UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30,
2014.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15
(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ___________ TO__________.
REVETT MINING COMPANY, INC.
(Exact name of small business issuer in its charter)
Delaware |
46-4577805 |
(State or other jurisdiction of incorporation) |
(IRS Employer Identification No.) |
11115 East Montgomery, Suite G
Spokane Valley,
Washington 99206
(Address of principal executive offices)
Registrants telephone number: (509) 921-2294
Indicate by check mark whether registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for a shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[X]
yes [ ] no
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definition of large accelerated filer, accelerated
filer and smaller reporting company in rule 12b-2 of the Exchange Act. (Check
One)
Large accelerated filer [
]
Accelerated filer [ ]
Non-accelerated filer [
] Smaller
reporting company [X]
Indicate by check whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act.
[ ]
yes [X] No
At November 10, 2014, 39,273,989 shares of common stock
were issued and outstanding.
1
INDEX
2
Part I Financial Information
Item 1. Financial Statements (unaudited)
Revett Mining Company, Inc. and Subsidiaries |
Contents |
3
Revett Mining Company, Inc.
Consolidated Balance
Sheets
at September 30, 2014 and December 31, 2013
(expressed in thousands of United States dollars except share
and per share amounts)
(Unaudited)
|
|
September 30, 2014 |
|
|
December 31, 2013 |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
7,240 |
|
$ |
7,951 |
|
Concentrate settlement and other receivables
|
|
5 |
|
|
1,164 |
|
Inventories |
|
4,069 |
|
|
4,133 |
|
Prepaid expenses and deposits |
|
267 |
|
|
414 |
|
Total current assets |
|
11,581 |
|
|
13,662 |
|
Property, plant, and equipment (net) |
|
70,478 |
|
|
65,108 |
|
Restricted cash |
|
6,549 |
|
|
6,542 |
|
Available for sale securities |
|
- |
|
|
600 |
|
Other long term assets |
|
736 |
|
|
736 |
|
|
|
|
|
|
|
|
Total assets |
$ |
89,344 |
|
$ |
86,648 |
|
|
|
|
|
|
|
|
Liabilities and
shareholders equity |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Trade accounts payable |
$ |
844 |
|
$ |
954 |
|
Payroll liabilities |
|
693 |
|
|
604 |
|
Income, property and mining
taxes |
|
216 |
|
|
588 |
|
Other accrued payable |
|
28 |
|
|
19 |
|
Current portion of capital
lease obligations and note payable |
|
1,917 |
|
|
925 |
|
Total current liabilities |
|
3,698 |
|
|
3,090 |
|
|
|
|
|
|
|
|
Long term portion of capital lease
obligations and note payable |
|
2,929 |
|
|
364 |
|
Reclamation and remediation
liability |
|
4,900 |
|
|
4,613 |
|
Deferred income taxes |
|
- |
|
|
25 |
|
Total liabilities |
|
11,527 |
|
|
8,092 |
|
|
|
|
|
|
|
|
Commitments and contingencies
(note 9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
|
|
|
|
|
Preferred stock, $0.01 par value, 25,000,000
authorized, no shares issued and outstanding |
|
- |
|
|
- |
|
Common stock, $0.01 par value
100,000,000 authorized, 39,273,989 and 34,596,387 shares issued and
outstanding at September 30, 2014 and December 31, 2013. |
|
393 |
|
|
88,495 |
|
|
|
|
|
|
|
|
Additional paid in capital
|
|
91,928 |
|
|
- |
|
|
|
|
|
|
|
|
Accumulated other
comprehensive gain, net of tax |
|
- |
|
|
45 |
|
Retained earnings (deficit) |
|
(14,504 |
) |
|
(9,984 |
) |
Total equity |
|
77,817 |
|
|
78,556 |
|
|
|
|
|
|
|
|
Total liabilities and shareholders
equity |
$ |
89,344 |
|
$ |
86,648 |
|
See accompanying notes to unaudited interim consolidated
financial statements.
4
Revett Mining Company, Inc.
Consolidated
Statements of Operations and Comprehensive income (loss)
Three and
nine months ended September 30, 2014 and 2013
(expressed in
thousands of United States dollars except share and per share amounts)
(unaudited)
|
|
Three month |
|
|
Three month |
|
|
Nine month |
|
|
Nine month |
|
|
|
period ended |
|
|
period ended |
|
|
period ended |
|
|
period ended |
|
|
|
September 30, 2014 |
|
|
September 30, 2013 |
|
|
September 30, 2014 |
|
|
September 30, 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
- |
|
$ |
(146 |
) |
$ |
6 |
|
$ |
70 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Troy Mine suspension related costs |
|
992 |
|
|
2,108 |
|
|
2,655 |
|
|
10,447 |
|
Depreciation and depletion |
|
5 |
|
|
8 |
|
|
16 |
|
|
24 |
|
Exploration and development |
|
350 |
|
|
444 |
|
|
782 |
|
|
1,083 |
|
General & administrative: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation |
|
16 |
|
|
149 |
|
|
410 |
|
|
482 |
|
Other |
|
569 |
|
|
658 |
|
|
2,078 |
|
|
2,459 |
|
Accretion of reclamation and remediation liability |
|
95
|
|
|
119
|
|
|
286
|
|
|
357
|
|
|
|
2,027 |
|
|
3,486 |
|
|
6,227 |
|
|
14,852 |
|
Income (loss) from operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,027 |
) |
|
(3,632 |
) |
|
(6,221 |
) |
|
(14,782 |
) |
Other income (expenses): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(27 |
) |
|
- |
|
|
(41 |
) |
|
(669 |
) |
Interest and other income |
|
3 |
|
|
6 |
|
|
1,313 |
|
|
14 |
|
Gain (loss) on available for sale
securities |
|
- |
|
|
- |
|
|
429 |
|
|
(1,376 |
) |
Gain on warrant derivative |
|
- |
|
|
- |
|
|
- |
|
|
63
|
|
Total other income (expenses) |
|
(24 |
) |
|
6 |
|
|
1,701 |
|
|
(1,968 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes |
|
(2,051 |
) |
|
(3,626 |
) |
|
(4,520 |
) |
|
(16,750 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current income tax benefit (expense)
|
|
- |
|
|
(20 |
) |
|
- |
|
|
(20 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income benefit (expense) |
|
- |
|
|
3,046 |
|
|
- |
|
|
7,996 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
(2,051 |
) |
$ |
(600 |
) |
$ |
(4,520 |
) |
$ |
(8,774 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss) |
|
- |
|
|
20 |
|
|
45 |
|
|
558 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss) |
|
(2,051 |
) |
$ |
(580 |
) |
$ |
(4,475 |
) |
$ |
(8,216 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) for basic earnings per
share |
|
(2,051 |
) |
$ |
(600 |
) |
$ |
(4,475 |
) |
$ |
(8,774 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) for diluted earnings per
share |
|
(2,051 |
) |
$ |
(600 |
) |
$ |
(4,475 |
) |
$ |
(8,774 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share |
$ |
(0.05 |
) |
$ |
(0.02 |
) |
$ |
(0.12 |
) |
$ |
(0.25 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share |
$ |
( 0.05 |
) |
$ |
(0.02 |
) |
$ |
(0.12 |
) |
$ |
(0.25 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares
outstanding |
|
39,180,040 |
|
|
34,596,387 |
|
|
37,698,762 |
|
|
34,590,684 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of diluted shares
outstanding |
|
39,180,040 |
|
|
34,596,387 |
|
|
37,698,762 |
|
|
34,590,684 |
|
See accompanying notes to unaudited interim consolidated
financial statements.
5
Revett Mining Company, Inc.
