Revett Minerals Reports Operating and Financial Results for the Three Months Ended March 31, 2008
SPOKANE VALLEY, WA, May 15 /PRNewswire-FirstCall/ — Revett Minerals Inc. (TSX-RVM) (“Revett” or the “Company”) is pleased to report on its improving operating and financial performance for the three months ended March 31, 2008. All currency in this report is in United States dollars unless otherwise indicated
The major highlights for the quarter ended March 31, 2008, included: – Troy (100% basis) achieved improved mill throughput averaging 3,332 tons per day compared to 2,309 tons per day during the three months ended December 31, 2007; – Troy (100% basis) produced 2.1 million pounds of copper and 231,912 ounces of silver compared to 1.1 million pounds of copper and 127,352 ounces of silver for the three months ended December 31, 2007; – Revett Minerals acquired the Kennecott term note leaving the consolidated company with only minimal non-royalty related fixed term debt, all of which relates to capital leases; – For the three months ended March 31, 2008, the Company reported income from operations of $1.9 million compared to a loss from operations of $6.5 million for the three months ended December 31, 2007; and – The Company reported net income of $1.4 million or $0.02 per share for the three months ended March 31, 2008 compared to a loss of $3.0 million or $0.04 per share for the three months ended December 31, 2007.
Bill Orchow, President and CEO of the Company, in commenting on the first quarter said “We are very pleased with the employees dedication in attaining continued production improvements which have had the added benefit of reducing our production costs on a metal produced basis. The management and staff at Troy are to be complemented for the efforts that they have made in improving the financial performance of the mine.”
CONSOLIDATED RESULTS ——————–
For the three months ended March 31, 2008, Revett reported a profit of $1.4 million or $0.02 per share on revenue of $12.0 million. This compared to a profit of $0.3 million or $0.00 per share during the three months ended March 31, 2007 on revenues of $10.7 million and a loss of $3.0 million or ($0.04) per share for the three months ended March 31, 2007 on revenues of $3.1 million.
Concentrate deliveries and sales during the three months ended March 31, 2008 consisted of 2.0 million pounds of payable copper and 183,735 ounces of payable silver compared to 2.7 million pounds of copper and 289,847 ounces of silver during the three months ended March 31, 2007.
During the first quarter of 2008, cost of sales was $8.3 million compared to $7.6 million in the first quarter of 2007. Operating costs were higher reflecting higher labor costs, higher materials and supplies (principally in the drill and blast activities), and higher property and state mining taxes. Depreciation and amortization in this current quarter was $0.4 million compared to $0.4 million in the first quarter of 2007. The Company uses the units-of-production method to depreciate the majority of Troy’s plant and equipment and therefore changes in throughput and ore reserves will result in corresponding adjustments to these expense items. The reclamation and remediation liability accretion expense was $0.2 million in the first quarter of 2008 and also $0.2 million in the first quarter of 2007.
Exploration and development costs totaled $0.4 million in the first quarter of 2008, compared to $0.5 million in the first quarter of 2007. The difference in exploration and development was largely a function of the timing of initiating Troy’s 2008 exploration program. General and administration costs were $1.0 million in the first quarter of 2008 compared to $1.0 million during the first quarter of 2007. Other income was an expense of $0.2 million during the first quarter of 2008 comprised almost entirely of a loss on foreign exchange. In the first quarter of 2007, other income was a loss of $0.02 million, reflecting a smaller change in the relative value of the Canadian dollar to the US dollar.
As a result net income before non controlling interest and taxes was $1.6 million for the first quarter of 2008 and $1.2 million for the first quarter of 2007. For the three months ended March 31, 2008, net income, after taxes and non controlling interests, was $1.4 million or $0.02 per share compared to net income of $0.3 million or $0.00 per share for the three month ended March 31, 2007.
On February 21, 2008, Revett Minerals acquired for face value Revett Silver’s loan obligation to Kennecott Montana Company, thereby, eliminating on a consolidated basis the majority of the Company’s debt obligations. The only remaining third part debt obligations are the capped Royal Gold production driven royalty expected to be retired within the next 12 to 18 months, depending production levels and metal prices, and $1.5 million in principal payments relating to certain capital lease obligations. At March 31, 2008, the Company’s cash and cash equivalents and short term investments, which consists of cash invested in fixed income securities, totaled $9.5 million compared to $18.0 million as at December 31, 2007. This use of cash was a mostly a function of acquiring the third party Kennecott note. At March 31, 2008 working capital had increased to $11.6 million from $10.2 million at December 31, 2007.
