(All figures, except per share amounts, are in $US unless otherwise stated or
unless context requires otherwise)
Quadra FNX Mining Ltd. (the "Company" or "Quadra FNX") (TSX:QUX) is pleased to
announce its third quarter 2011 ("Q3 2011") financial and operational results.
The Company's financial statements are prepared in accordance with International
Financial Reporting Standards ("IFRS").
Q3 2011 & RECENT HIGHLIGHTS:
-- Total production for the quarter was 60 million pounds of copper and
27,000 ounces of total precious metals (TPMs).
-- As compared to the previous year, revenues increased by 26% to $326
million and operating cash flow increased by 44% to $79 million.
-- Cash costs were $2.13 per pound, a decrease of 9% from the prior
quarter.
-- Earnings increased over 600% to $143 million compared to the previous
year, mainly as a result of net non cash adjustments for Sierra Gorda,
Carlota and Podolsky.
-- Adjusted earnings for Q3 2011 totaled $52 million or $0.27 per share
(basic) compared to $35 million or $0.18 per share (basic) for the
previous year. Unusual items included a $293 million gain on the
previously announced Sumitomo joint venture, partially offset by $238
million in impairments and non-recurring inventory adjustments at heap
leach operations and the Podolsky mine.
-- During the quarter the Company formed a 55/45% Sierra Gorda joint
venture with Sumitomo Metal Mining Co., Ltd. and Sumitomo Corporation.
The joint venture is now positioned to fully fund the project and
construction commenced in July.
-- After quarter end, the Company and Xstrata Nickel signed a term sheet
for an Access Arrangement to further optimize the production and
development of the Morrison deposit.
Paul Blythe, President and CEO of Quadra FNX comments, "Since the completion of
the Quadra and FNX merger over eighteen months ago our asset portfolio has gone
through numerous changes. The most significant areas of progress are the
financing and advancement of Sierra Gorda into construction, the discovery of
Zone 4 at Victoria and, most recently, the announcement of the Access
Arrangement. At Robinson, with the completion of the new ramp and further
increases in the mining rate, the improved Q3 2011 performance has continued
into Q4 2011, with over 12 million pounds of payable copper produced in October.
As a Company we have naturally turned our energy and focus to the operations and
projects that will deliver the most value to our shareholders by maximizing net
asset value and free cash flow. We believe that the best way to achieve this is
by optimizing the opportunities at our two flagship operations, Robinson and
Morrison, which together contribute over 85% of our operating income, while
continuing to deliver on our significant growth pipeline. We have reviewed our
other assets and have concluded that, on a risk adjusted basis, we should wind
down Carlota and Podolsky. We have also made significant changes to the mine
plan for Franke, which will be focused on the China pit that is expected to have
lower acid consumption rates. These changes in our portfolio will, in our view,
better position Quadra FNX to focus on its core strengths and maximize value."
Operating and Financial Summary Three months ended Nine months ended
In millions of US dollars
(except per share data and Sep 30, Sep 30, Sep 30, Sep 30,
production data) 2011 2010 2011 2010
----------------------------------------------------------------------------
Revenues 326.2 259.2 892.8 625.8
Adjusted earnings (1) 51.9 34.6 146.6 114.5
Adjusted earnings per share
(basic) $ 0.27 $ 0.18 $ 0.77 $ 0.80
EBITDA (2) 126.6 72.6 421.4 215.4
EBITDA per share (basic) $ 0.66 $ 0.38 $ 2.21 $ 1.51
Earnings for the period 142.8 19.5 374.3 111.0
Basic earnings per share $ 0.75 $ 0.10 $ 1.96 $ 0.78
Diluted earnings per share $ 0.71 $ 0.10 $ 1.89 $ 0.77
(1) Adjusted earnings is a non-IFRS financial measure and consists of net
earnings with adjustments made to exclude derivative losses, gain on
marketable securities and investments, merger costs, inventory write
down and tax related items.
(2) EBITDA is a non-IFRS financial measure which is defined as earnings
attributable to shareholders before interest expenses, income taxes,
depreciation, amortization and depletion
(3) Revenues and earnings from the former FNX operations are reported only
for the period commencing May 21, 2010, the day after the closing of
the merger with FNX Mining Ltd.
At Robinson the Company is continuing with optimization programs which will
improve operating flexibility and performance. At the end of the third quarter
both mining and milling rates improved substantially and the improved
performance has continued into the fourth quarter. As planned, the operation
transitioned into higher grade benches at the bottom of the Ruth pit resulting
in continuing quarter-over-quarter increases in production. As production
volumes increased, the cash cost per pound of payable copper produced declined
to US$2.13/lb from the US$2.78/lb level achieved in Q2 2011. Quadra FNX
continues to expect quarter-over-quarter production improvements into Q4 2011.
The drill campaign in the Liberty pit, which is located between the historical
Tripp-Veteran pit and the Ruth pit, was completed during the quarter, and a new
Liberty resource is expected by year-end, that may lead to an extended mine
life.
The strong operating performance of the Morrison deposit continued during the
quarter. In October, the Company and Xstrata Nickel signed a term sheet setting
out the terms of a proposed agreement to utilize the Craig mine shaft and
related underground infrastructure to further develop and optimize the Morrison
deposit. In addition, the Company is reviewing its options to re-dedicate the
Levack mine shaft to the production of Levack Nickel options. The arrangement is
expected to have a positive impact on Morrison's long term production outlook
and operating efficiencies. The Company also continues to advance discussions
with Xstrata for the treatment of additional contact nickel ores, which could
further improve the profitability of the Levack Complex.
The development of our flagship Sierra Gorda project in Chile remains on time
and on budget and the mass earthworks activities have already commenced. Both
mining and loading equipment have begun to arrive on site in preparation for the
commencement of pre-stripping in Q2 2012. The joint venture continues to
negotiate several of its key contracts, including the power purchase agreement,
the water supply system, railway transportation, transmission lines and port
facilities. The terms of these contracts are expected to be substantially
finalized by year end. The project has also successfully recruited its key
management positions and a total of over 600 employees and contractors are
currently on site.
Ongoing exploration efforts at Victoria are focused on the up and down plunge
extensions of Zone 4, as well as testing for satellite ore bodies. The Company
continues to advance engineering studies on the project, which are targeted to
be completed by the end of the year. Consultations continue with First Nations
groups and other stakeholders in the area, while the preparation and submission
of required permits is ongoing. Discussions with Vale on the offtake
arrangements and back-in right also continue.
At Franke, the transition to owner mining, lower acid consuming and maintenance
is now completed. The Company is currently conducting both engineering and
metallurgical studies on the nearby China deposit with a view to fully
transitioning to this new pit by Q2 2012. At Podolsky, due to limited
exploration success during 2011, production is expected to cease once the 2000
Deposit is depleted in late 2012. While the Company is continuing to evaluate
the leaching of sulphides and the Edar deposit at Carlota, the new life-of-mine
plan will only focus on mining readily available oxide ores followed by residual
leaching.
The complete financial statements and the MD&A will be available at
www.quadrafnx.com and www.sedar.com.
This Management Discussion and Analysis ("MD&A") of Quadra FNX Mining Ltd. and
its subsidiaries ("Quadra FNX" or the "Company") has been prepared as at
November 9, 2011 and is intended to be read in conjunction with the accompanying
unaudited consolidated financial statements for the quarter ended September 30,
2011 and with the audited consolidated financial statements for the year ended
December 31, 2010. This MD&A contains 'forward looking information' and
reference to the cautionary statement at the end of this MD&A is advised.
Additional information relating to the Company, including its Annual Information
Form, is available on the SEDAR website at www.sedar.com. The Company is a
reporting issuer in all provinces and territories of Canada and its common
shares are traded on the Toronto Stock Exchange under the symbol: QUX. All
financial information in this MD&A is prepared in accordance with the
International Financial Reporting Standards ("IFRS") and all dollar amounts are
expressed in millions of United States dollars unless otherwise indicated.
----------------------------------------------------------------------------
Three months ended Nine months ended
September 30 Sep 30
2011 2010 Change 2011 2010 Change
----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Revenues 326 259 26% 893 626 43%
(Loss) income from
mining operations (25) 67 -137% 100 181 -45%
EBITDA (1) 167 73 130% 519 215 141%
EBITDA per share
(basic) 0.87 0.38 127% 2.72 1.51 81%
Earnings for the period 143 20 632% 374 111 237%
Earnings per share
(basic) 0.75 0.10 623% 1.96 0.78 153%
Cash 1,067 323 230% 1,067 323 230%
Working capital 1,278 675 89% 1,278 675 89%
----------------------------------------------------------------------------
(1) The Company's financial statements are prepared in accordance with
International Financial Reporting Standards ("IFRS"). EBITDA is a non-
IFRS measure which is defined as earnings before interest expenses,
income taxes, depreciation, amortization and depletion.
THIRD QUARTER AND RECENT HIGHLIGHTS:
-- Total revenues increased 26% to $326 million in the quarter compared to
$259 million in the same quarter of 2010.
-- After adjustments to leach pad inventories at Carlota and Franke
totalling $76 million, loss from mining operations was $25 million.
-- The Company formed a 55%/45% joint venture ("JV") with Sumitomo Metal
Mining Co., Ltd. and Sumitomo Corporation (collectively "Sumitomo") to
develop the Sierra Gorda project in Chile with the Company retaining the
55%. As a result of this transaction the Company recognized a pre-tax
preliminary gain of $293 million in the quarter.
-- Partially offsetting the gain on the Sierra Gorda JV formation was $162
million in impairment losses on the Carlota and Podolsky mines.
-- Earnings increased 632% to $143 million compared to $20 million in the
same quarter of 2010.
-- EBITDA increased 130% to $167 million from $73 million in 2010.
-- Total production for the quarter was 60 million pounds of copper and
27,000 ounces of total precious metals (TPMs). Cash costs were $2.13 per
pound of copper.
-- The Company received approval of the Environmental Impact Assessment
("EIA"), the master environmental permit, for Sierra Gorda and commenced
construction in July.
-- Subsequent to the quarter end, the Company and Xstrata Nickel signed a
term sheet to utilize Xstrata's Craig mine shaft and related underground
infrastructure to further develop and operate the Company's Levack mine,
including the Morrison deposit.
FINANCIAL PERFORMANCE
Earnings
The Company recorded earnings of $142.8 million or $0.75 per share (basic) for
the third quarter of 2011 (Q3 2011) compared to $19.5 million or $0.10 per share
(basic) for the third quarter of 2010 (Q3 2010). For the first nine months of
2011, earnings increased to $374.3 million compared to $111.0 million in the
same period of 2010. The increased earnings in Q3 2011 were primarily driven by
a $292.5 million preliminary dilution gain from the formation of the JV with
Sumitomo (see "Review of Operations and Projects") and a $33.2 million gain on
derivatives (see "Financial Instruments and Other Instruments") partially offset
by a total of $162 million impairment losses on the Carlota and Podolsky mines
(see "Review of Operations and Projects") and $76 million inventory reductions
mainly at the Carlota mine. During Q3 2011, the Company sold 62 million pounds
of copper at an average price of $3.58/lb and 26 thousand ounces of total
precious metals ("TPMs") compared to 56.8 million pounds of copper in Q3 2010 at
an average price of $3.54/lb and 33.5 thousand ounces of TPMs.