Consolidated
Statements of Cash Flows
Nine months ended September 30, 2014 and
2013
(expressed in thousands of United States dollars except
share and per share amounts)
(unaudited)
|
|
Nine month |
|
|
Nine month |
|
|
|
period ended |
|
|
period ended |
|
|
|
September 30, 2014 |
|
|
September 30, 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities: |
|
|
|
|
|
|
Net income (loss) for the period |
$ |
(4,520 |
) |
$ |
(8,774 |
) |
Adjustment to reconcile net
income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
16 |
|
|
24 |
|
Deferred financing fee
amortization |
|
1 |
|
|
556 |
|
Accretion of reclamation and remediation
liability |
|
286 |
|
|
357 |
|
Loss on impairment of
available for sale securities |
|
- |
|
|
969 |
|
Stock based compensation |
|
410 |
|
|
482 |
|
Loss (gain)on disposal of
fixed assets |
|
- |
|
|
(22 |
) |
Accrued interest from reclamation trust fund
|
|
(7 |
) |
|
(7 |
) |
Gain on insurance recovery
for damage equipment |
|
(785 |
) |
|
- |
|
Gain on warrant derivative |
|
- |
|
|
(63 |
) |
Deferred income tax |
|
- |
|
|
(7,996 |
) |
Loss (gain) on sale of securities |
|
(429 |
) |
|
407 |
|
Changes in: |
|
|
|
|
|
|
Concentrate settlement and other receivable
|
|
63 |
|
|
218 |
|
Inventories |
|
63 |
|
|
367 |
|
Prepaid expenses and other assets |
|
172 |
|
|
546 |
|
Accounts payable and accrued
liabilities |
|
(382 |
) |
|
(2,773 |
) |
Net cash provided (used) by operating
activities |
|
(5,112 |
) |
|
(15,709 |
) |
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Purchase of plant and
equipment |
|
(5,388 |
) |
|
(247 |
) |
Proceeds from the sale of short term
investments |
|
- |
|
|
4,596 |
|
Proceeds from insurance
recovery |
|
1,882 |
|
|
- |
|
Proceeds from the sale of fixed assets |
|
- |
|
|
35 |
|
Proceeds from sale of
available for sale securities |
|
959 |
|
|
352 |
|
Net cash provided (used) in investing
activities |
|
(2,547 |
) |
|
4,736
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Proceeds from the sale of
shares and exercise of options, net |
|
3,416 |
|
|
120 |
|
Proceeds from new debt |
|
5,000 |
|
|
- |
|
Loan fees |
|
(25 |
) |
|
- |
|
Repayment of capital leases and note payable
|
|
(1,443 |
) |
|
(748 |
) |
Net cash provided (used)
by financing activities |
|
6,948 |
|
|
(628 |
) |
|
|
|
|
|
|
|
Net increase (decrease) in
cash and cash equivalents |
|
(711 |
) |
|
(11,601 |
) |
Cash and cash equivalents, beginning of
period |
|
7,951
|
|
|
18,986 |
|
Cash and cash equivalents,
end of period |
$ |
7,240 |
|
$ |
7,385 |
|
See accompanying notes to unaudited interim consolidated
financial statements.
6
Revett Mining Company, Inc.
Consolidated
Statements of Shareholders Equity
Nine months ended September 30,
2014 and year ended December 31, 2013
(expressed in thousands
of United States dollars except share and per share amounts)
(unaudited)
|
|
Common Shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
Accumulated other |
|
|
Retained |
|
|
|
|
|
|
|
|
|
|
|
|
Paid-in |
|
|
Comprehensive |
|
|
earnings |
|
|
|
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Income (loss) |
|
|
(deficit) |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
Balance, December 31, 2012 |
|
34,492,389 |
|
$ |
87,727 |
|
|
|
|
|
(538 |
) |
$ |
1,591 |
|
$ |
88,780 |
|
Issue of shares for exercise of options |
|
49,000 |
|
|
25 |
|
|
|
|
|
- |
|
|
- |
|
|
25 |
|
Issue of shares for exercise of warrants |
|
55,000 |
|
|
125 |
|
|
|
|
|
- |
|
|
- |
|
|
125 |
|
Unrealized gain on marketable securities, net of tax |
|
- |
|
|
- |
|
|
|
|
|
583 |
|
|
- |
|
|
583 |
|
Stock-based compensation on options granted |
|
- |
|
|
618 |
|
|
|
|
|
- |
|
|
- |
|
|
618 |
|
Net income for the period |
|
- |
|
|
- |
|
|
|
|
|
- |
|
|
(11,575 |
) |
|
(11,575 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2013 |
|
34,596,389 |
|
$ |
88,495 |
|
|
|
|
$ |
45 |
|
$ |
(9,984 |
) |
$ |
78,556 |
|
Reclassification due to change in par value
of common shares |
|
|
|
|
(88,149 |
) |
$ |
88,149 |
|
|
|
|
|
|
|
|
|
|
Issue of shares for exercise of options |
|
158,500 |
|
|
2 |
|
|
77 |
|
|
- |
|
|
- |
|
|
79 |
|
Issue of shares |
|
4,499,100 |
|
|
45 |
|
|
3,292 |
|
|
- |
|
|
- |
|
|
3,337 |
|
Issue of shares for compensation |
|
20,000 |
|
|
- |
|
|
16 |
|
|
- |
|
|
- |
|
|
16 |
|
Unrealized gain on marketable securities,
net of tax |
|
- |
|
|
- |
|
|
|
|
|
(45 |
) |
|
- |
|
|
(45 |
) |
Stock-based compensation on options granted |
|
- |
|
|
|
|
|
394 |
|
|
- |
|
|
- |
|
|
394 |
|
Net loss for the period |
|
|
|
|
- |
|
|
- |
|
|
- |
|
|
(4,520 |
) |
|
(4,520 |
) |
Balance, September 30, 2014 |
|
39,273,989 |
|
$ |
393 |
|
$ |
91,928 |
|
$ |
- |
|
$ |
(14,504 |
) |
$ |
77,817 |
|
See accompanying notes to unaudited interim consolidated
financial statements
7
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Three and nine months ended September 30,
2014 and 2013
(expressed in thousands of United States dollars
unless otherwise stated)
(unaudited)
1. Basis of Presentation:
In the opinion of management, the accompanying unaudited
interim consolidated balance sheets and consolidated statements of operations
and comprehensive income (loss), cash flows, and shareholders equity contain
all adjustments, consisting of normal recurring items, necessary to present
fairly, in all material respects, the financial position of Revett Mining
Company, Inc. (Revett Mining Company or the Company) as of September 30,
2014, and the results of its operations and its cash flows for the three and
nine month periods ended September 30, 2014 and 2013. The operating and
financial results for Revett Mining Company for the three and nine months ended
September 30, 2014 are not necessarily indicative of the results that may be
expected for the year ended December 31, 2014.
These unaudited interim financial statements have been prepared
by management in accordance with generally accepted accounting principles used
in the United States of America (U.S. GAAP) and are presented in U.S. dollars.
These unaudited interim consolidated financial statements do not include all
note disclosures required by U.S. GAAP on an annual basis, and therefore should
be read in conjunction with the annual audited consolidated financial statements
for the year ended December 31, 2013 filed with the appropriate securities
regulatory authorities.
Revett Mining Company, Inc. (formerly known as Revett Minerals
Inc.) was incorporated in Canada in August 2004 to acquire Revett Silver Company
and undertake a public offering of its common shares, transactions that were
completed in February 2005. Revett Silver Company, a Montana corporation, was
organized in April 1999 to acquire the Troy mine (Troy) and the Rock Creek
project (Rock Creek) from ASARCO Incorporated and Kennecott Montana Company,
transactions that were completed in October 1999 and February 2000. Revett
Mining Company changed its jurisdiction of incorporation (from Canada to
Delaware) and its name (from Revett Minerals, Inc. to Revett Mining Company,
Inc.) on February 18, 2014, following approval by shareholders at a special
meeting held on January 24, 2014. The Company conducts business through four
Montana corporations, all subsidiaries of its wholly-owned Revett Silver Company
subsidiary: Troy Mine, Inc., RC Resources, Inc., Revett Exploration, Inc. and
Revett Holdings, Inc.
Troy is an underground silver and copper mine located in
Lincoln County in northwestern Montana. ASARCO operated the mine from 1981 to
1993, and then placed it on care and maintenance because of low metals prices.
We restarted mining operations in late 2004 and commenced commercial production
in early 2005. We operated Troy continuously until December 2012, when
operations were suspended due to unstable underground conditions in portions of
the mine. After an unsuccessful attempt to find an alternative route to our
reserve mining areas, a decision was made to construct a new decline from the
service adit to the North C Beds, giving access to the A and C Beds, and then
continue to the undeveloped I Bed mining areas. In late September of 2014, we
reached the North C Bed orebody and have started to stockpile ore for milling in
the fourth quarter of 2014.
The Rock Creek project is located in Sanders County in
northwestern Montana, approximately sixteen air miles southeast of the Troy
Mine. Our proposed development of Rock Creek will occur in two phases. The first
phase entails a two year evaluation program to reconfirm geotechnical
assumptions and better define the economic and technical viability of the
project.
8
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Three and nine months ended September 30,
2014 and 2013
(expressed in thousands of United States dollars
unless otherwise stated)
(unaudited)
The second phase will encompass underground mine and surface
mill and ancillary facilities construction. We cannot begin the evaluation
program until we receive final permits and approvals from the various Federal
and State agencies that exercise jurisdiction over the project.
2. Changes affecting consolidated financial statements and
future accounting changes:
Accounting principles:
In May 2014, the FASB issued Accounting Standards Update No.
2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes
nearly all existing revenue recognition guidance under U.S. GAAP. The core
principle of ASU 2014-09 is to recognize revenues when promised goods or
services are transferred to customers in an amount that reflects the
consideration to which an entity expects to be entitled for those goods or
services. ASU 2014-09 defines a five step process to achieve this core principle
and, in doing so, more judgment and estimates may be required within the revenue
recognition process than are required under existing U.S. GAAP.
The standard is effective for annual periods beginning after
December 15, 2016, and interim periods therein, using either of the following
transition methods: (i) a full retrospective approach reflecting the application
of the standard in each prior reporting period with the option to elect certain
practical expedients, or (ii) a retrospective approach with the cumulative
effect of initially adopting ASU 2014-09 recognized at the date of adoption
(which includes additional footnote disclosures). We are currently evaluating
the impact of our pending adoption of ASU 2014-09 on our consolidated financial
statements and have not yet determined the method by which we will adopt the
standard in 2017.
