YEAR-TO-DATE LOSS FROM OPERATIONS REDUCED BY APPROXIMATELY 29%
YEAR-TO-DATE COPPER PRODUCTION INCREASED BY APPROXIMATELY 97%
MONTREAL, Aug. 6 /PRNewswire-FirstCall/ -- Campbell Resources Inc.
(the "Company") ("Campbell") (TSX: CCH, OTC Bulletin Board: CBLRF)
today announced financial results for the second quarter and first
six months of fiscal 2008 ended June 30, 2008. During and
subsequent to the period, the Company realized a number of
achievements: - Increased year-to-date ore production by
approximately 78% - Increased year-to-date copper production by
approximately 97% - Reduced year-to-date loss from operations by
approximately 29% - Reached 105-metre level at Corner Bay -
Identified vertical continuity of high-grade mineralized zone at
Copper Rand - Completed $3.54 million financing - Increased credit
facility with Nuinsco Resources Limited to a maximum aggregate
amount of $5.0 million "The results for the second quarter show
ongoing improvement," said Andre Fortier, Campbell's President and
Chief Executive Officer. "Production continues to increase
year-over-year and we are making steady progress in reducing our
losses from operations. At Corner Bay, the 105-metre level was
reached during the second quarter and some 10,000 tons of
mineralized material were extracted. However, progress has been
slower than expected because of operational and financial
challenges. Copper production levels were down at Copper Rand
during the second quarter, largely due to lower copper grade in the
ore and to breakdowns to transportation equipment. From a financial
perspective, working capital deficiencies have also made it more
difficult for the Company to operate as effectively as possible.
The reality is that these challenges will persist until positive
cash flow is generated, which should occur in the fourth quarter of
this year." FINANCIAL RESULTS As of January 1, 2007, results from
the Copper Rand mine have been included in the consolidated
operating results. Prior to this, Copper Rand mine was considered
to be in the preproduction development stage and as such all costs,
net of revenue from development ore, were deferred as mine
development costs. As of September 11, 2007, operations at Joe Mann
mine ceased and the mine was put on care and maintenance. The Joe
Mann mine was Campbell's principal gold-mining operation. In
October 2007, the Company commenced production at Merrill Pit. In
the second quarter of 2008, Campbell operations produced 71,673
tons of ore yielding 1,434 ounces of gold and 1,780,718 pounds of
copper. In the second quarter of 2007, 52,739 tons of ore were
milled, yielding 4,921 ounces of gold and 1,044,197 pounds of
copper. For the first six months of fiscal 2008, Campbell
operations produced 163,193 tons of ore yielding 4,024 ounces of
gold and 3,947,785 pounds of copper. In the first six months of
fiscal 2007, 91,526 tons of ore were milled, yielding 8,823 ounces
of gold and 2,005,838 pounds of copper. A total of 2,439 ounces of
gold and 2,328,460 pounds of copper were sold in the second quarter
of 2008 compared to 1,719 ounces of gold and Nil pounds of copper
for the same period of 2007. The average market price for gold in
the second quarter of 2008 was $905 (US$896) per ounce compared to
$732 (US$667) per ounce for the same period in 2007. The
average market price for copper in the second quarter of 2008 was
$3.87 (US $3.84). In the second quarter of 2008, the average sale
price for gold was $903 per ounce compared to $723 in the same
period of 2007. For copper, the average sale price was $3.70 per
pound in the second quarter of 2008. Net metal sales for the second
quarter of 2008 reached $9.0 million compared to $1.4 million for
the same period last year. For the first six months of fiscal 2008,
net metal sales totalled $9.7 million, compared to
$3.1 million in the corresponding period in 2007. As per the
contract for the sale of concentrate between Campbell and Ocean
Partners UK Limited ("OP"), revenues for concentrate inventory
shipped cannot be recognized until the transfer of ownership is
completed when the concentrate is delivered to the discharge port.
As at June 30, 2008, $7.1 million of inventory valued at
lowest of cost and net realizable value was stored at Port of
Quebec. On this amount of inventory, provisional payments in the
amount of $6.6 million were received from OP. The contract was
amended in March 2008 to allow the Company to borrow money on
concentrate to be shipped. As at June 30, 2008, the credit facility
was not used. The loss from operations totalled $4.1 million in the
second quarter of 2008, compared to $5.0 million loss in the prior
period. For the first six months of 2008, the loss from operations
totalled $7.5 million, compared to a $10.6 million loss from
operations in the corresponding period in 2007, a reduction of
approximately 29%. For the second quarter of 2008, Campbell
recorded a net loss of $4.1 million or $0.01 per share,
compared to a net loss of $4.3 million or $0.01 per for the same
period in 2007. For the first six months, Campbell recorded a net
loss of $6.2 million or $0.01 per share, compared to a net loss of
$6.1 million or $0.02 per share for the same period in 2007.
