Campbell Resources Announces Third Quarter Financial Results
Thursday November 8, 2:44 pm ET
IMPROVED OPERATING RESULTS, MERRILL PIT START-UP HIGHLIGHT SUCCESSFUL QUARTER
MONTREAL, Nov. 8 /CNW Telbec/ - Campbell Resources Inc. (the "Company") ("Campbell") (TSX: CCH, OTC Bulletin Board: CBLRF) today announced financial results for the third quarter and nine month-period ended September 30, 2007. Achievements during and subsequent to the period included:
- Closing a $4 million financing to fund completion of development of the
high-grade Corner Bay copper project near Chibougamau, Québec;
- Receiving the final permits from the Quebec Ministry of Environment to
allow mining of the Merrill Pit in line with the Company's strategy of
developing satellite deposits to provide additional feed for the Copper
Rand Mill;
- Beginning production at the Merrill Pit;
- Signing, through wholly-owned subsidiary Meston Resources Inc.,
("Meston"), a memorandum of understanding for the sale of the Joe Mann
Mine property;
- Making significant progress on Corner Bay development, completing
540 meters of the 700 meter decline by quarter end;
- Significantly increasing metal production at the Copper Rand Mine over
the second quarter of 2007 as follows: gold by 97%, copper by 66% and
silver by 75%;
- Increasing Company-wide metal production over the second quarter of
2007 as follows: gold by 2%, copper by 56% and silver by 19%;
- Improving development performance from 19 feet per day in the first
quarter to 31 feet per day in the third quarter;
- Commissioning of the paste backfill plant;
- Completing the back filling of mined-out areas.
"The third quarter of 2007 was a significant quarter for Campbell during
which we achieved a number of milestones that put us on track for continued
improving results going forward," said André Fortier, Campbell's President and
Chief Executive Officer. "We are beginning to see increased production as a
result of the initiatives we have implemented at the Copper Rand mine. The
permitting and successful start-up at the Merrill Pit is an important part of
our strategy to provide additional profitable feed for the Copper Rand mill.
This capitalizes on available capacity and lowers unit costs. Further to this
strategy, development is proceeding well at the Corner Bay deposit and we
expect to begin mining and processing the higher grade ore from Corner Bay in
the fourth quarter."
Financial Results
For the third quarter of 2007, Campbell recorded a net loss of
$3.9 million, or $0.01 per share, on net metal sales of $12.5 million,
compared with a net loss of $4.9 million, or $0.04 per share, on net metal
sales of $2.1 million for the same period in 2006. The weighted average number
of common shares outstanding during the third quarter of 2007 was
409.2 million, compared to 110.3 million for the same period in 2006. Cash
used by operating activities was $0.03 million in the third quarter of 2007,
compared to cash provided by operating activities of $1.2 million for the same
period of 2006.
The third quarter results include revenues from the first shipment of
August 3rd, representing a total 6,334 dry tons of concentrate. A total of
2,626 dry tons of concentrate remain in inventory at the Port of Québec. This
$4.4 million of inventory, valued at lowest of cost and net realizable value,
is not reflected in the revenues. Prepayments for this inventory in the amount
of $3.9 million were received from Ocean Partners.
For the first nine months of 2007, the net loss was $10.0 million, or
$0.03 per share, on net metal sales of $15.2 million, compared to a net loss
of $9.0 million, or $0.08 per share, on net metal sales of $7.9 million for
the corresponding period in 2006. For the first nine months of 2007, the
weighted average number of common shares was 385.2 million, compared to
110.3 million for the same period of last year. Cash used in operating
activities was $2.7 million for the first nine months of 2007, compared to
$0.4 million for the same period in 2006.
Operating Costs
Operating costs for the third quarter of 2007 were $14.7 million, compared
to $3.6 million in the same period of 2006. For the first nine months of 2007,
operating costs were $24.3 million, compared to $9.8 million for the
corresponding period in 2006. The increase in operating costs in the third
quarter of 2007 and the first nine months of 2007 is primarily due to the
inclusion of production costs from the Copper Rand Mine which had been
capitalized for the same period of 2006 as Copper Rand had not yet achieved
commercial production. Costs in 2007 reflect the cost of development headings
at Copper Rand in order to diversify the ore sources at Copper Rand, and a
more comprehensive maintenance program for mobile and fixed equipment that has
been implemented to maximize productivity.
