FNX Mining Company Inc. (TSX:FNX) ("FNX" or "the Company") reports unaudited
operating and financial results for the fourth quarter and the full year 2009.
The key operating and financial results for 2009 and comparable numbers for 2008
are shown in Table 1 and the unaudited financial statements are attached.
The Company recorded consolidated net earnings for the fourth quarter of $32.1
million ($0.31 per share) and a 2009 full year net loss of $40.1 million ($0.44
per share). Adjusting the 2009 full year results for previously announced 2009
non-cash write downs produces an adjusted net income of $49.1 for the year
($0.54 per share). The consolidated adjusted EBITDA for the fourth quarter and
2009 full year was $40.0 million and $69.2 million respectively.
Consolidated revenues in the fourth quarter were $108.6 million and were $238.2
million for the 2009 full year. Production from the Company's 100%-owned Sudbury
Mining Operations generated revenues of $94.9 million in the fourth quarter and
$185.2 million for the 2009 full year. Consolidated cash flow from operating
activities before changes in non-cash working capital for the fourth quarter and
2009 full year was 29.7 million ($0.29 per share) and $41.5 million ($0.46 per
share) respectively and, after changes in non-cash working capital, was ($1.1
million) and $22.5 million respectively. The lower than normal cash flows were a
result of shutdowns at the Company's third party processing facilities, which
resulted in delaying deliveries of third quarter ore to the fourth quarter and
the subsequent delay of cash receipts for ore shipped in the second half of 2009
until the first half of 2010. This resulted in an accounts receivable of $85.7
million compared to $59.3 million in 2008 for the same period.
Terry MacGibbon, Chairman and CEO of FNX, stated that, "The Company started 2009
in a survival mode but through the hard work and dedication of its employees and
improved commodity prices turned it into a very successful and profitable year.
During 2009, the Company strengthened its balance sheet, met or exceeded
guidance and advanced development of its high grade Levack Footwall Deposit
("LFD") toward scheduled commencement of production in mid-2010. The Company
also changed its strategy from survival to growth with a mid-year
re-vitalization and significant increase in its exploration efforts, which
resulted in a promising discovery at the Victoria Property."
Mr. MacGibbon continued, "FNX's 2009 operating plan drastically reduced capital
expenditures, conserved cash and focused on copper-precious metal production. In
addition, disruptions at the Company's custom processor's Sudbury operations
created challenges to the 2009 operating plan. In spite of these challenges, FNX
met or exceeded its 2009 metal production targets while simultaneously improving
our safety and environmental performance. Going forward we expect the Company to
significantly increase its payable metal production levels with the addition of
high margin production from the high grade Cu-Ni-precious metal rich LFD."
The cost to produce a pound of copper, net of by-product credits, for the 2009
full year was US$1.01, compared to US$1.15 for 2008. The average minesite cash
revenue per ton of ore shipped for the fourth quarter and 2009 full year were
$284 and $298 respectively, while the average minesite cash operating costs per
ton of ore shipped were $146 and $160 respectively, yielding an average minesite
cash operating margin per ton shipped of $138 and $138 respectively.
The cash balance increased during 2009, primarily as a result of $144.9 million
received from a bought-deal financing that closed in September 2009. Cash and
cash equivalents and working capital as at December 31, 2009 were $238.6 million
and $262.3 million respectively, compared to $129.6 million and $130.1 million
respectively as at December 31, 2008. Total assets were $974.9 million as at
December 31, 2009, compared to $853.9 million at the end of 2008. The Company
continues to have zero debt.
The Company's 2010 operating forecast guidance was provided in a December 23,
2009 news release.
