Copper Mountain trades heavily on Q3 results

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Copper Mountain Mining Corp. [CMMC-TSX] shares fell in heavy trading Wednesday after the company released disappointing third quarter 2022 financial results and said it is searching for a new CEO to replace Gil Clausen, who is planning to retire.

The shares were down 16.2% or 30 cents to $1.55 on volume of almost 6.0 million, making Copper Mountain the most actively-traded company on the TSX, Wednesday. The shares are currently trading in a 52-week range of $4.28 and $1.23.

Third quarter results were impacted by production challenges at the company’s 75%-owned Copper Mountain mine in southern British Columbia, which produced 16.5 million pounds of copper equivalent, including 13.2 million pounds of copper, 6,053 ounces of gold, and 64,331 ounces of silver during the quarter.

The company reported a third quarter net loss of $39.4 million or 15 cents per share and an adjusted net loss of $22.9 million or 11 cents per share.

It also posted third quarter revenue of $58.3 million from the sale of 12.3 million pounds of copper, 4,902 ounces of gold and 59,790 ounces of silver.

“Our third quarter clearly did not meet our expectations,” said Clausen. “We experienced a grade reduction as most of the ore processed in the third quarter came from the lower-grade North Pit as opposed to the planned Phase 4 of the main pit.

“Our higher-grade main pit Phase 4 ore release lagged due to spotty ore continuity in the upper benches of the pushback,’’ he said.

The Copper Mountain Mine 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.

The company has been drilling a satellite deposit known as New Ingerbelle in a bid to define sufficient reserves to add another 10 years of production to Copper Mountain’s life of mine plan.

On October 6, 2022, Copper Mountain said it had agreed to sell its other key asset —  the Eva Copper Project in the Mount Isa region of Queensland — to Harmony Gold Mining Co. for US$230 million. The deal calls for an upfront cash payment of US$170 million.

The Eva project is envisioned to be a conventional open pit with a conventional crush, grind, flotation circuit. Based on the current schedule, commissioning of Eva is expected to be in late 2024. The project is expected to produce 106 million pounds of copper equivalent (including 100 million pounds of copper and approximately 14,000 ounces of gold) on an annual basis.

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