Revett Minerals Reports on 2007 Financial and Operating Results
MONTREAL, March 28 /PRNewswire-FirstCall/ — Revett Minerals Inc., Spokane Valley, Washington (“TSX-RVM”) (“Revett” or the “Company”) is pleased to report the operating and financial results for the fourth quarter of 2007 and for the year ending December 31, 2007. All currency in this release is in United States dollars unless otherwise indicated.
Overall Performance ——————-
In summarizing the performance of the Company during its third year of operations, Mr. Bill Orchow, President and CEO of Revett Minerals, stated “We are pleased with the progress we have made in improving the operating performance at the Troy Mine (“Troy”) but saddened by the tragic fatality that occurred at Troy at the end of July. We were also pleased to receive during the fourth quarter of this year affirmation of the favorable biological opinion and record of decision for our Rock Creek Project from the United States Forest Service. Some other notable achievements in 2007 include:
– the Company reported its first ever year of profitability; – the Troy Mine generated pre-tax net income of $8.0 million (100% basis); – revenue from Troy totaled approximately $39 million, an increase of 24% from 2006; – the Troy Mine recorded its second consecutive year of positive cash flow; and – at Troy we discovered the “C-bed” reserves and associated mineralization. Consolidated Results ——————–
For the year ended December 31, 2007, the Company recorded revenues of $38.9 million. The direct operating costs to generate that revenue was $30.9 million and depreciation and depletion expense was $1.4 million implying a profit from mining operations (a non-GAAP measure) of $6.6 million. Profit from mining operations is a non-GAAP measure and may not be comparable to similar measures presented by other issuers. Management believes this is a useful supplementary measure of the performance of Troy. Other expenses included the non-cash accretion for reclamation and remediation liability of $0.6 million, general and administrative costs of $4.5 million, exploration and development expenditures at Troy and Rock Creek of $2.1 million, other income consisting of foreign exchange gains and net interest expense totaling $1.5 million. This resulted in income before income taxes and non-controlling interest of $0.9 million and for the year net income of $0.9 million or $0.01 per share. Metal sales for the 2007 calendar year were approximately 9.0 million pounds of payable copper and 1.0 million ounces of payable silver. During the year ending December 31, 2007, the Company used a net of approximately $0.4 million in cash from operating activities. Most significantly though, the Company experienced production restrictions in its underground mining operations for almost the entire second half of the year because of the rock fall and related fatality that occurred on July 30, 2007. This issue is discussed in more detail further in this release.
Revenues for the fourth quarter of 2007 were $3.1 million. The revenues recorded for the fourth quarter were adjusted downward to reflect the effect of the year end decline in the price of copper on sales for which prices had not been finalized. The increase in the price of copper by the end of March has served to partially offset the fourth sales quarter results. During the fourth quarter, the mine shipped and received provisional payment for approximately 1.0 million pounds of payable copper and 0.1 million ounces of payable silver. The direct costs of production for the fourth quarter were $7.5 million and depreciation and depletion expense was $0.3 million implying a loss from mining operations of $4.7 million (a non-GAAP measure). Other expenses during the fourth quarter included exploration and development costs of $0.4 million, general and administrative costs of $1.4 million, interest income net of interest expense together with a gain of foreign exchange balances held in Canadian dollars of $0.1 million, and the reclamation and remediation liability accretion of $0.1 million. The loss for the fourth quarter before income taxes and non-controlling interest was $6.4 million and the loss for the quarter was $3.0 million or $0.04 per share. The most significant factors affecting the fourth quarter were below average metal production resulting from low mill throughput and below normal ore grades and the decline in the copper price. For the three month period ending December 31, 2007, the Company used approximately $5.1 million in cash from operating activities.
The following is a summary of the production, sales and shipment results from the Troy Mine (100% basis) for the fourth quarter and the twelve month period ending December 31, 2007, with a comparison to 2006.
