Revett Minerals Reports Operating and Financial Results for the Three and Six Months Ended June 30, 2008
SPOKANE VALLEY, WA, Aug. 13 /PRNewswire-FirstCall/ — Revett Minerals Inc., (TSX-RVM) (“Revett” or the “Company”) is pleased to report on its operating and financial performance for the three and six months ended June 30, 2008. All currency in this report is in United States dollars unless otherwise indicated
The major highlights for the three and six months ended June 30, 2008 include the following:
– Troy has now operated for 12 consecutive months without a lost time incident; – Troy (100% basis) attained mill throughput averaging 3,645 tons per day for the three months ended June 30, 2008 ( and 3,489 tons per day for the first six month period in 2008) compared to 3,711 tons per day during the three months ended June 30, 2007 ( and 3,801 tons per day for the six month period ended June 30, 2007); – Troy (100% basis) generated over $5.2 million in cash for the three months ended June 30, 2008 bringing its year to date cash flow to over $3.6 million; – Troy (100% basis) generated net earnings before taxes of $3.4 million for the second quarter of 2008 and $6.6 million for the six month period ended June 30, 2008; – Troy (100% basis) produced 2.4 million pounds of copper and 259,847 ounces of silver in concentrate during the second quarter of 2008 compared to 3.5 million pounds of copper and 372,332 ounces of silver for the three months ended June 30, 2007; – For the six month period ended June 30, 2008, Troy produced 4.5 million pounds of copper and 491,759 ounces of silver in concentrate compared to production of 6.8 million pounds of copper and 731,466 ounces of silver in concentrate for the comparable six month period in 2007; – The Troy Mine has entered into a contractual agreement with Small Mine Development LLC (“SMD”) whereby SMD will provide contract mining services to assist in development of the “C-Beds” and also assist in the on-going mining and development in the East Ore Body; – For the three months ended June 30, 2008, the Company reported net income of $0.1 million ($0.00 per share) compared to $3.7 million ($0.05 per share for the second quarter of 2007; – In-spite of improving production of copper and silver, second quarter earnings were negatively impacted by the Company being required to fair value concentrate sales for which final settlement had not yet occurred, a large tax expense for the quarter and significant legal expenses relating to the Rock Creek permit challenges; and – The Company reported net income of $1.5 million or $0.02 per share for the six months ended June 30, 2008 compared to net income of $4.0 million ($0.06 per share) for the six months ended June 30, 2007.
Bill Orchow, President and CEO of the Company, in commenting on the results for the second quarter of 2008 said “We continue to be pleased with the strong earnings and cash generation that was achieved by Troy over the past three months coupled with a continuing excellent environmental record and an excellent safety record by all employees. Troy has not had a lost time incident for over a year”.
CONSOLIDATED RESULTS ——————–
For the three months ended June 30, 2008, Revett reported net income of $0.1 million or $0.00 per share on revenue of $13.4 million. This compared to net income of $3.7 million or $0.05 per share during the three months ended June 30, 2007 on revenues of $15.9 million. Net income for the second quarter of 2008 was negatively effected by three significant factors; (i) in the second quarter, revenues were reduced by $2.0 million due to the accounting requirement whereby the Company is required to mark to market accounts receivable and forward contracts for which final settlement has not yet occurred; (ii) approximately $0.5 million of legal expenses relating to Rock Creek; and (iii) a large tax adjustment because management changed its estimate of the amount of exploration spending at Rock Creek which significantly increased the income tax expense for the three and six months ended June 30, 2008.
Concentrate deliveries and sales during the three months ended June 30, 2008 consisted of 2.4 million pounds of payable copper and 244,630 ounces of payable silver compared to 3.5 million pounds of copper and 378,226 ounces of silver during the three months ended June 30, 2007.
During the second quarter of 2008, cost of sales was $9.5 million compared to $8.8 million in the second 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 $0.5 million compared to $0.4 million in the second quarter of 2007. The reclamation and remediation liability accretion expense was $0.1 million in the second quarter of 2008 and $0.2 million in the second quarter of 2007.
Exploration and development costs totaled $1.0 million in the second quarter of 2008, compared to $0.6 million in the second quarter of 2007. The large increase in exploration and development was largely a function of increased legal costs relating to the Rock Creek permit challenges. With all court filings now complete these expenses should be less in future periods. General and administration costs were $1.4 million in the second quarter of 2008 compared to $1.1 million during the second quarter of 2007. Other income during the second quarter was $0.1 million compared to $0.9 million recorded during the second quarter of 2007, reflecting lower foreign exchange gains on cash and short term investment held in Canadian dollars.
As a result of the foregoing factors, net income before non controlling interest and taxes was $1.0 million for the second quarter of 2008 and $5.8 million for the second quarter of 2007. For the three months ended June 30, 2008, net income, after taxes and non controlling interests, was $0.1 million or $0.00 per share compared to net income of $3.7 million or $0.05 per share for the three month period ended June 30, 2007.
