Iberian Minerals Corp. (TSX VENTURE: IZN) today announced financial
and operating results for the year ending December 31, 2009, with
comparative figures for the year ending December 31, 2008. The 2009
audited consolidated financials statements and related notes, and
Management Discussion and Analysis may be found on www.sedar.com.
The Company reported a net loss of $ 249.6 million for fiscal 2009,
representing $0.81 per share.
In addition, the Company has filed an Annual Information Form
for the year ended December 31, 2009.
Highlights for the Year Ended December 31, 2009
Financial:
Year ended December 31, 2009
-- Net loss was $249.64 million or $0.81 per share for the year, compared
with net income of $47.79 million or $0.19 per share in 2008. The loss
in 2009 was primarily due to an unrealized loss on derivative financial
instruments of $360.79 million compared to a $255.62 million unrealized
gain on derivative financial instruments and a $280.15 million realized
gain on derivative financial instruments in the prior year. The prior
year's realized and unrealized gains on derivative financial instruments
were offset by impairment of mining interests and goodwill of $394.18
million.
-- Before the impact of unrealized gain or loss on derivative financial
instruments net income before income taxes was $28.03 million or $0.09
per share, compared with a net loss before income taxes of $155.26
million or $0.62 per share in 2008. The unrealized loss on commodity
derivative contracts must be recorded in accordance with GAAP. Future
loss (or gain) to be realized upon settlement of the commodity
derivative contracts may differ materially.
-- Sales in the year were $161.13 million compared to $97.87 million in
2008.
-- Cash flow from operations before changes in non-cash working capital was
$35.44 million compared with $285.69 million in 2008. Cash flow from
operations after changes in non-cash working capital was $9.58 million
compared with $201.48 million in 2008.
Three months ended December 31, 2009
-- Net loss was $68.34 million or $0.20 per share for the fourth quarter,
compared with net loss of $16.15 million or $0.06 per share in the
fourth quarter of 2008. The loss in 2009 was primarily due to an
unrealized loss on derivative financial instruments of $122.09 million
compared to a $148.60 million unrealized gain on derivative financial
instruments and a $280.15 million realized gain on derivative financial
instruments in the prior year period. The prior year period realized and
unrealized gains on derivative financial instruments were offset by
impairment of mining interests and goodwill of $394.18 million.
-- Before the impact of unrealized gain or loss on derivative financial
instruments net income before income taxes was $10.24 million or $0.03
per share, compared with a net loss before income taxes of $142.89
million or $0.56 per share in the fourth quarter of 2008. The unrealized
loss on commodity derivative contracts must be recorded in accordance
with GAAP. Future loss (or gain) to be realized upon settlement of the
commodity derivative contracts may differ materially.
-- Sales in the period were $70.84 million compared to $22.40 million in
2008.
-- Cash flow from operations before changes in non-cash working capital was
$12.63 million compared with $264.40 million in 2008. Cash flow used in
operations after changes in non-cash working capital was $2.90 million
compared with cash provided by operations of $183.72 million in the
fourth quarter of 2008.
Operational - CMC:
Twelve months ended December 31, 2009 versus eleven months ended
December 31, 2008
-- Operations at the Condestable Mine remained in a steady state.
-- CMC processed 2,159,549 tonnes of ore in the period versus 2,028,022
tonnes in the prior year.
-- Copper concentrate shipments in the period were 95,339 tonnes versus
94,425 tonnes in the prior year.
-- Contained copper production in the period was 23,832 tonnes versus
23,228 tonnes in the prior year.
-- Operating costs for the period (C1 and C3) were US$ 0.90 and US$ 1.24
per payable pound of copper versus prior year C1 and C3 of US$ 0.96 and
US$ 1.42 respectively.
Three months ended December 31, 2009 versus 2008
-- CMC processed 544,084 tonnes of ore in the period versus 554,838 tonnes
in the prior year.
-- Copper concentrate shipments in the period were 23,429 tonnes versus
26,744 tonnes in the prior year.
-- Contained copper production in the period was 5,879 tonnes versus 6,390
tonnes in the prior year.
-- Operating costs for the period (C1 and C3) were US$ 0.94 and US$ 1.38
per payable pound of copper versus prior year C1 and C3 of US$ 0.98 and
US$ 1.44 respectively.
Other
-- On December 23, 2009 the Company announced that an agreement has been
entered into with Corianta S.A., a subsidiary of Cementos Pacasmayo
S.A.A., member of Hochschilds Group to purchase all remaining interest
in the Raul Mine, which forms part of the Condestable operation. The
purchase price is US$ 28.00 million, and is to close by March 31, 2010.
Development and operational - MATSA:
-- The Company continued the ramp-up of production at MATSA, with
commercial production declared during the fourth quarter of 2009 with
effect from October 1, 2009.
