Iberian Minerals Reports Record Sales and Operating Results for 2010 Sales of $226.7 Million, Production of 95.9 Million lbs. of Copper
Sales of $226.7 Million, Production of 95.9 Million lbs. of Copper
TORONTO, ONTARIO -- (Marketwire) -- 03/30/11 -- Iberian Minerals Corp. (TSX VENTURE: IZN) today announced financial and operating results for the year ended December 31, 2010, with comparative figures for the year ended December 31, 2009. The 2010 audited 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 loss of $84.4 million for 2010, representing $0.25 per share.
Overview of 2010:
Financial:
Year ended December 31, 2010
-- Recorded net loss of $84.39 million or $0.25 per registered share which
included:
-- Sales of $226.72 million and gross margin of $(29.54) million;
-- A realized loss of $108.14 million on commodity hedges (included in
sales);
-- An unrealized non-cash loss of $40.96 million on derivative
financial instruments outstanding, as a result of the increase in
metal prices in the year.
-- As at December 31, 2010 MATSA held 2,870 FMT of copper in concentrate at
port awaiting shipment with approximate market value of $24.4 million,
which subsequently occurred in Q1 2011.
-- Cash flow provided by operations before changes in non-cash working
capital was $25.25 million. Cash flow provided by operations after
changes in non-cash working capital was $4.25 million.
Three months ended December 31, 2010
-- Recorded net loss of $67.32 million or $0.19 per registered share which
included:
-- Sales of $61.75 million and gross margin of $(5.97) million;
-- A realized loss of $38.61 million on commodity hedges in the period
(included in sales);
-- An unrealized non-cash loss of $62.06 million on derivative
financial instruments outstanding, primarily as a result of the
significant increase in market copper price in the period.
-- Cash flow provided by operations before changes in non-cash working
capital was $0.59 million. Cash flow provided by operations after
changes in non-cash working capital was $3.82 million.
Operational - CMC:
Year ended December 31, 2010
-- Condestable Mine processed copper ore at budgeted rates. The average
copper ore grade was 1.16% in 2010 versus 1.22% in 2009.
-- CMC processed 2,234,498 tonnes of ore in 2010 versus 2,159,549 tonnes of
ore in 2009 (increase of 3%).
-- Copper concentrate production in 2010 was 92,264 DMT versus 95,339 DMT
in 2009 (decrease of 3%).
-- Contained copper production in 2010 was 23,153 tonnes versus 23,882
tonnes in the prior year.
-- The Cash Operating Cost (see Note 1 below) in 2010 was $1.04 per payable
pound of copper versus prior year of $0.90.
Three months ended December 31, 2010
-- Copper ore grade was 1.16% versus 1.21% in the fourth quarter of 2009.
-- CMC processed 567,566 tonnes of ore in the period versus 544,084 tonnes
for the same period of the prior year (increase of 4%).
-- Copper concentrate production in the period was 23,383 DMT versus 23,429
DMT in the prior year period.
-- Contained copper production in the period was 5,891 tonnes versus 5,879
tonnes in the prior year period.
-- The Cash Operating Cost for the period was $1.08 per payable pound of
copper versus prior year of $0.94.
Other
-- Completed the previously announced purchase from Corianta S.A. of all
remaining interest in the Raul Mine, which forms part of the Condestable
operation (the 'Raul Transaction'). The purchase price was $28.00
million. As such, CMC is no longer obligated to make royalty payments
that it was previously required to pay in connection with the lease of
the Raul Mine.
-- Completed the closing of a $55.00 million senior secured debt facility
which ultimately funded the Raul Transaction.
Operational - MATSA (no comparables for the full year 2009, only fourth
quarter):
Year ended December 31, 2010
-- MATSA processed 1,681,140 tonnes of ores in 2010; 1,173,152 copper and
507,988 polymetallic.
-- Produced 88,999 DMT of copper concentrate, 36,196 DMT of zinc
concentrate, 6,071 DMT of copper/lead bulk concentrate and 1,179 DMT of
lead concentrate. Contained metal production was 20,351 tonnes of
copper, 17,323 tonnes of zinc, 229 tonnes of lead and 655,319 oz of
silver.
-- The Cash Operating Cost was $2.22 per payable pound of copper.
Three months ended December 31, 2010
-- MATSA processed 480,786 tonnes of ore in the period versus 360,458
during the fourth quarter of 2009 (increase of 33%).
-- Produced 22,295 DMT of copper concentrate (2009 - 20,398 DMT), 15,105
DMT of zinc concentrate (2009 - 2,473 DMT) and 1,179 DMT of lead
concentrate (2009 - nil). Contained metal production was 4,933 tonnes of
copper (2009 - 5,074 tonnes), 7,209 tonnes of zinc (2009 - 1,218
tonnes), 229 tonnes of lead (2009 - nil) and 151,051 ounces of silver
(2009 - 72,141 ounces).
-- The Cash Operating Cost was $2.11 per payable pound of copper. Cash
Operating Cost in this period began to reflect the impact of the 30%
plant expansion as it was positively affected by lower per tonne
operating costs and higher production of zinc, lead and silver.
Other
-- The primary undertaking for MATSA during 2010 was the project to expand
mining and processing plant operations by 30% to allow for an annual
operating rate of 2.2Mtpa of processed ores. The expansion was completed
at the end of the third quarter of 2010. Major components of the
expansion included the purchase of additional mine mobile equipment and
acceleration of stope development, and processing circuit expansion,
including expansion of both the copper ore and poly-metallic ore
circuits to capacity of 3,000 tpd (combined 6,000 tpd), associated
electrical upgrades, pumps and piping and installation of a second
tailings deep cone thickener.
-- Completed the closing of a $50.00 million senior secured, revolving debt
facility.