----------------------------------------------------------------------------
Table 1 - (Unaudited) Financial and Q4 2009 Q4 2008 YTD 2009 YTD 2008
Operating Highlights
----------------------------------------------------------------------------
Consolidated
--------------------------------------
Revenue 108,589 48,723 238,193 378,062
Net Earnings (Loss) (C$000) 32,124 (397,402) (40,075) (388,540)
Basic and Diluted Earnings (Loss) per
Share (C$) 0.31 (4.68) (0.44) (4.59)
Cash and Cash Equivalents (C$000) 238,571 129,561 238,571 129,561
Cash Flow from Operating Activities
(C$000) (1,136) 7,966 22,507 77,166
Cash Flow per Share (C$) (0.01) 0.09 0.25 0.91
Adjusted EBITDA (C$000) 39,986 (28,223) 69,170 53,548
Mining Operations
--------------------------------------
Total Revenue (C$000) 94,935 27,265 185,217 244,958
Cash Operating Costs (C$000) 52,802 55,983 106,486 200,570
Cash Operating Margin (C$000) 42,133 (28,718) 78,731 44,388
Depreciation and Amortization (C$000) 4,970 12,496 10,319 47,472
Operating Margin (C$000) 37,163 (41,214) 68,412 (3,084)
Net Earnings (Loss) (C$000) 33,251 (391,364) (36,434) (370,430)
Cash Flow From Operating Activities
(C$000) (749) 278 21,928 68,699
Total Ore Sold (tons) 359,896 271,336 666,265 1,255,987
Total Ore in Inventory (tons) 10,858 18,065 10,858 18,065
Nickel Ore Sold (tons) 4,967 103,629 38,996 682,681
Grade of Nickel Ore Sold (%Ni) 3.1 1.5 2.2 1.2
Payable Metal Sold - Nickel (000 lbs) 1,671 3,011 4,430 13,140
Copper Ore Sold (tons) 354,929 167,707 627,269 573,306
Grade of Copper Ore Sold (%Cu) 2.7 5.3 3.2 3.7
Payable Metal Sold - Copper (000 lbs) 16,500 11,501 34,494 35,214
Payable Metal Sold - Total Precious
Metals (oz) 34,150 16,801 59,094 52,034
Minesite Revenue per Ton Sold (C$) 284 100 298 195
Cash Operating Costs per Ton Sold (C$) 146 206 160 160
Minesite Cash Operating Margin per Ton
Sold (C$) 138 (106) 138 35
Realized Nickel Price (US$/lb) 7.74 3.02 7.11 8.56
Realized Copper Price (US$/lb) 3.17 0.66 2.65 2.53
Exchange Rate (C$ /US$) 1.06 1.21 1.14 1.07
DMC Mining Services
--------------------------------------
Total Revenue (C$000) 13,654 21,458 52,976 133,104
Cash Operating Costs (C$000) 12,751 21,769 49,829 129,031
Cash Operating Margin (C$000) 903 (311) 3,147 4,073
Net Earnings (Loss) (C$000) (1,127) (6,038) (3,641) (18,110)
Cash Flow from Operating Activities
(C$000) (387) 7,688 579 8,467
----------------------------------------------------------------------------
Certain of the above items are considered to be non-GAAP performance
measures (see below)
Mining Operations
FNX shipped a total of 359,896 tons in the fourth quarter of 2009, resulting in
a net reduction in third quarter inventories by165,000 tons. Payable metals for
the 2009 fourth quarter were 16.5 million pounds of copper, 1.7 million pounds
of nickel and 34,150 ounces of platinum, palladium and gold. Ore inventories as
at December 31, 2009 were 10,858 tons, compared to 176,194 tons at the end of
the third quarter of 2009. The total ore shipped in 2009 full year was 666,265
tons of primarily copper-precious metal ore: 347,842 tons from the Podolsky Mine
and 318,423 tons from the Levack Complex. This compares to the 2009 full year
budget of 679,000 tons and 2008 full year ore shipments of 1,255,987 tons. The
decline in the total tons of ore shipped from 2008 to 2009 resulted from the
suspension of all primary nickel production at the end of 2008. Tables 2 and 3
show a summary of the Podolsky Mine and Levack Complex production data.
----------------------------------------------------------------------------
Three months Year ended
Table 2 - Production and Sales Summary ended Dec 31 Dec 31
Podolsky Mine 2009 2008 2009 2008
----------------------------------------------------------------------------
Copper Ore Inventory (tons) 4,310 3,034 4,310 3,034
Copper Ore Sold (tons) 184,650 82,017 347,842 243,239
Grade of Copper Ore Sold (%Cu) 4.2 6.8 4.8 6.4
Payable Metal Sold
Copper (000s lbs) 13,013 9,110 28,187 25,538
Nickel (000s lbs) 836 596 1,968 1,800
TPM (ozs) 15,140 8,202 27,738 24,072
Metal Sales and Costs
Minesite Revenue ($/ton of ore sold) 361 162 368 377
Cash Operating Cost ($/ton of ore sold) 168 248 182 233
Minesite Cash Operating Margin ($/ton of
ore sold) 193 (86) 186 144
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months
Table 3 - Production and Sales Summary ended Dec 31 Year ended Dec 31
Levack Complex 2009 2008 2009 2008
----------------------------------------------------------------------------
Copper Ore Inventory (tons) 4,900 15,031 4,900 15,031
Nickel Ore Inventory (tons) 1,648 - 1,648 -
Copper Ore Sold (tons) 170,279 85,690 279,427 330,067
Nickel Ore Sold (tons) 4,967 103,629 38,996 682,681
Total Ore Sold 175,246 189,319 318,423 1,012,748
Grade of Copper Ore (%Cu) 1.1 1.3 1.2 1.1
Grade of Nickel Ore (%Ni) 3.1 1.5 2.2 1.2
Payable Metal Sold
Copper (000s lbs) 3,488 2,391 6,308 9,676
Nickel (000s lbs) 835 2,415 2,462 11,340
TPM (ozs) 19,010 8,599 31,356 27,962
Metal Sales and Costs
Minesite Revenue ($/ton of ore sold) 203 74 222 151
Cash Operating Cost ($/ton of ore
sold) 125 189 136 142
Minesite Cash Operating Margin ($/ton
of ore sold) 78 (115) 86 9
----------------------------------------------------------------------------
Payable metals produced in 2009 full year totaled 34.5 million pounds of copper,
4.4 million pounds of nickel and 59,094 ounces of platinum, palladium and gold.