THE TROY MINE ————-
The table below illustrates certain key operating statistics for Troy (100% basis) for the three months ended March 31, 2008, with a comparison to the three months ended March 31, 2007 and also to the fourth quarter of 2007.
Three Months Three Months Three Months Ended Ended Ended ———— ———— ———— March 31, March 31, December 31, 2008 2007 2007 ——– ——– ———– Tons milled 299,863 350,180 212,425 Tons milled per day 3,332 3,891 2,309 Operating cost per ton milled (USD) 26.33 21.77 32.81 Copper grade (pct) 0.41 0.54 0.31 Silver grade (opt) 0.87 1.15 0.68 Copper recovery (pct) 86.5 87.1 85.0 Silver recovery (pct) 89.0 88.9 88.7 Copper produced (lbs) 2,129,522 3,302,352 1,135,338 Silver produced (ozs) 231,912 359,134 127,352
The continuing improvement in mill throughput, along with the continued high prices for silver and copper are the two most significant factors affecting the Company’s first quarter operating and financial results. If production can continue at levels experienced in March and prices remain at or near current levels, Troy could generate positive cash flow for the rest of 2008. Also, the mine continues to work aggressively in implementing its safety and environmental programs and this performance has been excellent for the past eight months.
ABOUT REVETT ————
Revett, through its subsidiaries, owns both the Rock Creek Project and the Troy Mine both of which are located in northwest Montana. Based on the drilling to date, Rock Creek contains an estimated inferred resource of 137 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 Mr. Jean-Francois Couture, P.Geo. and Mr. Ken Reipas, P.Eng. of SRK Consulting (Canada). Both Mr. Couture and Mr. 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 applicable Canadian securities legislation and 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 effect on the Company’s operations of pending or planned legal challenges, the timing and amount of estimated future production, industrial accidents, and costs of production, all involve known and unknown risks, uncertainties and other factors which may cause 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. Generally, these forward looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects”, or “does not expect”, “is expected”, “is not expected”, “budget”, “plans”, “schedule”, “estimates”, “forecasts”, “intends”, “anticipates”, “or does not anticipate” or “believes” or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward looking statements are subject to known and known risks, uncertainties and other factors. Such other factors may include, among others, ground control problems and flooding, metallurgical recovery problems, ore grade or tonnage shortfalls, labor disruptions or shortages of skilled labor, risks relating to environmental laws and regulations, the actual results of exploration activities, actual results of current reclamation activities, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, future metal prices, changes in the quantity and costs of producing copper concentrate 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 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 does not undertake to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws.
Revett Minerals Inc. Consolidated Balance Sheets at March 31, 2008 and December 31, 2007 (expressed in thousands of United States dollars except share and per share amounts) March 31, December 31, 2008 2007 (unaudited) Assets Current Assets Cash and cash equivalents $ 8,538 $ 14,055 Short term investments 1,002 3,955 Accounts receivable 3,968 970 Income tax receivable – 1,250 Concentrate settlement receivable 1,507 – Inventories (note 3) 4,701 4,519 Prepaid expenses and deposits 563 498 —————————– Total current assets 20,279 25,247 Mineral property, plant, equipment and mine development (net) (note 4) 60,531 60,714 Restricted cash (note 5) 7,477 7,386 Other long term assets 1,232 1,264 —————————– Total assets $ 89,519 $ 94,611 —————————– —————————– Liabilities and shareholders equity Current liabilities Trade accounts payable $ 1,801 $ 1,985 Payroll liabilities 880 806 Income, property and mining taxes 1,497 1,161 Concentrate settlement payable – 526 Other accrued liabilities 1,030 852 Current portion of long term debt 3,572 9,719 —————————– Total current liabilities 8,780 15,049 Long-term portion of debt (note 6) 1,011 1,784 Reclamation and remediation liability (note 9 (b)) 7,036 7,141 Future income tax 7,974 8,391 —————————– Total liabilities 24,801 32,365 —————————– Non controlling interest 8,604 8,175 Shareholders’ equity Preferred stock, no par value, unlimited authorized, nil issued and outstanding Common stock, no par value unlimited authorized, 75,002,702 (2007- 74,295,702) shares issued and outstanding (note 7 (b)) 56,871 56,315 Contributed surplus 