3. Inventory
The major components of the Companys inventory accounts are as
follows:
|
|
|
September 30, 2014 |
|
|
December 31, 2013 |
|
|
Concentrate inventory |
$ |
473 |
|
$ |
530 |
|
|
Material and supplies |
|
3,596
|
|
|
3,603
|
|
|
|
$ |
4,069 |
|
$ |
4,133 |
|
9
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Three and nine months ended September 30,
2014 and 2013
(expressed in thousands of United States dollars
unless otherwise stated)
(unaudited)
4. Property, Plant and Equipment
The major components of the Companys mineral property, plant,
and equipment accounts are as follows:
|
|
|
September 30, |
|
|
December 31, |
|
|
|
|
2014 |
|
|
2013 |
|
|
Troy: |
|
|
|
|
|
|
|
Property acquisition and development
costs |
$ |
18,322 |
|
$ |
18,322 |
|
|
Plant and equipment |
|
14,009 |
|
|
13,931 |
|
|
Construction in progress |
|
6,103 |
|
|
808 |
|
|
Buildings and
structures |
|
5,613 |
|
|
5,613 |
|
|
|
|
44,047 |
|
|
38,674 |
|
|
Rock Creek: |
|
|
|
|
|
|
|
Property acquisition costs |
|
34,976 |
|
|
34,976 |
|
|
|
|
|
|
|
|
|
|
Other, corporate |
|
4,330 |
|
|
4,330 |
|
|
Other, mineral properties |
|
118 |
|
|
118 |
|
|
|
|
83,471 |
|
|
78,098 |
|
|
Accumulated depreciation and
depletion: |
|
|
|
|
|
|
|
Troy Property acquisition and
development |
|
(7,332 |
) |
|
(7,332 |
) |
|
costs |
|
|
|
|
|
|
|
Troy plant and equipment |
|
(3,861 |
) |
|
(3,861 |
) |
|
Troy buildings and
structures |
|
(1,630 |
) |
|
(1,630 |
) |
|
|
|
(12,823 |
) |
|
(12,823 |
) |
|
Other corporate assets
|
|
(170 |
) |
|
(167 |
) |
|
|
|
(12,993 |
) |
|
(12,990 |
) |
|
|
$ |
70,478 |
|
$ |
65,108 |
|
The net book value of assets under capital leases at September
30, 2014 and December 31, 2013 was $0.0 million and $2.1 million,
respectively.
Included in other corporate assets is Revett Holdings Inc., a
wholly owned subsidiary of Revett Silver Company, which owns mitigation lands
with a carrying value of $3.6 million. This land and other land not essential to
our mining operations are designated as grizzly bear habitat mitigation land.
The property costs for Rock Creek will be amortized when the property is placed
into production, or written off if it is determined that Rock Creek cannot be
developed.
10
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Three and nine months ended September 30,
2014 and 2013
(expressed in thousands of United States dollars
unless otherwise stated)
(unaudited)
5. Available for sale securities
Available for sale securities are comprised of publically
traded common stocks which have been valued using quoted market prices in active
markets. The following table summarizes the Companys available for sale
securities at December 31, 2013:
Cost |
$ |
1,499 |
|
Other than temporary impairment charge |
|
(969 |
) |
Unrealized gain |
|
70 |
|
Fair value |
$ |
600 |
|
During the quarter ended March 31, 2014, the Company sold all
of its available for sale equity securities for approximately $1.0 million, and
recognized a gain of $0.4 million.
6. Long-term debt
(a) Capital leases and note payable:
At September 30, 2014 and December 31, 2013, the balance of the
Companys note payable and capital lease obligations were as follows:
|
|
September 30, |
|
|
Dec. 31, |
|
|
|
2014 |
|
|
2013 |
|
Capital leases and note
payable |
$ |
4,846 |
|
$ |
1,289 |
|
Less current portion |
|
(1,917 |
) |
|
(925 |
) |
Long-term portion |
$ |
2,929 |
|
$ |
364 |
|
The Company entered into a new note payable in August 2014. The
amount borrowed was $5 million with a 30 month term and a 6.25% interest rate.
Monthly principal and interest payments are $0.2 million ($2.2 million
annually). The note is collateralized by certain equipment at the Troy Mine. The
Company used a portion of the proceeds to pay off the two remaining capital
leases which principal balances were approximately $0.4 million.
(b) Revolving credit facility:
On December 10, 2011, the Company entered into a revolving
credit agreement with Societe Generale. No funds were drawn under the facility.
In August 2014, the Company and Societe Generale mutually agreed to terminate
this credit agreement. During the three months ended March 31, 2013, the Company
expensed the remaining unamortized deferred loan fee balance of $0.6 million,
which is included in interest expense. No expenses were incurred against this
credit facility during the nine months ended September 30, 2014. There is no
assurance that this credit facility will be renewed.
7. Share Capital
(a) Common Stock
11
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Three and nine months ended September 30,
2014 and 2013
(expressed in thousands of United States dollars
unless otherwise stated)
(unaudited)
During the first quarter 2014, the Company shareholders
approved a change of jurisdiction of incorporation from Canada to the United
States (the Domestication). As a result, the Company became Revett Mining
Company, Inc., a Delaware corporation. As a result of this change, a par value
of $0.01 was established for shares of common stock which previously had no par
value. The Company has one class of $0.01 par value common stock of which
100,000,000 are authorized for issue. The holders of common stock are entitled
to receive dividends without restriction when and if declared by the board of
directors. Holders of the Companys common stock are not entitled to preemptive
rights to acquire additional shares of common stock and do not have cumulative
voting rights.
During the nine months ended September 30, 2014, the Company
issued 158,500 common shares on exercise of stock options for cash proceeds of
$79 thousand, issued 4,499,100 common shares on sale of common shares through a
private placement for cash proceeds of $3.3 million and issued 20,000 common
shares for compensation with a fair value of $16 thousand.
During the nine months ended September 30, 2013, the Company
issued 49,000 common shares on exercise of stock options and 55,000 common
shares on exercise of warrants for cash proceeds of $0.12 million.
(b) Preferred Stock
The Company is authorized to issue 25,000,000 shares with a
$0.01 par value of preferred stock. The Companys board of directors is
authorized to create any series and, in connection with the creation of each
series, to fix by resolution the number of shares of each series, and the
designations, powers, preferences and rights; including liquidation, dividends,
conversion and voting rights, as they may determine. At September 30, 2014, no
preferred stock was issued or outstanding.
(c) Stock options
The Companys Equity Incentive Plan authorizes the Company to
reserve and have available for issue, 6,500,000 shares of common stock. There
were 1,060,000 stock options granted to employees during the nine months ended
September 30, 2014 with an exercise price of $0.77 to $1.20, expiring in 2019.
The Company used the Black-Scholes option pricing model with a risk-free
interest rate of 0.58% - 0.68%, volatility of 69.22% -71.87% and an expected
life of the options of 30 months to estimate the fair values of the options. The
weighted average fair value per share was $0.344 for a total value of $0.4
million. These stock options vest 100% on the date of issue. In addition, there
were 75,000 stock options granted to consultants during the nine months ended
September 30, 2014 with an exercise price of $0.79 to $1.26, expiring in 2017.
The Company used the Black-Scholes option pricing model with a risk-free
interest rate of 0.285% to 0.52%, volatility of 78.26% to 87.45% and an expected
life of the options of 18 to 24 months to estimate the fair values of the
options. The weighted average fair value per share was $0.32 to $0.53 for a
total value of $27 thousand. These stock options vest 100% on the date of issue.
There were 1,094,500 stock options granted during the nine months ended
September 30, 2013 with an exercise price of $2.16, expiring on March 21, 2018
and issued 30,000 stock options with an exercise price of $1.17 which expire on
September 6, 2015 and 2016. The Company used the Black-Scholes option pricing
model with a risk-free interest rate of 0.33% - 0.52%, volatility of 52.16% - 60.31% and an expected life of the options of 30
36 months to estimate the fair values of the options. The weighted average fair
value per share was $0.69 for a total value of $0.8 million for the 1,094,500
stock options and $13,400 for the 30,000 stock options. The majority of the
stock options vest 25% at the end of each quarter in 2013.
12
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Three and nine months ended September 30,
2014 and 2013
(expressed in thousands of United States dollars
unless otherwise stated)
(unaudited)
During the nine months ended September 30, 2014, 297,500
options were cancelled or expired and 158,500 options were exercised. As of
September 30, 2014 and 2013, the intrinsic value of options outstanding and
exercisable was $0.3 million and $0.1 million, respectively.
Total stock-based compensation recognized during the three and
nine months ended September 30, 2014 was $0.02 million and $0.4 million,
respectively (2013 - $0.1 million and $0.5 million, respectively). During the
three and nine months ended September 30, 2014, a total of $0.02 million and
$0.2 million, respectively (2013 - $0.1 million and $0.3 million, respectively)
stock option compensation was attributable to the Troy Mine employees and is
included in the amounts reported in general and administrative expense.
