VANCOUVER, March 10, 2020 /PRNewswire/ - Copper Mountain
Mining Corporation (TSX:CMMC |
ASX:C6C) ("Copper Mountain" or the "Company) has
revised its mine plan and project schedule at its Copper Mountain
Mine, located in Southern British
Columbia, with the objective of maintaining solid positive
margins and cash flow in response to current market conditions and
near-term copper price uncertainty as a result of the Coronavirus
impact to metal prices. A summary of changes includes:
- Deferral of Ball Mill #3 installation capital expenditures,
saving US$22 million in 2020.
- Reducing operating costs by re-sequencing short term production
to lower cost mine phases.
- Preserving high grade ore in Pit #3 scheduled for mining in
2020 to now be mined in 2021 for the benefit of expected higher
metal prices in future and to match deferred Ball Mill #3 expansion
capital expenditures.
These actions allow the Company to maintain solid cash flow
margins at the mine and run sustainably in the current low copper
price environment, without any sacrifice to the long term mine
plan. In addition, the revised mine plan also allows the Company to
continue to be able to fund the mill expansion project internally.
Saving the high-grade ore originally planned to be mined in
2020 for 2021 also better matches potential higher copper prices,
thereby maximizing cash flow generation. As a result of these
actions, the Company has revised its 2020 production and cost
guidance as outlined below.
"We are committed to protecting our cash flow and minimizing
costs given the low and volatile copper price environment that we
are currently operating in as a result of the Coronavirus impact,"
said Gil Clausen, Copper Mountain's
President and CEO. "We have revised our mine plan to protect and
grow cash margin so that we are able to comfortably meet all our
obligations, including debt service, while continuing with key
projects including the installation of the Direct Flotation
Reactors. This project requires minimal capital and has a fast
payback and high return. We have deferred the major discretionary
capital for the installation of Ball Mill # 3 until we see more
certainty and stability in the copper price. These initiatives
demonstrate our flexibility and ability to react quickly in
response to changing market conditions and metal prices."
Mr. Clausen added, "In periods of low metal prices such as
today, we will be disciplined and orderly in our development and
take a prudent approach to cash management. We will not
sacrifice the future of our mine by high-grading and deferring
stripping that builds a liability in the future. Our operation is
well positioned with mining phases that can be readily re-sequenced
without negatively impacting the intermediate and long term. While
the mine plan we have currently implemented is sustainable longer
term at these low copper prices, we believe this market uncertainty
is short term and fully anticipate the copper price to
recover."
Revised Mine Plan
The Company has modified the Copper Mountain mine plan for the
current low copper price environment. Copper Mountain is cutting
the mining rate by approximately 25% to 120,000 to 160,000 tonnes
per day for the remainder of 2020 from approximately 200,000 tonnes
per day. The Company is focusing on mining the lower cost areas in
the central and north phases of the main pit in order to maintain
positive margins. These areas are closer to the primary
crusher and waste dumps, which result in lower mining costs.
The Company will reschedule the mining of the higher grade ore
originally planned in 2020 for 2021, which should better match
higher copper prices and therefore support the funding of the mill
expansion project.
These initiatives allow the Company to maintain solid positive
margins at lower metal prices in 2020 and maximize cash flow in
2021 when prices are expected to recover.
Project Update
The mill expansion project at the Copper Mountain Mine is
planned to bring plant capacity to 45,000 tonnes per day from
40,000 tonnes per day. The project will be completed in two
stages: The first stage includes the cleaner circuit upgrade, which
involves the installation of Direct Flotation Reactors (DFRs). The
installation of the DFRs will increase the efficiency and the
capacity of the current cleaner circuit, which is expected to
increase copper concentrate grade from about 25% to 28%, resulting
in lower concentrate transportation, smelting and refining
costs. The installation of the DFRs is a low capital, high
return project, and the timing for commissioning remains unchanged
for June 2020. The remaining
capital required to complete the installation of the DFRs is
approximately US$2.3 million.
The second stage of the mill expansion project includes the
installation of the third ball mill. The Company has slowed down
this stage of the project to defer approximately US$22 million capital originally planned for
2020. The Company has maintained long lead item expenditures that
are critical to the project to allow for rapid restart. The
Company will manage project advancement dependent on market
conditions and has the flexibility to accelerate and decelerate the
project as necessary.
Updated Guidance
The Company's revised 2020 production and cost guidance is
provided below. The Company intends on providing updated 2021
and 2022 production guidance once markets stabilize and there is
more visibility into global conditions.
2020
|
Revised
Guidance
|
Former
Guidance
|
Production
|
|
|
CuEq
Production
|
86 to 94M
lbs(1,2)
|
100 to 113M
lbs(3)
|
Copper
Production
|
70 to 75M
lbs
|
86 to 96M
lbs
|
|
|
|
Unit
Costs(4)
|
|
|
C1 Cash Costs
(US$/lb)
|
$1.40 to
$1.55
|
$1.30 to
$1.45
|
All-in Sustaining
Costs (US$/lb)(5)
|
$1.55 to
$1.70
|
$1.40 to
$1.60
|
All-in Costs
(US$/lb)(6)
|
$2.20 to
$2.35
|
$1.95 to
$2.20
|
|
|
1.
|
Copper equivalent
assumes: US$2.60/lb of copper, US$1,600/oz of gold and US$17.00/oz
silver
|
2.
|
Gold production is
expected to be 24 to 28,000 ounces and silver production is
expected to be 260 to 300,000 ounces
|
3.
|
Former
guidance for copper equivalent assumed: US$3.00/lb of copper,
US$1,400/oz of gold and US$16.50/oz silver
|
4.
|
Unit Costs are net of
precious metal credits and assumes the same metal pricing as
footnote (1) for the calculation
|
5.
|
Sustaining capital
includes sustaining capital, lease payments and applicable
administration
|
6.
|
All-in costs include
sustaining capital, deferred stripping, low-grade stockpile
inventory expense and administration
|
About Copper Mountain Mining Corporation:
Copper Mountain's flagship asset is the 75% owned Copper
Mountain mine located in southern British
Columbia near the town of Princeton. The Copper Mountain mine produces
on average approximately 100 million pounds of copper equivalent
per year with a large resource that remains open laterally and at
depth. Copper Mountain also has the permitted, development-stage
Eva Copper Project in Queensland,
Australia and an extensive 4,000 km2 highly
prospective land package in the Mount Isa area. Copper Mountain
trades on the Toronto Stock Exchange under the symbol "CMMC" and
Australian Stock Exchange under the symbol "C6C".
Additional information is available on the Company's web page at
www.CuMtn.com.
On behalf of the Board of
COPPER MOUNTAIN MINING CORPORATION
"Gil Clausen"
Gil Clausen, P.Eng.
Chief Executive Officer
Note: This release contains forward-looking statements
that involve risks and uncertainties. These statements may
differ materially from actual future events or results. Guidance is
based on a number of assumptions and estimates as of December 31, 2019, including, among other things,
assumptions about metal prices and anticipated costs and
expenditures. Guidance involves estimates of known and unknown
risks, uncertainties and other factors which may cause the actual
results to be materially different. Readers are referred to the
documents, filed by the Company on SEDAR at www.sedar.com,
specifically the most recent reports which identify important risk
factors that could cause actual results to differ from those
contained in the forward-looking statements. The Company
undertakes no obligation to review or confirm analysts'
expectations or estimates or to release publicly any revisions to
any forward-looking statement.
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SOURCE Copper Mountain Mining Corporation