Imperial Reports 2023 Financial Results
Press Release
Vancouver | March 14, 2024 | Imperial Metals Corporation (the “Company”) (TSX:III) reports financial results for its fiscal year ended December 31, 2023.
| Select Annual Financial Information | Year Ended December 31 | ||
| expressed in thousands, except share and per share amounts | 2023 | 2022 | 2021 |
| Operations: | |||
| Total revenues | $344,455 | $172,797 | $133,591 |
| Net loss | $(36,715) | $(75,975) | $(26,070) |
| Net loss per share | $(0.23) | $(0.51) | $(0.19) |
| Diluted loss per share | $(0.23) | $(0.51) | $(0.19) |
| Adjusted net loss(1) | $(36,092) | $(95,598) | $(23,181) |
| Adjusted net loss per share(1) | $(0.23) | $(0.64) | $(0.17) |
| Adjusted EBITDA(1) | $24,876 | $(63,131) | $11,553 |
| Cash earnings(1)(2) | $23,557 | $(52,873) | $11,034 |
| Cash earnings per share(1)(2) | $0.15 | $(0.36) | $0.08 |
| Working capital deficiency | $(167,597) | $(65,091) | $(19,060) |
| Total assets | $1,411,990 | $1,299,702 | $1,186,341 |
| Total debt (including current portion)(3) | $319,787 | $197,788 | $34,975 |
- Refer to table in section Non-IFRS Financial Measures of the December 31, 2023 Management’s Discussion & Analysis for further details.
- Cash earnings is defined as the cash flow from operations before the net change in non-cash working capital balances, income and mining taxes, and interest paid. Cash earnings per share is defined as cash earnings divided by the weighted average number of common shares outstanding during the year.
- Total debt consists of banker’s acceptances, debentures, advanced development loan, and equipment loans and leases.
Select Items Affecting Net Loss
| presented on an after-tax basis | Year Ended December 31 | |||
| 2023 | 2022 | 2021 | ||
| (000’s) | (000’s) | (000’s) | ||
| Net loss before undernoted items | $(5,429) | $(67,063) | $(24,337) | |
| Interest expense | (31,332) | (8,921) | (1,497) | |
| Foreign exchange gain (loss) on debt | 46 | 9 | (236) | |
| Net Loss | $(36,715) | $(75,975) | $(26,070) | |
Total revenue increased to $344.5 million in 2023 compared to $172.8 million in 2022, an increase of $171.7 million or 99%.
Revenue from the Mount Polley mine in 2023 was $233.3 million compared to $42.7 million in 2022, an increase of $190.6 million. In 2023, the Mount Polley mine had 5.7 concentrate shipments (2022-1.0 concentrate shipments). Mount Polley restarted its operations in late June of 2022.
Revenue from the Red Chris mine in 2023 was $109.8 million compared to $129.5 million in 2022, a decrease of $19.7 million.
In 2023, the Red Chris mine (100% basis) had 12.4 concentrate shipments (2022-14.6 concentrate shipments).
Variations in revenue are impacted by the restart of operations, the timing and quantity of concentrate shipments, metal prices and exchange rates, and period end revaluations of revenue attributed to concentrate shipments where copper and gold prices will settle at a future date.
The London Metals Exchange cash settlement copper price per pound averaged US$3.85 in 2023 compared to US$4.00 in 2022. London Bullion Market Association, London gold price per troy ounce averaged US$1,943 in 2023 compared to US$1,801 in 2022. The average US/CDN dollar exchange rate in 2023 was 1.350 compared to an average of 1.302 in 2022.
imperialmetals.com
In CDN dollar terms, the average copper price in 2023 was CDN$5.19 per pound compared to CDN$5.21 per pound in 2022, and the average gold price in 2023 was CDN$2,622 per ounce compared to CDN$2,345 per ounce in 2022.
Revenue in 2023 decreased by a $7.6 million negative revenue revaluation compared to a negative revenue revaluation of $4.9 million in 2022. Revenue revaluations are the result of the metal price on the settlement date and/or the current period balance sheet date being higher or lower than when the revenue was initially recorded or the metal price at the last balance sheet date and finalization of contained metal as a result of final assays and weights.
Net loss in 2023 was $36.7 million ($0.23 per share) compared to net loss of $75.9 million ($0.51 per share) in 2022. The majority of the decrease in net loss of $38.8 million was primarily due to the following factors:
- loss from mine operations reduced to $13.7 million in 2023 from loss of $28.7 million in 2022, a decrease in net loss of $15.0 million;
- mine restart costs went from $64.9 million in 2022 to $Nil in 2023, a decrease in net loss of $64.9 million, which was slightly offset by the increase of $2.2 million in idle mine cost from $6.5 million in 2022 to $8.7 million in 2023;
- net gain on disposal of mineral properties decreased by $17.8 million from $16.9 million in 2022 to a loss of $0.9 million in 2023; and
- interest expense of $8.9 million in 2022 increased to $31.3 million in 2023, an increase of $22.4 million as a result of additional financing required to support working capital and capital expenditures in 2023 at the Company’s operating mines.
Capital expenditures including finance leases were $137.3 million in 2023, down from $150.0 million in 2022. Expenditures in 2023 included:
- $44.9 million in exploration, an increase of $3.5 million in comparison to 2022 of $41.4 million;
- $36.6 million for tailings dam construction, a decrease of $0.1 million in comparison to 2022 of $36.7 million;
- $12.6 million on stripping costs, a decrease of $11.2 million in comparison to 2022 of $23.8 million; and
- investment in other plant and equipment of $43.2 million, a decrease of $4.9 million in comparison to 2022 of $48.1 million.
At December 31, 2023, the Company had $24.9 million in cash compared to $27.5 million at December 31, 2022.
At December 31, 2023, the Company had not hedged any copper, gold or US/CDN Dollar exchange. Revenues will fluctuate depending on copper and gold prices, the US/CDN Dollar exchange rate, and the timing of concentrate sales, which is dependent on concentrate production and the availability and scheduling of transportation.
NON-IFRS FINANCIAL MEASURES
The Company reports on four non-IFRS financial measures: adjusted net loss, adjusted EBITDA, cash earnings and cash cost per pound of copper produced, which are described in detail below. The Company believes these measures are useful to investors because they are included in the measures that are used by management in assessing the financial performance of the Company.
Adjusted net loss, adjusted EBITDA, cash earnings and cash cost per pound of copper are not standardized financial measures under IFRS and might not be comparable to similar financial measures disclosed by other issuers.
Adjusted Net Loss and Adjusted Net Loss Per Share
Adjusted net loss is derived from operating net loss by removing the gains or loss, resulting from acquisition and disposal of property, mark to market revaluation of derivative instruments not related to the current period, net of tax, unrealized foreign exchange gains or losses on long term debt, net of tax and other non-recurring items. Adjusted net loss in 2023 was $36.1 million ($0.23 per share) compared to an adjusted net loss of $95.6 million ($0.64 per share) in 2022. We believe that the presentation of Adjusted Net Loss helps investors better understand the results of our normal operating activities and the ongoing cash generating potential of our business.
Adjusted EBITDA
Adjusted EBITDA in 2023 was $24.9 million compared to $(63.1) million in 2022. We define Adjusted EBITDA as net loss before interest expense, taxes, depletion, and depreciation, and as adjusted for certain other items.
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