As of September 30, 2014, the following stock options were
outstanding:
Options |
Options |
Exercise |
|
Expiration |
Granted
|
Exercisable |
Price |
|
Date |
|
|
|
|
|
10,000 |
10,000 |
1.05 |
|
October 31, 2014
|
16,500 |
16,500 |
4.98 |
|
October 31, 2014 |
17,000 |
17,000 |
4.18 |
|
October 31, 2014
|
6,000 |
6,000 |
2.15 |
|
October 31, 2014 |
17,500 |
17,500 |
2.16 |
|
October 31, 2014
|
5,000 |
5,000 |
1.05 |
|
November 2, 2014 |
30,000 |
30,000 |
1.65 |
|
December 30, 2014
|
183,000 |
183,000 |
2.15 |
|
March 15, 2015 |
10,000 |
10,000 |
1.17 |
|
September 6, 2015
|
7,500 |
7,500 |
2.16 |
|
September 22, 2015 |
6,500 |
6,500 |
4.98 |
|
September 22,
2015 |
7,000 |
7,000 |
4.18 |
|
September 22, 2015 |
25,000 |
25,000 |
0.79 |
|
September 22,
2015 |
20,000 |
20,000 |
2.50 |
|
November 1, 2015 |
472,500 |
472,500 |
4.98 |
|
March 21, 2016
|
2,500 |
2,500 |
5.93 |
|
April 8, 2016 |
15,000 |
15,000 |
1.26 |
|
August 26, 2016
|
20,000 |
20,000 |
1.17 |
|
September 6, 2016 |
60,000 |
60,000 |
0.79 |
|
March 29, 2017
|
603,000 |
603,000 |
4.18 |
|
April 1, 2017 |
20,000 |
20,000 |
3.77 |
|
May 3, 2017
|
616,500 |
616,500 |
2.16 |
|
March 21, 2018 |
967,500 |
967,500 |
0.79 |
|
March 29, 2019
|
30,000 |
30,000 |
0.77 |
|
May 29, 2019 |
15,000 |
15,000 |
1.20 |
|
August 19, 2019
|
3,183,000
|
3,183,000 |
$2.52 |
|
|
13
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Three and nine months ended September 30,
2014 and 2013
(expressed in thousands of United States dollars
unless otherwise stated)
(unaudited)
(d) Stock Purchase Warrants
The following stock purchase warrants were outstanding at
September 30, 2014 for the purchase of common shares of Revett Mining Company,
Inc.:
Number |
|
Exercise price |
Expiration |
|
|
|
|
1,153,844 |
|
USD $ 1.00 |
March 26, 2016 |
1,095,705
|
|
USD $ 1.00 |
March 31, 2016 |
2,249,549 |
|
|
|
During the nine months ended September 30, 2014, 2,249,549 new
warrants were issued and there were no warrants exercised. During the nine
months ended September 30, 2013, 55,000 warrants were exercised and no warrants
were issued.
8. Commitments and Contingencies
a) Reclamation
The following table shows the changes in the reclamation
liability for the periods indicated.
|
|
|
Nine months ended |
|
|
Nine months ended |
|
|
|
|
September 30, 2014 |
|
|
September 30, 2013 |
|
|
Reclamation and remediation liability
beginning of period |
$ |
4,613 |
|
$ |
5,598 |
|
|
Accretion expense, year to date |
|
287
|
|
|
357
|
|
|
Ending balance |
$ |
4,900 |
|
$ |
5,955 |
|
b) Rock Creek Development
The Rock Creek project is located in Sanders County, Montana,
approximately five miles northeast of Noxon, Montana and sixteen air miles
southeast of Troy Mine. The project comprises 99 patented lode-mining claims,
370 unpatented lode-mining claims, five tunnel site claims, 85 mill site claims
and 754 acres of fee land. The patented claims lying within the Cabinet Mountain
Wilderness Area convey mineral rights only; the patented claims lying outside
the wilderness area convey both mineral and surface rights and title. The
patented claims were legally surveyed in 1983, patented in 1989, and occupy an
area of approximately 1,809 acres. We conduct our development activities at Rock
Creek through RC Resources Inc., another of our second-tier operating
subsidiaries. RC Resources Inc. is also the record holder of the various claims
and fee lands comprising the project.
14
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Three and nine months ended September 30,
2014 and 2013
(expressed in thousands of United States dollars
unless otherwise stated)
(unaudited)
Our proposed development of Rock Creek will occur in two
phases. The first phase, a two year evaluation program, will confirm and better
define the economic and technical viability of the project and reconfirm
geotechnical assumptions. This initial phase will include the construction of a
7,000 foot evaluation adit to collect additional technical information;
underground infill drilling to establish and confirm mineral resource estimates;
geotechnical design studies; bulk sampling of the mineralization for use in
metallurgical testing; and, to collect and evaluate hydrologic information. We
estimate the evaluation program will cost $25 million to $30 million. Once the
program is completed, we will commission a feasibility study and, if it is
positive, seek financing to construct a 10,000 tons per day mine and process
facility. More specific information concerning our proposed development of Rock
Creek is set forth in Item 2 of this report.
We cannot begin the evaluation program until we receive final
permits and approvals from the various Federal and State agencies that exercise
jurisdiction over the project. Rock Creek is partially located on United States
Forest Service (the Forest Service) land within the Kootenai National Forest
and under the Cabinet Mountains Wilderness Area, and federal and state approval
is required before development can commence. In 2001, the Forest Service issued
a Final Environmental Impact Statement (Final EIS) under the National
Environmental Policy Act (NEPA). In 2003, the Forest Service and the Montana
Department of Environmental Quality (the DEQ) issued a joint administrative
decision approving our proposed plan of operations at Rock Creek (the Record of
Decision). The Record of Decision was based primarily on the findings in the
Final EIS and a companion biological opinion (the Biological Opinion) issued
by the U.S. Fish and Wildlife Service (USFWS) in 2003, pursuant to the
requirements of the Endangered Species Act (ESA). The project was challenged
by several regional and national environmental advocacy groups, culminating in a
May 2010 Montana Federal District Court decision that upheld the Biological
Opinion but remanded the Record of Decision to the Forest Service to address
several NEPA procedural deficiencies. The Federal District Court decision
upholding the Biological Opinion was affirmed by the Ninth Circuit Court of
Appeals in November 2012. The Forest Service is currently working to develop a
Supplemental EIS that will comply with the Federal District Courts decision.
We are also working to satisfy other federal and state
permitting requirements that are required for phase 1 development. These include
reclamation bonding, designing and constructing a water treatment facility, and
improving the road leading to the proposed evaluation adit site.
We currently own approximately 673 acres of fee land, located
in Lincoln and Sanders Counties, that has been designated for Grizzly bear
habitat mitigation lands as the Rock Creek project is developed. This land and
other current and future real estate holdings that are not essential to our day
to day mining operations are; or will be, held by Revett Holdings, Inc., a
wholly-owned Montana subsidiary of Revett Silver. Certain of these lands may later be selected for management under the Revett
Foundation according to a best-use philosophy.
15
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Three and nine months ended September 30,
2014 and 2013
(expressed in thousands of United States dollars
unless otherwise stated)
(unaudited)
Although the Company believes that it will ultimately receive
all environmental and operating permits, it is possible that successful
challenges to the project could delay or prevent the Company from developing
Rock Creek which could result in the impairment and write-down of the carrying
value related to the Rock Creek property.
9. Derivative instruments
Concentrate Sales Contracts
The Company enters into concentrate sales contracts with buyers
which provides for a provisional payment based upon provisional assays and
quoted metal prices. The provisionally priced sales contain an embedded
derivative that is required to be separated from the host contract for
accounting purposes. The host contract is the receivable from the sale of
concentrates at the forward price at the time of sale. The embedded derivative,
which is the final settlement based on a future price, does not qualify for
hedge accounting. These embedded derivatives are recorded in Concentrate
settlement and other receivables on the consolidated balance sheet and are
adjusted to fair value through earnings each period until the date of final
settlement.
Fixed Forward Contracts
At September 30, 2014, the Company did not have any fixed
forward contracts to sell silver or copper.
10. Fair Value of Financial Instruments
The carrying values of cash and cash equivalents, accounts
receivable, restricted cash, and accounts payable and accrued liabilities
approximate fair value due to their short time to maturity or ability to
immediately convert them to cash in the normal course. The carrying value of
concentrate settlement payable or receivable are marked to market each month
using quoted forward prices as at the last trading day of each month, and
accordingly are recognized at fair value. The carrying values of capital lease
obligations approximate fair market values as they are based on market rates of
interest.