Revenues
Three months ended September 30, 2011
--------------------------------------------------------------
McCreedy
Robinson Carlota Franke Morrison Podolsky West DMC Total
Copper sales
(million lbs) 27.9 6.6 10.5 10.1 6.0 0.9 62.0
--------------------------------------------------------------
(in millions
of U.S.
dollars)
Copper 97.2 26.2 41.6 34.4 20.0 2.8 - 222.2
Nickel - - - 11.9 2.6 10.7 - 25.2
Other by
product (1) 19.0 - - 4.2 5.0 1.5 - 29.7
Contract
mining - - - - - - 49.1 49.1
--------------------------------------------------------------
Total 116.2 26.2 41.6 50.5 27.6 15.0 49.1 326.2
--------------------------------------------------------------
--------------------------------------------------------------
Three months ended September 30, 2010
--------------------------------------------------------------
McCreedy
Robinson Carlota Franke Morrison Podolsky West DMC Total
Copper sales
(million lbs) 28.5 6.6 12.8 2.3 5.4 1.2 - 56.8
--------------------------------------------------------------
(in millions
of U.S.
dollars)
Copper 103.2 21.8 41.4 8.3 20.7 5.7 - 201.1
Nickel - - - 5.1 4.0 1.5 - 10.6
Other by
product (1) 26.7 - - 0.6 3.5 4.6 - 35.4
Contract
mining - - - - - - 12.1 12.1
--------------------------------------------------------------
Total 129.9 21.8 41.4 14.0 28.2 11.8 12.1 259.2
--------------------------------------------------------------
--------------------------------------------------------------
Nine months ended September 30, 2011
--------------------------------------------------------------
McCreedy
Robinson Carlota Franke Morrison Podolsky West DMC Total
Copper sales
(million lbs) 68.4 16.1 23.5 28.6 17.8 4.3 - 158.7
--------------------------------------------------------------
(in millions
of U.S.
dollars)
Copper 265.6 66.3 97.2 112.4 69.4 17.1 - 628.0
Nickel - - - 50.3 8.6 17.4 - 76.3
Other by
product (1) 52.1 - - 11.8 13.5 11.7 - 89.1
Contract
mining - - - - - - 99.4 99.4
--------------------------------------------------------------
Total 317.7 66.3 97.2 174.5 91.5 46.2 99.4 892.8
--------------------------------------------------------------
--------------------------------------------------------------
Nine months ended September 30, 2010
--------------------------------------------------------------
McCreedy
Robinson Carlota Franke Morrison Podolsky West DMC Total
Copper sales
(million lbs) 82.9 23.8 30.9 1.8 2.4 9.1 - 150.9
--------------------------------------------------------------
(in millions
of U.S.
dollars)
Copper 276.4 76.7 100.3 8.4 30.9 7.3 - 500.0
Nickel - - - 6.1 5.9 2.0 - 14.0
Other by
product (1) 81.4 - - 0.7 6.6 6.4 - 95.1
Contract
mining - - - - - - 16.7 16.7
--------------------------------------------------------------
Total 357.8 76.7 100.3 15.2 43.4 15.7 16.7 625.8
--------------------------------------------------------------
(1) Mainly from precious metals (gold, platinum and palladium)
Revenues, other than from contract mining, are generated by the sale of copper
concentrate, copper cathode and copper and nickel ore. For the sale of copper
concentrate and copper and nickel ore, revenues are generally recognized at the
time of delivery to a customer based on metal prices at that time; however,
under current sales contracts, final pricing for copper sold in concentrate and
copper and nickel ore is generally fixed up to six months after the time of
arrival of a shipment at the customer's port of delivery. As a result, the
Company's revenues include estimated prices for sales, based on forward copper
prices at period end, as well as pricing adjustments for sales that occurred in
the previous period, based on the difference between actual price received and
the price at period end for sales from the previous period that were not settled
in that period. The pricing of copper cathode sales is generally set in the
month of shipment or one month after the time of shipment and therefore pricing
adjustments in subsequent periods are minimal. Copper sales volumes are reported
based on the volume of pounds actually paid for by the customer (payable
pounds). Payable pounds at Robinson are generally 3-5% lower than the metal
volume actually delivered, and the amount of the deduction varies depending on
concentrate grade. Revenues from sales of Sudbury copper and nickel ores are
recognized based on the payable metals that are estimates based on metallurgical
testing and interim payment terms, neither of which is binding; as such final
payment terms could differ from those reported. Contract mining revenues are
generated from services performed, and are based on invoices issued.
Revenues in Q3 2011 were higher than the same period of 2010 mainly due to
higher sales volumes from the Morrison deposit, which reached commercial
production on September 1, 2010. During Q3, 2011, copper price decreased from
$4.22/lb at June 30, 2011 to $3.24/lb at September 30, 2011. As a result of the
decline in metal prices, Q3 2011 revenues included a $6 million negative price
adjustments related to prior quarter shipments. In addition, Q3 2011 revenues
included 28 million lbs of copper provisionally priced at $3.24/lb.
Revenues in Q3 2011 at the Morrison deposit, McCreedy West and Podolsky included
non-cash revenue of $1.7 million representing the amortization of the deferred
revenue liability related to the Company's obligation to sell 50% of the gold,
platinum and palladium contained in ore mined and shipped from certain deposits
to Franco Nevada (formerly Gold Wheaton).
Mine operating expenses and operating income
Three months ended September 30, 2011
------------------------------------------------------------------
McCreedy
Robinson Carlota Franke Morrison Podolsky West DMC Total
Revenues 116.2 26.2 41.6 50.5 27.6 15.0 49.1 326.2
Production
costs (76.3) (19.2) (34.9) (20.5) (17.5) (11.9) (43.8)(224.1)
Inventory
write
down - (66.7) (9.3) - - - - (76.0)
AD&D (1) (9.5) (4.8) (4.7) (11.8) (10.1) (3.9) (1.0) (45.8)
Royalties
and
mineral
taxes (3.9) (1.3) - - - - - (5.2)
------------------------------------------------------------------
Operating
expense (89.7) (92.0) (48.9) (32.3) (27.6) (15.8) (44.8)(351.1)
------------------------------------------------------------------
Operating
income
(loss) 26.5 (65.8) (7.3) 18.2 - (0.8) 4.3 (24.9)
------------------------------------------------------------------
------------------------------------------------------------------
Three months ended September 30, 2010
------------------------------------------------------------------
McCreedy
Robinson Carlota Franke Morrison Podolsky West DMC Total
Revenues 129.9 21.8 41.4 14.0 28.2 11.8 12.1 259.2
Production
costs (70.2) (10.5) (33.3) (5.1) (15.0) (9.2) (10.2)(153.5)
AD&D (1) (7.0) (2.2) (6.6) (5.8) (6.1) (3.1) (0.8) (31.6)
Royalties
and
mineral
taxes (6.5) (1.1) - - - - - (7.6)
------------------------------------------------------------------
Operating
expense (83.7) (13.8) (39.9) (10.9) (21.1) (12.3) (11.0)(192.7)
------------------------------------------------------------------
Operating
income
(loss) 46.2 8.0 1.5 3.1 7.1 (0.5) 1.1 66.5
------------------------------------------------------------------
------------------------------------------------------------------
Nine month ended September 30, 2011
------------------------------------------------------------------
McCreedy
Robinson Carlota Franke Morrison Podolsky West DMC Total
Revenues 317.7 66.3 97.2 174.5 91.5 46.2 99.4 892.8
Production
costs (205.4) (48.3) (87.1) (63.7) (51.4) (34.1) (85.5)(575.5)
Inventory
write
down - (77.7) (9.3) - - - - (87.0)
AD&D (3) (21.2) (12.5) (12.4) (30.1) (26.2) (9.0) (2.7)(114.1)
Royalties
and
mineral
taxes (12.9) (3.3) - - - - - (16.2)
------------------------------------------------------------------
Operating
expenses (239.5) (141.8) (108.8) (93.8) (77.6) (43.1) (88.2)(792.8)
------------------------------------------------------------------
Operating
income
(loss) 78.2 (75.5) (11.6) 80.7 13.9 3.1 11.2 100.0
------------------------------------------------------------------
------------------------------------------------------------------
Nine month ended September 30, 2010
------------------------------------------------------------------
McCreedy
Robinson Carlota Franke Morrison Podolsky West DMC Total
Revenues 357.8 76.7 100.3 15.2 43.4 15.7 16.7 625.8
Production
costs (189.5) (39.0) (74.1) (6.5) (25.1) (13.7) (14.2)(362.1)
AD&D (3) (18.9) (7.7) (14.8) (6.3) (8.9) (3.7) (1.4) (61.7)
Royalties
and
mineral
taxes (17.6) (3.9) - - - - - (21.5)
------------------------------------------------------------------
Operating
expenses (226.0) (50.6) (88.9) (12.8) (34.0) (17.4) (15.6)(445.3)
------------------------------------------------------------------
Operating
income
(loss) 131.8 26.1 11.4 2.4 9.4 (1.7) 1.1 180.5
------------------------------------------------------------------
------------------------------------------------------------------
(1) Amortization, depletion and depreciation
Production costs in Q3 2011 were higher than the same period of 2010 due mainly
to the contribution from the Morrison deposit and from DMC as contract mining
activities ramped up in 2011. As a result of the less than previously predicted
copper recoverable from the ores stacked on the pad in previous quarters and to
a lesser extent, the decline in copper price during Q3 2011, Carlota inventory
was written down by $66.7 million to its net realizable value. The $9.3 million
inventory write down at the Franke mine was mainly due to lower copper price at
the end of Q3 2011. Amortization, depletion and depreciation ("AD&D") were
higher in Q3 2011 than Q3 2010, mainly due to additional AD&D expenses from
Morrison and Podolsky as a result of higher production and sales volumes.
Operating income decreased in Q3 2011 compared to Q3 2010 primarily due to the
inventory write down at Carlota and Franke as well as the decrease in by-product
revenues and increase in operating costs at Robinson partially offset by higher
operating income from the Morrison deposit. (see "Review of Operations and
Projects").
General & administrative and other expenses
General and administrative expenses for Q3 2011 were in line with Q3 2010. In Q3
2011, the Company recognized a gain of $33.2 million on derivatives compared to
a loss of $25.5 million in the same quarter of 2010. The gain in the current
quarter was mainly due to the decrease in the fair value of the Company's issued
and outstanding warrants, which are treated as derivative liabilities under IFRS
(see "Conversion to IFRS") and the copper price linked long-term acid and water
contracts at the Franke mine as a result of the decrease in copper prices. For
the nine months of 2011, the Company recorded a gain on derivatives of $45.4
million compared to a loss of $14.4 million in the same period of 2010. The gain
for 2011 was mainly due to the decrease in the fair value of the Company's
issued and outstanding warrants.
On September 14, 2011, the Company formed a JV with Sumitomo to develop the
Sierra Gorda project in Chile (see "Review of Operations and Projects"). The
Company retained 55% beneficial interest in the JV. As a result of the reduction
in ownership in the subsidiary the Company recorded a preliminary gain, subject
to change as the valuation process is completed during 2011, of $292.5. The
gain, after costs, represents 55% of the initial contribution by Sumitomo less
45% of the historic cost.
During Q3 2011, the Company reviewed the carrying value of its Carlota mine in
light of the major revision of mine plan that reduced the life of mine. It is
indicated that the Carlota property is impaired. As a result, the Company
recorded an impairment loss of $122 million in Q3 2011 (see "Review of
Operations and Projects"). In addition, the Company wrote off the exploration
value of the Podolsky mine of $40 million due to the exploration programs to
date being unable to expand reserves (see "Review of Operations and Projects").
The Company recorded income tax expense of $27.5 million for the first nine
months of 2011 compared to $37.1 million for the same period of 2010. The tax
expense for 2011 has been recorded based on an estimated annual effective tax
rate of 7% (2010 - 22%). The decrease in effective tax rate in 2011 is due to
the accounting gain from joint venture formation being non-taxable for tax
purposes. Without the accounting gain from joint venture formation, the annual
effective tax rate is approximately 25%.
REVIEW OF OPERATIONS AND PROJECTS
SAFETY AND ENVIRONMENTAL
Safety Performance
The Company continued to deliver a generally strong safety performance in Q3
2011. The Sudbury Operations, including exploration team, reached 701 days
without a Lost Time Accident (LTA) at the end of the quarter. McCreedy West has
had no medical aid injuries in 2011. Carlota Mine has worked 484 days without a
LTA and 140 days without a reportable injury.