-- Received the EUR10.09 million grant from Junta de Andalucia in Spain.
Summarized Financial Results
The following table presents a summarized Statement of Operations for the year ended December 31, 2010 with comparatives for the year ended December 31, 2009.
Effective April 1, 2010, the Company's functional currency became U.S. dollars. The Company also converted its reporting currency to U.S. dollars. In accordance with GAAP, the Company restated all amounts presented for comparative purposes into U.S. dollars.
For accounting purposes, prior to September 30, 2009, MATSA was in a pre-production phase. As such, sales and costs and expenses of mining operations incurred in this phase were not recognized in the operating statement for the first nine months of 2009. Commercial production at MATSA was declared with effect from October 1, 2009. Sales and costs of expenses of mining operations for MATSA have been recognized in the operating statement of the Company in 2010 and the fourth quarter of 2009 only.
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Year ended December 31, 2010 2009
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$ $
Sales 226,723 144,298
Costs and expenses of mining operations 256,263 120,276
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Gross margin (29,540) 24,022
Expenses
Administrative expenses and other 15,216 16,209
Foreign exchange gain (6,059) (17,241)
Unrealized loss on derivative financial
instruments 40,964 321,651
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Total expenses 50,121 320,619
Net loss before income taxes (79,661) (296,597)
Non-controlling interest - (900)
Income tax expense 7,474 12,396
Future income tax recovery (2,746) (85,421)
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Net loss (84,389) (222,672)
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Basic loss per share ($) (0.25) (0.72)
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Diluted loss per share ($) (0.25) (0.72)
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Key operating statistics
Condestable:
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Three months Twelve months
Periods ended December 31, Unit 2010 2009 2010 2009
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Ore mined t 563,034 590,493 2,217,413 2,231,798
Ore processed t 567,566 544,084 2,234,498 2,159,549
Copper ore grade % 1.16 1.21 1.16 1.22
Concentrate grade % 25 25 25 25
Copper recovery rate % 90 90 89 92
Copper concentrate DMT 23,383 23,429 92,264 95,339
Copper contained in
concentrate FMT 5,891 5,879 23,153 23,882
Gold contained in
concentrate oz 3,214 3,952 13,881 17,361
Silver contained in
concentrate oz 82,950 70,472 291,000 250,504
Payable copper contained
in concentrate FMT 5,628 5,630 22,119 22,952
Payable gold contained in
concentrate oz 2,911 3,586 12,249 15,764
Payable silver contained
in concentrate oz 74,281 63,254 265,617 226,357
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Cash Operating Cost per lb
of payable copper USD $ 1.08 $ 0.94 $ 1.04 $ 0.90
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MATSA:
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Three months Twelve months
Periods ended December 31, Unit 2010 2009 2010 2009
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Copper ore
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Ore mined t 287,588 322,275 1,215,224 322,275
Ore processed t 252,597 321,951 1,173,152 321,951
Copper ore grade % 1.95 1.84 1.86 1.84
Concentrate grade % 22 23 22 23
Copper recovery rate % 81 81 83 81
Copper concentrate DMT 18,017 20,398 80,539 20,398
Copper contained in
concentrate FMT 3,988 4,800 17,888 4,800
Silver contained in
concentrate oz 53,571 51,536 249,384 51,536
Payable copper contained in
concentrate FMT 3,808 4,596 17,083 4,596
Payable silver contained in
concentrate oz 36,193 31,862 171,702 31,862
Polymetallic ore
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Ore mined t 223,674 56,881 505,071 56,881
Ore processed t 228,189 38,507 507,988 38,507
Copper ore grade % 1.17 1.20 1.23 1.20
Copper concentrate grade % 22 12 22 12
Copper recovery rate % 36 62 37 62
Zinc ore grade % 5.09 6.57 5.71 6.57
Zinc concentrate grade % 48 49 48 49
Zinc recovery rate % 64 51 63 51
Copper concentrate DMT 4,278 - 8,460 -
Copper/lead bulk concentrate DMT - 2,368 6,071 2,368
Zinc concentrate DMT 15,105 2,473 36,196 2,473
Lead concentrate DMT 1,179 - 1,179 -
Copper contained in
concentrate FMT 945 274 2,463 274
Zinc contained in concentrate FMT 7,209 1,218 17,323 1,218
Lead contained in concentrate FMT 229 - 229 -
Silver contained in
concentrate oz 97,480 20,605 405,935 20,605
Payable copper contained in
concentrate FMT 903 250 2,318 250
Payable zinc contained in
concentrate FMT 6,000 1,020 14,427 1,020
Payable lead contained in
concentrate FMT 176 - 176 -
Payable silver contained in
concentrate oz 67,900 18,321 289,655 18,321
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Cash Operating Cost per lb of
payable copper USD 2.11 2.61 2.22 2.61
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Outlook
The production guidance for 2011 issued by Iberian in a press release dated January 20, 2011 remains unchanged. Iberian expects to produce 108 million lbs of copper, 75 million lbs of zinc and 8 million lbs of lead in 2011 together with by-product gold (15,500 oz) and silver (1 million oz). The cash cost per payable pound of copper produced is expected to be $1.15 for Condestable and $1.75 for Aguas Tenidas for 2011.
The Company is currently evaluating its option to buy out Trafigura's 45.96% Net Profit Interest ('NPI') in CMC which was contingent consideration to be paid by Iberian to Trafigura as part of the acquisition of CMC in 2008. The NPI runs for four years from 2011 to 2014. Iberian may elect to buy out the NPI for $60 million by June 30, 2011. Concurrently with the NPI analysis, the Company is evaluating possible financing options for this proposed transaction.
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 2.2 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-GAAP 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 29, 2010. 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