Frontera Copper Reports Annual and Fourth Quarter
2007 Results
(All dollar amounts are expressed in United States currency unless
otherwise noted)
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Toronto, ON - March 20, 2008 - Frontera Copper Corporation (FCC: TSX,
FCC.NT, FCC. NT.A: TSX) today reports financial and operating results for the
year and quarter ended December 31, 2007.
2007 Highlights
- Cash
flow from operating activities of $55.7 million
- Cash
and cash equivalents increased by $20.9 million to $54.5 million
- Earnings of $31.8 million
- Copper
cathode production of 53.7 million pounds
- Copper
cathode sales of 54.1 million pounds
- Average
cash cost per pound of $1.30
- C$8.9
million paid to repurchase outstanding notes payable
- Phase
II Construction project completed and Phase III leach pad construction
initiated
- One
million man hours without a time lost accident
Alan Edwards, President and Chief Executive Officer,
said, "2007 was our first full year of operations at Piedras Verdes and
I am pleased to say that we produced and sold approximately 54 million pounds
of "LME Grade A" quality copper cathode at an average cash cost of
$1.30 per pound.
Financial Results (millions of dollars, except per share) ??????????????????????????? 2007 Quarters????????????????????? Years ????????????????? Dec?????? Sept????? June???? March????? 2007????? 2006 ??????????????? --------? --------- --------- --------? --------- -------- Revenues (1)??????? 37.5?????? 50.1????? 50.8???? 29.0????? 167.4???? 24.6 Net earnings???????? 6.7?????? 10.3?????? 9.8????? 5.0?????? 31.8???? (2.6) Net earnings per share - basic????????????? 0.11?????? 0.16????? 0.15???? 0.08?????? 0.50??? (0.05) Cash flows from operating activities???????? (3.1)????? 23.6????? 36.3???? (1.1)????? 55.7??? (12.1) Closing cash balances?????????? 54.5?????? 58.8????? 48.7???? 24.4 ??????54.5???? 33.5 ??????????????? --------? --------- --------- --------? --------- -------- (1) The Piedras Verdes operations commenced production in October 2006.
Capital expenditures for property, plant and
equipment totaled $29.8 million for the 2007 year and $1.3 million in the
fourth quarter of 2007, compared to $83.2 million for the 2006 year and $10.2
million in the fourth quarter of 2006.
Results from Operations ???????????????????????????????????????????? 2007 Quarters?????????? Year ???????? ?????????????????????????????Dec??? Sept??? June??? March?? 2007 ??????????????????????????????????? ------- ------- ------- ------- ------- "LME Grade A" quality copper cathode (millions of lbs.): ? Produced???????????????????????????? 12.3??? 15.1??? 15.9??? 10.4??? 53.7 ? Sold???????????????????????????????? 12.6??? 15.7??? 15.7??? 10.1??? 54.1 Cash costs per pound sold ($): ? (Excluding prepaid royalties)??????? 1.39??? 1.13??? 1.10??? 1.37??? 1.22 ? (Including prepaid royalties)??????? 1.46??? 1.21 ???1.18??? 1.43??? 1.30 Revenue ($ millions)?????????????????? 37.5??? 50.1??? 50.8??? 29.0?? 167.4 Average price per pound: ? Realized ($)???????????????????????? 2.97??? 3.20??? 3.23??? 2.87??? 3.09 ? COMEX ($)??????????????????????????? 3.26??? 3.48??? 3.46??? 2.70??? 3.23 ??????????????????????????????????? ------- ------- ------- ------- -------
For the year ended December 31, 2007, the Piedras Verdes operations produced
53.7 million pounds of "LME Grade A" quality copper cathode and
sold 54.1 million pounds of copper cathode. Average cash costs per pound for
2007, including prepaid royalties, were $1.30. During the fourth quarter of
2007, the Piedras Verdes operations produced 12.3 million pounds of copper
cathode and sold 12.6 million pounds of copper cathode. The lower production
is primarily the result of the continuing strike at the Company's major
supplier of sulfuric acid, which limited the operation to receiving only 75%
to 80% of its normal acid requirements during the fourth quarter of 2007. Average
cash costs per pound for the fourth quarter of 2007, including prepaid
royalties, were $1.46. The higher than planned unit operating costs reflect
the lower production levels and the higher cost of acid that was purchased
from alternate sources.
Cash and cash equivalents were $54.5 million at December 31, 2007. During the
year ended December 31, 2007, cash and cash equivalents increased by $20.9
million and during the fourth quarter of 2007, cash and cash equivalents
decreased by $4.4 million. During the year and quarter ended December 31,
2006 cash and cash equivalents decreased by $1.3 million and increased by
$26.6 million, respectively.