The Company's Total Recordable Injury Rate ("TRIR") for the quarter was 2.13.
The TRIR for underground mines was 6.1 compared to a 5.7 for Ontario mines. The
TRIR for open pit mines was 1.14 compared to a national average rate of 1.16 for
U.S. surface mines.
Environmental Performance
There were no reportable environmental incidents in Q3 2011 at any of the
Company's operations or development projects. Dust management is a key focus at
the Franke mine and Sierra Gorda project due to the challenges of working in the
Atacama Desert in Northern Chile.
PRODUCTION SUMMARY
Note: Production and operating statistics in this section are reported for
historical periods for all of the Company's mines, including periods prior to
the merger of Quadra and FNX. For accounting purposes, the financial results of
the Sudbury Operations have been consolidated commencing from May 21, 2010, the
date immediately following the closing date of the merger of Quadra and FNX.
Production for the quarter and nine months ended September 30, 2011 from the
Company's operating mines is summarized as follows:
Three months ended Nine months ended
Sep 30, 2011 Sep 30, 2011
----------------------------------------------------------------------------
Copper production (Mlbs)
Robinson (2) 26.7 67.9
Carlota (3) 6.6 17.0
Franke (3) 9.0 24.5
Morrison deposit (4) 10.1 28.6
Podolsky (4) 6.0 17.8
McCreedy West (4) 0.9 4.3
----------------------------------------
59.3 160.1
----------------------------------------
Nickel production (Mlbs)
Morrison deposit (4) 1.4 4.7
Podolsky (4) 0.3 0.8
McCreedy West (4) 1.3 1.9
----------------------------------------
3.0 7.4
----------------------------------------
TPM (1) (kozs)
Robinson (2) 9.2 21.8
Morrison deposit (4) 8.4 22.4
Podolsky (4) 7.2 19.7
McCreedy West (4) 1.9 15.6
----------------------------------------
26.7 79.5
----------------------------------------
Total copper equivalent (Mlbs) (5) 78.0 212.6
----------------------------------------
----------------------------------------------------------------------------
(1) Total precious metal, including gold, platinum and palladium
(2) Payable metals produced in concentrate
(3) Produced in cathode
(4) Shipped payable metal
(5) Copper equivalent amounts are based on previously announced LOM
commodity prices: Cu at $2.50/lb, Ni at $7/lb, Pt at $1500/oz, Pd at
US$400/oz, Au at $1000/oz and Mo at $12/lb and excludes the impact of
the Franco Nevada Agreement.
U.S. OPERATIONS
Robinson (Nevada)
----------------------------------------------------------------------------
Three months ended Nine months ended
Sep 30 Sep 30
2011 2010 2011 2010
----------------------------------------------------------------------------
Copper production payable (Mlbs) 26.7 25.4 67.9 78.8
Gold production payable (kozs) 9.2 15.3 21.8 57.3
----------------------------------------------------------------------------
Ore mined (Mt) 3.9 3.6 10.2 10.7
Waste mined (Mt) 12.5 13.2 34.5 35.1
Ore milled (Mt) 3.9 3.3 10.5 10.2
----------------------------------------------------------------------------
Copper grade (%) 0.43 0.49 0.42 0.50
Gold grade (g/t) 0.21 0.25 0.19 0.25
----------------------------------------------------------------------------
Copper recovery (%) 77.4 75.3 73.6 73.5
Gold recovery (%) 38.8 58.2 37.6 68.5
----------------------------------------------------------------------------
Cash cost per pound of copper
produced ($/lb) $ 2.13 $ 1.66 $ 2.44 $ 1.46
Capital expenditure $ 24.8 $ 13.7 $ 74.6 $ 26.8
Production costs of goods sold $ 76.3 $ 70.2 $ 205.4 $ 189.5
----------------------------------------------------------------------------
Operating income $ 26.5 $ 46.2 $ 78.2 $ 131.8
----------------------------------------------------------------------------
Production from the Robinson operation continued to improve as mining
transitioned into the higher grade benches at the bottom of the Ruth pit, but
was impacted by localized slope stability issues. The five haulage trucks that
were moved from Carlota to Robinson were re-commissioned and helped the mine
achieve a one day record ex-pit mining rate of 257 thousand tonnes (284 thousand
tons) in September. During September, the mill also achieved a monthly record
averaging approximately 44,000 tonnes (48,500 tons) per day, while copper
recovery improved due to improving mineralogy and higher grades.
Overall, copper production in Q3 2011 was higher than in the same quarter of
2010 as a result of higher mill throughput and copper recoveries, offsetting the
impact of modestly lower copper head grades. Gold production in Q3 2011 was
lower compared to Q3 2010 due to lower head grades and associated recoveries in
the Ruth pit compared to the Veteran pit. The mill gold recoveries from the Ruth
pit ore are lower than Veteran pit due to the low grade gold feed and fine gold
grains that are associated with pyrite and reporting to tailings.
Robinson production costs and capital expenditures
The Q3 2011 production costs of goods sold were $6 million higher than Q3 2010
mainly due to higher mine operating costs (largely fuel and tires) and scheduled
maintenance on the mining fleet.
The cash cost per pound of payable copper produced is a non-IFRS term and for
Robinson consists of onsite and offsite costs, less by-product revenue, divided
by the pounds of payable copper produced in the period (see "Non-IFRS Financial
Measures"). The cash cost of payable copper produced was $2.13/lb in Q3 2011
compared to $1.66/lb in the same quarter of 2010. The increased unit cost in the
current quarter is primarily due to increased onsite and offsite costs and a
decrease in by-product revenue in the quarter as a result of the lower gold
sales volumes.
Capital expenditures during the quarter were primarily related to Ruth pit
development work which included $3.7 million for dewatering activities and $9
million for the Ruth secondary access ramp. An additional $2.4 million in
expenditures was related to mill upgrades and $4.7 million was spent on the
Liberty pit exploration program.
Robinson Outlook
The measures taken to maximise fleet utilization, the development of a second
access ramp and other measures to increase operating flexibility have improved
performance and access the higher grade ore at the bottom of the Ruth pit.
However, localized wall activity has caused delays in implementing the plan and
in 2011 Robinson is expected to produce between 95 and 100 million pounds of
copper and 25,000 to 30,000 ounces of gold. The higher grade material delayed by
slide activity will be mined in 2012.
The 2011 drill campaign in the Liberty pit was concluded during the quarter. A
significant number of ore grade intercepts are driving engineering studies,
which are expected to result in a new resource block model by year-end.
Capital expenditures for the remainder of the year are expected to total $14
million including $7 million for the new secondary ramp and dewatering, $2
million for exploration, $3 million for equipment and tailings impoundment, and
$2 million for housing. In addition, bonding is expected to increase by $5.6
million in the remainder of the year as a result of additional work in the
Liberty pit area.
Carlota (Arizona)
----------------------------------------------------------------------------
Three months ended Nine months ended
Sep 30 Sep 30
2011 2010 2011 2010
----------------------------------------------------------------------------
Copper cathode production (Mlbs) 6.6 7.3 17.0 22.9
----------------------------------------------------------------------------
Ore mined (Mt) 1.3 2.3 3.6 4.9
Waste mined (Mt) 2.5 4.7 12.2 15.7
Ore placed (Mt) 1.3 2.3 3.6 4.9
----------------------------------------------------------------------------
Total copper grade (%) 0.32 0.77 0.41 0.56
----------------------------------------------------------------------------
Cash cost per pound of copper
sold ($/lb) $ 3.12 $ 1.74 $ 3.21 $ 1.80
Capital expenditure $ -0.7 $ 5.4 $ 4.2 $ 17.3
Production costs of goods sold $ 19.2 $ 10.5 $ 48.3 $ 39.0
----------------------------------------------------------------------------
Operating (loss) income $ -65.8 $ 8.0 $ -75.5 $ 26.1
----------------------------------------------------------------------------
Total tonnes mined in Q3 2011 were lower than the same quarter of 2010 mainly
due to a planned reduction in the mining rate which impacted both ore placement
and waste stripping. Despite significant reduction in ore placed, Q3 2011 copper
production benefited from improvement in recoveries in the conveyor stacked ore
placed in the prior quarters with 6.6 million lbs of copper produced.
Carlota production cost and capital expenditures
Production costs for Q3 2011 increased mainly because of higher acid prices and
consumption, as well as higher operating costs associated with conveyor stacking
partially offset by decreased fuel consumption.
As the Carlota mine is a heap leach operation ore stacked in one period affects
production in many future periods. Thus the grade of ore placed in a quarter
does not correspond to production in the quarter. The cash cost per pound of
payable copper increased from $1.74/lb in Q3 2010 to $3.12/lb in Q3 2011 mainly
due to the decreased production and increased production costs of goods sold.
As a result of the less than previously predicted copper recoverable from the
ores stacked on the pad in previous quarters and to a lesser extent, the decline
in copper price during Q3 2011, Carlota inventory was written down by $66.7
million to its net realizable value.
Capital expenditures for Q3 2011 declined primarily related to the completion of
the Phase 2 leach pad construction and the transfer of five haul trucks to
Robinson.
Carlota Outlook
After completing the conversion to conveyor stacking in Q2 2011, Carlota
implemented a major revision in the long term mining plan, reducing overall
tonnes mined, transferring mine equipment and deploying personnel to Robinson.
While oxide ore recovery rates were significantly enhanced with conveyor
stacking, preliminary bulk sample leach tests indicate that sulphide material at
Carlota, due to be mined in 2012, is unlikely to be economic at the Company's
long term copper price forecast. Therefore, the new life-of-mine plan will focus
on mining readily available oxide ores followed by residual leaching.
During Q3 2011, the operation continued with staff reduction and other measures
in order to reduce costs in line with the new plan and to ensure positive
operating cash flow based on forecast copper prices over the next several years.
As a result of the revisions made to Carlota's life-of-mine plan, the Company
has reviewed the carrying value of the property and recorded an impairment loss
of $122 million to reduce its carrying value to zero. Notwithstanding the
impairment decision, the Company is continuing to evaluate the leaching of
sulphides, the mining of the Edar deposit on the Carlota property, as well as
other strategic options.
Based on performance to date, 2011 cathode production at Carlota is expected to
be in the lower half of the previously revised range of 20 to 30 million pounds.
Capital costs for the remainder of 2011 are expected to total $3 million, plus
an additional $10.6 million for the renewal of the environmental closure bond.
CHILE OPERATIONS
Franke
----------------------------------------------------------------------------
Three months ended Nine months ended
Sep 30 Sep 30
2011 2010 2011 2010
----------------------------------------------------------------------------
Copper cathode production (Mlbs) 9.0 10.1 24.5 29.4
----------------------------------------------------------------------------
Ore mined (Mt) 0.8 1.0 2.1 3.0
Waste mined (Mt) 1.3 1.3 2.5 3.4
Ore placed (Mt) 0.8 0.9 2.1 2.5
----------------------------------------------------------------------------
Copper grade (%) 0.80 0.77 0.79 0.83
----------------------------------------------------------------------------
Cash cost per pound of copper
sold ($/lb) $ 3.33 $ 2.60 $ 3.70 $ 2.40
Capital expenditure $ 8.3 $ 9.6 $ 28.0 $ 18.1
Production costs of goods sold $ 34.9 $ 33.3 $ 87.1 $ 74.1
----------------------------------------------------------------------------
Operating loss/income $ -7.3 $ 1.5 $ -11.6 $ 11.4
----------------------------------------------------------------------------
The transition to owner mining and maintenance was completed during Q3 2011 and
the workforce was expanded to include additional mine operators and maintenance
personnel while the mining rate increased to a level in line with plan.