The Company classifies financial instruments recognized at fair
value in accordance with a fair value hierarchy that prioritizes the inputs to
valuation techniques used to measure fair value. The three levels of the fair
value hierarchy are described below:
Level 1 |
Unadjusted quoted prices in active markets that are
accessible at the measurement date for identical, unrestricted assets or
liabilities; |
|
|
Level 2 |
Quoted prices in markets that are not active, or inputs
that are observable, either directly or indirectly, for substantially the
full term of the asset or liability; and |
16
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Three and nine months ended September 30,
2014 and 2013
(expressed in thousands of United States dollars
unless otherwise stated)
(unaudited)
Level 3 |
Prices or valuation techniques that require inputs that
are both significant to the fair value measurement and unobservable
(supported by little or no market activity). |
The following table sets forth the Companys financial assets
and liabilities measured at fair value on a recurring basis by level within the
fair value hierarchy. Assets and liabilities are classified in their entirety
based on the lowest level of input that is significant to the fair value
measurement.
|
|
Fair value at September 30, 2014 |
|
|
|
Total |
|
|
Level
1 |
|
|
Level
2 |
|
|
Level
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
7,240 |
|
$ |
7,240 |
|
$ |
- |
|
$ |
- |
|
|
|
Fair value at December 31, 2013 |
|
|
|
Total |
|
|
Level
1 |
|
|
Level
2 |
|
|
Level
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
7,951 |
|
$ |
7,951 |
|
$ |
- |
|
$ |
- |
|
Available for sale securities |
|
600 |
|
|
600 |
|
|
- |
|
|
- |
|
The Companys cash and cash equivalent instruments are
classified within Level 1 of the fair value hierarchy because they are valued
using quoted market prices.
The Companys available for sale securities are valued using
quoted market prices, and accordingly, are included in Level 1.
The Companys concentrate receivable embedded derivative, which
includes provisionally priced sales, are valued using pricing models and the
Company generally uses similar models to value similar instruments. Where
possible, the Company verifies the values produced by its pricing models to
market prices. Valuation models require a variety of inputs, including
contractual terms, market prices, and correlations of such inputs. Such
instruments are typically classified within Level 2 of the fair value hierarchy.
There were no such amounts existing at June 30, 2014 or December 31, 2013.
11. Income Taxes
For the three and nine month periods ended September 30, 2014,
the Company did not report an income tax provision or benefit compared to an
income tax benefit of approximately $3.0 million and $8.0 million for the three
and nine month periods ended September 30, 2013, respectively. The following
table summarizes the components of the Companys income tax provision (benefit)
for the three and nine months ended September 30, 2014 and 2013:
17
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Three and nine months ended September 30,
2014 and 2013
(expressed in thousands of United States dollars
unless otherwise stated)
(unaudited)
|
|
|
Three months |
|
|
Three month |
|
|
Nine months |
|
|
Nine months |
|
|
|
|
ended |
|
|
ended |
|
|
ended |
|
|
ended |
|
|
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
|
Federal: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
$ |
- |
|
$ |
20 |
|
$ |
- |
|
$ |
20 |
|
|
Deferred |
|
- |
|
|
(2,726 |
) |
|
- |
|
|
(7,157 |
) |
|
Total |
|
- |
|
|
(2,706 |
) |
|
- |
|
|
(7,137 |
) |
|
State: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
Deferred |
|
- |
|
|
(320 |
) |
|
- |
|
|
(839 |
) |
|
Total |
$ |
- |
|
$ |
(3,026 |
) |
$ |
- |
|
$ |
(7,976 |
) |
As of September 30, 2014 management of the Company used the
guidelines contained in ASC 740 and evaluated the positive and negative evidence
available to determine whether a valuation allowance against the deferred tax
assets should be established. Management has determined that the Companys
negative evidence of a cumulative loss position after significant permanent
differences and the lack of future taxable income based on current conditions
regarding the Troy Mine outweighed the positive evidence. Management believes
that it is more likely than not the deferred tax assets will not be recovered.
Therefore a valuation allowance equal to 100% of the deferred tax assets has
been recorded.
The income tax provision (benefit) for the three and nine
months ended September 30, 2014 and 2013 varies from the statutory rate
primarily because of the change in valuation allowance for net deferred tax
assets and depletion. The Company has estimated an effective tax rate of zero
for 2014.
The Company has U.S. net operating loss carry forward of $44.0
million that expires at various dates between 2019 and 2034. Montana state net
operating losses of $34.0 million expire at various dates between 2014 and 2021.
The Company has a net capital loss carry forward of approximately $1.5 million
that expires in 2017 and 2018.
As a result of the reorganization of the Canadian company to a
U.S. company, the Canadian net operating loss of approximately $10.7 million was
forfeited upon the reorganization. Therefore, the Companys deferred tax asset
and valuation allowance has been reduced by approximately $2.8 million.
12. Earnings Per Common Share
For the three and nine months ended September 30, 2014 and
2013, options and warrants to purchase 5,432,549 and 3,282,000 shares,
respectively, of the Companys common stock were excluded from the computation
of diluted earnings per share because they were anti-dilutive.
18
Revett Mining Company, Inc.
Notes to Consolidated
Financial Statements
Three and nine months ended September 30,
2014 and 2013
(expressed in thousands of United States dollars
unless otherwise stated)
(unaudited)
13. Comprehensive income
The components of other comprehensive income are as follows:
|
|
Three |
|
|
Three |
|
|
Nine |
|
|
Nine |
|
|
|
months |
|
|
months |
|
|
months |
|
|
months |
|
|
|
ended |
|
|
ended |
|
|
ended |
|
|
ended |
|
|
|
Sept |
|
|
Sept |
|
|
Sept |
|
|
Sept |
|
|
|
30, |
|
|
30, |
|
|
30, |
|
|
30, |
|
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss on available for sale
securities before tax |
$ |
- |
|
$ |
30 |
|
$ |
- |
|
$ |
(520 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax effect |
|
- |
|
|
(10 |
) |
|
- |
|
|
184 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss on available for sale
securities, net of tax |
|
- |
|
|
20 |
|
|
- |
|
|
(336 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassification of loss on securities
included in net income (loss) |
|
- |
|
|
- |
|
|
70 |
|
|
1,376 |
|
Related deferred tax effect |
|
- |
|
|
- |
|
|
(25 |
) |
|
(482 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
- |
|
$ |
20 |
|
$ |
45 |
|
$ |
558 |
|
19
Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
This Managements Discussion and Analysis (MD&A) of the
financial results of Revett Mining Company, Inc. (Revett Mining or the
Company) for the nine month period ended September 30, 2014 should be read in
conjunction with the unaudited interim financial statements and notes as at and
for the nine months ended September 30, 2014 which form part of this report. In
addition, this MD&A and related financial statements should be read in
conjunction with the 2013 audited consolidated financial statements, the related
Managements Discussion and Analysis, and the Form 10-K filed in the United
States with the Securities and Exchange Commission (SEC) or on EDGAR, or on
file in Canada on SEDAR. These financial statements are expressed in United
States dollars, unless otherwise stated, and they are prepared in accordance
with United States generally accepted accounting principles (GAAP).
These unaudited interim consolidated financial statements have
been prepared by management in accordance with generally accepted accounting
principles used in the United States of America (U.S. GAAP) and are presented in
U.S. dollars.
Some of the statements in this MD&A are forward looking
statements that are subject to risk factors set out in the cautionary note
contained in this MD&A.
Overview and Important Factors Influencing Results for the
Nine Months Ended September 30, 2014
The Company owns a 100% interest in Revett Silver Company
(Revett Silver), which in turn owns 100% of Troy Mine, Inc., RC Resources,
Inc., Revett Exploration, Inc. and Revett Holdings, Inc. Troy Mine is an
operating underground silver and copper mine and Rock Creek is a development
stage silver and copper property. Both properties are located in northwest
Montana.
We suspended operations at Troy Mine in December 2012 due to
unstable underground conditions in portions of the mine. In November 2013, after
unsuccessful attempts to find alternative routes to our reserve mining areas and
with approval from the Mine Safety and Health Administration (MSHA), we
commenced construction of a new decline from the main service adit to access the
North C Beds and the undeveloped I Beds. In late September, 2014 we completed
the initial decline totaling approximately 7,500 feet (including dual drifts,
cross-overs, muck bays, etc.) to the North C Beds and expect to resume milling
operations and return to limited commercial production in the fourth quarter
2014. Continued development to the deeper I Beds will require us to construct an
additional 5,900 feet of decline including an accompanying borehole for
secondary egress and ventilation. We anticipate this continued development will
take an additional six to nine months to complete;, following which, we expect
to ramp-up to full production of around 4,000tpd. The cost of constructing the
decline to the North C Beds in order to resume production is estimated to be
approximately $5.9 million; the total cost of the decline, including the
extension to the undeveloped I Bed area, is currently estimated to be
approximately $12 million. Although we took significant steps to improve our
liquidity during the first nine months of 2014, we currently do not have enough
cash on hand to complete the I-Bed development and are reviewing alternative
sources of finance to meet our capital spending requirements.
20
Overall Performance
As at September 30, 2014 the Company has working capital of
$7.9 million. Due to the suspension of mining operations since December of 2012,
during 2013 and the first nine months of 2014 we were unable to generate
production revenues, which resulted in a net loss. For the three and nine month
periods ended September 30, 2014, the Company reported a net loss after taxes of
$2.1 million and $4.5 million or $0.05 and $0.12 a share, respectively, compared
to a net loss after taxes of $0.6 and $8.8 million or $0.02 and $0.25 per share,
respectively, for the three and nine months periods ended September 30, 2013.