For the year ended December 31, 2007, cash flows from operating activities
were $55.7 million compared to a negative $12.1 million for the year ended
December 31, 2006.
The Company will continue to evaluate its operating plans in light of the
availability of reasonably priced acid. At current copper prices, the
Company's current operating plan indicates positive earnings and cash flows
for 2008. This plan is predicated on receiving sufficient acid at acceptable
prices to enable the operation to achieve full production.
The Company's December 31, 2007 Financial Statements and Management's
Discussion and Analysis have been filed on SEDAR and are available on the
Company's website.
On February 25, 2008, Frontera Copper provided an update on operations. The
Company will provide a further operations update following completion of the
2008 first quarter. The Company also plans to hold a conference call after it
releases its 2008 first quarter results in mid-May.
The Company will be filing an updated Technical Report and its 2007 Annual
Information Form on SEDAR later this month.
About Frontera Copper
Frontera Copper is a Canadian mining, development and exploration company
whose principal activity is the production of copper cathode from the Piedras
Verdes run-of-mine heap-leach copper operation in Sonora, Mexico. Based on
the January 1, 2008 ore reserves and the estimated recoverable copper
contained on the leach pads at December 31, 2007, approximately 1 billion
pounds of copper is projected to be produced over the remaining 17-year life
of the operation.
For further information, please see Frontera Copper's website at
www.fronteracopper.com or contact:
Alan Edwards
President and Chief Executive Officer
Tel.: 602-424-5488
Toll-free: 888-323-0973
Email: alan.edwards@fronteracopper.com
Dave Peat
Vice President and Chief Financial Officer
Tel.: 602-424-5484
Toll-free: 888-323-0973
Email: dave.peat@fronteracopper.com
Information in this news release that is not current or historical factual
information may constitute forward-looking information or statements within
the meaning of applicable securities laws. Implicit in this information,
particularly in respect of statements as to future operating results and
economic performance of the Company, and resources and reserves at the
Piedras Verdes operations, are assumptions regarding projected revenue and
expense, copper prices and mining costs. These assumptions, although
considered reasonable by the Company at the time of preparation, may prove to
be incorrect. Readers are cautioned that actual results are subject to a
number of risks and uncertainties, including risks relating to general
economic conditions and mining operations, and could differ materially from
what is currently expected. The Company disclaims any intention or obligation
to update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
Frontera Copper Corporation Consolidated Balance Sheet US$ (in thousands) ????????????????????????????????????????????????? December 31, December 31, ????????????????????????????????????????????????????? 2007???????? 2006 ?????????????????????????????????????????????????? ----------?? ---------- ????????????????????? Assets Current ???? Cash and cash equivalents???????????????????????? 54,479?????? 33,547 ???? Restricted cash??????????????????????????????????????? -??? ????1,233 ???? Accounts receivable????????????????????????????????? 705??????? 1,645 ???? Commodity taxes recoverable??????????????????????? 4,181??????? 5,817 ???? Inventory???????????????????????????????????????? 24,918?????? 19,511 ???? Prepaid expenses and deposits????????????????????? 6,440??????? 5,741 ???? Future tax asset?????????????????????????????????? 2,883??????????? - ?????????????????????????????????????????????????? ----------?? ---------- ??????????????????????????????????????????????????? ???93,606?????? 67,494 Restricted cash???????????????????????????????????????? 1,825??????? 1,825 Long-term inventory??????????????????????????????????? 20,912????????? 813 Long-term deposits????????????????????????????????????? 1,854??????????? - Deferred finance charges??????????????????????????????????? -????????? 653 Property, plant and equipment???????????????????????? 136,036????? 118,927 ?????????????????????????????????????????????????? ----------?? ---------- ?????????????????????????????????????? ???????????????254,233????? 189,712 ?????????????????????????????????????????????????? ==========?? ========== ?????????????????? Liabilities Current ???? Accounts payable and accrued liabilities????????? 17,547?????? 21,325 ???? Deferred revenue????????? ???????????????????????????326??????????? - ???? Income taxes payable????????????????????????????? 14,501??????????? - ???? Derivative instruments???????????????????????????? 8,143??????????? - ???? Current portion of notes payable?????????????????? 6,915 ???????6,704 ?????????????????????????????????????????????????? ----------?? ---------- ?????????????????????????????????????????????????????? 47,432?????? 