Leaching performance improved early in the quarter but weakened in September as
a result of degradation of ore on several modules stacked in late August and
early September which resulted in high turbidity in the solution fed to the SX
plant. Copper cathode production for Q3 2011 was lower than the same quarter of
2010 due to lower recovery from the ore placed late in the quarter and a lower
throughput rate.
Franke production costs and capital expenditures
Production costs at Franke are mainly driven by onsite costs, sales volumes and
projected recoveries from the leach pads. Onsite costs in Q3 2011 were higher
than Q3 2010 due to higher acid and power costs.
Due to higher cost in inventory and the decline in copper prices in Q3 2011, a
$9.3 million write down was required to adjust Franke's leach pad inventory to
its net realizable value. The cash cost per pound of payable copper increased
from $2.60/lb in Q3 2010 to $3.33/lb in Q3 2011 mainly due to the decreased
production and increased production costs of goods sold.
Capital expenditures of $8.3 million at Franke in Q3 2011 were primarily related
to road work, the vibration mitigation project on the primary crusher, and
various other projects including a vacuum truck, and initial payments on two new
bunk houses.
Franke Operations Outlook
The total 2011 copper cathode production is expected to be modestly below the
previously stated guidance range of 35 to 45 million pounds.
Leaching of high carbonate ore from the Franke pit requires approximately 100 kg
of acid per tonne of ore, well above any other heap leach operation known to the
Company. This level of acid placement causes degradation of the rock structure,
leading to generation of slimes and, in turn, porosity issues in the leach pads
as well as turbidity in the SX plant, which together impact copper recovery.
Based on its current mine plan, the operation was expected to encounter
secondary sulphides in the Franke pit in the second half of 2012 which, based on
tests to date, are expected to yield lower recovery.
The China deposit is located 5 km from the Franke processing facility. Following
a drill program at China, the Company is completing engineering and
metallurgical studies, including commercial scale tests, on the China orebody
with a view to fully transitioning to the China pit in Q2 2012. In the meantime,
in order to reduce operating costs, the operation has adjusted cut-off
parameters in the Franke pit to reduce carbonate levels and associated acid
requirements.
The operation is expected to continue to run at below its design throughput rate
due to low overall availability issues and pending the replacement stacker being
in place. The commissioning of the new stacker has been impacted by further
design issues.
Capital costs for the remainder of 2011 are expected to be below $1 million and
are related to the study of the China orebody, the access road, and the
completion of the bunkhouse project.
CANADIAN OPERATIONS
Note: Production statistics in the following tables are reported for all
historical periods, including the period prior to the merger of Quadra and FNX
on May 20, 2010.
Morrison deposit
----------------------------------------------------------------------------
Three months ended Nine months ended
Sep 30 Sep 30
2011 2010 2011 2010
----------------------------------------------------------------------------
Copper ore sold (kt) (1) 53.3 29.3 155.5 62.1
Copper grade (%) 9.6 11.2 9.4 9.4
Nickel ore sold (kt) (1) 2.0 4.5 12.8 14.5
Nickel grade (%) 1.8 2.5 3.1 2.8
----------------------------------------------------------------------------
Copper sold - payable (Mlbs) 10.1 6.3 28.6 11.2
Nickel sold - payable (Mlbs) 1.4 1.2 4.7 3.0
Gold sold - payable (kozs) 1.8 0.4 4.1 0.7
Platinum sold - payable (kozs) 2.1 0.8 5.7 1.5
Palladium sold - payable (kozs) 4.5 1.9 12.5 3.6
----------------------------------------------------------------------------
Cash cost per pound of copper
sold ($/lb) (2) $ 0.59 $ -0.04 $ 0.19 $ -0.08
Capital expenditure (2) $ 7.5 $ 1.0 $ 22.1 $ 1.0
Production costs of goods sold
(2) $ 20.5 $ 5.1 $ 63.7 $ 6.5
----------------------------------------------------------------------------
Operating income (2) $ 18.2 $ 3.1 $ 80.7 $ 2.4
----------------------------------------------------------------------------
(1) Converted to metric tonnes from short tons
(2) Morrison was in pre-production stage in Q2 2010 and production costs
were capitalized. Q2 2010 performance is not comparable. The Morrison
deposit commenced commercial operations on September 1, 2010
The Morrison deposit commenced commercial production in September 2010 and as
such operating results for only one month were recorded for Q3 2010. Therefore,
Q3 2010 results are not comparable.
Operating performance in Q3 2011 remained strong although there was a normal
grade variation based on mining sequencing, compared to Q2 2011. Development
performance (including the ramp to the #2 Shaft) improved steadily through Q3
2011 but has since been suspended as a result of the Craig Access Arrangement
which is discussed below.
Morrison production costs and capital expenditures
Despite higher volumes, production costs of goods sold for Q3 2011 were $2.7
million lower than in Q2 2011 as cost control efforts resulted in a continuous
improvement in direct mining costs throughout the quarter.
Despite the lower production costs in Q3 2011, the cash cost per pound of
payable copper increased from $0.23/lb in Q2 2011 to $0.59/lb in Q3 2011. The
increase was mainly due to a $6.8 million reduction in by-product revenues as a
result of the lower metal prices in Q3 2011.
Capital spending of $7.5 million in Q3 2011 was primarily due to lateral
development work and surface haulage of waste.
Morrison deposit outlook
Q4 2011 is expected to be a strong quarter for production as mining starts on
the second cut of higher grade sill horizons. The 2011 payable copper production
is expected to be at the high end of the previously stated 30 to 40 million
pounds guidance range. In addition, TPM production is expected to be between the
25,000 to 30,000 ounces range while payable nickel production is expected to
total approximately 6 million pounds.
In October the Company and Xstrata Nickel signed a term sheet (the "Craig Access
Arrangement") to utilize the Craig mine shaft and related underground
infrastructure to further develop and operate the Levack mine, including the
Morrison deposit. The Company expects that the use of Xstrata Nickel's Craig
infrastructure will significantly improve the operational flexibility of the
Morrison deposit and provide additional mining and drill access in the lower
portions of this high grade ore body. The additional development and improved
efficiency is expected to have a positive impact on Morrison's long term
production outlook.
As a result of the Craig Access Arrangement, the Company has ceased the
development of the 3900 Level ramp and is focused on development to depth below
4200 Level. An implementation plan and preparation work has been initiated which
will enable a seamless transition to Craig infrastructure in Q1 2012. Key
priorities are establishing ore and waste haulage through the existing 4000
Level breakthrough to the Craig mine and up the Craig Shaft as well as
development of an exploration drift platform to delineate reserves to depth.
Onsite and offsite costs at Morrison are on a downward trend and are expected to
a total approximately $80 million for 2011. Capital expenditures are expected to
be $30 million for 2011, below the previously stated $40 million. This is
primarily due to a reduction in development work (i.e., 3900 Level ramp) and
cancellation of shop upgrades as a result of the Craig Access Arrangement.
Podolsky
----------------------------------------------------------------------------
Three months ended Nine months ended
Sep 30 Sep 30
2011 2010 2011 2010
----------------------------------------------------------------------------
Copper ore sold (kt) (1) 112.2 97.2 302.5 297.4
Copper grade (%) 3.0 3.2 3.2 3.3
----------------------------------------------------------------------------
Copper sold - payable (Mlbs) 6.0 5.4 17.8 17.2
Nickel sold - payable (Mlbs) 0.3 0.3 0.8 1.2
Gold sold - payable (kozs) 1.1 0.9 3.1 3.8
Platinum sold - payable (kozs) 2.8 2.0 7.8 9.1
Palladium sold - payable (kozs) 3.2 2.5 8.8 9.3
----------------------------------------------------------------------------
Cash cost per pound of copper
sold ($/lb) $ 1.89 $ 1.67 $ 1.78 $ 1.64
Capital expenditure $ 2.8 $ 2.7 $ 10.6 $ 3.9
Production costs of goods sold $ 17.5 $ 15.0 $ 51.4 $ 25.1
----------------------------------------------------------------------------
Operating income $ 0.0 $ 7.1 $ 13.9 $ 9.4
----------------------------------------------------------------------------
(1) Converted to metric tonnes from short tons
Ore production in Q3 2011 was higher than Q3 2010 as a result of higher
throughput, which offset the impact of lower grades. Lateral development and
backfill production remained at or above plan levels.
Podolsky production costs and capital expenditures
Production costs of goods sold for Q3 2011 was higher than Q3 2010 mainly due to
higher ore production. Cash cost per pound of payable copper for Q3 2011 was
slightly higher than Q3 2010 due to higher production cost. Capital expenditures
for the quarter were primarily associated with development and diamond drilling
activities.
Podolsky outlook
The Company continues to expect 2011 production from Podolsky to be in the upper
end of the previously stated 18 to 21 million pounds of payable copper, 20,000
to 25,000 ounces of payable TPMs and approximately 1 million pounds of payable
nickel.
While a number of exploration targets had been identified at Podolsky the 2011
exploration program was completed with no material additional reserves
identified. As a result the Company has taken a $40 million impairment related
to the exploration potential at Podolsky. In consequence, the Company has also
decided to terminate operations once the 2000 Deposit is mined out. As a result
of this change in mine plan, copper production from the Podolsky operation will
cease by the end of 2012.
Capital expenditures for the remainder of the year is expected to total $2
million and will mainly be related to additional development work.
The Company will continue to explore in the vicinity of Podolsky and to evaluate
methodologies for mining the complex vein structures in the Grey Gabbro
profitably. The Company will also continue to evaluate increasing nickel
production from its McCreedy West and Levack mines and the highly skilled
Podolsky workforce will be encouraged to transfer to these properties (subject
to nickel prices as well as ongoing studies and off-take terms for the ore).
McCreedy West
----------------------------------------------------------------------------
Three months ended Nine months ended
Sep 30 Sep 30
2011 2010 2011 2010
----------------------------------------------------------------------------
Copper ore sold (kt) (1) 15.6 72.6 168.5 207.3
Copper grade (%) 1.6 0.9 1.3 1.0
Nickel ore sold (kt) (1) 53.6 - 53.6 -
Nickel grade (%) 1.6 - 1.6 -
----------------------------------------------------------------------------
Copper sold - payable (Mlbs) 0.9 1.2 4.3 3.7
Nickel sold - payable (Mlbs) 1.3 0.2 1.9 0.6
Gold sold - payable (kozs) 0.5 0.9 2.0 3.3
Platinum sold - payable (kozs) 0.7 2.7 5.9 7.7
Palladium sold - payable (kozs) 0.8 4.5 7.7 13.1
----------------------------------------------------------------------------
Cash cost per pound of copper
sold ($/lb) $ -0.38 $ 2.83 $ 1.85 $ 3.73
Capital expenditure $ 2.4 $ 2.9 $ 9.9 $ 4.4
Production costs of goods sold $ 11.9 $ 9.2 $ 34.1 $ 13.7
----------------------------------------------------------------------------
Operating Income (loss) $ -0.8 $ -0.5 $ 3.1 $ -1.7
----------------------------------------------------------------------------
(1) Converted to metric tonnes from short tons
In Q3 2011 McCreedy West changed from mining copper-rich and precious metal-rich
ores to mining contact nickel ores. This change in mining type was accomplished
with the same workforce and same equipment. Copper mining from the 700 Copper
Complex continued at scheduled rates while production from the PM zone declined.
Following the waiver by Vale of its right to the magnesium oxide ("MgO") contact
nickel ores, the Company delivered approximately 54,000 tonnes of contact nickel
ore from McCreedy West to Xstrata, which was milled in August on a trial basis.
Discussions with Xstrata for the treatment of additional ore are ongoing.
McCreedy West production costs and capital expenditures
Production costs of goods sold for Q3 2011 were higher than Q3 2010 due to a
combination of higher tonnage volumes and additional operational diamond
drilling Cash cost per pound of copper sold decreased from $2.83/lb in Q3 2010
to negative $0.38/lb in Q3 2011 as a result of higher nickel by-product credits.
