Caledonia Mining Corporation Plc press release
Copper Mountain Mining Announces Q4 2021 Financial Results and Provides Annual Guidance
NYSE - New York Stock Exchange · Jersey
Canada NewsWire
VANCOUVER, BC , Feb. 14, 2022 /CNW/ - Copper Mountain Mining Corporation (TSX: CMMC) (ASX: C6C) (the "Company" or "Copper Mountain") announces fourth quarter and full year 2021 financial and operating results. All currency is in Canadian dollars, unless otherwise stated. All results are reported on a 100% basis. The Company's Financial Statements and Management's Discussion & Analysis ("MD&A") are available at www.CuMtn.com and www.sedar.com .
[](https://mma.prnewswire.com/media/1746038/CMMC_LOGO.html)
HIGHLIGHTS
Sales in Q4 2021 were 19.4 million pounds of copper, 6,285 ounces of gold, and 108,020 ounces of silver, bringing sales for the year to 93 million pounds of copper, 29,691 ounces of gold, and 533,096 ounces of silver. Production in Q4 2021 was 16.7 million pounds of copper, 5,472 ounces of gold, and 80,377 ounces of silver. Full year 2021 production was 90.1 million pounds of copper, 28,736 ounces of gold, and 523,821 ounces of silver, achieving the Company's upward revised 2021 copper production guidance range. C1 cash cost (1) per pound of copper produced in Q4 2021 was US$2.17 , all-in sustaining cost ("AISC") (1) per pound of copper was US$2.54 , and all-in cost ("AIC") (1) per pound of copper was US$2.76 . Full year 2021 C1 cash cost (1) per pound of copper produced was US$1.49 , AISC (1) per pound of copper was US$1.84 , and AIC (1) per pound of copper was US$2.12 . Revenue for Q4 2021 was $136.8 million and for the full year was $578.2 million . Net income for Q4 2021 was $31.5 million , or $0.11 on a per-share basis, and for the full year was $148.1 million , or $0.50 on a per-share basis. Cash flow from operations for Q4 2021 was $50.4 million , or $0.24 on a per-share basis (1) and for the full year was $315.5 million , or $1.50 on a per-share basis (1) . Cash, cash equivalents and restricted cash at the end of 2021 was $178.4 million . The third ball mill at the Copper Mountain Mine was commissioned in Q4 2021, increasing plant milling capacity to 45,000 tonnes per day from 40,000 tonnes per day. Exploration success continued with the Company extending mineralization to depth and to the west at New Ingerbelle and extended three major mineralized zones at Cameron Copper. Construction plan for the Eva Copper Project was approved, contingent on advancing detailed engineering to 80%, the lifting of COVID-19 restrictions in Queensland and obtaining committed project financing, and capital and operating costs were also updated, confirming positive economics. 2021 sustainability targets were met or exceeded, achieving at least an "A" or "Yes" rating on each of the Mining Association of Canada's Towards Sustainable Mining protocols. Subsequent to the year-end, zero-cost collar options were purchased for 3.3 million pounds of copper per month through 2022 with a floor price of US$4.00 per pound and an average ceiling price of US$4.91 per pound. Annual guidance for 2022:
| (1) | _The Company reports the non-GAAP financial measures of C1 cash costs, AISC and AIC per pound of copper produced and cash flow from operations per share to manage and evaluate its operating performance. See "Cautionary Note Regarding Non-GAAP P erformance Measures" in this press release. _ |
Gil Clausen , Copper Mountain's President and CEO, stated, "The fourth quarter of 2021 was very demanding, and I am proud of our team for coming together and getting us through this period. Production was impacted late in the fourth quarter by severe weather including heavy rains and flooding in British Columbia followed by unprecedented cold temperatures which caused extremely difficult operating conditions, in addition to damage sustained to our secondary crusher. Despite these events, we met our sale targets for the quarter and achieved our upwardly revised annual production guidance, which we had increased earlier in the year. We came in right at the mid-point of our original guidance. Further, we have commissioned our new third ball mill, which completes the 45,000 tonnes per day mill expansion project."