Production Results
Ore production at the Copper Rand mine during the third quarter 2007 was
47,758 tons, producing 1,909 ounces of gold, 1,533,065 pounds of copper and
3,868 ounces of silver. This represents a significant improvement both
sequentially over the second quarter of 2007 (a 94% increase in tons, a 97%
increase in gold production, a 66% increase in copper production, and a 75%
increase in silver production) and compared with the third quarter of 2006 (a
165% increase in tons, a 185% increase in gold production, a 161% increase in
copper production, and a 126% increase in silver production).
For the first nine months of 2007, Copper Rand produced 3,350,403 pounds
of copper, 3,761 ounces of gold and 8,428 ounces of silver, representing a 40%
increase, 31% increase and a 23% increase, respectively, over the first nine
months of 2006.
On a consolidated basis, tonnage mined at the Copper Rand and Joe Mann
mines increased by 33% during the current quarter, compared with the second
quarter of 2007. As a result over the same period, aggregate gold production
increased by 2% to 5,030 ounces, copper production increased by 56% to
1,625,926 pounds and silver production increased by 19% to 5,830 ounces.
During the quarter, production from the Joe Mann mine ceased, with the mine
being placed on care and maintenance. As well, the Company signed, through its
wholly-owned subsidiary Meston Resources Inc., a memorandum of understanding
with Gold Bullion Development Corp. for the sale of the Joe Mann Mine
property. Completion of this transaction is pending. Production revenue lost
by the closure of Joe Mann is expected to be more that offset by revenues from
the Merrill Pit and Corner Bay.
Outlook
The Company is pleased to see the positive impact that initiatives
implemented during the course of the year have had on tonnage and metal
production at the Copper Rand mine. During the third quarter, the Company
began to execute its strategy of mining satellite deposits in the Chibougamau
mining camp to supplement production with the permitting and start of
development of the Merrill Pit. With the processing of high-grade ore from the
Corner Bay deposit scheduled to begin in the fourth quarter, the Company
expects further improvements in both production and costs going forward. The
initial 42,000 ton bulk sample carries an average grade of 3.7% copper and a
mining rate of 450 tons per day is expected. In addition, management continues
to evaluate opportunities to acquire additional ore sources in and around
Chibougamau.
Copper Rand
The Company continues to make significant progress at the Copper Rand
mine, and the impact of the introduction of Alimak mining and other
initiatives to increase productivity can be seen in the improved tonnage
milled and increased metal production during the third quarter. The Copper
Rand Mine has historically operated with one stope. The objective is to have a
minimum of three stopes by the first quarter of 2008. Tons of ore milled have
increased consistently during 2007, from 22,043 tons in the first quarter, to
24,656 tons in the second quarter, to 47,758 tons in the current quarter.
Underground development has also consistently improved during the year, rising
from an average of 19 feet per day in the first quarter to 23 feet per day in
the second quarter to 31 feet per day in the current quarter. Preparation of
additional Alimak stopes is ongoing in an effort to increase the number of
working faces in the mine. The paste fill system is now operating at full
capacity, which will continue to help stabilize ground conditions going
forward.
Corner Bay
Development for extraction of a bulk sample at the Corner Bay deposit is
progressing quickly with expenditures to date under budget. CMAC-Thyssen
employees have excavated 540 meters of the ramp and adjacent openings to date.
The first tonnage from Corner Bay should be milled at the Copper Rand Mill in
November. While extracting the 42,000-ton bulk sample, the Company will apply
for permitting to continue mining.
Merrill Pit
Following the receipt of environmental permits in September, the Company
moved quickly to initiate production from the Merrill Pit. To date,
75,000 tons of ore have been blasted and 18,000 tons milled grading
0.43% copper and 0.014 ounces per ton gold. With the successful start up of
this operation the Company intends to produce 30,000 tons of ore per month
from Merrill Island, a 50% increase over the initial tonnage planned. Grades
above 0.30% Cu are profitable at this operation. In addition to the
concentrate being produced, the Merrill tonnage is leaving positive impact on
backfilling at the Copper Rand Mine and on milling costs for the Copper Rand
Mill.
