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Vancouver | August 9, 2023 | Imperial Metals Corporation (the “Company”) (TSX:III) reports financial results for the three and six months ended June 30, 2023, as summarized in this news release and discussed in detail in the Management’s Discussion & Analysis. The Company’s financial results are prepared in accordance with International Financial Reporting Standards (“IFRS”). The reporting currency of the Company is the Canadian (“CDN”) Dollar.
Total revenue was $85.8 million in the June 2023 quarter compared to $36.4 million in the 2022 comparative quarter.
In the June 2023 quarter, the Red Chris mine (100% basis) had 3.6 concentrate shipments (2022-4.5 concentrate shipments).
Mount Polley mine had 1.4 concentrate shipments (2022-nil concentrate shipments).
Variations in revenue are impacted by the re-start of the Mount Polley mine operations, 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 the June 2023 quarter compared to US$4.32 in the 2022 comparative quarter. The LBMA (London Bullion Market Association) gold price per troy ounce averaged US$1,978 in the June 2023 quarter compared to US$1,873 in the 2022 comparative quarter. The average US/CDN Dollar exchange rate was 1.343 in the June 2023 quarter, 5.2% higher than the exchange rate of 1.277 in the June 2022 quarter. In CDN Dollar terms the average copper price in the June 2023 quarter was CDN$5.17 per pound compared to CDN$5.52 per pound in the 2022 comparative quarter, and the average gold price in the June 2023 quarter was CDN$2,657 per ounce compared to CDN$2,391 per ounce in the 2022 comparative quarter.
A negative revenue revaluation in the June 2023 quarter was $8.2 million as compared to a negative revenue revaluation of $7.3 million in the 2022 comparative quarter. 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 for the June 2023 quarter was $16.0 million ($0.10 per share) compared to net loss of $29.3 million ($0.21 per share) in the 2022 comparative quarter. The decrease in net loss of $13.3 million was primarily due to the following factors:
Capital expenditures including leases were $42.5 million in the June 2023 quarter, an increase of $2.9 million from $39.6 million in the 2022 comparative quarter. The June 2023 quarter expenditures included $11.9 million in exploration, $10.7 million for tailings dam construction, $3.3 million on stripping costs, and $16.6 million of other capital.
At June 30, 2023, the Company had not hedged any copper, gold or US/CDN Dollar exchange. Quarterly 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.
During the quarter ended June 30, 2023, Imperial’s consolidated metal production was 11,181,595 pounds copper and 14,289 ounces gold, with 7,062,836 pounds copper and 10,185 ounces gold produced from Mount Polley and 4,118,759 pounds copper and 4,104 ounces gold from its 30% share of Red Chris mine production.
Mount Polley Mine
Q2 2023 vs Q1 2023
Mount Polley metal production for the second quarter of 2023 was 7,062,836 pounds copper and 10,185 ounces gold, compared to 6,678,094 pounds copper and 9,980 ounces gold produced during the first quarter of 2023. Metal production was up by 5.8% for copper and 2.1% for gold for this quarter due to higher copper and gold grades and slightly higher throughput. The throughput was 15,724 tonnes per day compared to 15,440 tonnes per day, copper recovery was 79.9% compared to 81.1%, gold recovery was 68.3% compared to 71.5%. A lightning strike damaged a mill motor during the quarter, which inhibited the drive to increase throughput while maintaining the excellent metal recoveries that are being achieved year to date. The motor is out for repair and expected to be repaired and returned to site at the end of August 2023.
|Three Months Ended||Three Months Ended|
|June 30||March 31|
|Ore milled – tonnes||1,430,842||1,389,635|
|Ore milled per calendar day – tonnes||15,583||15,440|
|Grade % – copper||0.28||0.27|
|Grade g/t – gold||0.32||0.31|
|Recovery % – copper||79.9||81.1|
|Recovery % – gold||68.3||71.5|
|Copper – 000’s pounds||7,063||6,678|
|Gold – ounces||10,185||9,980|
Q2 2023 vs Q2 2022
During the comparative June 30, 2022 quarter, Mount Polley Mine was not in production.
Exploration, development, and capital expenditures in the second quarter of 2023 were $9.8 million compared to $5.2 million in the 2022 comparative quarter.