McCreedy West outlook
In 2011 payable copper production expectations remain in the 5 to 6 million
pound range, while annual nickel production volumes increases to 3 to 4 million
pound range with the contact nickel re-start. Capital expenditures are primarily
related to mobile equipment, mine infrastructure and development work.
Mining of contact nickel ore has continued in parallel with discussions with
Xstrata. Subject to nickel price and the outcome of these negotiations, the 2012
business plan includes mining of McCreedy West contact nickel ores.
PROJECTS UNDER DEVELOPMENT
Sierra Gorda Joint Venture (55% interest)
On May 16, 2011, Quadra FNX entered into a definitive agreement with Sumitomo to
form the Sierra Gorda Joint Venture ("JV") to develop the Sierra Gorda
copper-molybdenum project in Chile. In August 2011, anti-trust approval was
received and the formation of the JV was completed on September 14, 2011. The JV
operates through a jointly-controlled entity owned 55% by the Company and 45% by
Sumitomo.
As part of its initial contribution, on closing Sumitomo made a $360 million
cash payment into the JV and will contribute an additional $364 million for a
total of $764 million which is expected to cover 100% of costs from May 2011
until early 2012. After the initial contributions by Sumitomo, the Company and
Sumitomo will fund proportionally those JV costs not covered by borrowing.
During the quarter the Company recognized a preliminary gain of $293 million on
formation of the JV.
Cash calls by the JV fund three months of capital costs and thus at September
30, 2011 the JV had cash of $220 million. Because the JV is accounted for using
equity based accounting principles, this cash is not included in the Company's
cash balances. For the first nine months of 2011 Sierra Gorda project had
incurred $177 million capital expenditures, including progress payments for
mining and plant equipment, camp and infrastructure construction, and other
project related payments. The Company funded $33 million of costs for 2011 prior
to May 2011 and provided $17 million of cash for working capital. Full credit
for these amounts was made in arriving at the JV contributions.
Sumitomo will take the lead in efforts to arrange, and will guarantee, project
financing in the amount of $1.0 billion. In the event that project financing is
not satisfactorily arranged then Sumitomo will provide a shareholder back-up
loan for $800 million to the JV with no recourse to the Company. The JV has
retained Sumitomo Mitsui Bank Corporation (SMBC) as the financial advisor for
the $1 billion project financing. Discussions are progressing with the project
syndicate.
Sierra Gorda activities and outlook
On July 6, 2011, the Estudio de Impacto Ambiental (EIA - or Environmental Impact
Assessment) was approved by the regulatory authorities and construction
activities commenced on the Sierra Gorda project.
Fluor has been retained as the EPCM contractor for process plant and related
construction activities and by the end of Q3 2011, over 130 engineering,
construction and service contracts have been awarded while 14 additional
contracts are under bidding and evaluation process. A total of over 600
employees and contractors are on site. The project has also successfully
recruited key management positions for participation in the project design and
ahead of the pre-stripping activities as well as for future operation. The
recruiting of operating personnel will continue throughout the construction
phase.
Mass earthworks activities have commenced. Specifically, construction has
started on project offices, camp facilities, potable water and sewage
facilities, and equipment laydown and assembly areas. The first two Bucyrus
shovels were delivered to site, with assembly scheduled for the next quarter.
During the quarter, the JV has also contracted for most of its requirement of
tires and replacements to support the pre-stripping activities. Commencement of
pre-stripping is scheduled for the beginning of Q2 2012.
The JV has been negotiating several of the major key outsourced operation
contracts including the water supply system, railway transportation,
transmission lines, port facilities and power purchase agreement with terms of
these contracts expected to be finalized by year end.
The total capital cost including contingency for Sierra Gorda is unchanged at
$2,877 million, and with working capital and interest during construction the
total is estimated at approximately $3.0 billion. The project is expected to
start production in 2014.
As of September 30, 2011, the Sierra Gorda JV has made contract commitments of
$131 million. In addition, purchase orders for mining equipment (including
shovels, drills and trucks) and infrastructure of $294 million have been made.
Victoria Project
During the quarter the drilling program at the Victoria property focused on the
expansion of the Zone 4 Deposit at depth, completion of shaft geotechnical
holes, and exploration for Zone 4 satellite orebodies that could impact the size
of underground infrastructure.
The Company continues to advance Engineering Studies for the Victoria project,
targeted to be completed by the end of the year. The Studies consider sinking
two concurrent shafts, one for production and the other for ventilation, a
secondary egress and lateral development. The second shaft will also be used to
establish definition diamond drill platforms and facilitate the extraction of a
bulk sample for metallurgical/commercial test work. Concurrent with this, the
Company has continued First Nations and other stakeholder consultation, and the
continued preparation and submission of required permits.
Victoria Project Outlook
The exploration approach for the remainder of 2011 will continue to be drill
focused. The focus will be the expansion of Zone 4 in both the up and down
plunge directions and testing for satellite orebodies to the west of Zone 4.
The ongoing Engineering Studies and First Nations consultations are expected to
form part of the project's Closure Plan, which will serve as the basis for the
final permits. The Company has also engaged Vale, who has the offtake agreement
for the production from Victoria and a back-in right to acquire 51% of the
project by bringing Victoria into production. All of these activities are
required before a decision can be made to proceed with the project.
DMC MINING SERVICES
DMC Mining Services continued to report no lost time accidents but did
experience one medical aid to the end of Q3 2011. Work volume continues to grow
in Canada and the United States with the total contract work to be completed now
exceeding $440 million.
DMC engineers are working diligently on the shaft for BHP Billiton's Jansen
Project in Saskatchewan where ground freezing commenced for both the production
and services shafts in early October. Revenue for the quarter was $49.1 million
and for the first nine months of 2011 was $99.4 million. Operating income for
the quarter was $4.3 million and $11.2 million for the first nine months of
2011. DMC is on target to meet or exceed all budget expectations for the year.
2011 OUTLOOK AND GUIDANCE SUMMARY
For 2011, the Company expects consolidated payable copper production to still be
in the range of 240 million pounds +/- 10% plus approximately 100 thousand
ounces of payable TPMs, mainly due to lower gold production from Robinson. The
Company also expects approximately 8 to 10 million pounds of payable nickel
production, although values are dependent on the timing of the potential nickel
re-start at McCreedy West.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 2011, the Company had cash and cash equivalents of $1,067
million. These amounts are comprised of cash deposits and highly liquid
investments that are readily convertible to cash. The counter parties include
banks, governments and government agencies. The Company also held marketable
securities with a total fair value of $46.4 million. During the first nine
months of 2011 the Company sold all of its 56,464,126 of common shares of Gold
Wheaton to Franco-Nevada for total cash proceeds of $295 million or C$5.20 per
share. The proceeds included top-up cash received when Franco-Nevada
successfully acquired the remaining shares of Gold Wheaton effective March 14,
2011.
During Q3 2011 the Company generated $79.3 million in operating cash flow. The
Company generated cash flow from operating activities of $188.7 million for the
first nine months of 2011 compared to $127.5 million for the same period of
2010. The increase in operating cash flow in 2011 is largely driven by the
higher average copper prices and sales volumes in the current year.
At September 30, 2011, the Company had working capital of $1,278.1 million as
compared to $759.8 million at December 31, 2010. The increase in working capital
in 2011 is primarily the result of the increase in cash and cash equivalent from
the proceeds of the issue of the senior notes and the sale of Gold Wheaton
shares. At September 30, 2011, accounts receivable and revenues include
approximately 28 million pounds of copper that have been provisionally valued at
$3.24/lb. The final pricing for these provisionally priced sales is expected to
occur between October and December 2011. Changes in the price of copper from the
amounts used to calculate the provisional values will impact the Company's
revenues and working capital position in the fourth quarter of 2011. Based on
the Q3 2011 quarter end copper price of $3.24/lb, the Company estimates a cash
repayment of approximately $20 million for provisional payments received from
customers for the Q3 2011 shipments.
During June 2011, the Company issued, through private placement, $500 million
aggregate principal amount of 7.75% senior unsecured notes ("Notes") due 2019.
These Notes contain certain covenants that limit the Company's ability, and the
ability of certain subsidiaries, to incur additional indebtedness and issue
preferred stock; create liens; make restricted payments; create or permit to
exist restrictions on the ability of the Company or certain subsidiaries to make
certain payments and distributions; engage in amalgamations, mergers or
consolidations; make certain dispositions and transfers of assets; and engage in
transactions with affiliates.
The Company may redeem, prior to June 15, 2014, up to 35% of the Notes with the
net proceeds of certain equity offerings at a redemption price equal to 107.75%
of the principal amount plus accrued interest. Prior to June 15, 2015, the
Company may redeem the Notes in whole or in part at 100.0% of their principal
amount, plus accrued interest, and amount equal to the greater of 1.0% of the
principal amount of the note to be redeemed and the excess, if any, of the
present value of the June 15, 2015 redemption price plus required interest
payments through June 15, 2015 over the principal amount of the note.
The Company may redeem the Notes at any time on or after June 15, 2015 at the
redemption prices and periods set forth below, plus accrued and unpaid interest:
June 15, 2015 103.875%
June 15, 2016 101.938%
June 15, 2017 and thereafter 100.000%
Upon specified change of control events, each holder of a note will have the
right to require the Company to purchase all or a portion of the Notes at a
purchase price in cash equal to 101% of the principal amount, plus accrued
interest to the date of purchase. At September 30, 2011 no mandatory principal
repayments are required in the next five years.
Capital spending in the first nine months of 2011 was $309.6 million for
operations and projects, which included $22 million of capitalized Ruth pit mud
removal costs and $141 million on the Sierra Gorda project before the formation
of the JV. After the formation of the JV, the Company received a net payment of
$100.7 million from the JV for the repayment of the loan which was advanced by
the Company to the JV from May 1 to September 14, 2011.
During the first nine months of 2011, the Company purchased additional copper
put options under the price protection program at a cost of $3.7 million. In
addition, the Company exercised the Far West warrants with a total exercise
price of $14.9 million. This resulted in the Company acquiring additional shares
in Far West which were then converted, along with the originally held Far West
shares, to cash of $11.4 million and Capstone Mining Corp. ("Capstone") shares
after Far West was acquired by Capstone.
Liquidity Outlook
The Company's future profitability and cash position is highly dependent on the
price of copper and to a lesser extent, precious metals and nickel. Future
changes in the price of copper will also impact the final settlement price of
provisionally priced sales. The Company has purchased copper put options to
protect a minimum floor price for a portion of its future copper production (see
"Financial Instruments"). In addition, the Company expects to spend
approximately $30 million on capital expenditures and $16.2 million on
environmental bond at its six operating mines in the remainder of 2011. At
current metal prices, the Company expects that it will be able to fund the 2011
capital requirements for all of its mines and projects from existing cash on
hand and internally generated funds.
Commitments and contractual obligations
Less than 1-2 2-3 3-4 4-5 After Total
1 year years years years years 5 years
----------------------------------------------------------------------------
Reclamation
liabilities $ 0.6 $ 1.0 $ 3.2 $ 2.2 $ 0.5 $ 89.2 $ 96.7
Franke Mine supply
contracts 2.8 11.5 11.6 12.7 10.4 51.1 100.1
Robinson Mine
power supply
contract 2.3 9.2 - - - - 11.5
Minimum lease
payments (capital
and operating) 3.3 8.4 6.1 2.8 1.0 0.3 21.8
----------------------------------------------------------------------------
Total $ 9.0 $ 30.1 $ 20.9 $ 17.7 $ 11.9 $ 140.5 $ 230.1
----------------------------------------------------------------------------
Under the Sierra Gorda JV agreement, the Company expects to fund approximately
$650 million of the construction budget in the next three years.