Mr. Clausen added, "The Company is providing two-year production guidance as we expect our life of mine plan to change materially beyond that period with the results of our major drilling program. We plan on updating the life of mine plan mid-2022, which will be based on an anticipated larger mineral reserve and mineral resource estimate at the Copper Mountain Mine, with a mine/mill expansion study. We firmly believe there is potential to substantially increase annual production at the Copper Mountain Mine."
SUMMARY OF OPERATING RESULTS
| Mine Production Information | | | | | | Copper Mountain Mine (100% Basis) | Q4 2021 | Q4 2020 | Annual 2021 | Annual 2020 | | Mine | | | | | | Total tonnes mined (000s) | 11,368 | 15,499 | 56,897 | 55,045 | | Ore tonnes mined (000s) | 3,023 | 3,785 | 13,358 | 14,173 | | Waste tonnes (000s) | 8,346 | 11,713 | 43,540 | 40,872 | | Stripping ratio | 2.76 | 3.09 | 3.26 | 2.88 | | | | | | | | Mill | | | | | | Tonnes milled (000s) | 3,124 | 3,408 | 13,406 | 14,336 | | Feed Grade (Cu%) | 0.30 | 0.40 | 0.38 | 0.32 | | Recovery (%) | 80.4 | 77.3 | 79.8 | 78.0 | | Operating time (%) | 87.5 | 94.1 | 91.9 | 92.4 | | Tonnes milled (TPD) | 33,957 | 37,043 | 36,729 | 39,169 | | | | | | | | Production | | | | | | Copper (000s lb) | 16,693 | 23,053 | 90,140 | 77,551 | | Gold (oz) | 5,472 | 8,959 | 28,736 | 29,227 | | Silver (oz) | 80,377 | 144,934 | 523,821 | 392,494 | | | | | | | | Sales | | | | | | Copper (000s lb) | 19,391 | 18,712 | 93,004 | 73,277 | | Gold (oz) | 6,285 | 7,253 | 29,691 | 26,137 | | Silver (oz) | 108,020 | 96,509 | 533,096 | 323,276 | | | | | | | | C1 cash cost per pound of copper produced (US$) (1) | 2.17 | 1.43 | 1.49 | 1.53 | | AISC per pound of copper produced (US$) (1) | 2.54 | 1.58 | 1.84 | 1.69 | | AIC per pound of copper produced (US$) (1) | 2.76 | 1.82 | 2.12 | 1.90 | | | | | | | | Average realized copper price (US$/lb) | $4.44 | $3.35 | $4.21 | $2.84 |
| (1) | _The Company reports the non-GAAP financial measures of C1 cash costs, AISC and AIC per pound of copper produced to manage and evaluate its operating performance. For further information, see "Cautionary Note Regarding Non-GAAP Performance Measures" in this press release. _ |
Fourth Quarter 2021
Production
The Copper Mountain Mine produced 16.7 million pounds of copper, 5,472 ounces of gold, and 80,377 ounces of silver in Q4 2021, as compared to 23.1 million pounds of copper, 8,959 ounces of gold, and 144,934 ounces of silver in Q4 2020. Lower production in the quarter was a result of lower grade and reduced mill throughput. The average mill feed grade was 0.30% Cu during Q4 2021, as compared to average feed grade of 0.40% Cu in Q4 2020. This was due to ore being mined predominantly from the lower grade Phase 2 area for most of the quarter. This was planned for the commissioning of Ball Mill 3, however, the severe weather that brought significant flooding and then immediately after extreme cold temperatures to the area prevented the mine from accessing higher-grade ore from Phase 3 of the Main Pit later in the quarter. This severe cold weather also created more difficult operating conditions, including frozen bins and conveyor belt rips due to frost chunks in feeders, particularly for the feeder belt to the SAG mill.