28,029 Accounts payable and accrued liabilities??????????????? 3,197??????? 1,825 Notes payable???? ?????????????????????????????????????73,446?????? 65,663 Asset retirement obligation???????????????????????????? 4,907??????? 5,235 Derivative instruments????????????????????????????????? 3,440??????????? - Future income taxes????????????????????????????? ???????7,849????????? 288 ?????????????????????????????????????????????????? ----------?? ---------- ????????????????????????????????????????????????????? 140,271????? 101,040 ?????????????????????????????????????????????????? ----------?? ---------- Shareholders' Equity Capital stock???????????????????????????????????????? 102,807????? 101,412 Contributed surplus???????????????????????????????????? 1,174??????? 1,734 Accumulated other comprehensive income???????????????? (7,388)?????????? - Retained earnings (deficit)??????????????????????????? 17,369????? (14,474) ?????????????????????????????????????????????????? ----------?? ---------- ????????????????????????????????????????????????????? 113,962?????? 88,672 ????????????????????????????? ?????????????????????----------?? ---------- ????????????????????????????????????????????????????? 254,233????? 189,712 ?????????????????????????????????????????????????? ==========?? ========== Frontera Copper Corporation Consolidated Statements of Operations US$ (in thousands except per share amounts) ?????????????????????????????????????????? 4th Quarter????????? Year ??????????????????????????????????????? ----------------? ---------------- ????????????????????????????????????????? 2007???? 2006???? 2007???? 2006 ??????????????????????????????????????? -------? -------? -------? ------- ?????????????????????????????????????????? (unaudited) Revenue????????????????????????????????? 37,471?? 24,639? 167,382?? 24,639 Cost of sales and expenses ???? Cost of sales?????????????????????? 18,355?? 11,237?? 70,297?? 11,237 ???? Depreciation, depletion and ????? amortization??????????????????????? 2,530??? 1,706?? 10,785??? 1,706 ???? Exploration??????????????????????????? 191????? 154????? 550????? 154 ???? Administration?????????????????????? 2,360????? 278??? 6,995??? 8,115 ??????????????????????????????????????? -------? -------? -------? ------- ???????????????????????????????????????? 23,436?? 13,375?? 88,627?? 21,212 ??????????????????????????????????????? -------? -------? -------? ------- Other (income) and expenses ???? Interest income?????????????????????? (772)??? (159)? (2,180)? (1,627) ???? Long-term interest and accretion???? 3,042??? 2,958?? 12,462?? 10,664 ???? Foreign exchange loss????????????????? 297?? (2,588)? 11,443????? 525 ???? Loss on repurchase of notes ????? payable???????????????????????????????? -??????? -????? 944??????? - ???? Unrealized losses on derivatives ????? contracts??????????????????????????? (406)?????? -??? 1,322??????? - ??? ????????????????????????????????????-------? -------? -------? ------- ????????????????????????????????????????? 2,161????? 211?? 23,991??? 9,562 ??????????????????????????????????????? -------? -------? -------? ------- Income (loss) before income taxes? ??????11,874?? 11,053?? 54,764?? (6,135) Income taxes???????????????????????????? (5,142)?? 3,504? (22,921)?? 3,504 ??????????????????????????????????????? -------? -------? -------? ------- Net income (loss) for the period????????? 6,732?? 14,557?? 31,843?? (2,631) ??????????????????????????????????????? =======? =======? =======? ======= Income (loss) per share - Basic??????????? 0.11???? 0.28???? 0.50??? (0.05) ??????????????????????? - Diluted????????? 0.10???? 0.27???? 0.49??? (0.05) Weighted average common shares ??? outstanding - Basic????????????????? 64,238?? 52,554?? 63,976?? 49,327 ??????????????? - Diluted??????????????? 64,963?? 53,594?? 64,657?? 49,327 Frontera Copper Corporation Consolidated Statements of Retained Earnings (Deficit) US$ (in thousands) ????????????????????????????????? 4th Quarter??????????????? Year ??????????????????????????? ----------------------- ---------------------- ?????????????????????????????? 2007??????? 2006??????? 2007??????? 2006 ??????????????????????????? ----------- ----------? ----------? ---------- ????????????????????????????????? (unaudited) Retained earnings (deficit), beginning of period???????????? 10,637??? (29,031)??? (14,474)??? (11,843) Net income (loss) for the period?????????????????????????? 6,732???? 14,557????? 31,843????? (2,631) ??????????????????????????? ----------- ----------? ----------? ---------- Retained earnings (deficit), end of period??????? 17,369??? (14,474)???? 17,369???? (14,474) ??????????????????????????? =========== ==========? ==========? ========== Consolidated Statements of Comprehensive Income (Loss) US$ (in thousands) ????????????????????????????????? 4th Quarter??????????????? Year ??????????????????????????? ----------------------- ---------------------- ?????????? ????????????????????2007??????? 2006??????? 2007??????? 