- Record production of 16.0 million pounds of copper
- $1.7 million cash flow from operations
- Gross tolling revenue was $32.5 million (Q3-2015: $14.9 million), mainly due to an 88% increase in copper production. The Group's recorded copper tolling price was $2.13/lb (Q3-2015: $2.36/lb). Molybdenum production was restarted in Q3-2016. Revenue after notional items was $23.4 million (Q3-2015: $10.8 million).
- Tolling and production costs were $24.3 million (Q3-2015: $15.3 million), an increase of 59% driven by an 88% increase in copper production.
- Cash cost (a non-GAAP measure equal to the aggregate of smelting and refining charges, tolling/production costs net of inventory adjustments and administration costs, net of by-product credits) before DET notional copper royalties and DET molybdenum royalties decreased to $1.60/lb (Q3-2015: $2.07/lb) due to higher production.
- Total cost (a non-GAAP measure equal to the aggregate of cash cost of $1.60/lb, DET notional copper royalties and DET molybdenum royalties of $0.36/lb and depreciation of $0.22/lb) decreased to $2.18/lb (Q3-2015: $2.62/lb), due to lower cash cost.
- Gross loss was $0.9 million (Q3-2015: $4.5 million) and net loss was $2.5 million (Q3-2015: $6.2 million).
- In Q3-2016 the Group generated cash flow from operations before changes in non-cash working capital of $1.7 million (Q3-2016: used cash flow in operations of $2.5 million).
- Q3-2016 copper production was 16.0 million pounds, 88% higher than the 8.5 million pounds produced in Q3-2015.
- Q3-2016 copper production includes 9.8 million pounds from Cauquenes, 5.6 million pounds from fresh tailings and 0.7 million pounds from Maricunga.
- The ramp-up in production from Cauquenes has progressed in line with expectations, with tonnage higher than design rates of 60,000 tonnes per day ("tpd") and plant recovery averaging 34.4% in the quarter.
- Molybdenum production restarted in August 2016, with Q3-2016 production of 138,301 pounds. The operation of the molybdenum plant has been outsourced to a subcontractor who refurbished the plant with a $1.0 million investment to be paid by MVC over the course of three years.
- The Group's cash balance was $21.1 million at September 30, 2016 (December 31, 2015: $9.0 million), with a working capital deficiency of $1.1 million (December 31, 2015: working capital deficiency of $6.0 million).
- The Group's cash balance at September 30, 2016 includes $13.6 million in operating accounts and $7.5 million in a debt service reserve account.
- MVC maintains its 2016 production guidance of 55.0 to 60.0 million pounds of copper at an annual cash cost of $1.65 to $1.85/lb.
- MVC's sustaining Capex in 2016, excluding Capex incurred to refurbish the molybdenum plant, continues to be estimated at $5.0 million, mostly incurred on extraction sumps at Cauquenes.
- MVC expects to complete the production test required under the Cauquenes Expansion Loan in Q4-2016.
- Cash and cash equivalents at MVC at December 31, 2016 are expected to be lower than at September 30, 2016, following scheduled debt repayments in December 2016 and expected changes in other working capital accounts in Q4-2016.
|Copper produced 1 million pounds||16.0||8.5||7.5||88||%|
|% of production from historic tailings||61||%||9||%||-||578||%|
|Gross copper tolling price ($/lb)||2.13||2.36||(0.23||)||(10||%)|
|Cash cost per pound 2||1.60||2.07||(0.47||)||(23||%)|
|Total cost per pound 2||2.18||2.62||(0.44||)||(17||%)|
|1 As of January 1, 2015 production of copper concentrates from El Teniente fresh and historic tailings is conducted under a tolling agreement with DET.|
|2 Cash and total costs are non-GAAP measures.|
|Summary Consolidated Statements of Financial Position|
|September 30,||December 31,|
|Cash and cash equivalents||21,056||9,032|
|Property plant and equipment||176,389||181,494|
|Total liabilities and shareholders' equity||222,257||220,210|
|Summary Consolidated Statements of Comprehensive Loss|
|Tolling and production costs||(24,300||)||(15,290||)|
|Income tax (expense) recovery||(240||)||810|
|Other comprehensive income (loss)||149||(279||)|
|Loss per share - Basic and Diluted||(0.01||)||(0.03||)|
|Summary Consolidated Statements of Cash Flows|
|Net cash provided by (used in) operations||10,188||(6,814||)|
|Net cash used in investing activities||(1,341||)||(15,498||)|
|Net cash (used in) provided by financing activities||3,000||20,248|
|Net cash inflow (outflow)||11,847||(2,064||)|
- forecast production and operating costs;
- our strategies and objectives;
- our estimates of the availability and quantity of tailings, and the quality of our mine plan estimates;
- the extension of El Teniente's useful life and the extent of its remaining ore reserves;
- prices and price volatility for copper and other commodities and of materials we use in our operations;
- the demand for and supply of copper and other commodities and materials that we produce, sell and use;
- sensitivity of our financial results and share price to changes in commodity prices;
- our financial resources;
- interest and other expenses;
- domestic and foreign laws affecting our operations;
- our tax position and the tax rates applicable to us;
- the timing and costs of construction and tolling/production, and the issuance and maintenance of the necessary permits and other authorizations required for, our expansion projects, including the expansion for the Cauquenes deposit and the timing of ramp up to full production from Cauquenes;
- our ability to procure or have access to financing (including funding of the remaining phases of the Cauquenes project) and to comply with our loan covenants;
- the production capacity of our operations, our planned production levels and future production;
- potential impact of production and transportation disruptions;
- hazards inherent in the mining industry causing personal injury or loss of life, severe damage to or destruction of property and equipment, pollution or environmental damage, claims by third parties and suspension of operations
- our planned capital expenditures (including our plan to upgrade our existing plant and operations after phase one of Cauquenes is complete) and estimates of asset retirement, royalty, severance and other obligations;
- our future capital and production costs, including the costs and potential impact of complying with existing and proposed environmental laws and regulations in the operation and closure of our operations;
- repudiation, nullification, modification or renegotiation of contracts;
- our financial and operating objectives;
- our environmental, health and safety initiatives;
- the outcome of legal proceedings and other disputes in which we may be involved;
- the outcome of negotiations concerning metal sales, treatment charges and notional royalties/royalties;
- our capital expenditures, including the timing and cost of completion of capital projects;
- disruptions to the information technology systems of the Company and its subsidiaries (collectively, the "Group"), including those related to cyber-security;
- our dividend policy; and
- general business and economic conditions.