Joe Mann
Joe Mann has ceased operations in September. The mine is currently held on
a care & maintenance basis prior to the conclusion of a final agreement for
the sale of the mine. Production revenue lost by the closure of Joe Mann is
expected to be more that offset by revenues fro the Merrill Pit and Corner
Bay.
About Campbell Resources Inc.
Campbell Resources Limited is a mining company focusing mainly in the
Chibougamau region of Québec, holding interests in gold and gold-copper
exploration and mining properties. The Company's shares trade on the Toronto
Stock Exchange under the ticker symbol CCH.
Certain information contained in this release contains "Forward-Looking
Statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 and is subject to certain risks 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, 2006. 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 price which affect the
profitability and mineral reserves and resources of Campbell. Readers are
cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. Campbell undertakes no obligation to
release publicly any revisions to these forward-looking statements to reflect
events or circumstances after the date hereof or to reflect unanticipated
events or developments.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Expressed in thousands of Canadian dollars)
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September 30 December 31
2007 2006
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$ $
Assets
Current assets
Cash and cash equivalents 216 1,964
Restricted cash 1,091 2,784
Short-term investments 727 792
Receivables 2,933 1,591
Settlements receivable 7 5,413
Restricted deposits and exchange agreement - 50,000
Production inventories 4,923 401
Supply inventories 3,798 3,844
Prepaids 757 1,194
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14,452 67,983
Amount receivable from Copper Rand/Portage
Restoration Fiduciary Trust 2,945 2,826
Restricted cash 1,158 1,158
Future income tax assets 1,462 1,484
Property, plant and equipment 41,367 37,135
Accrued benefit asset 4,663 4,427
Deferred charges and other assets 179 129
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66,226 115,142
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Liabilities
Current liabilities
Short term loan - 3,891
Accounts payable 12,471 13,973
Accrued liabilities 5,762 5,475
Prepayments for concentrate inventory shipped 3,893 -
Current portion of long-term debt 16,150 65,287
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38,276 88,626
Asset retirement obligations 7,008 7,804
Long-term debt 2,349 70
Future income tax liabilities 6,617 6,636
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54,250 103,136
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Shareholders' equity
Capital stock 93,618 85,572
Warrants, stock options and conversion rights 9,555 9,263
Contributed surplus 3,996 1,996
Deficit (95,078) (84,825)
Accumulated other comprehensive income (115) -
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11,976 12,006
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66,226 115,142
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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 Nine months ended
September 30 September 30
-----------------------------------------
2007 2006 2007 2006
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$ $
Gross metal sales 14,201 2,267 17,397 8,751
Treatment charges and
transportation 1,751 171 2,155 805
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Net metal sales 12,450 2,096 15,242 7,946
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Expenses
Operating 14,694 3,584 24,323 9,770
Depreciation and amortization 814 574 2,203 2,115
General administration 539 676 1,901 1,992
Stock-based compensation 336 496 336 496
Reorganisation and CCAA costs 74 693 281 1,282
Care and maintenance 15 74 91 195
Exploration - 7 - (151)
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16,472 6,104 29,135 15,699
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Loss before the following items 4,022 4,008 13,893 7,753
Interest expense on short-term loan (24) (149) (185) (373)
Interest expense on long-term debt (712) (243) (1,280) (679)
Interest income 9 138 37 154
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Loss from operations 4,749 4,262 15,321 8,651
Other income (expense)
Other income 809 (631) 5,295 (242)
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Loss before taxes 3,940 4,893 10,026 8,893
Income and mining tax - (9) - (62)
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Net loss 3,940 4,902 10,026 8,955
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Weighted average number of
common shares ('000) 409,205 110,349 385,151 110,349
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Loss per share undiluted and
diluted 0.01 0.04 0.03 0.08