Reclamation liabilities
The Company has estimated total future reclamation costs of $96.7 million
(undiscounted), which primarily relate to the closure of the Robinson, Carlota
and Franke mines and the Sudbury operations. The accounting carrying value of
this liability is $86.8 million at September 30, 2011 based on the estimated
discounted future payments. To secure a portion of the closure costs related to
Robinson, Carlota and Sudbury operations, the Company has posted environmental
bonds and held cash in a reclamation trust totalling $71.6 million as at
September 30, 2011. The Company revises the Reclamation plan and cost estimate
for Robinson annually as required by the US Bureau of Land Management and
adjusts the amount of the bond accordingly. The reclamation plan and cost
estimate for Carlota is updated every five years as required by the regulator
and the amount of the bond is adjusted accordingly. There is currently no
environmental bonding in place at Franke. A closure plan for Podolsky has been
submitted to the Ontario Government. Closure plans for the McCreedy West and
Levack operations are governed by arrangements between the Ontario Government
and Vale and between Vale and the Company.
Franke Mine supply contracts
The Company has a long-term supply contract for sulphuric acid for use in the
copper extraction process at Franke. The minimum commitment under the contract
is estimated to be $4.1 million per annum subject to adjustment based on the
prevailing copper prices over the term of the contract which expires in 2022.
The Company is committed to purchase 150,000 tonnes of sulfuric acid per annum
at a base price of $27/tonne. The base price for acid in the contract is
increased by $2.50/tonne for each $0.10/lb that the copper price exceeds
$1.10/lb.
Franke also has a long-term supply contract for industrial water. The minimum
commitment under the contract is estimated to be approximately $1.1 million per
annum subject to adjustment based on the prevailing copper prices over the term
of the contract which expires in 2020. The copper price adjustment requires, on
an annualized basis, that approximately an additional $120 be paid for each
$0.15/lb that the copper price exceeds a base price of $1.50/lb. The Company has
also entered into various supply and other contracts for operation and
development of Franke.
Robinson Mine power supply contract
Robinson has a three year supply contract for electricity. The minimum
commitment under the contract is estimated to be $8.8 million plus service
charges per annum over the term of the contact which expires in 2012.
MARKET TRENDS AND FUNDAMENTALS
Copper prices declined approximately 25% in September trading to a fifteen month
low of approximately $3.00/lb due largely to uncertainty in the European banking
sector and sovereign debt crises. However, despite the sharp September selloff,
copper prices averaged $4.07/lb in Q3 2011. Looking forward, the Company
believes that copper market fundamentals will remain strong; supported by
continued underperformance in copper supply resulting from falling ore grades,
strikes, aging large mines and project delays and difficulty in funding large
high cost technically challenging projects. In the short term, from a demand
perspective, the Company recognizes headwinds due to the economic environment in
Europe and slowing economic activity in parts of China. Longer term, continued
urbanization of emerging market countries such as China and continued gradual
growth in OECD economies should provide a positive backdrop for copper demand.
The following graph shows the spot price of copper from 2006 to October 31, 2011
as published by the London Metal Exchange ("LME").
To view the graph associated with this release, please visit the following link:
http://media3.marketwire.com/docs/qux1110lmecopperprice.jpg.
At September 30, 2011, the closing spot price was $3.24/lb. At October 31, 2011,
the closing spot price was $3.62/lb. The reference price of copper metal is
determined by trading on the LME, where the price is set in U.S. dollars at the
end of each business day.
FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS
The Company's revenues and cash flows are subject to fluctuations in the market
price of copper and gold. In addition, there is a time lag between the time of
initial payment on shipment and final pricing, and changes in the price of
copper and gold during this period impact the Company's revenues and working
capital position.
The following table summarizes the impact of the changes in copper price on the
Company's after tax earnings for the remainder of 2011, excluding the impact of
changes in fair value of copper put options:
----------------------------------------------------------------------------
Impact on the after tax earnings
Copper price (excluding derivatives)
----------------------------------------------------------------------------
+ $0.20/lb 17.1
----------------------------------------------------------------------------
- $0.20/lb (17.1)
----------------------------------------------------------------------------
The Company has a floor price protection program in place for a portion of its
anticipated copper sales from April to January 2012. During the first nine
months of 2011, the Company purchased additional copper put options for 124
million pounds of copper at an average strike price of $2.74/lb at a cost of
$3.7 million. A total of 150 million pounds of copper put options expired
unexercised.
At September 30, 2011, the Company had 69 million pounds of copper puts
outstanding with an average strike price of $2.78/lb. The expiry dates of these
put options are between October 2011 and January 2012.
Under the terms of these contracts, if the average LME cash price for the month
is less than the strike price of the put option the Company will receive the
difference in price between the average LME cash price and the strike price for
the contracted number of pounds. The counter parties consist of several
international financial institutions. The Company monitors its counter party
exposures and does not believe there are any credit or collection issues at the
current time. The change in fair value of these instruments is recorded as a
derivative gain or loss on the statement of earnings.
The following table summarizes the impact of different copper prices on the
Company's cash flows from copper put options in the remainder of 2011:
----------------------------------------------------------------------------
Copper price Cash flows from copper put options
----------------------------------------------------------------------------
$1.50/lb 88.3
----------------------------------------------------------------------------
$2.00/lb 53.8
----------------------------------------------------------------------------
$2.50/lb 19.3
----------------------------------------------------------------------------
$3.00/lb -
----------------------------------------------------------------------------
The Company has entered into NYMEX heating oil futures contracts and collar
contracts in order to manage the price risk associated with diesel fuel. During
the first nine months of 2011, the Company settled 8.1 million gallons of NYMEX
heating oil contracts resulting in a cash receipt of $5.6 million to the
Company, which has been recorded in cost of sales on the statement of earnings.
At September 30, 2011, the Company had no NYMEX heating oil futures contracts
outstanding.
Subsequent to September 30, 2011 the Company purchased a non deliverable forward
contract to sell $200.0 into Chilean Pesos ("CLP") at rates between CLP 504 and
CLP 510 to manage the CLP currency risks at the Sierra Gorda JV for a period of
30 days. If the CLP weakens against the U.S. dollar, the Company would have to
pay the counterparty the difference between the hedged rate and the market rate.
If the CLP strengthens against the U.S. dollar the counterparty would have to
pay the Company the difference between the hedged rate and the market rate.
CONTINGENCIES
(a) The Company sells all the ore produced from its Sudbury operations to a
single processor. That processor is required to pay for ore shipped and
sold based on the metals which the processor is able to recover from
the various ores delivered. This varies depending on the metallurgical
and mineralogical composition as well as mining grades of nickel,
copper, cobalt, platinum, palladium, gold and silver for each ore. This
is determined by the processor via metallurgical and mineralogical
testing of the various ores. There are several different payable metals
terms with the processor for the various ores from the Company's
Sudbury mines in order to reflect the differences in the metal
recoveries.
Interim processing terms (i.e. treatment and refining charges) and
interim payable metals terms have been established by the processor for
the Sudbury operations. The company is currently discussing final
commercial terms with the processor. There is a possibility that once
final terms have been agreed that revised terms may be applied to ore
shipped in prior periods. The Company cannot, at this time, determine
the amount, if any, of such adjustment. Depending on the outcome of the
negotiations of final payable metals and processing terms, a material
increase or decrease in payable metals and/or processing costs may need
to be recorded.
(b) In the normal course of business DMC enters into agreements that
contain indemnification commitments and may contain features that meet
the expanded definition of guarantees. The terms of these
indemnification agreements will vary based on the contract and
typically do not provide for a limit on the maximum potential
liability. The Company has not made any payments under such
indemnifications and no amounts have been accrued in the financial
statements with respect to these indemnification commitments.
(c) The Company is subject to lawsuits from time to time which are not
disclosed on the grounds that they are not believed to be material.
TRANSACTIONS WITH RELATED PARTIES
One of the directors of the Company is a partner of an affiliate of the
Company's primary legal counsel. During the nine months ended September 30,
2011, the Company incurred legal fees of $1.3 million (September 30, 2010 - $1.3
million), all of which were at normal business terms.
Upon formation of the Sierra Gorda JV, it became a related party with the
Company. The amount due from the Sierra Gorda JV is $1.3 million.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
In preparing financial statements management has to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues
and expenses. Based on historical experience, current conditions and expert
advice, management makes assumptions that are believed to be reasonable under
the circumstances. These estimates and assumptions form the basis for judgments
about the carrying value of assets and liabilities and reported amounts for
revenues and expenses. Different assumptions would result in different estimates
and actual results may differ materially from results based on these estimates.
These estimates and assumptions are also affected by management's application of
accounting policies. Critical accounting policies and estimates are those that
affect the consolidated financial statements materially and involve a
significant level of judgment by management.
Mineral Properties
Mineral property development costs, including exploration, mine construction,
and stripping costs, are capitalized until production is achieved, and are then
amortized over the remaining life of the mine based on proven and probable
reserves. The determination of the extent of reserves is a complex task in which
a number of estimates and assumptions are made. These involve the use of
geological sampling and models as well as estimates of future costs. New
knowledge derived from further exploration and development of the ore body may
also affect reserve estimates. In addition the determination of economic
reserves depends on assumptions on long-term commodity prices and in some cases
exchange rates.
The carrying value of mineral properties is reviewed regularly and whenever
events or changes in circumstances indicate that the carrying value of an asset
may not be recoverable. An impairment loss is recognized for a mineral property
if its carrying value exceeds the higher of total discounted cash flows expected
from its use and disposal ("value in use") or fair value less costs to sell.
Discounted cash flows for mineral properties are estimated based on a number of
assumptions including management's view of long- term commodity prices, proven
and probable reserves, estimated value beyond proven and probable reserves, and
estimates of future operating, capital, reclamation costs and discount rate.
Based on management's view of future metal prices, mineral reserves and cost
assumptions, the carrying value of the Carlota mine mineral properties was
impaired and a $122 million impairment loss was recorded in Q3 2011.
Leach Pad Inventory
Leach pad inventory is comprised of ore that has been extracted from the mine
and placed on the heap leach pad for further processing. Costs are removed from
leach pad inventory as cathode copper is produced, based on the average cost per
recoverable pound of copper in process. The quantity of recoverable copper in
process is an engineering estimate which is based on the expected grade and
recovery of copper from the ore placed on the leach pad. The nature of the
leaching process inherently limits the ability to precisely monitor inventory
levels. However, the estimate of recoverable copper placed on the leach pad is
reconciled to actual copper production, and the engineering estimates will be
refined based on actual results over time.
Revenue Recognition
Sales are recognized and revenues are recorded at market prices when title
transfers and the rights and obligations of ownership pass to the customer. The
majority of the Company's product is sold under pricing arrangements where final
prices are determined by quoted market prices in a period subsequent to the date
of sale. For sales of Robinson's concentrates and Sudbury's copper and nickel
ores, final pricing is generally determined three to six months after the date
of sale. For the sales of copper cathode, final pricing is generally determined
in the month or the subsequent month after the date of sale. The Company
estimates provisional pricing for its product based on forward prices for the
expected date of the final settlement. Subsequent variations in price are
recognized as revenue adjustments as they occur until the price is finalized. As
a result, revenues include estimated prices for sales in that period as well as
pricing adjustments for sales that occurred in the previous period. These types
of adjustments can have a material impact on revenues.
Site Closure and Reclamation Provision
Due to uncertainties concerning environmental remediation, the ultimate cost to
the Company of future site restoration could differ from the amounts provided.
In previous years the Company has revised its estimate of the timing and amount
of closure costs at its mines, which resulted in adjustments to the liability
recorded in the Company's financial statements. The estimate of the total
liability for future site restoration costs is subject to change based on cost
inflation, amendments to laws and regulations and may also change as new
information concerning the Company's operations becomes available. The Company
is not able to determine the impact on its financial position, if any, of
environmental laws and regulations that may be enacted in the future.