In spite of a very challenging 2009, payable metal production essentially met or
exceeded the original 2009 guidance of 35.2 million pounds of copper, 3.7
million pounds of nickel and 58,000 ounces of precious metals recovered from
slightly fewer tons of ore shipped.
Production totals for 2009 exclude the fourth quarter shipment of 3,445 tons of
LFD pre-production, development ore from the metallurgical sample taken in 2008,
yielding 0.5 million pounds of copper, 0.1 million pounds of nickel and 540
ounces of precious metals. The value of this pre-production, development LFD ore
was credited to the LFD capital.
The 2009 full year capital expenditures totaled $64.2 million, compared to
$167.7 million in 2008 and were $6.0 million less than the 2009 budget of $70.2
million. The 2009 capital expenditures are detailed in Table 4. The Company
incurred $6.9 million of Canadian Exploration Expenditures ("CEE") of the total
$15.0 million raised from the flow-through common share issuance, which amount
is included in the 2009 capital expenditures.
--------------------------------------------------------
--------------------------------------------------------
Table 4 - 2009 Capital Expenditures
--------------------------------------------------------
$000s
Levack Complex 5,278
Podolsky Mine 13,333
LFD 36,654
Victoria 6,909
Falconbridge Footwall 416
Other Properties 509
Corporate 57
DMC 1,027
--------------------------------------------------------
64,183
--------------------------------------------------------
--------------------------------------------------------
Sudbury Operations and Exploration in 2009 had a record low Total Medical Injury
Frequency Rate ("TMIFR") of 5.03 per every 200,000 hours worked, compared to
8.00 in 2008 full year. FNX realized a considerable improvement in its
environmental performance in 2009. The water quality issues experienced in 2008
concerning ammonia were eliminated in 2009 through enhancements to the
environmental management system and process changes in the Podolsky water
treatment plant.
Development
Development of the LFD remained the highest corporate priority in 2009, which
led to the decision during the year to reduce pre-production development ore
production to ensure uninterrupted development of the LFD. As a result of this
decision, total development footage related to the LFD was 7,987 ft in 2009,
which was 117% of the footage budgeted in the original development plan for
2009. By the end of 2009, the main access ramp for the LFD had reached the 3800
Level and was slightly ahead of schedule. The main LFD access ramp is scheduled
to reach the 4000 Level crosscut from Xstrata's Craig Mine by the second quarter
of 2010. The main LFD access ramp will continue to be driven deeper throughout
2010 in order to further access the LFD at depth and to provide drill platforms
for reserve and resource definition.
Development at the Podolsky Mine continued to focus on internal connection of
the main access ramp to facilitate future stope sequencing and operational
flexibility. The main access ramp was completed late in 2009, as planned. Total
development advance at the Podolsky Mine in 2009 was 5,304 ft.
At the McCreedy West Mine, the 2009 development plan was completed as scheduled
for a total of 3,012 ft. The 2009 development plan focused on the PM Deposit to
support future production.
Exploration
The original reduced exploration budget for 2009 received a significant boost
from a $15.0 million flow-through share financing completed in April 2009.
Approximately $6.9 million in flow-through funds were spent in 2009 and the
balance of $8.1 million is budgeted for 2010. The initial flow-through
expenditures in 2009 focused on the Victoria Property, which resulted in the
announcement in January 2010 of the discovery of multiple Offset Dyke deposits.
There are currently five surface drill rigs deployed at Victoria engaged in
expanding the new discovery and targeting several additional untested downhole
geophysical anomalies.
In 2009, exploration drilling totaled 84,969 ft in 28 completed holes and five
holes in progress. This does not include 93,532 ft completed in 2009 at the LFD,
59,994 ft at the Podolsky Mine and 70,862 ft at the McCreedy West Mine to
support production planning and expand reserves and resources.
The non-production exploration expenditures for 2009 focused on the Victoria
Offset Dyke targets and tested the footwall potential at both the Podolsky and
Falconbridge Footwall properties. Current exploration plans for 2010 include
extensive drilling at the Victoria, Podolsky and Falconbridge Footwall
properties and also include drill programs at the Kirkwood Property and the
Nickel Lake joint venture located on the Foy Offset Dyke. The total
non-production exploration budget for 2010 is approximately $16 million.