Results of Operations for the Three and Nine Months Ended
September 30, 2014 compared to the same periods in 2013.
Financial Results:
|
a) |
Revenue: Revenue for the first nine months of 2013
reflects the settlement of a few outstanding invoices. There was no
invoicing for concentrate sales during the first nine months of 2014 and
2013 due to the suspension of mining activities described above. |
|
|
|
|
b) |
Troy Mine suspension related costs: 2013 spending
reflects the costs related to attempts to repair access to the mine along
with general costs of maintaining the Troy mine. 2014 spending reflects
both the cost of I Bed development along with the general cost of
maintaining the Troy mine. All of the spending related to the I Bed
development was capitalized ($5.3 million for the nine months ended
September 30, 2014). The 2013 spending reflects the efforts to design a
plan to resume mining operations and to maintain our staffing levels as we
did not layoff any employees until May of 2013. In May, and again, in
October of 2013, we reduced our staffing levels from over 180 employees to
just over 60 employees at the Troy Mine. |
|
|
|
|
c) |
Depreciation and depletion: For the three and nine
month periods of 2014 and 2013, the depreciation expense is significantly
lower. The majority of the plant and equipment at Troy is depreciated
using the units-of-production method and the effect of the suspension of
mining operations resulted in no depreciation expense for the Troy
Mine. |
|
|
|
|
d) |
Exploration and development: This expense includes
$0.8 million in 2014 spending for Rock Creek permitting. The spending in
2014 is lower than 2013 ($1.1 million) due to efforts to conserve cash. We
did not have any exploration spending during the first nine months of
2014. |
|
|
|
|
e) |
General and administration costs: The decrease in
the corporate administration costs during the first nine months of 2014
and 2013 is a result of efforts to conserve cash due to suspension of
mining activities at the Troy Mine. |
|
|
|
|
f) |
Other income: During the first nine months of 2014
we sold our available for sale securities for a gain of $0.4 million and
recorded a gain of $1.3 million on the recovery of insurance proceeds
related to the damaged mine equipment. |
|
|
|
|
g) |
Net loss: The net loss for the first nine months
2014 and 2013 reflects the suspension of mining activities at the Troy
Mine. |
21
Summarized Financial Results by Quarter
|
2012 |
2013 |
2013 |
2013 |
2013 |
2014 |
2014 |
2014 |
|
4Q |
1Q |
2Q |
3Q |
4Q |
1Q |
2Q |
3Q |
Cu Production (million lbs) |
1.0 |
- |
- |
- |
- |
- |
- |
- |
Ag Production (000s ozs) |
161 |
- |
- |
- |
- |
- |
- |
- |
Total Sales (millions) |
$7.2 |
$0.2 |
$0.0 |
$(0.1) |
$0.0 |
$0.0 |
$0.0 |
$0.0 |
Cash Flow from Operations before changes in
working capital (millions) (1) |
$(0.02) |
$(4.7) |
$(3.9) |
$(2.1) |
$(1.4) |
$(3.0) |
$(4.2) |
$(4.6) |
Net Income (loss) (millions) |
$(1.8) |
$(4.1) |
$(4.1) |
$(0.6) |
$(2.8) |
$(0.8) |
$(1.6) |
$(2.1) |
EPS- Basic |
$(0.05) |
$(0.12) |
$(0.12) |
$(0.02) |
$(0.05) |
$(0.02) |
$(0.04) |
$(0.05) |
EPS- Fully diluted |
$(0.05) |
$(0.12) |
$(0.12) |
$(0.02) |
$(0.05) |
$(0.02) |
$(0.04) |
$(0.12) |
Cash and Cash Equivalents & Short term
Investments (millions) |
$28.3 |
$21.0 |
$15.0 |
$12.1 |
$8.0 |
$9.0 |
$6.1 |
$7.2 |
Total Assets ending (millions) |
$108.0 |
$100.2 |
$92.7 |
$91.2 |
$86.6 |
$89.8 |
$86.8 |
$89.3 |
Total liabilities (millions) |
$19.2 |
$15.1 |
$11.1 |
$10.0 |
$8.1 |
$8.4 |
$7.0 |
$11.5 |
Total Equity (millions) |
$88.8 |
$85.1 |
$81.7 |
$81.2 |
$78.5 |
$81.4 |
$79.8 |
$77.8 |
(1) This is a non-GAAP measurement. These amounts reflect the
net cash flow from the Troy Mine before capital spending, equipment payments and
changes in working capital.
22
Financing Activities
In August 2014, the Company entered into a note payable for
$5.0 million. This note is secured by certain pieces of the Companys mining
equipment. The two existing capital leases were paid off from the proceeds of
this new note payable. The payoff amount was approximately $0.4 million. The
Company has the following contractual financial obligations (in thousands of
USD):
|
|
|
|
|
Current |
|
|
1 to 3 |
|
|
3 to 5 |
|
|
5 years or |
|
Contractual obligation |
|
Total |
|
|
portion |
|
|
years |
|
|
years |
|
|
more |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note payable |
$ |
4,846 |
|
$ |
1,917 |
|
|
2,929 |
|
|
- |
|
|
- |
|
Long term reclamation costs |
|
12,743 |
|
|
- |
|
|
- |
|
|
- |
|
$ |
12,743 |
|
Total contractual
obligations |
$ |
17,589 |
|
$ |
1,917 |
|
|
2,929 |
|
|
- |
|
$ |
12,743 |
|
Revett Silver has also entered into a number of operating
leases relating to the production and transportation of the copper concentrate
produced at Troy. All such leases expire in 2014 and many may be renewed
annually. The obligations in 2014 under the terms of these leases are $0.4
million.
Liquidity and Capital Resources
The Companys liquidity position is directly related to the
level of concentrate production, cost of this production and the provisional and
final prices received for the copper and silver in the concentrate that is sold.
At September 30, 2014, working capital was $7.9 million, including cash and cash
equivalents of $7.2 million. At September 30, 2014, concentrate receivable and
other receivables was $0.005 million compared to $1.2 million at December 31,
2013. In early April, 2014, we received the final settlement for an insurance
claim for a net cash proceeds of $1.9 million.
Delays in recommencing production at Troy could erode our cash
and working capital position. We continue to have discussions with interested
parties in possibly obtaining capital, however, no assurance can be given that
these efforts will prove successful. Given current market conditions, we may
experience difficulties in raising sufficient funds to meet our obligations and
complete construction of the development decline to gain access to the deeper
ore reserves at Troy. Because of our need to conserve cash, nearly all
discretionary capital spending and exploration spending has been placed on
hold.
Off Balance Sheet Arrangements
Royal Gold, Inc. holds a 3% gross smelter royalty on a defined
area of production from Troy Mine and a 1% net smelter royalty on production
from Rock Creek pursuant to the terms of an amended royalty agreement dated
October 13, 2009.
Related Party Transactions
Trafigura AG is the sole purchaser of the silver and copper
concentrate we produce at Troy. It is also the beneficial owner of more than
five percent of our outstanding common shares, and is therefore a related party.
During the nine months ended September 30, 2014 and 2013, there were no sales
transactions with Trafigura AG. However, during the nine months ended September
30, 2014, Trafigura AG paid us $0.3 million for the purchase of 320,512 shares
of common stock (see note 7).
23
Principal Risks and Uncertainties
The following risk factors and other information in this report
contain forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act. If any of the following
events or developments described below actually occur, our business, financial
condition or operating results could be materially harmed. This could cause the
market price of our common stock to decline.
Production Operations at Troy are currently suspended.
We suspended production operations at Troy in December 2012 due to
unstable underground conditions in portions of the mine. In November 2013, after
unsuccessful attempts to find alternative routes to our reserve mining areas and
with approval from the Mine Safety and Health Administration (MSHA), we
commenced construction of a new decline from the main service adit to access the
North C Beds and the undeveloped I Beds. In late September, 2014 we completed
the initial decline totaling approximately 7,500 feet (including dual drifts,
cross-overs, muck bays, etc.) to the North C Beds and expect to resume milling
operations and return to limited commercial production in the fourth quarter
2014. Continued development to the deeper I Beds will require us to construct an
additional 5,900 feet of decline including an accompanying borehole for
secondary egress and ventilation. We anticipate this continued development will
take an additional six to nine months to complete;, following which, we expect
to resume full production of around 4,000tpd. The cost of constructing the
decline to the North C Beds in order to resume production is estimated to be
approximately $5.9 million; the total cost of the decline, including the
extension to the undeveloped I Bed area, is currently estimated to be
approximately $12 million. Although we took significant steps to improve our
liquidity during the first quarter of 2014, we currently do not have enough cash
on hand to complete the I-Bed development and are reviewing alternative sources
of finance to meet our capital spending requirements. There is no assurance our
financing efforts will be successful under current market conditions. Our
business has been materially and adversely affected by the suspension of
commercial mining operations at Troy.
Copper and silver prices fluctuate markedly. Our
operations are significantly influenced by the prices of copper and silver.