————————————————————————- Fourth Quarter 2007 Fiscal 2006 Fiscal ————– ———– ———– 2007 Year Year —- —- —- ————————————————————————- Tons milled 212,425 1,108,503 944,783 ————————————————————————- Tons milled per day 2,309 3,037 2,588 ————————————————————————- Copper grade (pct) 0.31 0.50 0.46 ————————————————————————- Silver grade (opt) 0.68 1.07 1.13 ————————————————————————- Copper recovery (pct) 85.0 86.5 83.5 ————————————————————————- Silver recovery (pct) 88.6 88.7 86.2 ————————————————————————- Copper produced (pounds) 1,135,338 9,681,827 7,304,383 ————————————————————————- Silver produced (ounces) 127,352 1,054,417 916,969 ————————————————————————- Copper sold (pounds) 1,030,105 8,962,776 6,455,713 ————————————————————————- Silver sold (ounces) 112,938 964,916 817,250 ————————————————————————-
For the year ended December 31, 2007, 1,108,503 tons of ore (3,037 tpd) were processed through the mill, which is less than expected levels. Mill throughput for the fourth quarter was only 2,309 tons per day, which was well below the daily average for the first nine months of the year. The primary reason for the shortfall in mill throughput was the restrictions placed on underground mining activities resulting from the rock fall and related fatality that occurred on July 30, 2007. During the first six months of the year the mill processed 3,801 tpd but during the second half of the year only 2,286 tpd were produced. Management of the Company continues to work aggressively to rectify the production shortfalls and to date in 2008 good progress has been made in increasing mill throughput, along with an improvement in the grade of ore mined and milled. During the fourth quarter of 2007, the grade of copper milled averaged 0.31% and the silver head grade was 0.68 ounces per ton. These ore grades were well below normal and were, again, caused by the restrictions placed on underground mining following the July rock fall. For the year, the copper grade was 0.50% and the silver grade was 1.07 ounces per ton. The operation of the mill has been very good as recoveries for both copper and silver remain above budgeted levels.
Year End Reserves-Troy Mine —————————
At December 31, 2007 the proven and probable reserves at the Troy Mine are estimated to be 13.2 million tons grading 1.18 ounces of silver per ton and 0.54% copper per ton. These reserves were calculated by using a cut-off NSR of $18.86 per ton. At projected production rates, the operating life of the Troy Mine is projected to exceed seven more years. The reserve estimates are based upon the Troy Mine N.I. 43-101 reported and updated by Mr. Larry Erickson, a qualified person in accordance with N.I. 43-101. Mr. Erickson is an employee of the Company and is not considered independent.
Rock Creek ———-
At Rock Creek, the Company continues with its efforts to advance the project. In December, the United States Forest Service re-affirmed both the Rock Creek biological opinion and its record of decision. During the year, the Company continued design work on the water treatment plant and work with the regulators to finalize the memorandum of understanding for the grizzly bear mitigation program Also in 2007 the Company acquired addition mitigation lands required by the Rock Creek record of decision at a cost of $2.6 million. Other work on Rock Creek included work on the Rock Creek scoping study, base line water quality and hydrology studies for the water treatment plant, and an application to the Montana Department of Environmental Quality to commence with the Rock Creek evaluation adit.
About Revett ————
Revett through its subsidiaries, owns the Rock Creek Project and the Troy Mine both located in northwest Montana. Based on the drilling to date, Rock Creek contains an estimated inferred resource of 136.6 million tons grading 1.67 ounces silver per ton and 0.72% copper, containing approximately 229 million ounces of silver and over 2 billion pounds of copper using a cut off grade of US $10.00 per ton. Further information on both the Troy Mine and the Rock Creek Project may be found in the National Instrument 43-101 reports at http://www.sedar.com/. These reports were prepared on behalf of the Company by Jean-Francois Couture, P.Geo. and Ken Reipas, P.Eng. of SRK Consulting (Canada). Both Mr. Couture and Reipas are Qualified Persons in accordance with National Instrument 43-101. All of these issues are discussed in greater detail in the Company’s official filings at http://www.sedar.com/.