DMC Mining Services
Operating revenues for DMC in 2009 totaled $53.0 million, which generated a net
loss of $3.6 million, compared to revenues of $133.1 million and a net loss of
$18.1 million in the 2008 full year. DMC had a cash operating income and net
operating cash flow for 2009 of $3.1 million and $0.6 million respectively,
compared to $4.1 million and $8.5 million for fiscal 2008. As at December 31,
2009 cash and cash equivalents and working capital were $8.7 million and $14.3
million, respectively.
In spite of DMC's US Division completing its third consecutive year without a
lost time injury, DMC's Total Medical Injury Frequency Rate in 2009 climbed to
3.72 from 2.32 in 2008 per every 200,000 hours worked.
The mining contracting business in 2009 faced severe challenges in the wake of
the global credit crisis and DMC positioned itself to manage in the downturn.
There was a modest recovery underway in the last part of 2009 and the US portion
of the business was profitable during the year. At the end of 2009, DMC had a
$26.9 million work backlog and was bidding on several large, long term contracts
in North America. Both the number and size of the projects DMC is currently
being asked to bid has improved going into 2010. The DMC forecast calls for a
return to modest profitability in 2010.
Investments
Investments totaled $16.7 million at December 31, 2009, an increase from the
$4.0 million at December 31, 2008.
FNX accounts for its investment in Gold Wheaton using the equity method and is,
therefore, required to include in earnings FNX's share of Gold Wheaton's
earnings or loss for the period and the Company's investment therein is adjusted
by an equivalent amount. For the quarter ended December 31, 2009, FNX's 25%
share of the earnings of its equity investee, Gold Wheaton, was $0.7 million,
and for the full year 2009, was a loss of less than $0.1 million. At December
31, 2009 the market value of FNX's 360,000,000 Gold Wheaton shares was
approximately $131.4 million. The carrying value of FNX's equity investment in
Gold Wheaton totaled $143.0 million at December 31, 2009, including $46.9
million representing the carrying value of the Gold Wheaton note receivable.
Subsequent to year end, Gold Wheaton announced on February 2, 2010 the
consolidation of its common shares on a one for ten basis. The consolidation was
effective February 4, 2010 and resulted in FNX owning 36 million common shares
in Gold Wheaton with a market price of $2.43 per common share on February 4,
2010.
Share Capital and Warrants
During the fourth quarter of 2009, share capital and warrants increased by less
than $0.1 million as a result of the exercise of 3,000 stock options. Year to
date share capital increased by $153.3 million as a result of the equity bought
deal which closed on September 9, 2009, the exercise of 15,500 stock options and
the issuance of 2,173,914 flow-through shares in April.
As at December 31, 2009, outstanding shares were 102,016,191 and stock options
to purchase 3,552,667 common shares at a weighted average price of $13.45 per
share were outstanding. Including 332,959 outstanding deferred share units, the
fully diluted share total was 105,901,817 as at December 31, 2009.
Non-GAAP Performance Measures
Minesite revenue per ton of ore sold, cash operating cost, cash operating
margin, operating margin, cash operating cost per ton of ore sold, minesite cash
operating margin per ton of ore sold, cash flow per share, EBITDA, adjusted
EBITDA and adjusted net income are included in this news release because these
statistics are key performance measures that management uses to monitor
performance. These performance measures do not have a meaning within GAAP and,
therefore, amounts presented may not be comparable to similar data presented by
other mining companies. The data is intended to provide additional information
and should not be considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP.
Forward-Looking Statement
Certain information included in this press release, including information
relating to future financial or operating performance and other statements that
express management's expectations or estimates of future performance constitute
"forward-looking statements." Such forward-looking statements include, without
limitation, (i) estimates of future capital expenditures; (ii) estimates
regarding timing of future development and production; and (iii) estimates of
future costs towards profitable commercial operations. Where the Company
expresses or implies an expectation or belief as to future events or results,
such expectation or belief is expressed in good faith and believed to have a
reasonable basis. However, forward-looking statements are subject to risks,
uncertainties and other factors, which could cause actual results to differ
materially from future results expressed, projected or implied by such
forward-looking statements. Such risks include, but are not limited to,
interpretation and implications of drilling and geophysical results; estimates
regarding timing of future capital expenditures and costs towards profitable
commercial operations. Other factors that could cause actual results,
developments or events to differ materially from those anticipated include,
among others, increases/decreases in production; volatility in metals prices and
demand; currency fluctuations; cash operating margins; cash operating cost per
pound sold; costs per ton of ore; variances in ore grade or recovery rates from
those assumed in mining plans; reserves and/or resources; the ability to
successfully integrate acquired assets; operational risks inherent in mining or
development activities, and legislative factors relating to prices, taxes,
royalties, land use, title and permits, importing and exporting of minerals and
environmental protection. Accordingly, undue reliance should not be placed on
forward-looking statements. These forward-looking statements are made as at the
date hereof and the Company does not undertake any obligation to update publicly
or revise any such forward-looking statements or any forward-looking statements
contained in any other documents whether as a result of new information, future
events or otherwise, except as may be required under applicable securities law.