Copper and silver prices fluctuate widely and are affected by numerous factors
that are beyond our control, such as the strength of the United States dollar,
global and regional industrial demand, and the political and economic conditions
of major producing countries throughout the world. During the last four years,
annual average copper prices have fluctuated from a low of $2.34 per pound in
2009 to a high of $4.00 per pound in 2011, and world average annual silver
prices have fluctuated from a low of $14.38 per ounce in 2009 to a high of
$35.11 per ounce in 2011.
There are other formidable risks to mining. We
are subject to all of the risks inherent in the mining industry, including
industrial accidents, labor disputes, environmental related issues, unusual or
unexpected geologic formations, cave-ins, surface subsidence, flooding, power
disruptions and periodic interruptions due to inclement weather. These risks
could result in damage to or destruction of our mineral properties and
production facilities, personal injury, environmental damage, delays, monetary
losses and legal liability. In addition, we are subject to competition for new
minerals properties, management and skilled miners from other mining companies,
many of which have significantly greater resources than we do. We also have no
direct control over changes in governmental regulation of mining activities, the speculative
nature of mineral exploration and development, operating hazards, fluctuating
metal prices and inflation and other economic conditions.
24
Legal challenges could prevent us from ever developing
Rock Creek. Our proposed development of Rock Creek has been challenged
by several regional and national conservation groups at various times since the
Forest Service issued its initial Record of Decision in 2003 approving our plan
of operation. Some of these challenges have alleged violations of a variety of
federal and state laws and regulations pertaining to our permitting activities
at Rock Creek, including the Endangered Species Act, the National Environmental
Policy Act, the 1872 Mining Law, the Federal Land Policy Management Act, the
Wilderness Act, the National Forest Management Act, the Clean Water Act, the
Clean Air Act, the Forest Service Organic Act of 1897 and the Administrative
Procedural Act. Although we have successfully addressed most all of these
challenges, we were directed by the Montana Federal District Court in May 2010
to produce a Supplemental EIS (SEIS) to address NEPA procedural deficiencies
identified by the court. We cannot predict with any degree of certainty how
possible future challenges will be resolved. Rock Creek is potentially the more
significant of our two mining assets. New court challenges to the Supplemental
EIS and a revised Record of Decision may delay us from proceeding with our
planned development at Rock Creek. If we are successful in completing the SEIS
and defending any challenges, we still must comply with a number of requirements
and conditions as development progresses, failing which we could be denied the
ability to continue with our proposed activities.
Our reclamation liability at Troy Mine could be
substantial. Our financial obligations to reclaim, restore and close
Troy are presently covered by a $12.9 million surety bond, which includes $6.5
million in a restricted cash account. In late 2012, Montana DEQ and the U.S.
Forest Service issued a new EIS and Record of Decision pertaining to the Troy
reclamation. We do not presently know whether the revised reclamation plan will
increase our bonding costs. Laws governing the closure of mining operations in
Montana have become more stringent since Troy Mine was first placed into
production. These factors could result in the imposition of a higher performance
bond. Our reclamation liability for Troy is not limited by the amount of the
performance bond itself; the bond serves only as security for the payment of
these obligations. We would necessarily have to pay for any substantial increase
in actual costs over and above the maximum allowed under the bond.
We presently do not have the financial resources to
complete the construction of the new decline at Troy or to develop Rock Creek.
Although we are continuing efforts to procure financing, we presently do
not have sufficient funds to complete the construction of a new decline to the
North C Bed and deeper I Bed areas at Troy. We also do not have sufficient cash
to develop a mine or begin mining operations at Rock Creek should it prove
feasible to do so.
The Rock Creek mineral resources are not equivalent to
reserves. This report includes information concerning the estimated size
of our mineral resource at Rock Creek and supplemental information concerning
the extent of the remaining mineral resource at Troy. Although we believe these
mineral resources are significant, it does not mean they can be economically
mined. A mineral resource is not equivalent to proven reserves or probable
reserves under standards promulgated by the SEC, principally because of the
absence of sufficient quantifiable data. We will not be able to determine
whether Rock Creek contains a commercially mineable ore body until our
evaluation program has been completed and we have obtained a final, economic and
technical feasibility study that will include an analysis of the amount of ore
that can be economically produced under then-prevailing market conditions.
Similarly, we will not be able to determine whether the supplemental mineral
resources at Troy can be commercially mined without further exploration and
study. Stockholders are cautioned not to assume that mineral resources will ever
be converted into proven reserves or probable reserves.
25
Future accounting changes
In May 2014, the FASB issued Accounting Standards Update No.
2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes
nearly all existing revenue recognition guidance under U.S. GAAP. The core
principle of ASU 2014-09 is to recognize revenues when promised goods or
services are transferred to customers in an amount that reflects the
consideration to which an entity expects to be entitled for those goods or
services. ASU 2014-09 defines a five step process to achieve this core principle
and, in doing so, more judgment and estimates may be required within the revenue
recognition process than are required under existing U.S. GAAP.
The standard is effective for annual periods beginning after
December 15, 2016, and interim periods therein, using either of the following
transition methods: (i) a full retrospective approach reflecting the application
of the standard in each prior reporting period with the option to elect certain
practical expedients, or (ii) a retrospective approach with the cumulative
effect of initially adopting ASU 2014-09 recognized at the date of adoption
(which includes additional footnote disclosures). We are currently evaluating
the impact of our pending adoption of ASU 2014-09 on our consolidated financial
statements and have not yet determined the method by which we will adopt the
standard in 2017.
Financial Instruments, Hedging Activities and Other
Instruments
The largest market risk the Company is exposed to is changes in
the prices of copper and silver will have a significant effect on revenue, cash
flow and the value of concentrate receivables or payables because a significant
portion of the Companys sales are subject to a future pricing mechanism and
changes in metal prices will change both revenue and the value of concentrate
receivables or payables. The Company does have a hedging policy which permits
the Company to fix the sales price of copper and silver in concentrate to be
produced in the future or for which concentrate has been sold and for which
final settlement has not occurred.
For financial statement purposes, the Company records at fair
value the amount of silver and copper in concentrate sold to its customer for
which final prices have not yet been determined. At each month-end, the Company
adjusts its revenue to account for expected future prices and the corresponding
expected future revenue and cash flow. In order to do this, the Company must
make estimates of the future prices expected to prevail when final settlement
occurs. The Company uses published forward prices for the period of expected
settlement to estimate these expected prices.
As at September 30, 2014, the Company had no contracts
outstanding to sell silver or copper
Forward Looking Statements
Cautionary Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995. With the exception of historical
matters, the matters discussed in this report are forward- looking statements
that involve risk and uncertainties that could cause actual results to differ
materially from projections or estimates contained herein. The words believe,
estimate, anticipate, expect, and project and similar expressions are included to identify
forward-looking statements. Such forward looking-statements include statements
regarding future production levels and operating costs at the Troy mine, future
levels of capital expenditures at both Troy and Rock Creek, the reserve and
resource estimates at both Troy and Rock Creek, the adequacy of the financial
resources and funds to cover operating and exploration costs at Troy and the
cost of exploration at Rock Creek, the timing of certain litigation activities
which have delayed exploration activities at Rock Creek, the adequacy of third
party financing to complete certain corporate development activities, and the
expectation that the Troy mine will be able to generate positive cash flow in
future periods. Factors that could cause actual results to differ materially
from these forward looking statements include, among others:
26
- changes in copper and silver prices;
- the operating performance of the Troy mine;
- geological conditions at the Troy mine;
- the need for copper concentrate by copper smelters and the costs
associated with selling such concentrate to the smelters;
- the ability of the Company to complete exploration activities at the Rock
Creek project;
- activities of certain environmental groups opposed to the Companys
activities in the United States;
- changes in the planned Rock Creek project parameters;
- changes in estimates of the reserves and resources at all the properties
owned or controlled by the Company;
- economic and market conditions;
- future financial needs and the Companys ability to secure such financing
under reasonable terms and conditions;
- changes in federal or state legislation and regulations governing our
operations and projects;
- risks of future unknown lawsuits respecting future planned activities on
our projects or past activities by the Company.
As well as other factors described elsewhere in our annual Form
10-K and the various regulatory filings with United States and Canadian and
provincial regulatory bodies which are available in Canada at www.sedar.com or
in the United States on EDGAR. Future events and actual results could differ
materially from those set forth in, contemplated by, or underlying the
forward-looking statements. Most of these factors are beyond our ability to
predict or control. Future events and actual results could differ materially
from those set forth in, contemplated by, or underlying the forward looking
statements. We disclaim any obligation to update any forward-looking statement
made here-in except as required by law. Readers are cautioned not to put undue
reliance on forward looking statements.
Item 3. Quantitative and Qualitative Disclosures About
Market Risk
Our earnings and cash flow are significantly affected by
changes in the market price of copper and silver. The prices of both metals can
fluctuate widely and are influenced by numerous factors such as demand,
production levels, and world political and economic events and the strength of
the US dollar. During the past eighteen years the average annual price of copper
has ranged from a low of $0.71 per pound to a high of $4.48 per pound. Average
annual silver prices over this same period have ranged from a low of $3.95 per
ounce to a high of $41.96. Should the price of copper or silver decline
substantially, the value of Troy and Rock Creek could fall dramatically and the
future operation of Troy and the future exploration and development at Rock
Creek could both be at risk.