-- During the development and ramp up phase for the nine months ended
September 30, 2009, MATSA processed 488,557 tonnes of ore and produced
20,571 tonnes of copper concentrate, 10,742 tonnes of zinc concentrate,
6,937 tonnes of copper-lead bulk concentrate, and 913 tonnes of lead
concentrate for revenues of US$ 27.90 million. As this revenue was
generated prior to declaration of commercial production it was
capitalized for accounting purposes.
-- In the fourth quarter MATSA processed 360,458 tonnes of ore.
-- Shipments in the fourth quarter were 20,398 tonnes of copper
concentrate, 2,473 tonnes of zinc concentrate and 2,368 tonnes of
copper-lead bulk concentrate. Contained metal was 5,074 tonnes of copper
and 1,218 tonnes of zinc.
-- Operating costs for the fourth quarter (C1 and C3) were US$ 2.61 and US$
3.34 per payable pound of copper. C1 and C3 cost figures were higher
than anticipated for steady state as the production rate in the period
was below nameplate capacity of 1.7 Mtpa at 85%. In addition, grade and
recovery were below targets.
Summarized Financial Results
For accounting purposes, to September 30, 2009, MATSA was
considered to be 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 and were capitalized in
property, plant and equipment until such time that MATSA achieved
commercial production. Commercial production at MATSA was declared
with effect from October 1, 2009. As such sales and costs of
expenses of mining operations for MATSA were recognized in the
operating statement of the Company in the fourth quarter of
2009.
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Year ended December 31, 2009 2008
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$ $
Sales 161,133 97,866
Costs and expenses of mining operations 133,674 105,363
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Gross margin 27,459 (7,497)
Expenses
Administrative expenses and other 18,144 9,675
Foreign exchange (gain)/loss (18,711) 23,029
Unrealized (gain)/loss on derivative financial
instruments 360,789 (255,616)
Realized gain on derivative financial instruments - (280,150)
Impairment of investments - 1,026
Impairment of mining interests and goodwill - 394,183
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Total expenses (other income) 360,222 (107,853)
Net income (loss) before income taxes (332,763) 100,356
Non-controlling interest (1,063) 4,685
Income tax expense 14,130 7,355
Future income tax recovery (96,189) 40,522
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Net (loss) income (249,641) 47,794
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Basic (loss) income per share ($) (0.81) 0.19
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Diluted (loss) income per share ($) (0.81) 0.18
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Key Operating Statistics
CMC operating statistics
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Three months Twelve months (i)
Periods ended December 31, Unit 2009 2008 2009 2008
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Ore mined t 590,493 571,815 2,231,798 2,052,081
Ore processed t 544,084 554,838 2,159,549 2,028,022
Copper ore grade % 1.21 1.24 1.22 1.24
Concentrate grade % 25 24 25 25
Copper recovery rate % 90 93 91 93
Copper concentrate DMT 23,429 26,744 95,339 94,425
Copper contained in
concentrate t 5,879 6,390 23,832 23,228
Gold contained in
concentrate oz 3,952 4,790 17,361 16,091
Silver contained in
concentrate oz 70,472 72,015 250,504 259,676
Payable copper contained in
concentrate t 5,630 6,074 22,952 22,105
Payable gold contained in
concentrate oz 3,586 4,324 15,764 14,527
Payable silver contained in
concentrate oz 63,254 64,295 226,357 231,848
C1 cost per lb of payable
copper USD $ 0.94 $ 0.98 $ 0.90 $ 0.96
C3 cost per lb of payable
copper USD $ 1.38 $ 1.44 $ 1.24 $ 1.42
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(i) in 2008 the period was for eleven months ended December 31, 2008.
MATSA operating statistics
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Three months ended December 31, Unit 2009
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Copper ore
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Ore mined t 322,275
Ore processed t 321,951
Copper ore grade % 1.84
Concentrate grade % 23
Copper recovery rate % 81
Copper concentrate DMT 20,398
Copper contained in concentrate t 4,800
Silver contained in concentrate oz 51,536
Payable copper contained in concentrate t 4,596
Payable silver contained in concentrate oz 31,862
Polymetallic ore
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Ore mined t 56,881
Ore processed t 38,507
Copper ore grade % 1.20
Copper/lead bulk concentrate grade % 12
Copper recovery rate % 62
Zinc ore grade % 6.57
Zinc concentrate grade % 49
Zinc recovery rate % 51
Copper/lead bulk concentrate DMT 2,368
Zinc concentrate DMT 2,473
Copper contained in concentrate t 274
Zinc contained in concentrate t 1,218
Silver contained in concentrate oz 20,605
Payable copper contained in concentrate t 250
Payable zinc contained in concentrate t 1,020
Payable silver contained in concentrate oz 18,321
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C1 cost per lb of payable copper USD $ 2.61
C3 cost per lb of payable copper USD $ 3.34
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Outlook
Following the conclusion of a tumultuous year in 2009, which
commenced with the carry-over effect of a severe global recession
from late 2008, global economies have moved towards recovery.