The only remaining third party debt obligations of the Company are the capped Royal Gold production driven royalty expected to be retired within the next nine months depending on production levels and metal prices and $1.6 million in principal payments relating to certain capital lease obligations. At June 30, 2008, the Company’s cash and cash equivalents and short term investments, which consists of cash invested in fixed income securities, totaled $13.1 million compared to $9.5 million as at March 31, 2008. At June 30, 2008 working capital had increased to $12.5 million from $11.6 million at March 31, 2008.
THE TROY MINE ————-
The table below illustrates certain key operating statistics for Troy (100% basis) for the three and six months ended June 30, 2008, with a comparison to the three and six months ended June 30, 2007.
Three Months Three Months Six Months Six Months ———— ———— ———- ———- Ended Ended Ended Ended —– —– —– —– June 30, June 30, June 30, June 30, ——- ——- ——- ——- 2008 2007 2008 2007 —- —- —- —- Tons milled 331,698 337,712 631,561 687,892 Tons milled per day 3,645 3,711 3,489 3,801 Operating cost per ton milled (USD) 26.96 22.04 26.67 21.90 Copper grade (pct) 0.41 0.59 0.41 0.56 Silver grade (opt) 0.87 1.24 0.87 1.19 Copper recovery (pct) 87.9 87.1 87.2 87.1 Silver recovery (pct) 90.1 88.5 89.6 88.7 Copper produced (lbs) 2,388,947 3,490,930 4,518,469 6,793,282 Silver produced (ozs) 259,847 372,332 491,759 731,466 Copper sold (payable pounds) 2,391,086 3,544,216 4,409,060 6,276,480 Silver sold (payable ozs) 244,630 378,226 447,393 668,073
The continuing improvement in mill throughput, combined with the continued high prices for silver and copper are the two most significant factors affecting the Company’s second quarter operating and financial results. Production levels in the second quarter of 2008 improved by 10.6% over the first quarter of 2008, but lower than planned ore grades continue to affect the amount of payable metal produced. Since January 2008, the mine has operated for significant periods of time in the fringes of the ore body because metal prices have allowed for economic production from lower grade material and, additionally the mine remains behind in its development as it continues to recovery from restrictions placed on it by MSHA (relating to the July 30, 2007 rock fall) during the second half of 2007. Ore grades, however, remained below average life of mine grades but a modest improvement in grades is anticipated throughout the rest of the year. If production can continue at levels experienced in the second quarter and prices remain at or near current levels, Troy could generate positive cash flow during the rest of this year. Also, the mine continues to work aggressively in implementing its safety and environmental programs and this performance has been excellent for the past twelve months.
ROCK CREEK UPDATE —————–
All required legal briefs have been filed with the court respecting the challenges brought by certain environmental groups concerning the Rock Creek permit. Meanwhile, in accordance with our permits, the Company has completed construction of the office and core shed at the Rock Creek property.
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/ and with the SEC on EDGAR.
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 Form 10-Kfiled on SEDAR at http://www.sedar.com/ and with the SEC on EDGAR. 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 June 30, 2008 and December 31, 2007 (expressed in thousands of United States dollars) (unaudited) June 30, 2008 December 31, (unaudited) 2007 Assets Current Assets Cash and cash equivalents $ 13,106 $ 14,055 Short term investments – 3,955 Accounts receivable 3,941 970 Income taxes receivable 50 1,250 Inventories 4,767 4,519 Prepaid expenses and deposits 601 498 ————————— Total current assets 22,465 25,247 Mineral property, plant, equipment and mine development (net) 60,364 60,714 Restricted cash 7,538 7,386 Other long term assets 1,197 1,264 ————————— Total assets $ 91,564 $ 94,611 ————————— ————————— Liabilities and shareholders equity Current liabilities Trade accounts payable $ 2,347 $ 1,985 Payroll liabilities 1,062 806 Income, property and mining taxes 1,698 1,161 Concentrate settlement payable 416 526 Other accrued liabilities 1,438 852 Current portion of long term debt 3,025 9,719 ————————— Total current liabilities 9,986 15,049 Long-term portion of debt 597 1,784 Reclamation and remediation liability 7,231 7,141 Future income taxes 8,450 8,391 ————————— Total liabilities 26,264 32,365 ————————— Non controlling interest 9,072 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 56,871 56,315 Contributed surplus 1,675 1,556 Deficit (2,318) (3,800) ————————— 56,228 54,071 ————————— Total liabilities and shareholders equity $ 91,564 $ 94,611 ————————— ————————— Revett Minerals Inc. Consolidated Statements of Operations and Comprehensive income Three and six months ended June 30, 2008 and 2007 (expressed in thousands of United States dollars except share and per share amounts) (unaudited) Three month Three month Six month Six month period ended period ended period ended period ended June 30, June 30, June 30, June 30, 2008 2007 2008 