For a more detailed discussion of such risks and other factors, see the
Company's latest filings with Canadian securities regulators.
Conference Call
FNX will be hosting a fourth quarter and full year conference call on February
26, 2010 at 10:00 am Eastern Time.
CONFERENCE CALL numbers are:
Live in North America:
Toll-Free Access: 1-888-789-9572 or 416-695-7806
Enter Passcode: 7852335#
Replay Access information:
Toll-Free Access: 1-800-408-3053 or 416-695-5800
Passcode: 5071353#
Available until March 31, 2010 at Midnight (Toronto Time)
Slides for the conference call may be accessed on the Company's website at
www.fnxmining.com. There will be no transcript available for the conference
call.
Note: The unaudited balance sheet, statement of operations and statement of cash
flow are appended to this news release.
Consolidated Balance Sheets
As at December 31
(in thousands of Canadian dollars) (Unaudited) 2009 2008
----------------------------------------------------------------------------
----------------------------------------------------------------------------
$ $
Assets
Current
Cash and cash equivalents 238,571 129,561
Accounts receivable 85,744 59,324
Inventory 1,232 2,307
Prepaid and other assets 1,523 1,504
----------------------------------------------------------------------------
327,070 192,696
Investments 16,743 4,009
Investment in Gold Wheaton 143,015 215,620
Property, plant and equipment 481,567 435,114
Reclamation deposits 6,485 6,485
----------------------------------------------------------------------------
974,880 853,924
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Liabilities
Current
Accounts payable and accrued liabilities 42,677 36,136
Deferred revenue 22,106 26,433
----------------------------------------------------------------------------
64,783 62,569
----------------------------------------------------------------------------
Long-term deferred revenue 357,102 368,969
Mine closure and site restoration 5,716 5,393
Future income and resource taxes 58,191 60,499
----------------------------------------------------------------------------
421,009 434,861
----------------------------------------------------------------------------
485,792 497,430
----------------------------------------------------------------------------
Shareholders' equity
Share capital 711,153 571,750
Warrants 13,873 -
Contributed surplus 18,542 13,741
Deficit (260,655) (220,580)
Accumulated other comprehensive income
(loss) 6,175 (8,417)
----------------------------------------------------------------------------
489,088 356,494
----------------------------------------------------------------------------
974,880 853,924
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Consolidated Segmented Balance Sheets
As at December 31, 2009
(in thousands of Canadian dollars) (Unaudited) Mining DMC Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Assets $ $ $
Cash and cash equivalents 229,901 8,670 238,571
Accounts receivable 74,988 10,756 85,744
Other current assets 1,820 935 2,755
----------------------------------------------------------------------------
306,709 20,361 327,070
Investments 16,743 - 16,743
Investment in Gold Wheaton 143,015 - 143,015
Property, plant and equipment 459,934 21,633 481,567
Reclamation deposits 6,485 - 6,485
----------------------------------------------------------------------------
932,886 41,994 974,880
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Liabilities
Accounts payable and accrued liabilities 37,391 5,286 42,677
Deferred revenue 21,367 739 22,106
----------------------------------------------------------------------------
58,758 6,025 64,783
----------------------------------------------------------------------------
Long-term deferred revenue 357,102 - 357,102
Mine closure and site restoration 5,716 - 5,716
Future income and resource taxes 57,439 752 58,191
----------------------------------------------------------------------------
420,257 752 421,009
----------------------------------------------------------------------------
479,015 6,777 485,792
----------------------------------------------------------------------------
----------------------------------------------------------------------------
As at December 31, 2008 Mining DMC Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Assets $ $ $
Cash and cash equivalents 120,131 9,430 129,561
Accounts receivable 44,459 14,865 59,324
Other current assets 2,823 988 3,811
----------------------------------------------------------------------------
167,413 25,283 192,696
Investments 4,009 - 4,009
Investment in Gold Wheaton 215,620 - 215,620
Property, plant and equipment 409,718 25,396 435,114
Reclamation deposits 6,485 - 6,485
----------------------------------------------------------------------------
803,245 50,679 853,924
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Liabilities
Accounts payable and accrued liabilities 28,469 7,667 36,136
Deferred revenue 25,456 977 26,433
----------------------------------------------------------------------------
53,925 8,644 62,569
----------------------------------------------------------------------------
Long-term deferred revenue 368,969 - 368,969
Mine closure and site restoration 5,393 - 5,393
Future income and resource taxes 59,374 1,125 60,499
----------------------------------------------------------------------------
433,736 1,125 434,861
----------------------------------------------------------------------------
487,661 9,769 497,430
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Consolidated Statements of Operations
(in thousands of Canadian dollars Three months ended Year ended December