OPERATING PERFORMANCE Copper Rand Mine The Copper Rand mine started
commercial production on January 1, 2007. Production at Copper Rand
in the second quarter of 2008 was 37,303 tons grading 0.040 Au oz/t
(yielding 1,199 ounces of gold), 1.49% Cu (yielding 1,025,137
pounds of copper) and 0.136 Ag oz/t (yielding 3,192 ounces of
silver) with a recovery rate of 79.83% for gold, 91.97% for copper
and 62.94% for silver. In the second quarter of 2007, production
totalled 24,656 tons grading 0.048 Au oz/t (yielding 969 ounces of
gold), 1.92% Cu (yielding 922,132 pounds of copper) and 0.15 Ag
oz/t (yielding 2,209 ounces of silver) with a recovery rate of
82.17% for gold, 97.54% for copper and 59.61% for silver. For the
first six months of fiscal 2008, Copper Rand produced 84,028 tons
of ore yielding 2,830,133 pounds of copper, 3,488 ounces of gold
and 9,039 ounces of silver, compared 46,699 tons of ore
yielding 1,817,338 pounds of copper, 1,852 ounces of gold and 4,559
ounces of silver in the first six months of fiscal 2007. There are
currently three production areas at Copper Rand, identified as
"44-4," "4850 depth extension" and "Lower H-2." Campbell has also
identified the vertical continuity of higher-grade mineralized ore
at the "Upper H-2" area which should be available by the end of
2008. Two additional areas are currently under evaluation ("52-5"
at Shaft #6 and "level 1950" at Shaft #4). Those two additional
sectors could provide ore feed to the Copper Rand mill in the
second half of 2009. Campbell expects to be able to maintain
current production levels at Copper Rand in the coming months.
Merrill Pit The first tons of ore from Merrill pit were milled in
October 2007. In the second quarter of 2008, a total of 24,375 tons
of ore were milled, grading 0.45% copper (198,814 pounds), 0.008
oz/t gold (144 ounces) and 0.087 oz/t silver (1,266 oz). The
recovery rate was 90.26% for copper, 73.53% for gold and 59.92% for
silver. In the first six months of 2008, a total of 68,098 tons
were milled, yielding 517,339 pounds of copper, 420 ounces of gold
and 3,790 ounces of silver. A major breakdown to the crusher
occurred in early March and operations at the pit only resumed in
late April. Operations at the Merrill pit were suspended in June as
the term of the mining contractor's agreement had expired. Campbell
is currently in discussions with a new contractor and hopes to
resume operations at Merrill in the third quarter. Corner Bay
Development In the second quarter of 2008, 9,995 tons of
mineralized material were extracted from Corner Bay and
subsequently milled at the Copper Rand mill. The material graded
3.07% copper (556,768 pounds), 0.012 oz/t gold (91 oz) and 0.240
oz/t silver (1,640 oz). The recovery rate was 90.83% for copper,
79.05% for gold and 68.38% for silver. During the second quarter of
2008, $4.3 million net of revenues was invested in the development
of the project. Development to the 105 metre level was achieved. At
a 3% Cu cut-off, Corner Bay has measured and indicated resources of
446,000 tonnes (Ref : Technical Report prepared by Geostat in July
2006, available on SEDAR at http://www.sedar.com/). Joe Mann Mine
Production at the Joe Mann mine ceased on September 11. In the
second quarter of 2007, Joe Mann produced 28,083 tons of ore. The
yield was 3,952 ounces of gold, 122,065 pounds of copper and
2,670 ounces of silver. In the first six months of 2007, Joe Mann
produced 6,971 ounces of gold, 188,500 pounds of copper and
4,234 ounces of silver. On August 1, 2008, Campbell ceased pumping
underground water which will result in the flooding of the mine
over time. OUTLOOK "The Company continues development for
extraction of a bulk sample at Corner Bay. Further, we are working
to improve the efficiency of the Copper Rand mine and to achieve
positive cash flow by year end. Revenues for fiscal 2008 should be
substantially higher than those realized in 2007 and we expect to
be able to meet the commitments related to the Plan of Arrangement
for Meston Resources Inc. in the coming months," Mr. Fortier said.
CONFERENCE CALL Campbell Resources will hold a conference call on
Wednesday, August 6, 2008 at 4 P.M (Eastern Time) to discuss this
announcement. Interested parties can join the call by dialling
1-800-587-1892. About Campbell Resources Campbell Resources Inc.
concentrates on the development and exploitation of copper and gold
mining properties in the Chibougamau region of Quebec. The
geographical grouping of its operations allows Campbell to realize
economies of scale and to focus development within access to
existing infrastructures. Campbell's main operations include the
Copper Rand and Merrill mines, the Corner Bay property and the
Copper Rand mill. Campbell's headquarters are located in Montreal,
Quebec. Certain information contained in this release may contain
"Forward-Looking Statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 and is subject to certain
risks, assumptions and uncertainties, including those "Risk
Factors" set forth in the Campbell's current Annual Report on Form
20-F for the year ended December 31, 2007, which may cause actual
future results to differ materially from those expressed or implied
in any forward-looking statement. Such factors include, but are not
limited to: differences between estimated and actual mineral
reserves and resources; changes to exploration, development and
mining plans due to prudent reaction of management to ongoing
exploration results, engineering and financial concerns; and
fluctuations in the gold and copper prices which affect the
profitability and mineral reserves and resources of Campbell. The
key assumptions underlying the forward-looking statements contained
in this release are that the gold and copper prices remain equal to
or above the prices disclosed herein. Readers are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date hereof. Forward-looking statements are
expressly qualified in their entirety by this cautionary statement.
