Copper Mountain advances on Q1 results

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Copper Mountain Mining Corp. [CMMC-TSX], a company that recently agreed to be acquired by Hudbay Minerals Inc.  [HBM-TSX, NYSE], said Friday it is on track to meet its production targets after releasing its 2023 first quarter results.

In spite of setbacks that included a ransomware attack and reduced throughput due to limited fresh water, Copper Mountain recorded the highest production and lowest all-in cost quarter since 2021, which was a record year for the company. “As we finished the quarter on plan, we remain on track to achieve our 2023 copper production guidance of between 88 to 98 million pounds at our all-in cost guidance of between US$2.45 to US$2.95 per pound,’’ said Copper Mountain President and CEO Gil Clausen.

Copper Mountain shares advanced on the news, rising 0.98% or $0.025 to $2.56 on volume of 399,050. The shares are currently trading in a 52-week range of $3.11 and $1.23.

Copper Mountain is set to be acquired by Hudbay Minerals in a transaction worth $2.67 a share or US$439 million.

The deal is expected to create a premier Americas-focused copper mining company that is well positioned to deliver sustainable cash flows from an operating portfolio of three long life mines, as well as organic growth from a pipeline of copper expansion and development projects.

These assets are expected to deliver US$30 million annually in operating efficiencies and corporate synergies.

The combined company represents the third largest copper producer in Canada (150,000 tonnes annually), based on 2023 estimated copper production.

Hudbay’s Constancia operations in Cusco, Peru, produce copper, with gold, silver and molybdenum by-products. Its Snow Lake operations in Manitoba produce gold with copper, zinc and silver by products. Its organic pipeline includes the Copper World project in Arizona and Mason project in Nevada.

Copper Mountain’s key asset is the 75%-owned Copper Mountain Mine in British Columbia, which currently produces approximately 100 million pounds of copper equivalent per year, with average annual production expected to increase to approximately 140 million pounds of copper equivalent at a cash cost of US$1.19 per- pound over the first 10 years of its 21-year mine life.

Copper Mountain reported first quarter production of 18.9 million pounds of copper equivalent, including 15.9 million pounds of copper, 5,616 ounces of gold and 75,277 ounces of silver. Revenue in the quarter was $100.5 million from the sale of 16.1 million pounds of copper, 5,579 ounces of gold and 78,122 ounces of silver.

The company posted a first quarter net loss of $13 million or $0.06 per share and adjusted net income of $0.9 million, or $0.00 per share. The net loss was primarily due to one time items, including finance expenses associated with a bond buyback and deferred tax expenses on an increase in decommissioning obligation, totalling $13 million.

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