except earnings per share) December 31 31
(Unaudited) 2009 2008 2009 2008
----------------------------------------------------------------------------
----------------------------------------------------------------------------
$ $ $ $
Operating revenues 108,589 48,723 238,193 378,062
----------------------------------------------------------------------------
Operating expenses
Expenses, excluding depreciation
and amortization 65,553 77,752 156,315 329,601
Depreciation and amortization 6,084 14,202 14,899 56,151
----------------------------------------------------------------------------
71,637 91,954 171,214 385,752
----------------------------------------------------------------------------
36,952 (43,231) 66,979 (7,690)
----------------------------------------------------------------------------
Expenses
Administration 2,654 2,436 9,703 14,348
Capital taxes - - - (1,803)
Depreciation 165 229 816 853
Stock-based compensation 1,931 637 7,410 4,056
Asset impairments - 487,362 57,935 501,490
Dilution loss - - 31,238 -
Other expenses (income) (5,617) (74) (10,265) (10,814)
----------------------------------------------------------------------------
(867) 490,590 96,837 508,130
----------------------------------------------------------------------------
Earnings (loss) before taxes and
other 37,819 (533,821) (29,858) (515,820)
Income and resource taxes recovery
(expense) (6,435) 137,010 (10,189) 128,880
Share of income (loss) of equity
investee 740 (591) (28) (1,600)
----------------------------------------------------------------------------
Net earnings (loss) for the period 32,124 (397,402) (40,075) (388,540)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Basic earnings (loss) per share 0.31 (4.68) (0.44) (4.59)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Diluted earnings (loss) per share 0.31 (4.68) (0.44) (4.59)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Consolidated Segmented Statements of Operations
(in thousands of Canadian dollars)
(Unaudited)
For the three months ended December 31, 2009 Mining DMC Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
$ $ $
Operating revenues 94,935 13,654 108,589
----------------------------------------------------------------------------
Operating expenses
Expenses, excluding depreciation and
amortization 52,802 12,751 65,553
Depreciation and amortization 4,970 1,114 6,084
----------------------------------------------------------------------------
57,772 13,865 71,637
----------------------------------------------------------------------------
37,163 (211) 36,952
----------------------------------------------------------------------------
Expenses
Administration 2,654 - 2,654
Depreciation 165 - 165
Stock-based compensation 1,777 154 1,931
Other expenses (income) (5,601) (16) (5,617)
----------------------------------------------------------------------------
(1,005) 138 (867)
----------------------------------------------------------------------------
Earnings (loss) before taxes and other 38,168 (349) 37,819
Income and resource taxes recovery (expense) (5,657) (778) (6,435)
Share of income (loss) of equity investee 740 - 740
----------------------------------------------------------------------------
Net earnings (loss) for the period 33,251 (1,127) 32,124
----------------------------------------------------------------------------
----------------------------------------------------------------------------
For the year ended December 31, 2009 Mining DMC Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
$ $ $
Operating revenues 185,217 52,976 238,193
----------------------------------------------------------------------------
Operating expenses
Expenses, excluding depreciation and
amortization 106,486 49,829 156,315
Depreciation and amortization 10,319 4,580 14,899
----------------------------------------------------------------------------
116,805 54,409 171,214
----------------------------------------------------------------------------
68,412 (1,433) 66,979
----------------------------------------------------------------------------
Expenses
Administration 9,703 - 9,703
Depreciation 816 - 816
Stock-based compensation 6,648 762 7,410
Asset impairments 57,935 - 57,935
Dilution loss 31,238 - 31,238
Other expenses (income) (9,857) (408) (10,265)
----------------------------------------------------------------------------
96,483 354 96,837
----------------------------------------------------------------------------
Earnings (loss) before taxes and other (28,071) (1,787) (29,858)
Income and resource taxes recovery (expense) (8,335) (1,854) (10,189)
Share of income (loss) of equity investee (28) - (28)
----------------------------------------------------------------------------
Net earnings (loss) for the period (36,434) (3,641) (40,075)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Consolidated Segmented Statements of Operations
(in thousands of Canadian dollars)
(Unaudited)
For the three months ended December 31, 2008 Mining DMC Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
$ $ $
Operating revenues 27,265 21,458 48,723
----------------------------------------------------------------------------
Operating expenses
Expenses, excluding depreciation and 55,983 21,769 77,752
amortization
Depreciation and amortization 12,496 1,706 14,202
----------------------------------------------------------------------------
68,479 23,475 91,954
----------------------------------------------------------------------------
(41,214) (2,017) (43,231)
----------------------------------------------------------------------------
Expenses
Administration 2,436 - 2,436
Depreciation 229 - 229
Stock-based compensation 405 232 637
