Iberian Minerals Reports Q3 Net Income of $123.6 Million
TORONTO, ONTARIO -- (Marketwire) -- 11/10/11 -- Iberian Minerals Corp. (TSX VENTURE: IZN) today announced financial and operating results for the three and nine month periods ended September 30, 2011, with comparative figures for the three and nine month periods ended September 30, 2010. The unaudited condensed consolidated financial statements and related notes, and Management Discussion and Analysis may be found on www.sedar.com. Unless stated otherwise, all reported figures are in U.S. dollars. The Company reported net income of $123.6 million for Q3 2011, representing $0.27 per share.
Financial Highlights:
Three months ended September 30, 2011
- Recorded net income of $123.59 million or $0.27 per registered share
which included:
- Sales of $60.11 million and gross loss of $24.09 million;
- A realized loss of $52.42 million on commodity hedges (included in
sales) which caused the gross loss;
- An unrealized non-cash gain of $164.22 million on derivative
financial instruments outstanding, partially as a result of
commodity hedging positions in copper and zinc that were delivered
into during the period and were thus retired and partially due to a
decline in metals prices impacting the fair value of outstanding
hedge positions.
- Cash flow provided by operations before changes in working capital
items was $1.49 million.
Nine months ended September 30, 2011
Recorded net income of $201.55 million or $0.51 per registered share
- which included:
- Sales of $183.48 million and gross loss of $54.02 million;
- A realized loss of $171.03 million on commodity hedges (included in
sales) which caused the gross loss;
- An unrealized non-cash gain of $292.66 million on derivative
financial instruments outstanding, partially as a result of
commodity hedging positions in copper and zinc that were delivered
into during the period and were thus retired and partially due to a
decline in metals prices impacting the fair value of outstanding
hedge positions.
- Cash flow provided by operations before changes in working capital
items was $22.28 million.
- In June 2011 the Company completed a CA$76 million equity financing
which allowed for the buy-out of Trafigura's 45.96% net-profit interest
('NPI') in Condestable (for 2011 to 2014) for $60 million. The buy-out
of the NPI was completed on June 30, 2011.
Operational Highlights - CMC:
Three months ended September 30, 2011
- Condestable Mine processed copper ore at expected rates. The average
copper ore grade was 1.05% in 2011 versus 1.21% in 2010.
- CMC processed 597,139 tonnes of ore in 2011 versus 564,541 tonnes of
ore in 2010 (increase of 6%).
- Copper concentrate production in 2011 was 24,551 DMT versus 24,544 DMT
in 2010 (no change versus prior year).
- Contained copper production in 2011 was 5,688 FMT versus 6,088 FMT in
the prior year (decrease of 6%).
- The Cash Operating Cost in 2011 was $1.19 per payable pound of copper
produced versus prior year of $0.99.
Nine months ended September 30, 2011
- Condestable Mine processed copper ore at expected rates. The average
copper ore grade was 1.09% in 2011 versus 1.16% in 2010.
- CMC processed 1,769,167 tonnes of ore in 2011 versus 1,666,932 tonnes
of ore in 2010 (increase of 6%).
- Copper concentrate production in 2011 was 72,428 DMT versus 68,840 DMT
in 2010 (increase of 5%).
- Contained copper production in 2011 was 17,387 FMT versus 17,252 FMT in
the prior year (increase of 1%).
- The Cash Operating Cost in 2011 was $1.12 per payable pound of copper
produced versus prior year of $1.02. For the current year this is below
the 2011 guidance of $1.15 per payable pound of copper.
Other
- In May 2011 CMC completed an amendment to its senior debt facility and
increased the principal to $60 million and extended the term by six
months (to September 2013).
- Major project works were completed on the previously announced 10%
processing plant expansion. The processing plant reached 6,600 tpd of
ore processed in June 2011.
Operational Highlights - MATSA:
Three months ended September 30, 2011
- MATSA processed 518,682 tonnes of ores in 2011 versus 460,999 tonnes of
ores in 2010 (increase of 12%).
- Produced 28,707 DMT of copper concentrate (2010 - 26,754 DMT), 18,260
DMT of zinc concentrate (2010 - 5,968 DMT) and 7,280 DMT of lead
concentrate (2010 - nil). Contained metal production was 6,638 FMT of
copper (2010 - 5,767 FMT), 8,632 FMT of zinc (2010 - 2,834 FMT), 1,217
FMT of lead (2010 - nil) and 235,549 ounces of silver (2010 - 181,978
ounces).
- The Cash Operating Cost was $1.56 per payable pound of copper produced
(2010 - $2.06 per payable pound of copper produced). For the current
year this is below the 2011 guidance of $1.75 per payable pound of
copper produced.