1,636 1,556 Deficit (2,393) (3,800) —————————– 56,114 54,071 Total liabilities and shareholders equity $ 89,519 $ 94,611 —————————– —————————– See accompanying notes to interim consolidated financial statements. Revett Minerals Inc. Consolidated Statements of Operations Three months ended March 31, 2008 and 2007 (expressed in thousands of United States dollars except share and per share amounts) (unaudited) Three month Three month period ended period ended March 31, March 31, 2008 2007 Revenues $ 12,034 $ 10,716 Expenses: Cost of sales 8,278 7,550 Depreciation and amortization 392 386 Exploration and development 355 475 General & administrative 986 975 Accretion of reclamation and remediation liability 146 161 —————————– 10,157 9,547 —————————– Income from operations 1,877 1,169 Other income (expenses): Interest expense (274) (371) Interest and other income 255 387 Foreign exchange (loss) (216) (33) —————————– Total other income (expenses) (235) (17) Net income before non controlling interest and taxes 1,642 1,152 Income tax recovery (expense) 426 (376) Net income before non controlling interest 2,068 776 Non controlling interest (661) (475) Net income for the period $ 1,407 $ 301 —————————– —————————– Basic earnings per share $ 0.02 $ 0.00 —————————– —————————– Diluted earnings per share $ 0.02 $ 0.00 —————————– —————————– Weighed average number of shares outstanding 74,761,856 72,934,097 —————————– —————————– Weighted average number of diluted shares outstanding 75,071,221 73,509,069 —————————– —————————– Revett Minerals Inc. Consolidated Statement of Cash Flow Three months ended March 31, 2008 and 2007 (expressed in thousands of United States dollars except share and per share amounts) (unaudited) Three month Three month period ended period ended March 31, March 31, 2008 2007 (unaudited) (unaudited) Cash flows from operating activities: Net income for the period $ 1,407 $ 301 Adjustment to reconcile net income to net cash used by operating activities Depreciation and amortization 392 386 Accretion of reclamation and remediation liability 146 161 Foreign exchange loss 216 33 Stock based compensation 80 343 Loss on disposal of fixed assets 74 – Future income tax expense (recovery) (623) 376 Non controlling interest 661 475 Accrued interest from reclamation trust fund (86) (82) Amortization of prepaid insurance premium 32 41 Change in fair value of derivative contracts (2,033) (3,974) Changes in: Accounts receivable (2,998) 3,399 Income tax receivable 1,250 – Inventory (182) (857) Prepaid expenses and other (65) (370) Accounts payable and accrued liabilities 404 (1,745) —————————– Net cash used by operating activities (1,325) (1,513) —————————– Cash flows from investing activities: Proceeds (purchase) of short term investments 2,953 (479) Other long term assets (3) 42 Purchase of plant and equipment (6) (258) —————————– Net cash provided (used) by investing activities 2,944 (695) —————————– Cash flows from financing activities: Proceeds form the issuance of common stock, net – 1,327 Repayment of debt (6,625) (740) Repayment of capital leases (295) (181) —————————– Net cash from (used by) financing activities (6,920) 406 —————————– Effects of foreign exchange on cash held In foreign currencies (216) (33) Net (decrease) increase in cash and cash equivalents (5,517) (1,835) Cash and cash equivalents, beginning of period 14,055 19,862 —————————– Cash and cash equivalents, end of period $ 8,538 $ 18,027 —————————– —————————– Supplementary cash flow information: Cash paid for interest expense $ 404 $ 545 Cash received for interest income $ 374 $ 247 Common stock issued to acquire non controlling interest $ 556 $ – Reduction of reclamation and remediation liability $ 251 $ 1,021 Revett Minerals Inc. Consolidated Statement of Shareholders’ Equity Three months ended March 31, 2008 and year ended December 31, 2007 (expressed in thousands of United States dollars except share and per share amounts) (unaudited) Common Shares Contri- ————- buted Shares Amount Surplus Deficit Total —— —— ——- ——- —– 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 ———————————————————- ———————————————————- Issued to acquire non controlling interest 707,000 556 – – 556 Stock-based compensation on options granted – – 80 – 80 Net income for the period – – – 1,407 1,407 ———————————————————- Balance, March 31, 2008 75,002,702 $ 56,871 $ 1,636 $ (2,393) $ 56,114 ———————————————————- ———————————————————- See accompanying notes to interim consolidated financial statements.
REVETT MINERALS INC
CONTACT: Scott Brunsdon, CFO; Doug Ward, VP Corporate Development, (509)921-2294; http://www.revettminerals.com/; Renmark Financial Communications Inc.: JasonRoy, jroy@renmarkfinancial.com; Maurice Dagenais,mdagenais@renmarkfinancial.com, (514) 939-3989, Fax: (514) 939-3717;http://www.renmarkfinancial.com/