The mill processed a total of 3.1 million tonnes of ore during the quarter as compared to 3.4 million tonnes in Q4 2020. Lower throughput was mainly a result of commissioning Ball Mill 3, severe weather in the quarter, and damage to the secondary crusher's main shaft, shaft assembly and bushing in the second half of November. The main shaft was temporarily weld repaired by early December, but the temporary nature of the fix required the Company to reduce crushing power to sustain operation, thereby increasing the crusher product size of the ore feed going to the SAG mill, which resulted in lower SAG throughput. A new main shaft is expected to be installed in April 2022 at a cost of approximately $0.5 million . Mill throughput is therefore expected to remain at reduced levels of 35,000 to 38,000 TPD through to mid Q2 2022. Copper recovery was 80.4% in Q4 2021 as compared to 77.3% in Q4 2020. Mill availability averaged 87.5% for Q4 2021 as compared to 94.1% in Q4 2020.
The Company continues to advance the plant improvement and optimization projects currently underway at the mine. Both the installation of additional cleaner circuit capacity to support maximizing recovery on slower kinetic ore types and the installation of additional filtration capacity are expected to be completed during the first half of 2022. An expansion of the rougher flotation circuit commenced in Q4 2021 to further enhance rougher recovery and construction is planned to be completed by the end of Q2 2022. With the completion of these projects, the replacement of the new main shaft for the secondary crusher, and as Copper Mountain begins to mine higher grade ore from the Phase 4 area, production is expected to be higher in the second half of 2022.
To date there have been no material interruptions to the Company's operations, logistics and supply chains due to the COVID-19 pandemic. However, the severe flooding and extreme cold temperatures affected normal supplier material flow during the quarter. Operations were also modestly impacted as staff and employees assisted the Town of Princeton and its residents respond to the major flooding event in town and the surrounding area.
Costs
C1 cash cost per pound of copper produced, net of precious metal credits, for Q4 2021 was US$2.17 , as compared to US$1.43 in Q4 2020. The increase in cost per pound in Q4 2021 was primarily a result of lower production during the quarter as well as slightly higher operating costs.
AISC per pound of copper produced for Q4 2021 was US$2.54 , as compared to US$1.58 in Q4 2020. AISC carries forward from C1 cash costs with the addition of $7.7 million in sustaining capital, lease and applicable administration expenditures in Q4 2021 as compared to $4.7 million in Q4 2020. The increase is primarily due to higher sustaining capital of $4.9 million in Q4 2021 as compared to sustaining capital of $2.2 million in Q4 2020 as the Company completed the installation of additional new contact water management systems.
AIC per pound of copper produced, for Q4 2021 was US$2.76 , as compared to US$1.82 in Q4 2020. AIC carries forward from AISC with the addition of $4.7 million in deferred stripping as compared to $7.2 million deferred stripping in Q4 2020. Deferred stripping costs in Q4 2021 were from regular development activities as the Company continued to advance development of the Phase 4 pushback of the Copper Mountain Main Pit, which will continue into the first half of 2022.
Full Year 2021
Production
During the year ended December 31, 2021 , the Copper Mountain Mine produced 90.1 million pounds of copper, 28,736 ounces of gold, and 523,821 ounces of silver compared to 77.6 million pounds of copper, 29,227 ounces of gold, and 392,494 ounces of silver for the year ended 2020. The Company achieved its 2021 copper production guidance range of 90 to 100 million pounds of copper, which was increased within the year. Higher mill feed grades are the primary driver of significantly higher production for the 2021 year as compared to 2020. Average feed grade was 0.38% Cu during the year ended December 31, 2021 , compared to average feed grade of 0.32% Cu for the year ended 2020.