Jim Miller-Tait, P.Geo., Imperial Metals Vice President Exploration (“Mr. Miller-Tait”), has reviewed the Mount Polley disclosure contained in this news release and is the designated Qualified Person as defined by National Instrument 43-101 (“NI 43-101”) for the Mount Polley exploration program.
Red Chris Mine
Q2 2023 vs Q1 2023
Red Chris metal production (100%) for the second quarter of 2023 was 13,729,195 pounds copper and 13,680 ounces gold, compared to 11,589,689 pounds copper and 10,496 ounces gold produced during the first quarter of 2023. At Red Chris, metal production was higher by 18.5% for copper and 30.3% for gold compared to the first quarter of 2023 primarily due to higher head grades for copper and gold, and a 11.5% increase in ore milled compared to the previous quarter.
Q2 2023 vs Q2 2022
|100% Red Chris mine production||Three Months Ended June 30||Six Months Ended June 30|
|Ore milled – tonnes||2,357,656||2,576,109||4,448,428||4,601,566|
|Ore milled per calendar day – tonnes||25,908||28,309||24,577||25,423|
|Grade % – copper||0.348||0.486||0.337||0.450|
|Grade g/t – gold||0.343||0.394||0.328||0.375|
|Recovery % – copper||75.9||80.5||76.6||77.3|
|Recovery % – gold||52.6||60.6||51.5||57.0|
|Copper – 000’s pounds||13,729||22,005||25,319||35,316|
|Gold – ounces||13,680||19,540||24,176||31,628|
Imperial’s 30% share of exploration, development, and capital expenditures were $32.5 million in the June 2023 quarter compared to $33.9 million in the 2022 comparative quarter.
Block Cave Feasibility Study
At Red Chris, progress towards block cave mining is advancing with the decline at 3,245 metres as of July 20, 2023. The Block Cave Feasibility Study is expected to be completed in the second half of 2023.
The exploration program continued at Red Chris during the first quarter of 2023 with ongoing drilling east of the East Ridge Exploration Target returning positive results. Work is underway to update the Red Chris Mineral Resources estimate to include East Ridge in 2023, which will provide further clarity on the size and scale of this prospect.
During the reporting period, there were up to four diamond drill rigs in operation. A further 6,947 metres of drilling was completed during the quarter from 11 drill holes.
Mr. Miller-Tait has reviewed the Red Chris disclosure contained in this MD&A and is the designated Qualified Person as defined by NI 43-101 for the Red Chris exploration program.
Huckleberry operations ceased in August 2016 and the mine remains on care and maintenance status.
Site personnel continue to focus on maintaining site access, water management (treatment and release of mine contact water into Tahtsa Reach), snow removal, maintenance of site infrastructure and equipment, mine permit compliance, environmental compliance monitoring and monitoring tailings management facilities.
For the June 2023 quarter, Huckleberry incurred idle mine costs comprised of $1.6 million in operating costs and $0.2 million in depreciation expense compared to $1.5 million in operating cost and $0.2 million in depreciation expense in the comparable quarter of 2022.
EARNINGS AND CASH FLOW
Select Quarter Financial Information
|expressed in thousands of dollars,||Three Months Ended June 30||Six Months Ended June 30|
|except share and per share amounts||2023||2022||2023||2022|
|Net loss per share||$(0.10)||$(0.21)||$(0.15)||$(0.26)|
|Diluted loss per share||$(0.10)||$(0.21)||$(0.15)||$(0.26)|
|Adjusted net loss||$(16,056)||$(29,706)||$(23,311)||$(48,460)|
|Adjusted net loss per share||$(0.10)||$(0.21)||$(0.15)||$(0.34)|
|Cash earnings per share||$0.01||$(0.16)||$0.04||$(0.26)|
|Working capital deficiency||$(103,022)||$(62,806)||$(103,022)||$(62,806)|
|Total debt (including current portion)||$277,002||$99,092||$277,002||$99,092|
For detailed information, refer to Imperial’s 2023 Second Quarter Report available on imperialmetals.com and sedarplus.ca.
Imperial is a Vancouver based exploration, mine development and operating company with holdings that include the Mount Polley mine (100%), the Huckleberry mine (100%), the Red Chris mine (30%). Imperial also holds a portfolio of 23 greenfield exploration properties in British Columbia.
Brian Kynoch | President | 604.669.8959
Darb Dhillon | Chief Financial Officer | 604.669.8959