Nine months ended September 30, 2011
- MATSA processed 1,499,209 tonnes of ores in 2011 versus 1,200,355
tonnes of ores in 2010 (increase of 25%). The copper ore head grade was
2.20% (2010 - 1.83%)
- Produced 84,064 DMT of copper concentrate (2010 - 66,817 DMT), 50,893
DMT of zinc concentrate (2010 - 21,645 DMT) and 23,525 DMT of lead
concentrate (2010 - nil). Contained metal production was 18,916 FMT of
copper (2010 - 15,399 FMT), 24,390 FMT of zinc (2010 - 10,400 FMT),
4,216 FMT of lead (2010 - nil) and 725,101 ounces of silver (2010 -
516,488 ounces).
- The Cash Operating Cost was $1.67 per payable pound of copper produced
(2010 - $2.24 per payable pound of copper produced). For the current
year this is below the 2011 guidance of $1.75 per payable pound of
copper produced.
Other
- In May 2011 MATSA was awarded the exploration concessions by the local
authorities for the Sotiel property. The Sotiel mine, which forms part
of the concessions, was a past producing mine and is located
approximately 30 km from the Aguas Tenidas operation.
Outlook:
Operations
The Company updates previously issued production guidance for 2011.
- At Condestable, due to a decreased copper ore grade in recent months,
it is expected that produced metal will be as follows: 22,500 FMT
copper, 13,000 Foz gold and 289,300 Foz silver. The Cash Operating Cost
per pound of payable copper produced is expected to be $1.15.
- The production guidance for Aguas Tenidas remains as follows: 25,000
FMT copper, 33,900 FMT zinc, 3,700 FMT lead and 730,000 Foz silver. The
Cash Operating Cost per pound of payable copper produced is expected to
be $1.75.
- The labour contract negotiations on-going at MATSA are progressing in a
positive fashion. The most recent contract expired on December 31,
2010. The Company remains hopeful that a new collective labour
agreement will be reached in the coming weeks.
Development
The Company continues activities relating to the study of a possible rehabilitation and re-start of the Sotiel Mine together with a related expansion study for the operations at Aguas Tenidas. A budget for this work program of approximately $20 million was approved by the Board of Directors in June 2011 and is expected to be spent over the remainder of 2011 and early 2012. The Company could make a construction decision by the end of 2011.
Summarized Financial Results
The following table presents a summarized Statement of Operations for the three and nine months ended September 30, 2011 with comparatives for the three and nine months ended September 30, 2010.
Three months ended Nine months ended
September 30, September 30,
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(thousands of U.S. Dollars) 2011 2010 2011 2010
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$ $ $ $
Sales 60,110 57,482 183,482 164,976
Costs and expenses of mining
operations 84,196 71,966 237,499 223,574
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Gross loss (24,086) (14,484) (54,017) (58,598)
Expenses
Administrative expenses and
other 1,876 1,066 4,947 3,281
Exploration and evaluation
expenditures 4,816 - 4,816 -
Foreign exchange gain (4,770) (177) (1,607) (6,394)
Contingent consideration fair
value - 9,442 - 5,233
Unrealized (gain) loss on
derivative instruments (164,216) 97,862 (292,656) (21,093)
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Total expenses (other income) (162,294) 108,193 (284,500) (18,973)
Operating income (loss) 138,208 (122,677) 230,483 (39,625)
Net finance (income) costs (4,490) 5,897 3,783 4,786
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Income (loss) before taxation 142,698 (128,574) 226,700 (44,411)
Current income tax expense
(recovery) (931) 2,933 150 5,611
Future income tax expense
(recovery) 20,042 (29,112) 25,003 3,796
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Net income (loss) 123,587 (102,395) 201,547 (53,818)
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Basic earnings (loss) per share
($) 0.27 (0.30) 0.51 (0.16)
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Diluted earnings per share ($) 0.26 (0.30) 0.48 (0.16)
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Key operating statistics
CMC:
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Three months Nine months
Periods ended
September 30, Unit 2011 2010 2011 2010
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Ore mined t 608,008 550,346 1,787,493 1,654,379
Ore processed t 597,139 564,541 1,769,167 1,666,932
Copper ore grade % 1.05 1.21 1.09 1.16
Concentrate grade % 23 25 24 25
Copper recovery rate % 91 90 90 89
Copper concentrate DMT 24,551 24,544 72,428 68,840
Copper contained in
concentrate FMT 5,688 6,088 17,387 17,252
Gold contained in
concentrate oz 3,543 3,382 10,574 10,660
Silver contained in
concentrate oz 79,404 76,216 240,667 207,925
Payable copper
contained in
concentrate FMT 5,424 5,823 16,588 16,491
Payable gold
contained in
concentrate oz 3,207 3,065 9,574 9,334
Payable silver
contained in
concentrate oz 71,213 68,363 215,625 191,329