Copper recovery was 79.8% for the year ended December 31, 2021 as compared to 78.0% for the year ended 2020. The mill processed a total of 13.4 million tonnes of ore for the year ended December 31, 2021 , as compared to 14.3 million tonnes for the year ended December 31 , 2020. Mill tonnage was intentionally reduced in 2021 to manage the volume of copper concentrate being produced and to maintain recovery while processing the higher head grade of Phase 3 ore. Also contributing to slightly lower mill tonnage was the commissioning of Ball Mill 3 and the maintenance issue with the secondary crusher in the fourth quarter of 2021. The Company is advancing the installation of additional cleaner and filtration capacity to maintain full throughput during periods of high-grade production. These projects are expected to be completed in the first half of 2022. The Company is also advancing additional rougher flotation to maintain high recovery with slower kinetic ores. The rougher flotation expansion project is estimated to be complete by the end of the first half of 2022. Mill availability averaged 91.9% for the year ended December 31, 2021 as compared to 92.4% for the year ended December 31, 2020 .
Costs
C1 cash cost per pound of copper produced, net of precious metals credits, for the year ended December 31, 2021 was US$1.49 , as compared to US$1.53 for the year ended December 31 , 2020. The decrease in cost per pound in 2021 was due to higher production and larger by-product credits for the gold and silver produced as compared to 2020. Higher by-product credits were due to greater silver production and higher metal prices in 2021 as compared to 2020. The decrease is also due to $31.2 million in deferred stripping costs capitalized in 2021, compared to $21.0 million that were capitalized in 2020.
AISC per pound of copper produced for the year ended December 31, 2021 was US$1.84 and was higher than AISC for the year ended December 31, 2020 of US$1.69 . AISC carries forward from C1 cash cost with the addition of $39.6 million in sustaining capital, lease and applicable administration expenditures in the year as compared to $16.6 million for the year ended December 31 , 2020. The increase is largely due to higher sustaining capital of $23.0 million and lease payments of $14.0 million in 2021 as compared to $7.1 million and $6.9 million , respectively, in 2020. Higher lease costs were a result of four new haul truck leases contracted in the first half of 2021, in addition to four new haul truck leases entered into in late 2020. All of the new trucks are electric Trolley Assist capable.
Total AIC per pound of copper produced, for the year ended December 31, 2021 was US$2.12 , as compared to US$1.90 for the year ended December 31 , 2020. AIC carries forward from AISC with the addition of $31.2 million in deferred stripping as compared to $21.0 million for the year ended December 31 , 2020. No low-grade stockpile mining costs were incurred for the year ended December 31, 2021 , as compared to $0.3 million of low-grade stockpile costs for the year ended December 31, 2020 .
SUMMARY OF FINANCIAL RESULTS
| Results and Highlights (100%) | Three months ended December 31, | Year ended December 31, | | | | (In thousands of CDN$, except for per share amounts) | 2021 $ | 2020 $ | 2021 $ | 2020 $ | | Financial | | | | | | Revenue | 136,755 | 106,103 | 578,202 | 341,748 | | Gross profit | 72,175 | 47,314 | 320,882 | 104,643 | | Gross profit before depreciation (1) | 74,441 | 52,872 | 344,419 | 127,344 | | Net income | 31,535 | 28,540 | 148,139 | 50,264 | | Income per share – basic | 0.11 | 0.10 | 0.50 | 0.18 | | Adjusted earnings (1) | 23,293 | 5,502 | 130,262 | 20,569 | | Adjusted earnings per share – basic (1) | 0.11 | 0.03 | 0.62 | 0.11 | | EBITDA (1) | 67,724 | 57,205 | 306,217 | 117,836 | | Adjusted EBITDA (1) | 59,482 | 34,167 | 288,340 | 88,141 | | Cash flow from operations | 50,420 | 50,990 | 315,456 | 121,610 | | Cash flow from operations per share – basic (1) | 0.24 | 0.26 | 1.50 | 0.63 | | Cash and cash equivalents – end of period | | | 171,902 | 85,571 |
| (1) | _The Company reports the non-GAAP financial measures of gross profit before depreciation, adjusted earnings, adjusted earnings per share, EBITDA and adjusted EBITDA to manage and evaluate its operating performance. For further information, see "Cautionary Note Regarding Non-GAAP Performance Measures". _ |
Fourth Quarter 2021
In Q4 2021, revenue was $136.7 million , net of pricing adjustments and treatment charges, compared to $106.1 million in Q4 2020. Revenue in Q4 2021 is based on the sale of 19.4 million pounds of copper, 6,285 ounces of gold, and 108,020 ounces of silver. This compares to 18.7 million pounds of copper, 7,253 ounces of gold and 96,509 ounces of silver sold in Q4 2020. The increase in revenue is due to a higher copper price and higher copper and silver sales which were somewhat offset by lower United States to Canadian dollar foreign exchange rates and a smaller positive mark to market and final adjustment on concentrate sales of $7.7 million as compared to a positive mark to market and final adjustment of $11.9 million for Q4 2020.