Asset impairments 480,574 6,788 487,362
Other expenses (income) 61 (135) (74)
----------------------------------------------------------------------------
(483,705) (6,885) (490,590)
----------------------------------------------------------------------------
Earnings (loss) before taxes and other
items (524,919) (8,902) (533,821)
Income and resource taxes recovery
(expense) 134,146 2,864 137,010
Share of income (loss) of equity investee (591) - (591)
----------------------------------------------------------------------------
Net earnings (loss) for the period (391,364) (6,038) (397,402)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
For the year ended December 31, 2008 Mining DMC Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
$ $ $
Operating revenues 244,958 133,104 378,062
----------------------------------------------------------------------------
Operating expenses
Expenses, excluding depreciation and
amortization 200,570 129,031 329,601
Depreciation and amortization 47,472 8,679 56,151
----------------------------------------------------------------------------
248,042 137,710 385,752
----------------------------------------------------------------------------
(3,084) (4,606) (7,690)
----------------------------------------------------------------------------
Expenses
Administration 14,348 - 14,348
Capital taxes (1,803) - (1,803)
Depreciation 853 - 853
Stock-based compensation 2,206 1,850 4,056
Asset impairments 490,574 10,916 501,490
Other expenses (income) (14,332) 3,518 (10,814)
----------------------------------------------------------------------------
491,846 16,284 508,130
----------------------------------------------------------------------------
Earnings (loss) before taxes and other items (494,930) (20,890) (515,820)
Income and resource taxes recovery (expense) 126,100 2,780 128,880
Share of income (loss) of equity investee (1,600) - (1,600)
----------------------------------------------------------------------------
Net earnings (loss) for the period (370,430) (18,110) (388,540)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Consolidated Statements of Cash Flow Three months ended Year ended December
(in thousands of Canadian dollars) December 31 31
(Unaudited) 2009 2008 2009 2008
----------------------------------------------------------------------------
----------------------------------------------------------------------------
$ $ $ $
Operating activities
Net earnings (loss) for the
period 32,124 (397,402) (40,075) (388,540)
Non-cash items
Depreciation and amortization 6,249 14,431 15,715 57,004
Stock-based compensation 1,060 1,742 4,828 5,161
Future income and resource
taxes 5,643 (125,485) (56) (114,926)
Asset impairments - 487,362 57,935 501,490
Dilution loss - - 31,238 -
Amortization of Gold Wheaton
deferred revenue (8,970) (2,363) (15,837) (5,575)
Gain on disposal of shares - - - (8,461)
Gain on Gold Wheaton common
shares acquired - (2,700) - (2,700)
Mark-to-market and accretion of
Gold Wheaton note receivable (5,935) 14,846 (11,721) 14,846
Provision for doubtful accounts - - - 4,242
(Increase) decrease in value of
investments held-for-trading 144 19 (607) 746
Share of (income) loss of
equity investee (740) 591 28 1,600
Other 89 (3,016) 86 698
----------------------------------------------------------------------------
29,664 (11,975) 41,534 65,585
Net change in non-cash working
capital (30,800) 19,941 (19,027) 11,581
----------------------------------------------------------------------------
(1,136) 7,966 22,507 77,166
----------------------------------------------------------------------------
Financing activities
Common shares issued 22 - 144,926 2,814
Warrants issued - - 14,427 -
Transaction costs on shares and
warrants issued - - (8,354) -
Bank indebtedness - advance - - - 45,837
Bank indebtedness - payment - - - (45,837)
----------------------------------------------------------------------------
22 - 150,999 2,814
----------------------------------------------------------------------------
Investing activities
Investments - - - (10,000)
Property, plant and equipment (20,235) (28,126) (64,183) (167,751)
Proceeds on sale of gold
equivalent units - - - 175,000
Gold Wheaton transaction costs - - - (4,366)
Proceeds from disposal of
investments - - - 21,441
----------------------------------------------------------------------------
(20,235) (28,126) (64,183) 14,324
----------------------------------------------------------------------------
Effect of exchange rate changes on
cash 1,718 (1,348) (313) 97
----------------------------------------------------------------------------
Change in cash and cash equivalents
for the period (19,631) (21,508) 109,010 94,401
Cash and cash equivalents -
beginning of period 258,202 151,069 129,561 35,160
----------------------------------------------------------------------------
Cash and cash equivalents - end of
period 238,571 129,561 238,571 129,561
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Consolidated Segmented Statements of Cash Flow
(in thousands of Canadian dollars) (Unaudited)
For the three months ended December 31, 2009 Mining DMC Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating activities $ $ $
Net earnings (loss) for the period 33,251 (1,127) 32,124
Non-cash items
Depreciation and amortization 5,135 1,114 6,249
Stock-based compensation 905 155 1,060
Future income and resource taxes 5,657 (14) 5,643
Amortization of Gold Wheaton deferred revenue (8,970) - (8,970)
Mark-to-market and accretion of Gold
Wheaton note (5,935) - (5,935)
Share of (income) loss of equity investee (740) - (740)
Other 194 39 233