2006 ??????????????????????????? ----------- ----------? ----------? ---------- ????????????????????????????????? (unaudited) Net income (loss) for the period?????????????????????????? 6,732???? 14,557????? 31,843????? (2,631) Unrealized gain (loss) on derivatives designated as cash flow hedges, (net of tax of $(6,571) and $2,873)???? 16,895????????? -????? (7,388)????????? - Tax valuation allowance?????????? 9,444????????? -?????????? -?????????? - ??????????????????????????? ----------- ----------? ----------? ---------- ???????????????????????????????? 26,339????????? -????? (7,388)????????? - ??????????????????????????? ----------- ----------? ----------? ---------- Comprehensive income (loss) for the period????????????????? 33,071???? 14,557????? 24,455????? (2,631) ??????????????????????????? =========== ==========? ==========? ========== Frontera Copper Corporation Consolidated Statements of Cash Flows US$ (in thousands) ???????????????????? ???????????????4th Quarter?????????????? Year ??????????????????????????????? --------------------? -------------------- ?????????????????????????????????? 2007?????? 2006?????? 2007?????? 2006 ??????????????????????????????? ---------? ---------? ---------? --------- ???????????????????????????????????? (unaudited) Cash flows from operating activities Net income (loss) for the period??? 6,732???? 14,557???? 31,843???? (2,631) ?? Items not involving cash: ????? Stock-based compensation????????? -???????? 30????????? -??????? 121 ????? Future income taxes???????????? (55)??? (3,504)???? 7,551???? (3,504) ????? Unrealized foreign exchange???? 273???? (3,137)??? 11,752?????? (462) ????? Depreciation, depletion and ?????? amortization???????????????? 4,098????? 1,838???? 15,011????? 1,838 ????? Accretion?????????????????????? 685??????? 938????? 3,166????? 2,540 ????? Write-off of deferred ?????? finance costs??????????????????? -????????? -??????? 522????????? - ????? Unrealized (gains) losses ?????? on derivative contracts?????? (406)???????? -????? 1,322????????? - ????? Long term inventory???????? (16,099)????? (813)?? (20,099)????? (813) ????? Long term deposits?????????? (1,854)???????? -???? (1,854)???????? - ????? Loss on note repurchase?????????? -?????? ???-??????? 944????????? - ??????????????????????????????? ---------? ---------? ---------? --------- ?????????????????????????????????? (6,626)???? 9,909???? 50,158???? (2,911) Changes in non-cash working capital balances?????????????????? 3,521???? (3,854)???? 5,581???? (9,164) ??????????????????????????????? ---------? ---------? ---------? --------- Cash flows from operating activities??????????????????????? (3,105)???? 6,055???? 55,739??? (12,075) ??????????????????????????????? ---------? --------- ?---------? --------- Cash flows from investing activities ???? Property, plant and ????? equipment??????????????????? (1,344)?? (10,241)?? (29,765)?? (83,209) ???? Decrease in restricted ????? cash????????????????????????????? -????? 3,487????? 1,233??? ?32,555 ??????????????????????????????? ---------? ---------? ---------? --------- Cash flows from investing activities??????????????????????? (1,344)??? (6,754)?? (28,532)?? (50,654) ??????????????????????????????? ---------? ---------? ---------? --------- Cash flows from financing activities ???? Issuance (repurchase) of ????? notes???????????????????????????? -????????? -???? (8,385)??? 22,085 ???? Exercise of warrants?????????????? -???? 38,438????????? -???? 39,815 ???? Exercise of options????????? ?????69??????? 145??????? 835??????? 317 ???? Loan proceeds, net???????????????? -??? (11,034)???????? -?????? (753) ??????????????????????????????? ---------? ---------? ---------? --------- Cash flows from financing activities?????????????????????????? ?69???? 27,549???? (7,550)??? 61,464 ??????????????????????????????? ---------? ---------? ---------? --------- Effect of exchange rate changes on cash?????????????????????????????? 15?????? (204)???? 1,275????????? 4 ??????????????????????????????? ---------? ---------? ---------? --------- Change in cash and cash equivalents during the period???? (4,365)??? 26,646???? 20,932???? (1,261) Cash and cash equivalents, beginning of period?????????????? 58,844????? 6,901???? 33,547???? 34,808 ??????????????? ????????????????---------? ---------? ---------? --------- Cash and cash equivalents, end of period???????????????????????? 54,479???? 33,547???? 54,479???? 33,547 ??????????????????????????????? =========? =========? =========? ========= Cash and cash equivalents consist of: ???? Cash?????????????????????????? 9,771????? 6,907????? 9,771????? 6,907 ???? Cash equivalents????????????? 44,708???? 26,640???? 44,708???? 26,640 ??????????????????????????????? ---------? ---------? ---------? --------- ?????????????????????????????????? 54,479???? 33,547???? 54,479???? 33,547 ??????????????????????????????? =========? =========? =========? ========= Supplemental information: ???? Interest paid????????????????? 3,259????? 4,215????? 9,164????? 8,673 ???? Income taxes paid????????????? 1,209????????? -????? 1,209????????? - |