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Expressed in thousands of
Canadian dollars)
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June 30 December 31 2008 2007
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$ $ Assets Current assets Cash 2 474 Restricted cash 1,113 1,113
Short-term investments 31 33 Receivables 1,683 3,066 Settlements
receivable 1,232 739 Concentrate and metal inventories 7,428 1,218
Supply inventories 2,569 2,882 Prepaids 706 408
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14,764 9,933 Amount receivable from Copper Rand/Portage Restoration
Fiduciary Trust 3,116 3,028 Restricted cash 1,158 1,158 Future
income tax assets 1,338 1,317 Property, plant and equipment 52,560
45,017 Accrued benefit asset 5,054 4,897
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77,990 65,350
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Liabilities Current liabilities Short-term loan 4,343 1,996
Accounts payable 19,225 15,411 Accrued liabilities 9,329 5,954
Prepayments for concentrate 6,628 965 Current portion of long-term
debt 18,453 18,337
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57,978 42,663 Asset retirement obligations 7,610 7,396 Long-term
debt 3,187 2,688 Future income and mining tax liabilities 6,661
6,472
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75,436 59,219
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Shareholders' equity Capital stock 98,812 96,639 Warrants, stock
options and conversion rights 7,541 9,432 Contributed surplus 6,421
4,109 Deficit (110,209) (104,040) Accumulated other comprehensive
loss (11) (9)
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(110,220) (104,049)
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2,554 6,131
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77,990 65,350
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CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Expressed in
thousands of Canadian dollars except per share amounts)
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Three months ended Six months ended June 30 June 30 2008 2007 2008
2007
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$ $ Gross metal sales 10,755 1,482 11,481 3,196 Treatment charges
1,754 52 1,758 70
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Net metal sales 9,001 1,430 9,723 3,126
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Expenses Cost of sales 10,648 4,772 11,340 9,963 Depreciation and
amortization 911 577 2,036 1,389 General administration 825 628
1,493 1,362 Warrants issued as fee for short-term financial
arrangement - - 427 - Reorganisation and CCAA costs 34 102 34 207
Care and maintenance 318 34 902 76
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12,736 6,113 16,232 12,997
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Loss before the following items (3,735) (4,683) (6,509) (9,871)
Interest expense on short-term loan (78) (86) (202) (161) Interest
and financial expenses on long-term debt (317) (288) (792) (568)
Interest income 5 20 19 28
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Loss from operations (4,125) (5,037) (7,484) (10,572) Other income
(expense) Other (expense) income 1 696 (307) 4,486
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Loss before taxes (4,124) (4,341) (7,791) (6,086) Income and mining
taxes - - 1,622 -
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Net loss (4,124) (4,341) (6,169) (6,086)
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Weighted average number of common shares ('000) 446,445 396,829
439,525 372,925
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Loss per share undiluted and diluted (0.01) (0.01) (0.01) (0.02)
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CONSOLIDATED STATEMENTS OF CONTRIBUTED SURPLUS AND DEFICIT
(UNAUDITED) (Expressed in thousands of Canadian dollars)
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Three months ended Six months ended June 30 June 30 2008 2007 2008
2007
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$ $ Contributed surplus Balance, beginning of period 4,191 3,991
4,109 1,996 Stock options expired and cancelled 44 - 69 - Warrants
expired 2,186 - 2,243 1,995
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Balance, end of period 6,421 3,991 6,421 3,991
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Deficit Balance, beginning of period 106,085 86,797 104,040 84,825
Net loss 4,124 4,341 6,169 6,086
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Balance, end of period 110,209 91,138 110,209 91,138
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Expressed in
thousands of Canadian dollars)
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Three months ended Three months ended June 30 June 30 2008 2007
2008 2007
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$ $ Net Loss 4,124 4,341 6,169 6,086 Other comprehensive income,
net of income tax: Unrealized losses (gain) on available-for-sale
investments arising during the period (1) 50 2 79
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Comprehensive loss 4,123 4,391 6,171 6,165
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DATASOURCE: CAMPBELL RESOURCES INC. CONTACT: Campbell Resources
Inc.: Andre Fortier, President and Chief Executive Officer, (514)
875-9037, Fax: (514) 875-9764, ; Alain Blais, Vice-president and
General Manager of Operations, (418) 748-7691, Fax: (418) 748-7696,
; Renmark Financial Communications Inc.: Henri Perron: ; Eric
St-Pierre: , (514) 939-3989, Fax: (514) 939-3717,
http://www.renmarkfinancial.com/
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