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Cash Operating Cost
per lb of payable
copper USD $ 1.19 $ 0.99 $ 1.12 $ 1.02
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MATSA:
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Three months Nine months
Periods ended September 30, Unit 2011 2010 2011 2010
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Copper ore
Ore mined t 257,205 348,691 878,166 927,636
Ore processed t 274,240 362,290 867,343 920,555
Copper ore grade % 2.20 1.82 2.20 1.83
Concentrate grade % 23 22 22 22
Copper recovery rate % 86 82 86 83
Copper concentrate DMT 22,601 24,908 72,859 62,633
Copper contained in concentrate FMT 5,184 5,393 16,336 13,881
Silver contained in concentrate oz 61,993 77,105 220,676 199,913
Payable copper contained in
concentrate FMT 4,958 5,144 15,608 13,275
Payable silver contained in
concentrate oz 40,193 53,411 163,966 139,830
Polymetallic ore
Ore mined t 230,785 104,843 645,342 281,397
Ore processed t 244,442 98,709 631,866 279,800
Zinc ore grade % 5.39 4.91 5.71 6.19
Zinc concentrate grade % 47 47 48 48
Zinc recovery rate % 66 61 68 61
Copper ore grade % 1.17 1.08 1.10 1.26
Copper concentrate grade % 24 20 23 21
Copper recovery rate % 51 38 38 40
Lead ore grade % 1.55 - 1.69 -
Lead concentrate grade % 18 - 18 -
Lead recovery rate % 33 - 39 -
Zinc concentrate DMT 18,260 5,968 50,893 21,645
Copper concentrate DMT 6,106 1,846 11,205 4,184
Copper/lead concentrate DMT - - - 6,071
Lead concentrate DMT 7,280 - 23,525 -
Zinc contained in concentrate FMT 8,632 2,834 24,390 10,400
Copper contained in concentrate FMT 1,454 374 2,580 1,518
Lead contained in concentrate FMT 1,217 - 4,216 -
Silver contained in concentrate oz 173,556 104,873 504,425 316,575
Payable zinc contained in
concentrate FMT 7,171 2,357 20,321 8,427
Payable copper contained in
concentrate FMT 1,393 355 2,468 1,415
Payable lead contained in
concentrate FMT 999 - 3,510 -
Payable silver contained in
concentrate oz 97,776 20,799 303,121 177,466
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Cash Operating Cost per lb of
payable copper USD 1.56 2.06 1.67 2.24
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About Iberian Minerals Corp.
Iberian Minerals Corp. is a Canadian listed global base metals company with interests in Spain and Peru. The Condestable Mine, located in Peru approximately 90 km south of Lima operates at 2.4 million tonnes per year producing copper, and associated silver and gold in a concentrate. The Aguas Tenidas Mine is in the Andalucia region of Spain approximately 110 km north-west of Seville and operates a 2.2 million tonnes per year underground mine and concentrator that produces copper, zinc and lead concentrates that also contain gold and silver.
Note 1 - The Cash Operating Cost per pound of payable copper is a non-IFRS performance measure. It includes cash operating costs, including treatment and refining charges ('TC/RC'), freight and distribution costs, and is net of by-product metal credits (zinc, gold and silver). The Cash Operating Cost per pound of payable copper indicator is consistent with the widely accepted industry standard established by Brook Hunt and is also known as the C1 cash cost.
FORWARD LOOKING STATEMENTS:
This news release contains certain 'forward-looking statements' and 'forward-looking information' under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as 'plan', 'expect', 'project', 'intend', 'believe', 'anticipate', 'estimate', and other similar words, or statements that certain events or conditions 'may' or 'will' occur. Forward looking information may include, but is not limited to, statements with respect to the future financial or operating performances of the Corporation, its subsidiaries and their respective projects, the timing and amount of estimated future production, estimated costs of future production, capital, operating and exploration expenditures, the future price of copper, gold and zinc, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the costs and timing of future exploration, requirements for additional capital, government regulation of exploration, development and mining operations, environmental risks, reclamation and rehabilitation expenses, title disputes or claims, and limitations of insurance coverage. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Many of these assumptions are based on factors and events that are not within the control of the Corporation and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include changes in market conditions and other risk factors discussed or referred to in the section entitled 'Risk Factors' in the Corporation's annual information form dated March 30, 2011. Although the Corporation has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Corporation undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.
Neither 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.
Contacts:
Iberian Minerals Corp.
Laura Sandilands
Investor Relations and Corporate Communications
416-815-8558