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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 Nine months ended
September 30 September 30
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2007 2006 2007 2006
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$ $
Contributed surplus
Balance, beginning of period 3,991 1,404 1,996 1,404
Conversion rights expired - 459 - 459
Warrants expired - - 1,995 -
Stock options expired 5 47 5 47
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Balance, end of period 3,996 1,910 3,996 1,910
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Deficit
Balance, beginning of period,
as previously reported 91,138 47,683 84,825 43,630
Financial Instrument-recognition
and measurement - - 227 -
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91,138 47,683 85,052 43,630
Net loss (income) 3,940 4,902 10,026 8,955
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Balance, end of period 95,078 52,585 95,078 52,585
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Expressed in thousands of Canadian dollars)
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Three months ended Nine months ended
September 30 September 30
-----------------------------------------
2007 2006 2007 2006
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$ $
Net Loss 3,940 4,902 10,026 8,955
Other comprehensive income,
net of income tax:
Net change in unrealized loss
on short term investments 36 - 115 -
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Comprehensive income 3,976 4,902 10,141 8,955
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CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
(Expressed in thousand of Canadian dollars)
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Three months ended Nine months ended
September 30 September 30
-----------------------------------------
2007 2006 2007 2006
-------------------------------------------------------------------------
$ $
Operating activities
Net loss (3,940) (4,902) (10,026) (8,955)
Adjustments to reconcile net
loss to net cash provided by
(used in) operating activities
Depreciation and amortization 814 574 2,203 2,115
Loss (gain) on sale of
short-term investment 153 - 258 (262)
Gain on sale of property,
plant and equipment (85) - (4,005) (1)
Devaluation of short-term
investments - 596 - 606
Excess of pension plan expenses
over amount paid 71 5 144 15
Amortization of deferred charges
and other assets - 241 129 364
Deferred interest accrued on
long term debt 304 13 871 39
Accretion of long-term debt 230 76 230 191
Stock-based compensation 336 496 336 496
Share issued in payment of
services 88 87 244 87
Asset retirement obligation
accretion expense 58 71 184 212
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(1,971) (2,743) (9,432) (5,093)
Change in non-cash working capital 1,937 3,941 6,749 4,652
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Cash used in operating activities (34) 1,198 (2,683) (441)
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Financing activities
Increase (decrease) in
short-term loan (2,000) (1,696) (3,891) (3,597)
Issuance of capital stock 500 7,805 7,605 7,805
Issuance of share purchase
warrants - 1,250 - 1,250
Future mining taxes 3 1,745 3 1,745
Deferred charges 80 (236) (179) (392)
Increase (decrease) in
long-term debt 4,297 (3,931) 4,287 (3,937)
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Cash provided by (used in)
financing activities 2,880 4,937 7,825 2,874
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Investing activities
Restricted cash - (2,019) (3,053) (2,244)
Increase in property, plant
and equipment (4,744) (2,656) (7,999) (1,065)
Acquisition of short-term
investments - - (20) (12)
Proceeds on sale of short-term
investments 647 - 1,312 362
Proceeds on sale of property,
plant and equipment 238 (1,000) 2,870 515
Amount paid in excess of the
pension plan expenses
capitalized to mining properties - (221) - (665)
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Cash (used in) provided by
investing activities (3,859) (5,896) (6,890) (3,109)
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Increase (decrease) in cash and
cash equivalents (1,013) 239 (1,748) (676)
Cash and cash equivalents,
beginning of period 1,229 857 1,964 1,772
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Cash and cash equivalents,
end of period 216 1,096 216 1,096
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For further information
Campbell Resources Inc.: André Fortier, President and Chief Executive Officer, (514) 875-9037, Fax: (514) 875-9764, afortier@campbellresources.com
Alain Blais, Vice-president and General Manager of Operations, (418) 748-7691, Fax: (418) 748-7696, ablais@campbellresources.com
Renmark Financial Communications Inc.: Henri Perron: hperron@renmarkfinancial.com
Julien Ouimet: jouimet@renmarkfinancial.com, (514) 939-3989, Fax: (514) 939-3717, www.renmarkfinancial.com |