Cost of sales in Q4 2021 was $64.6 million as compared to $58.8 million for Q4 2020. The increase in cost of sales can largely be attributed to the increase in volume of copper sold in Q4 2021 as compared to Q4 2020. Cost of sales is also affected by the allocation of mine operating costs to deferred stripping with $5.3 million , inclusive of $0.6 million in depreciation, allocated to deferred stripping in Q4 2021, compared to $8.4 million , inclusive of $1.2 million in depreciation, in Q4 2020.
The Company generated gross profit of $72.2 million in Q4 2021 compared to $47.3 million in Q4 2020. Net income was $31.5 million in Q4 2021 compared to net income of $28.5 million in Q4 2020. The variance in net income was due to several items, including:
Higher revenue in Q4 2021 due to more pounds sold at a higher average price as compared to Q4 2020. Q4 2021 included a $7.7 million positive mark to market and final adjustment from provisional pricing on concentrate sales, as compared to an $11.9 million positive mark to market and final adjustment from provisional pricing on concentrate sales for Q4 2020. Q4 2021 included a non-cash unrealized foreign exchange gain of $1.2 million as compared to a gain of $13.9 million in Q4 2020, which was primarily related to the Company's debt that is denominated in US dollars. Q4 2021 included a non-cash deferred tax expense of $26.2 million as compared to $19.2 million for Q4 2020.
On an adjusted basis, the Company recorded a net income of $23.3 million in Q4 2021, or $0.11 per share, compared to $5.5 million in Q4 2020, or $0.03 per share.
Full Year 2021
For the year ended December 31, 2021 , revenue was $578.2 million , net of pricing adjustments and treatment charges, compared to $341.7 million for the year ended December 31 , 2020. Revenue for the year ended December 31, 2021 is based on the sale of 93.0 million pounds of copper, 29,691 ounces of gold, and 533,096 ounces of silver. This compares to 73.3 million pounds of copper, 26,137 ounces of gold and 323,276 ounces of silver sold in the year ended December 31 , 2020. The increase in revenue was due to higher copper prices during the period as well as more pounds of copper sold.
Cost of sales for the year ended December 31, 2021 , was $257.3 million as compared to $237.1 million for the year ended December 31 , 2020. Cost of sales is net of $35.5 million of mining costs, inclusive of $4.3 million in depreciation, allocated to deferred stripping in the year ended December 31, 2021 as compared to $23.8 million in the year ended December 31 , 2020. The lower deferred stripping costs in the year ended December 31, 2020 were due to lower deferred stripping activity in response to the Company adjusting its operating plan to decrease costs in reaction to market conditions associated with COVID-19.
During 2021, the Company generated gross profit of $320 .9 million as compared to a gross profit of $104 .6 million for the year ended December 31 , 2020. The Company reported net income of $148.1 million for the year ended December 31, 2021 , as compared to net income of $50 .3 million for the year ended December 31 , 2020. The variance in the net income for 2021, as compared to 2020, was a result of higher realized metal prices and higher quantities of metal sold.
On an adjusted basis, the Company recorded a net income of $130.3 million for the year ended December 31, 2021 , or $0.62 per share, compared to $20.6 million in Q4 2020, or $0.11 per share.