Repayment of Due to Pembridge | (1,000) | - |
| Long-term deposits | - | (946) |
| Return of capital | - | (6,306) |
| Net cash provided by (used in) financing activities | (6,442) | (5,535) |
| Change in cash | 1,893 | 271 |
| Cash, beginning of period | 9,979 | 507 |
| Cash, end of period | $ 11,872 | $ 778 |
Operational Outlook
Minto is pleased to reconfirm the financial guidance for 2022 as we continue to ramp up our ore production throughout the year. We are committed to a cost control strategy while improving our mine and milling operations.
| Production Volumes | Dec 31, 2022 | |||
| Payable Copper (million pounds) | 27.0 - 31.0 | |||
| Gold (ounces) (1) | 11,000 - 12,100 | |||
| Silver (ounces) (1) | 140,000 - 150,000 | |||
| Production Costs | Dec 31, 2022 | |||
| Cash Costs ($USD/lb) (2) | $2.70 -$2.90 | |||
| AISC ($USD/lb) (2) | $3.85 -$4.00 | |||
| Exploration ($ millions) | $9.2 | |||
| Sustaining Capital (2) | $27.0- $31.0 | |||
- 100% amounts. Under the agreement with Wheaton Precious Metals, the Company receives 65% of the value of the gold shipments up to 11,000 ounces. Silver receipts are the lesser of the prevailing market price and US $4.35/oz.
- Refers to Cash Costs, All-In Sustaining Costs and Sustaining Capital "Alternative Performance Measures" on pages 19 and 20 of the Company's Q1 2022 MD&A.
The Yukon received between 150% and 400% of the normal annual snowfall during this past winter which generated a significant volume of water across the territory as it melted. With the warmer temperatures over the past couple of weeks, the Minto mine site saw daily water volume inflow exceed the mine's discharge capacities which caused the storage pond water levels to rise.
Underground mining operations continued uninterrupted during this temporary mill shutdown with ore being stockpiled ahead of the milling facility restart. The Mill is permitted to process an average of 4,200 tonnes/day of ore and underground production is currently averaging around 3,000 tonnes/day. With the milling facility restart, the stockpiled ore will be processed at a higher rate which means that there will be no metal production impact on the original guidance in 2022.
The Company temporarily suspended its milling operations until Spring Freshet ended, ensuring all water arriving on the mine site was properly managed within our water management system and that the environment was protected. The Company took full advantage of this temporary mill shutdown to complete future planned maintenance work in the mill thereby avoiding another shutdown in the coming months.
Once freshet ended, the company restarted its milling operations. The Mill is expected to run steadily for the balance of 2022.
"At the beginning of 2022 Minto committed to spending $8 million dollars to improve the mine water management system at the Minto Mine. Our investment included an upgrade to our water treatment plant, the installation of a new microfiltration plant, and the purchase of evaporation units, all to support improved environmental stewardship. As outlined in an article from the Yukon government, the snowpack levels are unusually high and above the normal level across the Yukon, and in areas in the vicinity of the mine. Minto Metals takes the protection of the environment seriously and the temporary mill shutdown highlights our commitment", stated Chris Stewart, President & CEO of Minto Metals.
About Minto Metals Corp.
Minto operates the producing Minto mine located in the Minto Copper Belt, Yukon. The Minto mine has been in operation since 2007 with underground mining commencing in 2014. Since 2007, approximately 500Mlbs of copper have been produced from the Minto mine. The current mine operations are based on underground mining, a process plant to produce high-grade copper, gold, and silver concentrate, and all supporting infrastructure associated with a remote location in Yukon. The Minto property is located west of the Yukon River, about 20 km WNW of Minto Landing, the latter on the east side of the river, and approximately 250 road-km north of the City of Whitehorse, the capital city of Yukon.
Forward-Looking Information
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements"), within the meaning of applicable Canadian securities laws and "forward-looking information" within the meaning of applicable U.S. securities laws, which we refer to collectively as "forward-looking statements". Forward-looking statements are statements and information regarding possible events, conditions, or results of operations that are based upon assumptions about future conditions and courses of action. All statements and information other than statements of historical fact may be forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as "seek", "expect", "anticipate", "budget", "plan", "estimate", "continue", "forecast", "intend", "believe", "predict", "potential", "target", "may", "could", "would", "might", "will" and similar words or phrases (including negative variations) suggesting future outcomes or statements regarding an outlook. Forward-looking statements or assumptions in this press release include, but are not limited to: statements with respect to when milling operations will restart, ore will be processed at a higher rate, and no metal production is expected to be lost in 2022 as a result of the temporary Mill shutdown.
Such forward-looking statements are based on a number of material factors and assumptions, including, but not limited to: that required financing and permits will be obtained; general economic conditions; no labour disputes or disruptions, no flooding, ground instability, geotechnical failure, fire, failure of the plant; that equipment and processes continue to operate as anticipated and other risks of the mining industry will not be encountered; that contracted parties provide goods or services in a timely manner; that there is no material adverse change in the price of copper, gold or other metals; competitive conditions in the mining industry; title to mineral properties; costs; taxes; the retention of the Company's key personnel; no changes in-laws, and no material worsening of the direct and indirect impact of COVID-19 including rules and regulations applicable to Minto.
Forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause actual results, performance, or achievements to differ materially from those anticipated in such forward-looking statements. The Company believes the expectations reflected in such forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and you are cautioned not to place undue reliance on forward-looking statements contained herein. Some of the risks and other factors which could cause actual performance and results to differ materially from those expressed in the forward-looking statements contained in this news release, include, but are not limited to: changes in commodity prices, general economic conditions, mineral reserve and mineral resource estimates may change and may prove to be inaccurate; Minto has a limited operating history and is subject to risks associated with establishing new mining operations; sustained increases in costs, or decreases in the availability, of commodities consumed or otherwise used by the Company may adversely affect the Company; adverse geotechnical and geological conditions (including geotechnical failures) may result in operating delays and lower throughput or recovery, closures or damage to mine infrastructure; the Company's operations may encounter delays in or losses of production due to equipment delays or the availability of equipment; the Company's operations are subject to continuously evolving legislation, compliance with which may be difficult, uneconomic or require significant expenditures; the Company may be unsuccessful in attracting and retaining key personnel; labour disruptions could adversely affect the Company's operations; risks related to the Company's use of contractors; the hazards and risks normally encountered in the exploration, development and production of copper, gold and silver; the Company's operations are subject to environmental hazards and compliance with applicable environmental laws and regulations; the Company's operations and workforce are exposed to health and safety risks; the Company's title to exploration, development and mining interests can be uncertain and may be contested; the Company's properties may be subject to claims by various community stakeholders; risks related to limited access to infrastructure and water; the Company may not be able to secure additional financing when needed or on acceptable terms; the Company may be subject to litigation; and those risk factors set out in the Company's annual information form dated March 31, 2022 for the year ended December 21, 2021 as filed on SEDAR. Although the Company has attempted to identify important factors that could cause actual performance, results, or events to differ materially from those described in the forward-looking statements, you are cautioned that this list is not exhaustive and there may be other factors that the Company has not identified. Furthermore, the Company undertakes no obligation to update or revise any forward-looking statements included in or incorporated by reference in, this news release if these beliefs, estimates, and opinions or other circumstances should change, except as otherwise required by applicable law.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contact Information:
For further information:
David J. Birch,
Chief Financial Officer
(416) 895-4824
E-mail: info@mintomine.com
Chris A. Stewart,
President & Chief Operating Officer
(647) 523-6618
SOURCE Minto Metals Corp.