Financial Instruments
Financial instruments are designated as loans and receivables, available for
sale and "fair value through profit and loss". Financial instruments are
recorded in the balance sheet as either an asset or liability with changes in
fair value recognized in the consolidated comprehensive income. The estimate of
fair value of all financial instruments is based on quoted market prices or, in
their absence, third-party market indications and forecasts. The estimated fair
value of financial assets and liabilities is subject to measurement uncertainty.
Deferred Income Tax Assets
Management believes that uncertainty exists regarding the realization of certain
deferred tax assets and therefore a valuation allowance has been recorded as of
September 30, 2011. At September 30, 2011 the Company had additional available
U.S. Alternative Minimum Tax Credits of $8.3 million, which have not been
recognized due to the uncertainty of realization. The Company also has not
recognized the benefit of certain non-capital losses. However, the Company has
recognized a net current deferred income tax asset for other temporary
differences created between the tax and accounting basis of assets and
liabilities in the United States, Chile and the Company's Sudbury operations.
Management estimates that, using long term copper prices in line with its mine
plan estimates, the future taxable income will be sufficient to utilize the
deferred tax assets which have been recognized.
OUTSTANDING SHARE DATA
The Company had 191,456,584 common shares issued and outstanding at September
30, 2011. As of November 9, 2011, the Company had 191,487,944 common shares
issued and outstanding.
INTERNAL CONTROL OVER FINANCIAL REPORTING
The Company's management is responsible for establishing and maintaining
adequate internal control over financial reporting. Any system of internal
control over financial reporting, no matter how well designed, has inherent
limitations. Therefore, even those systems determined to be effective can
provide only reasonable assurance with respect to financial statement
preparation and presentation. There have been no changes in internal control
over financial reporting during the quarter ended September 30, 2011 that have
materially affected, or are reasonably likely to materially affect internal
control over financial reporting.
CONVERSION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS")
Effective January 1, 2011 Canadian publicly listed companies were required to
prepare financial statements in accordance with IFRS for interim and annual
periods. The three months ended March 31, 2011 is the Company's first reporting
period under IFRS.
The IFRS project team has completed the conversion implementation.
Post-implementation will continue in future periods. The following outlines the
IFRS transitional impacts and the on-going impact of IFRS on the Company's
financial results.
Significant accounting impacts of conversion to IFRS
As a result of the accounting policy differences on conversion from Canadian
GAAP to IFRS, the Company recorded a reduction in the shareholders' equity of
approximately $28 million as at January 1, 2010. The following table summarizes
the adjustments to Shareholders' Equity on adoption of IFRS on January 1, 2010,
and at September 30, 2010 and December 31, 2010 for comparative purposes:
----------------------------------------------------------------------------
----------------------------------------------------------------------------
January 1, September 30, December 31,
2010 2010 2010
----------------------------------------------------------------------------
Equity under Canadian GAAP 1,005.4 2,128.2 2,195.0
Site closure and reclamation
provisions (19.1) (21.1) (23.5)
Impairment of long-lived assets - - (152.5)
Financial instruments (11.0) (34.8) (42.3)
Deferred income taxes 2.3 3.3 40.9
----------------------------------------------------------------------------
Total IFRS adjustments to equity (27.8) (52.6) (177.4)
----------------------------------------------------------------------------
Equity under IFRS 977.6 2,075.6 2,017.6
----------------------------------------------------------------------------
----------------------------------------------------------------------------
In transition to IFRS, the Company recorded a decrease in earnings of
approximately $17.6 million and $3.5 million for the three months ended
September 30, 2010 and nine months ended September 30, 2010, respectively. For
the year ended December 31, 2010, a reduction in earnings of approximately
$128.3 million as a result of applying IFRS standards. The following table
summarizes the adjustments to previous reported Canadian GAAP earnings for the
three and nine months ended September 30, 2010 and the year ended December 31,
2010 under IFRS:
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three month Nine month
period ended period ended Year ended
September 30, September 30, December 31,
2010 2010 2010
----------------------------------------------------------------------------
Earnings under Canadian GAAP 37.1 114.5 172.5
Site closure and reclamation
provisions (0.6) (2.1) (4.3)
Impairment of long-lived assets - - (152.5)
Financial instruments (17.0) (2.4) (10.1)
Deferred income taxes - 1.0 38.6
----------------------------------------------------------------------------
Total IFRS adjustments to
earnings (17.6) (3.5) (128.3)
----------------------------------------------------------------------------
Earnings under IFRS 19.5 111.0 44.2
----------------------------------------------------------------------------
----------------------------------------------------------------------------
The transition to IFRS has resulted in numerous comprehensive income
presentation changes in the financial statements, most significantly on the
consolidated statement of comprehensive income. The changes to the balance sheet
relate only to the further break-out of balances on the face of the balance
sheet including provisions and deferred income taxes. The following is a summary
of the significant changes to the Company's consolidated statement of
comprehensive income:
-- Expenses by function - the Company's statement of earnings presents
expenses by function. Accordingly, depreciation and amortization is no
longer presented as a separate item on the statement of comprehensive
income but is included in cost of sales.
-- Finance expense - under IFRS, finance expense includes interest on debt,
accretion expense for site closure and reclamation and other provisions.
-- Finance income - finance income under IFRS includes interest income and
gain on marketable securities.
The above changes are reclassifications within the statement of comprehensive
income so there is no net impact to the Company's earnings as a result of these
changes.
Business Activities
The impact of the IFRS conversion project on our compensation arrangements has
been assessed. Such arrangements are calculated based on financial information
disclosed in the financial statements. The project team continues to work with
the human resources department to ensure that all compensation arrangements are
amended for the applicable IFRS changes in accordance with compensation
policies. There is no significant impact to existing compensation arrangements
due to the IFRS conversion project. The Company's budgeting and forecasting
models have been amended to reflect the IFRS changes in accounting policies,
reclassifications, and measurements of applicable financial statement line
items.
Controls and Procedures
The conversion to IFRS does not have a significant impact on the Company's
internal controls (including information technology systems), and accounting
processes. However, the extent of change in accounting framework has required
the Company to update its internal controls, disclosure controls and procedures
to ensure they are appropriately designed and operated effectively for reporting
under IFRS. These include: training/communication - to ensure IFRS knowledge is
transferred from subject matter experts to the entire organization;
documentation - to ensure corporate accounting policies are updated for IFRS,
and transitional analysis and decisions are adequately supported; and review -
to ensure segregation of duties in the review and approval of IFRS information
from preparer to management, and ultimately by the Audit Committee. As a result
of these incremental internal control enhancements, the impact of the conversion
from Canadian GAAP to IFRS on the Company's risk management or other business
activities are reduced.
Ongoing Activities
The completion of the Implementation and commencement of Post-Implementation
phases will involve continuous monitoring of the changes implemented to date to
ensure completeness and accuracy of our IFRS financial reporting. In particular,
there may be additional new or revised IFRSs or IFRICs in relation to
consolidation, joint ventures, financial instruments, hedge accounting,
discontinued operations, leases, employee benefits, revenue recognition and
stripping costs in the production phase of a surface mine. The Company also
notes that the International Accounting Standards Board is currently working on
an extractive industries project, which could significantly impact the Company's
financial statements primarily in the areas of capitalization of exploration
costs and disclosures. There are processes in place to ensure that potential
changes are monitored and evaluated. The impact of any new IFRSs and IFRIC
Interpretations will be evaluated as they are drafted and published.
SUMMARY OF QUARTERLY OPERATING RESULTS
The following table summarizes the financial and operating results of the most
recent eight quarters (unaudited):
----------------------------------------------------------------------------
SUMMARY OF QUARTERLY FINANCIAL RESULTS
2009
2011 2010 (ii)
----------------------------------------------------------------------------
Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4
Revenues (i)
Robinson 116 106 95 132 130 95 133 136
Carlota 26 22 18 30 22 24 31 19
Franke 42 26 30 41 41 25 34 21
Podolsky 28 32 32 48 28 15 - -
Levack Complex (1) 66 84 71 63 26 5 - -
DMC 49 28 23 18 12 5 - -
----------------------------------------------------------
Revenues - Total 326 298 269 332 259 169 197 176
Operating (loss)
income (24.9) 63.5 61.4 112.0 66.5 31.5 82.4 63.4
Earnings (loss)
before income
taxes 119.3 71.3 211.2 (79.1) 37.7 39.1 68.3 45.6
Earnings (loss) 142.8 63.8 167.7 (67.0) 19.5 36.5 55.0 46.5
Basic earnings
(loss) per share $ 0.75 $ 0.33 $ 0.88 $-0.35 $ 0.10 $ 0.26 $ 0.55 $ 0.47
Diluted earnings
(loss) per share $ 0.71 $ 0.33 $ 0.85 $-0.35 $ 0.10 $ 0.21 $ 0.54 $ 0.46
----------------------------------------------------------------------------
(1) Including Morrison deposit commercial production revenues
(i) See "Financial Performance - Revenues" section for description of
payments process.