----------------------------------------------------------------------------
29,497 167 29,664
Net change in non-cash working capital (30,246) (554) (30,800)
----------------------------------------------------------------------------
(749) (387) (1,136)
Financing activities
Common shares issued 22 - 22
Investing activities
Property, plant and equipment (19,259) (976) (20,235)
Effect of exchange rate changes on cash - 1,718 1,718
----------------------------------------------------------------------------
Change in cash and cash equivalents for the period (19,986) 355 (19,631)
Cash and cash equivalents - beginning of period 249,887 8,315 258,202
----------------------------------------------------------------------------
Cash and cash equivalents - end of period 229,901 8,670 238,571
----------------------------------------------------------------------------
----------------------------------------------------------------------------
For the year ended December 31, 2009 Mining DMC Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating activities $ $ $
Net earnings (loss) for the period (36,434) (3,641) (40,075)
Non-cash items
Depreciation and amortization 11,135 4,580 15,715
Stock-based compensation 4,065 763 4,828
Future income and resource taxes 315 (371) (56)
Asset impairments 57,935 - 57,935
Dilution loss 31,238 - 31,238
Amortization of Gold Wheaton deferred
revenue (15,837) - (15,837)
Mark-to-market and accretion of Gold
Wheaton note (11,721) - (11,721)
Share of (income) loss of equity investee 28 - 28
Other (694) 173 (521)
----------------------------------------------------------------------------
40,030 1,504 41,534
Net change in non-cash working capital (18,102) (925) (19,027)
----------------------------------------------------------------------------
21,928 579 22,507
Financing activities
Common shares and warrants issued - net 150,999 - 150,999
Investing activities
Property, plant and equipment (63,157) (1,026) (64,183)
Effect of exchange rate changes on cash - (313) (313)
----------------------------------------------------------------------------
Change in cash and cash equivalents for the
period 109,770 (760) 109,010
Cash and cash equivalents - beginning of
period 120,131 9,430 129,561
----------------------------------------------------------------------------
Cash and cash equivalents - end of period 229,901 8,670 238,571
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Consolidated Segmented Statements of Cash Flow
(in thousands of Canadian dollars) (Unaudited)
For the three months ended December 31, 2008 Mining DMC Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
$ $ $
Operating activities
Net earnings (loss) for the period (391,364) (6,038) (397,402)
Non-cash items
Depreciation and amortization 12,725 1,706 14,431
Stock-based compensation 405 232 637
Future income and resource taxes (123,694) (1,791) (125,485)
Asset impairments 480,574 6,788 487,362
Mark-to-market and accretion of Gold
Wheaton note 14,846 - 14,846
Other (2,122) (4,242) (6,364)
----------------------------------------------------------------------------
(8,630) (3,345) (11,975)
Net change in non-cash working capital 8,908 11,033 19,941
----------------------------------------------------------------------------
278 7,688 7,966
Financing activities - - -
Investing activities
Property, plant and equipment (25,516) (2,610) (28,126)
Effect of exchange rate changes on cash - (1,348) (1,348)
----------------------------------------------------------------------------
Change in cash and cash equivalents for the
period (25,238) 3,730 (21,508)
Cash and cash equivalents - beginning of
period 145,369 5,700 151,069
----------------------------------------------------------------------------
Cash and cash equivalents - end of period 120,131 9,430 129,561
----------------------------------------------------------------------------
----------------------------------------------------------------------------
For the year ended December 31, 2008 Mining DMC Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
$ $ $
Operating activities
Net earnings (loss) for the period (370,430) (18,110) (388,540)
Non-cash items
Depreciation and amortization 48,325 8,679 57,004
Stock-based compensation 3,311 1,850 5,161
Future income and resource taxes (113,135) (1,791) (114,926)
Asset impairments 490,574 10,916 501,490
Other 5,493 (97) 5,396
----------------------------------------------------------------------------
64,138 1,447 65,585
Net change in non-cash working capital 4,561 7,020 11,581
----------------------------------------------------------------------------
68,699 8,467 77,166
Financing activities
Common shares issued 2,814 - 2,814
Investing activities
Investments (10,000) - (10,000)
Property, plant and equipment (157,704) (10,047) (167,751)
Proceeds on sale of gold equivalent units 175,000 - 175,000
Gold Wheaton transaction costs (4,366) - (4,366)
Proceeds from disposal of investments 21,441 - 21,441
----------------------------------------------------------------------------
24,371 (10,047) 14,324
Effect of exchange rate changes on cash - 97 97
----------------------------------------------------------------------------
Change in cash and cash equivalents for the
period 95,884 (1,483) 94,401
Cash and cash equivalents - beginning of
period 24,247 10,913 35,160
----------------------------------------------------------------------------
Cash and cash equivalents - end of period 120,131 9,430 129,561
----------------------------------------------------------------------------
----------------------------------------------------------------------------
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