Iberian expects that this recent recovery will continue in 2010.
However, it remains unclear at what pace this will occur.
The medium term outlook for commodities appears to remain
positive. It is expected that industrializing countries, especially
China, will continue to focus on growing domestic infrastructures
and this will continue to stimulate the demand for commodities. As
a base metals producer of copper, zinc and lead, Iberian's
operations are subject to the demand for, and fluctuations in the
market prices of these commodities. The Company considers itself
well-positioned for the future.
The outlook for CMC is positive in that it will continue to
produce copper concentrate at similar levels to 2009. It is
expected that CMC will process 2.2 million tonnes of ore in 2010.
In addition to maintaining steady state production, CMC has set two
priorities for 2010. The first priority is to complete the US$
28.00 million purchase of the Raul mine lease and royalty which
will generally allow for greater control over the mining operation
and eliminate the Raul mine lease and royalty payments. In
connection with this CMC must successfully complete the previously
announced financing by way of an amended senior, secured debt
facility, in the expected amount of US$ 55.00 million. There can be
no assurance that this or any other financing will be finalized, or
the terms on which any financing will be obtained. The potential
consequence of not successfully completing this or any other
financing is to solely frustrate the purchase of the Raul mine
lease and royalty. The second priority is to improve reliability of
the operation by investing US$ 3.30 million in improvement of
secondary crushing.
MATSA achieved a significant milestone when the Company declared
commercial production in October 2009. Both circuits at the
processing plant are operational, and processing results continue
to improve. With further enhancements to the polymetallic circuit
that are currently underway to produce separate copper and lead
concentrates, rather than a bulk concentrate, and the planned
process plant expansion to increase capacity to the equivalent of
2.2 million tonnes per annum, 2010 will be a pivotal year in the
further growth and maturation of the Aguas Tenidas Mine.
In 2010, the Company must address four significant short term
priorities.
First a projected funding shortfall at MATSA was identified in
2009. This cash shortfall arose mainly due to the acquisition of
the Insersa underground contractor and pending receipt of the
approved government grant. In addition, delays in production due to
modifications to the polymetallic circuit, together with on-going
ramp-up issues affected the financial condition at MATSA. The
Company quantified the extent of MATSA's projected 2010 cash
shortfall between approximately US$ 40 and US$ 45 million. It is
expected that the Company will address this funding requirement
through completion of a proposed US$ 50 million senior, secured
debt facility which the Company now expects to be completed by
mid-April.
Second, the Company currently projects that its corporate
operations are under-funded by approximately $3 to $4 million for
2010. The Company is evaluating options to address its corporate
requirements.
Third, MATSA must successfully complete and implement the
current enhancements to the polymetallic circuit. The modular
installation is complete and commissioned in Q1 2010. The effective
use of this circuit is dependent on additional reagents being used.
MATSA received from the relevant authority of the Junta de
Andalucia, in Spain, the environmental authorization which permits
the use of six new reagents for the operation of the new modular
copper/lead flotation separation circuit at the Aguas Tenidas Mine.
The reagents have now been received on site and the bulk separation
circuit will start up in early April in line with the planned
processing of polymetallic ores during the month.
Finally, during 2010, MATSA must successfully complete and
implement the planned processing plant expansion. Currently, the
Company is on track to be operating at the 2.2 Mtpa level by the
third quarter of 2010. The capital cost estimate for the expansion
is expected to be between US$ 13.00 million and US$ 15.00 million
and consists of mine and processing equipment that is comparable in
nature to that currently employed in the operations. The ability to
operate at the increased level will depend on added employment,
successful completion of certain labour arrangements, and
applications to the government authorities for the necessary
permits to allow operations at the increased level of 2.2 Mtpa.
There can be no assurance as to the fact or timing of, or
conditions attached to any government permits or authorizations.
While the Company does not anticipate any issues relating to a Q3
operation at 2.2 Mtpa, the impact of any negative developments in
this regard would be the inability to expand the processing plant,
either in whole or in part.
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 1.7 million tonnes per year underground mine and
concentrator that produces copper, zinc and bulk copper/lead
concentrates that also contain gold and silver.
C1 costs are cash costs including mining, processing, site
administration, and refining and treatment charges, net of by
product credits, and C3 costs are total costs being C1 costs plus
depreciation and amortization charges, royalties, interest costs
and financing charges.
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 April 30, 2009.
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
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