2007 Revenues $ 13,377 $ 15,903 $ 25,411 $ 26,619 Expenses: Cost of sales 9,515 8,758 17,793 16,307 Depreciation and amortization 454 449 846 835 Exploration and development 958 625 1,310 1,100 General and administrative 1,389 1,064 2,375 2,039 Accretion of reclamation and remediation liability 148 162 295 323 ——————————————————- 12,464 11,058 22,619 20,604 ——————————————————- Income from operations 913 4,845 2,792 6,015 Other income (expenses): Interest expense (270) (372) (544) (744) Interest and other income 362 465 617 692 Foreign exchange gain (loss) 35 838 (183) 966 ——————————————————- Total other income (expenses) 127 931 (110) 914 ——————————————————- Net income before non controlling interest and taxes 1,040 5,776 2,682 6,929 Income tax expense 496 953 71 1,329 ——————————————————- Net income before non controlling interest 544 4,823 2,611 5,600 Non controlling interest 469 1,096 1,129 1,571 ——————————————————- Net income and comprehensive income for the period $ 75 $ 3,727 $ 1,482 $ 4,029 ——————————————————- ——————————————————- Basic earnings per share $ 0.00 $ 0.05 $ 0.02 $ 0.06 ——————————————————- ——————————————————- Diluted earnings per share $ 0.00 $ 0.05 $ 0.02 $ 0.06 ——————————————————- ——————————————————- Weighed average number of shares outstanding 75,002,702 72,863,666 74,882,279 72,863,666 ——————————————————- ——————————————————- Weighted average number of diluted shares outstanding 75,028,702 73,585,032 74,908,279 73,250,995 ——————————————————- ——————————————————- Revett Minerals Inc. Consolidated Statements of Cash Flow Three and six months ended June 30, 2008 and 2007 (expressed in thousands of United States dollars) (unaudited) Three month Three month Six month Six month period ended period ended period ended period ended June 30, June 30, June 30, June 30, 2008 2007 2008 2007 Cash flows from operating activities: Net income for the period $ 75 $ 3,727 $ 1,482 $ 4,029 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 454 449 846 835 Accretion of reclamation and remediation liability 148 162 295 323 Foreign exchange loss (gain) (35) (838) 183 (966) Stock based compensation 39 154 119 497 Loss (gain) on disposal of fixed assets (7) 1 67 1 Future income tax expense (recovery) 475 953 (147) 1,329 Non controlling interest 469 1,096 1,129 1,571 Accrued interest from reclamation trust fund (67) (85) (153) (168) Amortization of prepaid insurance premium 36 39 68 80 Change in fair value of derivative contracts 2,142 (1,466) 109 1,641 Changes in: Accounts receivable (82) (3,838) (3,080) (5,113) Income taxes receivable – – 1,250 – Inventory (65) 605 (247) (253) Prepaid expenses and other (88) 126 (153) (270) Accounts payable and accrued liabilities 1,229 5,187 1,631 1,061 ——————————————————- Net cash generated by operating activities 4,723 6,272 3,399 4,597 ——————————————————- Cash flows from investing activities: Proceeds (purchase) of short term investments 1,002 (1,465) 3,955 (1,944) Other long term assets 3 541 – 583 Purchase of plant and equipment (149) (2,450) (155) (2,708) ——————————————————- Net cash provided (used) by investing activities 856 (3,374) 3,800 (4,069) ——————————————————- Cash flows from financing activities: Proceeds form the issuance of common stock, net – – – 1,327 Proceeds from long term debt – 1,838 – 1,839 Repayment of debt (763) (1,602) (7,388) (2,342) Repayment of capital leases (282) (244) (577) (425) ——————————————————- Net cash from (used by) financing activities (1,045) (8) (7,965) 399 ——————————————————- Effects of foreign exchange on cash held In foreign currencies 35 838 (183) 966 ——————————————————- Net increase (decrease) in cash and cash equivalents 4,569 3,728 (949) 1,893 Cash and cash equivalents, beginning of period 8,537 18,027 14,055 19,862 ——————————————————- Cash and cash equivalents, end of period $ 13,106 $ 21,755 $ 13,106 $ 21,755 ——————————————————- ——————————————————- Supplementary cash flow information: Cash paid for interest expense $ 148 $ 242 $ 552 $ 787 Common stock issued to acquire non- controlling interest $ – $ – $ 556 $ – Acquisition of plant and equipment under capital lease business acquisition $ – $ – $ 84 $ – Revett Minerals Inc. Consolidated Statement of Shareholders’ Equity Six months ended June 30, 2008 and 2007 (expressed in thousands of United States dollars) (unaudited) Common shares Contri- ———————– buted Shares Amount surplus Deficit Total ————————————————————————- Balance, December 31, 2006 71,904,088 $ 53,989 $ 816 $ (4,673) $ 50,132 Issued for cash on the exercise of share purchase warrants 1,293,615 1,327 – – 1,327 Stock-based compensation on options granted – – 496 – 496 Net income for the year – – – 4,029 4,029 ——————————————————– Balance, June 30, 2007 73,197,703 $ 55,316 $ 1,312 $ (644) $ 55,984 ——————————————————– ——————————————————– 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 Issued for cash on the exercise of share purchase warrants – – – – – Stock-based compensation on options granted – – 119 – 119 Net income for the period – – – 1,482 1,482 ——————————————————– Balance, June 30, 2008 75,002,702 $ 56,871 $ 1,675 $ (2,318) $ 56,228 ——————————————————– ——————————————————–
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/