27
A substantial portion of our cash and short term investments
are invested in certificates of deposit or high quality government and corporate
fixed income securities, all of which are denominated in US dollars. With the
uncertainty in the financial markets the value of these fixed income securities
could change. Approximately $0.8 million of our short term investments are in a
major Canadian chartered bank and are denominated in US dollars.
Item 4. Controls and Procedures
Management is responsible for adopting internal control that
gives it and the board of directors reasonable assurance that the Companys
consolidated financial statements present fairly its financial position and
results of operations. Management also is responsible for establishing and
maintaining disclosure controls and procedures that provide assurance that
material information concerning the Company, including its consolidated
subsidiaries, is appropriately disclosed.
Disclosure Controls and Procedures. Our
disclosure controls and procedures are designed to ensure that information we
are required to disclose in our periodic reports and other information filed
under the Securities Exchange Act of 1934 (the Exchange Act) is recorded,
processed, summarized and reported within the time periods prescribed by the
SECs rules. They include, without limitation, controls and procedures designed
to ensure that such information is accumulated and promptly communicated to our
management, including our chief executive officer and our chief financial
officer and other principal accounting officers, so such persons can make timely
decisions regarding disclosure.
We evaluated the effectiveness of the design and operation of
our disclosure controls and procedures as required by Rules 13(a)-15(e) and
15(d)-15(e) under the Exchange Act. This evaluation was performed under
the supervision and with the participation of our management, including our
chief executive officer and our chief financial officer, both of whom concluded
that such controls and procedures were effective as of September 30, 2014. Based
upon this evaluation, our chief executive officer and chief financial officer
concluded that the design and operation of the Companys disclosure controls and
procedures were effective as at September 30, 2014 to ensure that information
required to be disclosed by us in reports that we file under the Exchange
Act, is gathered, reported, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commissions rules and
forms and is accumulated and communicated to management, including the chief
executive officer and the chief financial officer, to allow timely decisions
regarding required disclosure as specified under U.S. and Canadian securities
laws.
Changes in Internal Control over Financial Reporting.
There have been no changes in the Companys internal control over financial
reporting during the most recent fiscal quarter that have materially affected,
or are reasonably likely to affect, its internal control over financial
reporting.
PART II: Other Information
Item 1: Legal Proceedings
There have been no material changes with regard to legal
proceedings which are reported in the December 31, 2013 Form 10-K.
Item 2: Unregistered sales of equity securities and Use of
proceeds
Not Applicable
28
Item 3: Defaults Upon Senior Securities
Not Applicable
Item 4: Mine Safety Disclosure
Our operations at the Troy Mine are subject to health, safety
and other standards imposed under the Federal Mine Safety and Health Act of 1977
(FMSHA) and regulations promulgated thereunder. FMSHA is administered by the
Mine Safety and Health Administration (MSHA).
During the three months ended September 30, 2014 MSHA issued
one citation pursuant to Section 104 of FMSHA for violations of mandatory health
or safety standards that could, in the agencys opinion, significantly and
substantially contribute to mine safety or health hazard. MSHA proposed
penalties of $5,019 for violations.
There were no mining fatalities at the Troy Mine during the
three months ended September 30, 2014, nor did MSHA issue written notice
pursuant to Section 104(e) of FMSHA during the period alleging any pattern of
violations of mandatory health or safety standards or the potential for such a
pattern. MSHA did not deem the cited violations to be flagrant within the
meaning of Section 110(b)(2) of FMSHA.
There is two pending appeals before the Federal Mine Health
Safety Review Commission challenging MSHAs assessment of proposed penalties
against us. The following table sets forth relevant information concerning the
statutory basis for these violations:
Mine
Name Mine ID
|
Section
104 S&S Citations
|
Section
104(b) Orders
|
Section
104(d) Citations and
Orders
|
Section
110(b)(2) Violations
|
Section
107(a) Orders
|
Total
Dollar Value of MSHA
Assessment s Proposed
|
Total
Number of Mining Related
Fatalities
|
Received
Notice of Pattern of
Violations Under Section 104(e)
|
Received
Notice of Potential to Have
Pattern Under Section 104(e) |
Legal
Actions Pending as of Last
Day of the Period
|
Legal
Actions Initiated During
Period
|
Legal
Actions Resolved During
Period
|
Troy Mine, Inc. 24-01467 |
1 |
0 |
0 |
0 |
0 |
$5,019 |
0 |
No |
No |
2 |
1 |
0 |
Item 5: Other Information
Not Applicable
Item 6: Exhibits
(a) Exhibits:
29
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
|
REVETT MINING COMPANY, INC. |
|
|
|
|
Date: November 10, 2014 |
By: /s/John Shanahan |
|
John Shanahan |
|
President and Chief Executive Officer |
|
|
|
|
Date: November 10, 2014 |
By: /s/ Ken Eickerman |
|
Ken Eickerman |
|
Chief Financial Officer |
30
EXHIBIT 31.1
CERTIFICATION
I, John
Shanahan, certify that:
1. |
I have reviewed this form 10-Q of Revett Mining Company,
Inc. (the registrant); |
|
|
|
2. |
Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this report; |
|
|
|
3. |
Based on my knowledge, the financial statements, and
other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
report; |
|
|
|
4. |
The registrants other certifying officer and I are
responsible for establishing and maintaining disclosure controls and
procedures as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for
the registrant and internal control over financial reporting as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and
have: |
|
|
|
|
a) |
Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which
this report is being prepared; |
|
|
|
|
b) |
Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles; |
|
|
|
|
c) |
Evaluated the effectiveness of the registrants
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on
such evaluation; and |
|
|
|
|
d) |
Disclosed in this report any change in the registrants
internal control over financial reporting that occurred during the
registrants most recent fiscal quarter that has materially affected, or
is reasonably likely to materially affect, the registrants internal
control over financial reporting; and |
|
|
|
5. |
The registrants other certifying officer and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrants auditors and the audit committee
of the registrants board of directors (or persons performing the
equivalent functions): |
|
|
|
|
a) |
All significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant ability to
record, process, summarize and report financial information;
and |
1
|
b) |
Any fraud, whether or not material, that involved
management or other employees who have a significant role in the
registrants internal control over financial
reporting. |
Date: November 10, 2014
/s/John Shanahan
|
|
John Shanahan |
|
President and Chief Executive Officer |
|
2
EXHIBIT 31.2
CERTIFICATION
I, Ken Eickerman, certify that:
1. |
I have reviewed this form 10-Q of Revett Mining Company,
Inc. (the registrant); |
|
|
|
2. |
Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this report; |
|
|
|
3. |
Based on my knowledge, the financial statements, and
other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
report; |
|
|
|
4. |
The registrants other certifying officer and I are
responsible for establishing and maintaining disclosure controls and
procedures as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for
the registrant and internal control over financial reporting as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and
have: |
|
|
|
|
a. |
Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which
this report is being prepared; |
|
|
|
|
b. |
Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles; |
|
|
|
|
c. |
Evaluated the effectiveness of the registrants
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on
such evaluation; and |
|
|
|
|
d. |
Disclosed in this report any change in the registrants
internal control over financial reporting that occurred during the
registrants most recent fiscal quarter that has materially affected, or
is reasonably likely to materially affect, the registrants internal
control over financial reporting; and |
|
|
|
5. |
The registrants other certifying officer and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrants auditors and the audit committee
of the registrants board of directors (or persons performing the
equivalent functions): |
|
|
|
|
a. |
All significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting which
are reasonably likely to adversely |
1
|
|
affect the registrant ability to record, process,
summarize and report financial information; and |
|
|
|
|
b. |
Any fraud, whether or not material, that involved
management or other employees who have a significant role in the
registrants internal control over financial
reporting. |
Date: November 10, 2014 |
|
|
|
|
|
/s/Ken Eickerman
|
|
Ken Eickerman |
|
Chief Financial Officer |
|
2
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Revett Mining Company, Inc. (the
Company) on Form 10-Q for the period ended September 30, 2014, as filed with
the Securities and Exchange Commission on the date hereof (the Report), each
of the undersigned hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted
pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.
/s/ John Shanahan
|
|
John Shanahan |
|
President and Chief Executive Officer |
|
Date: November 10, 2014 |
|
A signed original of this written statement required by Section 906 has been
provided to Revett Mining Company, Inc. and will be retained by Revett Mining
Company, Inc. and furnished to the Securities and Exchange Commission or its
staff upon request.
EXHIBIT 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Revett Mining Company, Inc. (the
Company) on Form 10-Q for the period ended September 30, 2014, as filed with
the Securities and Exchange Commission on the date hereof (the Report), each
of the undersigned hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted
pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.
/s/ Ken Eickerman
|
|
Ken Eickerman |
|
Chief Financial Officer |
|
Date: November 10, 2014 |
|
A signed original of this written statement required by Section 906 has been
provided to Revett Mining Company, Inc. and will be retained by Revett Mining
Company, Inc. and furnished to the Securities and Exchange Commission or its
staff upon request.
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