William Orchow President & CEO
Except for the statements of historical fact contained herein, the information presented in this press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, including but not limited to those with respect to the price of silver and copper, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, risks relating to environmental laws and regulations, the actual results of current exploration activities, actual results of current reclamation activities, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, future prices of silver and copper, as well as those factors discussed in the section entitled “Risk Factors” in the Annual Information Form filed on sedar at http://www.sedar.com/. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
REVETT MINERALS INC. Consolidated Balance Sheets (Expressed in thousands of United States dollars) December 31, 2007 and 2006 ————————————————————————- ————————————————————————- 2007 2006 ————————————————————————- Assets Current assets: Cash and cash equivalents $ 14,055 $ 19,862 Short-term investments 3,955 3,940 Accounts receivable 970 980 Income taxes receivable 1,250 – Inventories 4,519 4,005 Prepaid expenses and deposits 498 512 ———————————————————————– 25,247 29,299 Mineral property, plant and equipment 60,714 56,012 Restricted cash 7,386 7,043 Other assets 1,264 1,849 ————————————————————————- $ 94,611 $ 94,203 ————————————————————————- ————————————————————————- Liabilities and Shareholders’ Equity Current liabilities Trade accounts payable $ 1,985 $ 569 Payroll liabilities 806 808 Income, property and mining taxes 1,161 1,081 Concentrate settlement payable 526 1,846 Other accrued liabilities 852 1,544 Current portion of long-term debt 9,719 4,387 ———————————————————————– 15,049 10,235 Long-term debt 1,784 9,354 Reclamation and remediation liability 7,141 7,603 Future income taxes 8,391 8,353 ————————————————————————- 32,365 35,545 Non-controlling interest 8,175 8,524 Shareholders’ equity: Share capital Authorized: unlimited no par common shares Issued and outstanding: 74,295,702 (2006 – 71,904,088) common shares 56,315 53,989 Contributed surplus 1,556 816 Deficit (3,800) (4,671) ———————————————————————– 54,071 50,134 ————————————————————————- $ 94,611 $ 94,203 ————————————————————————- ————————————————————————- REVETT MINERALS INC. Consolidated Statements of Operations and Comprehensive Income (Loss) (Expressed in thousands of United States dollars, except per share amounts) Years ended December 31, 2007, 2006 and 2005 ————————————————————————- ————————————————————————- 2007 2006 2005 ————————————————————————- Revenue $ 38,885 $ 31,381 $ 21,136 Expenses: Cost of sales 30,894 25,043 19,318 Depreciation and depletion 1,393 1,280 1,441 Exploration 2,131 1,417 1,259 General and administrative 4,518 3,558 2,618 Accretion of reclamation and remediation liability 559 596 584 ———————————————————————– 39,495 31,894 25,220 ————————————————————————- Loss from operations (610) (513) (4,084) Other income (expenses): Interest expense (1,307) (1,689) (1,745) Interest and other income 1,291 841 605 Foreign exchange loss (gain) 1,470 (225) – ———————————————————————– 1,454 (1,073) (1,140) ————————————————————————- Income (loss) before income taxes and non-controlling interest 844 (1,586) (5,224) Income tax recovery 634 165 1,100 ————————————————————————- Income (loss) before non-controlling interest 1,478 (1,421) (4,124) Non-controlling interest (607) (310) 1,206 ————————————————————————- Net income (loss) and comprehensive income (loss) for the year $ 871 $ (1,731) $ (2,918) ————————————————————————- ————————————————————————- Basic and diluted income (loss) per share $ 0.01 $ (0.03) $ (0.06) ————————————————————————- ————————————————————————- Weighted average number of shares outstanding: Basic 73,308,813 61,292,210 48,835,179 Diluted 73,579,709 61,292,210 48,835,179 ————————————————————————- ————————————————————————- REVETT MINERALS INC. Consolidated Statements of Shareholders’ Equity (Expressed in thousands of United States dollars, except share amounts) Years ended December 31, 2007, 2006 and 2005 ————————————————————————- ————————————————————————- Common shares Contri- ———————– buted Shares Amount surplus Deficit Total ————————————————————————- Balance, December 31, 2004 1 $ – $ – $ (22) $ (22) Issued for cash on IPO 34,500,000 24,972 – – 24,972 Exchanged for Revett Silver shares 24,489,705 17,222 – – 17,222 Redeemed (1) – – – – Issued for expenses 15,690 7 – – 7 Issued for interest owing 1,042,108 500 – – 500 Stock-based compensation on options granted – – 243 – 243 Net loss for the year – – – (2,918) (2,918) ————————————————————————- Balance, December 31, 2005 60,047,503 42,701 243 (2,940) 40,004 Issued for cash on the exercise of share purchase warrants 356,585 368 – – 368 Issued for cash on private placement 11,500,000 10,920 – – 10,920 Stock-based compensation on options granted – – 573 – 573 Net loss for the year – – – (1,731) (1,731) ————————————————————————- Balance, December 31, 2006 71,904,088 53,989 816 (4,671) 50,134 Issued to acquire non controlling interest 1,097,999 999 – – 999 Issued for cash on the exercise of share purchase warrants 1,293,615 1,327 – – 1,327 Stock-based compensation on options granted – – 740 – 740 Net income for the year – – – 871 871 ————————————————————————- Balance, December 31, 2007 74,295,702 $ 56,315 $ 1,556 $ (3,800) $ 54,071 ————————————————————————- ————————————————————————- REVETT MINERALS INC. Consolidated Statements of Cash Flows (Expressed in thousands of United States dollars) Years ended December 31, 2007, 2006 and 2005 ————————————————————————- ————————————————————————- 2007 2006 2005 ————————————————————————- Cash provided by (used in): Operating activities: Net income (loss) for the year $ 871 $ (1,731) $ (2,918) Items not involving cash: Depreciation and depletion 1,393 1,280 1,441 Accretion of reclamation and remediation liability 559 596 584 Unrealized foreign currency exchange loss (gain) (1,470) 225 – Stock-based compensation 740 573 243 Loss on disposal of fixed assets 25 – – Expenses paid with common shares – – 7 Future income tax recovery (634) (165) (1,100) Non-controlling interest 607 310 (1,206) Accrued interest from reclamation trust (343) (324) (159) Amortization of insurance premiums 128 144 115 Changes in non-cash working capital: Accounts receivables 10 2,110 345 Income taxes receivable (1,250) – – Inventories (514) (2,267) 1,795 Prepaid expenses and deposits 15 191 34 Accounts payable and accrued liabilities (518) 2,989 1,045 Deferred revenue acquired – – (1,850) ———————————————————————– (381) 3,931 (1,624) Financing activities: Proceeds from issuance of common stock 1,327 11,288 24,972 Repayment of debt (3,027) (1,529) (502) Repayment of capital leases (1,069) (565) (249) Proceeds from long-term debt – – 1,500 ———————————————————————– (2,769) 9,194 25,721 Investing activities: Sale (purchase) of short-term investments (15) 3,456 (7,396) Purchase of mineral property, plant and equipment (3,565) (793) (4,345) Other long-term assets 457 (310) (1,715) Restricted cash – – (6,560) Business acquisitions, net of cash acquired – – 528 Purchase of non controlling interest (1,004) – – ———————————————————————– (4,127) 2,353 (19,488) Impact of foreign exchange on cash and cash equivalents 1,470 (225) – ————————————————————————- Increase (decrease) in cash and cash equivalents (5,807) 15,253 4,609 Cash and cash equivalents, beginning of year 19,862 4,609 – ————————————————————————- Cash and cash equivalents, end of year $ 14,055 $ 19,862 $ 4,609 ————————————————————————- ————————————————————————- Supplemental disclosure of cash flow information: Cash paid for interest expense $ 1,532 $ 1,787 $ 1,419 Cash received for interest income 1,248 824 482 Cash paid for income taxes 1,250 – – Non-cash transactions: Shares issued in business acquisition (note 3(a)) – – 17,222 Common stock issued to acquire non controlling interest 999 – – Common stock issued in connection with debt settlement – – 500 Acquisition of plant and equipment under capital lease 1,859 650 889 Reduction of reclamation and remediation liability and offset to mineral property, plant and equipment 1,021 1,944 – ————————————————————————- ————————————————————————-
REVETT MINERALS INC
CONTACT: Scott Brunsdon, CFO or Doug Ward, VP Corporate Development,(509) 921-2294, or visit our website at http://www.revettminerals.com/; RenmarkFinancial Communications Inc.: Jason Roy, jroy@renmarkfinancial.com; MauriceDagenais, mdagenais@renmarkfinancial.com, (514) 939-3989, Fax: (514) 939-3717,http://www.renmarkfinancial.com/