(ii) 2009 quarterly results are recorded in accordance with Canadian GAAP
----------------------------------------------------------------------------
SUMMARY OF QUARTERLY OPERATING RESULTS
2011 2010 2009
----------------------------------------------------------------------------
Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4
Robinson
Cu produced payable
(Mlbs) 26.7 21.2 19.9 25.4 25.4 22.7 30.7 28.2
Ore milled (Mt) 3.9 3.2 3.4 3.5 3.3 3.6 3.3 3.3
Au production
payable (kozs) 9.2 7.1 5.5 14.9 14.5 14.7 26.0 24.4
Cu grade (%) 0.43 0.43 0.41 0.46 0.49 0.40 0.59 0.59
Au grade (g/t) 0.21 0.17 0.18 0.26 0.25 0.20 0.31 0.31
Cu recovery (%) 77.4 73.0 69.5 75.4 75.3 73.5 72.2 65.9
Au recovery (%) 38.8 44.2 30.4 53.3 58.2 66.3 78.1 73.1
Cu sales (Mlbs) 27.9 22.3 18.2 24.7 28.6 26.6 27.8 31.7
Average final
settlement price
($/lb) $ 4.07 $ 4.13 $ 4.39 $ 3.79 $ 3.19 $ 3.19 $ 3.37 $ 3.02
Cash cost per pound
of payable copper
produced ($/lb) $ 2.13 $ 2.78 $ 2.49 $ 1.89 $ 1.66 $ 1.67 $ 1.14 $ 1.53
Carlota
Cu production (Mlbs) 6.6 6.2 4.2 6.6 7.3 7.4 8.2 8.0
Ore placed (Mt) 1.3 1.5 0.8 1.5 2.3 1.6 1.0 2.3
Total Cu grade (%) 0.32 0.44 0.39 0.7 0.77 0.39 0.35 0.61
Cu sales (Mlbs) 6.6 5.4 4.1 7.7 6.6 7.7 9.5 6.4
Average realized
price ($/lb) $ 3.99 $ 4.06 $ 4.37 $ 3.88 $ 3.29 $ 3.13 $ 3.25 $ 3.01
Cash cost per pound
of copper sold
($/lb) $ 3.12 $ 3.24 $ 3.37 $ 1.84 $ 1.74 $ 1.89 $ 1.76 $ 1.61
Franke
Cu production (Mlbs) 9.0 8.3 7.2 7.8 10.1 10.4 8.9 9.4
Ore placed (Mt) 0.8 0.8 0.5 0.7 1.0 0.8 0.8 0.9
Total Cu grade (%) 0.80 0.82 0.75 0.86 0.77 0.86 0.91 0.85
Cu sales (Mlbs) 10.5 6.1 6.9 10.3 12.8 7.8 10.3 6.9
Average realized
price ($/lb) $ 3.96 $ 4.15 $ 4.38 $ 3.97 $ 3.23 $ 3.24 $ 3.25 $ 3.03
Cash cost per pound
of copper sold
($/lb) $ 3.33 $ 4.49 $ 3.57 $ 2.60 $ 2.60 $ 2.60 $ 1.99 $ 2.07
Morrison
Cu ore sold (kt) (1) 53.3 52.2 50.0 39.7 29.3 20.0 12.7 3.1
Cu grade (%) 9.6 10.1 8.4 9.5 11.2 9.1 5.8 8.2
Payable Cu sold
(Mlbs) 10.1 10.3 8.2 7.1 6.3 3.5 1.6 0.7
Payable Ni sold
(Mlbs) 1.4 1.7 1.6 1.5 1.2 0.9 0.9 0.3
Payable TPM sold
(kozs) (2) 8.4 8.2 5.8 4.1 3.1 1.9 0.9 0.8
Average realized
price ($/lb) $ 3.47 $ 4.14 $ 4.27 $ 4.37 $ 3.67 $ 2.89 $ 3.49 $ 3.17
Cash cost per pound
of copper sold
($/lb) $ 0.59 $ 0.23 $-0.33 $-0.34 $-0.04 $-2.70 $-7.39 $ 0.36
Podolsky
Cu ore sold (kt) (1) 112.2 91.0 99.2 118.0 97.2 128.9 71.3 167.5
Cu grade (%) 3.0 3.6 3.1 3.7 3.2 3.7 2.6 4.2
Payable Cu sold
(Mlbs) 6.0 6.4 5.4 8.1 5.4 8.6 3.2 13.0
Payable Ni sold
(Mlbs) 0.3 0.3 0.2 0.4 0.3 0.6 0.3 0.8
Payable TPM sold
(kozs) (2) 7.2 5.9 6.6 10.6 5.4 11.5 5.3 15.1
Average realized
price ($/lb) $ 3.42 $ 4.14 $ 4.28 $ 4.36 $ 3.82 $ 2.88 $ 3.63 $ 3.17
Cash cost per pound
of copper sold
($/lb) $ 1.89 $ 1.67 $ 1.80 $ 0.74 $ 1.67 $ 1.07 $ 1.69 $ 1.16
McCreedy West
Cu ore sold (kt) (1) 15.6 78.0 74.9 76.1 72.6 67.5 67.3 154.5
Cu grade (%) 1.6 1.6 1.0 0.8 0.9 1.1 1.1 1.1
Ni ore sold (kt) (1) 53.6 - - - - - - -
Ni grade (%) 1.6 - - - - - - -
Payable Cu sold
(Mlbs) 0.9 2.3 1.1 1.1 1.2 1.2 1.3 3.3
Payable Ni sold
(Mlbs) 1.3 0.4 0.2 0.2 0.2 0.2 0.2 0.6
Payable TPM sold
(kozs) (2) 1.9 6.4 7.2 8.3 8.1 8.3 7.7 18.8
Average realized
price ($/lb) $ 3.74 $ 4.12 $ 4.27 $ 4.46 $ 3.69 $ 2.84 $ 3.25 $ 3.17
Cash cost per pound
of copper sold
($/lb) $-0.38 $ 1.39 $ 4.55 $ 1.55 $ 2.83 $ 3.15 $ 1.23 $ 1.77
----------------------------------------------------------------------------
(1) Converted into metric tonne from original short ton
(2) Total precious metal, including gold, platinum and palladium
(3) Production and operating statistics in this table are reported for
historical periods for all of the Company's mines, including periods
prior to the merger of Quadra and FNX on May 20, 2010
The quarterly performance of Robinson varies as a result of changes in head
grade, metal recovery and waste stripping requirements. Due to the complex
nature of the Robinson ore body, volatility in metal prices, and industry cost
pressures the results have varied from quarter to quarter and this is expected
to continue in the future.
NON-IFRS FINANCIAL MEASURES
The cash cost per pound of copper, and onsite costs and offsite costs are
non-IFRS financial measures that do not have a standardized meaning under IFRS,
and as a result may not be comparable to similar measures presented by other
companies. Management uses these statistics to monitor operating costs and
profitability. Onsite costs include mining costs, equipment operating lease
costs, mill costs, mine site general and administration costs, environmental
costs and royalties. Offsite costs include the costs of transportation, smelting
and refining of concentrate, and treatment costs for ores. By-product revenues
from the Sudbury Operations reflect the actual cash price earned from sales of
precious metals to Gold Wheaton. Costs of sales, as reported on the statement of
comprehensive income, is different than the costs of production because of
changes in inventory levels. The following table shows a reconciliation of these
non-IFRS financial measures to the consolidated statements of operations:
Three months ended September 30, 2011
----------------------------------------------------------------
Carlota McCreedy
Robinson (2) Franke Morrison Podolsky West Total
Production
costs of
goods sold 76.3 19.2 34.9 20.5 17.5 11.9 180.3
Adjustment
for change
in
inventory (4.3) - - - - - (4.3)
Royalties 3.9 1.3 - - - - 5.2
----------------------------------------------------------------
Total cash
cost 75.9 20.5 34.9 20.5 17.5 11.9 181.2
By-product
revenues (19.0) - - (14.6) (6.1) (12.2) (52.0)
----------------------------------------------------------------
56.9 20.5 34.9 5.9 11.4 (0.3) 129.2
Copper
produced/
sold
(million
lbs) 26.7 6.6 10.5 10.1 6.0 0.9 60.8
----------------------------------------------------------------
Cash cost
per pound
of copper
(US$/lb)(1) $ 2.13 $ 3.12 $ 3.33 $ 0.59 $ 1.89 $ (0.38) $ 2.13
----------------------------------------------------------------
----------------------------------------------------------------
Three months ended September 30, 2010
----------------------------------------------------------------
Morrison Podolsky McCreedy
Robinson Carlota Franke (3) (3) West (3) Total
Production
costs of
goods sold 70.2 10.5 33.3 5.1 15.0 9.2 143.3
Adjustment
for change
in
inventory (4.9) - - - - - (4.9)
Royalties 3.5 1.1 - - - - 4.6
----------------------------------------------------------------
Total cash
cost 68.8 11.6 33.3 5.1 15.0 9.2 143.0
By-product
revenues (26.6) - - (5.2) (6.0) (5.8) (43.6)
----------------------------------------------------------------
42.2 11.6 33.3 (0.1) 9.0 3.4 99.4
Copper
produced/
sold
(million
lbs) 25.4 6.6 12.8 2.3 5.4 1.2 53.7
----------------------------------------------------------------
Cash cost
per pound
of copper
(US$/lb)(1) $ 1.66 $ 1.74 $ 2.60 $ (0.04) $ 1.67 $ 2.83 $ 1.85
----------------------------------------------------------------
----------------------------------------------------------------
Nine months ended September 30, 2011
----------------------------------------------------------------
Carlota McCreedy
Robinson (2) Franke Morrison Podolsky West Total
Production
costs of
goods sold 205.4 48.3 87.1 63.7 51.4 34.1 490.0
Adjustment
for change
in
inventory 2.1 - - - - - 2.1
Royalties 10.2 3.3 - - - - 13.5
----------------------------------------------------------------
Total cash
cost 217.7 51.6 87.1 63.7 51.4 34.1 505.6
By-product
revenues (52.1) - - (58.3) (19.6) (26.1) (156.2)
----------------------------------------------------------------
165.6 51.6 87.1 5.4 31.8 8.0 349.4
Copper
produced/
sold
(million
lbs) 67.9 16.1 23.5 28.6 17.8 4.3 158.2
----------------------------------------------------------------
Cash cost
per pound
of copper
(US$/lb)
(1) $ 2.44 $ 3.21 $ 3.70 $ 0.19 $ 1.78 $ 1.85 $ 2.21
----------------------------------------------------------------
----------------------------------------------------------------
Nine months ended September 30, 2010
----------------------------------------------------------------
Morrison Podolsky McCreedy
Robinson Carlota Franke (3) (3) West (3) Total
Production
costs of
goods sold 189.5 39.0 74.1 5.8 25.1 14.4 348.0
Adjustment
for change
in
inventory (2.1) - - - - - (2.1)
Royalties 10.6 3.9 - - - - 14.5
----------------------------------------------------------------
Total cash
cost 198.1 42.9 74.1 5.8 25.1 14.4 360.4
By-product
revenues (82.9) - - (6.0) (10.2) (7.7) (106.8)
----------------------------------------------------------------
115.2 42.9 74.1 (0.2) 14.9 6.7 253.6
Copper
produced/
sold
(million
lbs) 78.8 23.8 30.9 2.4 9.1 1.8 146.8
----------------------------------------------------------------
Cash cost
per pound
of copper
(US$/lb)
(1) $ 1.46 $ 1.80 $ 2.40 $ (0.08) $ 1.64 $ 3.73 $ 1.73
----------------------------------------------------------------
----------------------------------------------------------------
(1) Robinson cash cost per pound of copper produced is based on payable
copper.
(2) Carlota cash cost per pound of copper sold does not include the amount
of inventory write down.
(3) For the period after May 20, 2010, the day after the merger with FNX.
Three months ended Three months ended
September 30, 2011 September 30, 2010
-------------------------------------------------------
Robinson Carlota Franke Robinson Carlota Franke
Production costs of
goods sold 76.3 19.2 34.9 70.2 10.5 33.3
Adjustment for change
in inventory (4.3) (1.1) 0.8 (4.8) 9.8 (8.4)
Royalties 3.9 1.3 - 3.5 1.1 -
-------------------------------------------------------
Total onsite and
offsite costs 75.9 19.4 35.7 68.9 21.4 24.9
-------------------------------------------------------
-------------------------------------------------------
Nine months ended Nine months ended
September 30, 2011 September 30, 2010
-------------------------------------------------------
Robinson Carlota Franke Robinson Carlota Franke
Production costs of
goods sold 205.4 48.3 87.1 189.5 39.0 74.1
Adjustment for change
in inventory 2.1 18.5 13.3 (2.0) 29.4 (1.4)
Royalties 10.2 3.3 - 10.6 3.9 -
-------------------------------------------------------
Total onsite and
offsite costs 217.7 70.1 100.4 198.1 72.3 72.7
-------------------------------------------------------
-------------------------------------------------------
Note: onsite and offsite costs at Morrison, Podolsky and McCreedy West equal to
production costs of goods sold as inventory movement at these mines is minimal.
Cash flow from operating activities (before working capital changes) is also not
a defined term under IFRS, and consists of cash provided from operating
activities less net changes in non-cash working capital.
Adjusted earnings and adjusted earnings per share are non-IFRS measures which
determine the performance of the Company, excluding certain impacts which the
Company believes are either non-recurring, or recurring, but of a nature which
are not reflective of the Company's underlying performance, such as the impact
of gain and loss on derivatives, gains and losses from marketable securities and
investments, inventory write down (reversal), impairment of non-current assets,
merger costs, and adjustments of prior year taxes. Management believes that
these measures provide investors with ability to better evaluate underlying
performance. The following table provides a reconciliation of earnings to
adjusted earnings for the periods presented:
Three months Three months
ended Sep 30, ended Sep 30,
2011 2010
-----------------------------------
(All amounts in millions of United States
dollars except per share amounts)
Net earnings - IFRS 142.8 19.5
Adjusting items:
(Gain) loss on derivatives (33.2) 25.5
Gain on marketable securities - (7.4)
Transaction costs for FNX merger - 0.2
Accounting gains from investment in
Gold Wheaton - 1.3
Dilution gain from the formation of
Sierra Gorda JV (292.5) -
Inventory write down 76.0 -
Impairment of non-current assets 162.0 -
Tax impact of the above items (3.2) (4.5)
-----------------------------------
(90.9) 15.1
-----------------------------------
Net earnings - Adjusted 51.9 34.6
-----------------------------------
-----------------------------------
Weighted-average number of shares
outstanding - basic 191.4 189.0
Earnings per share - adjusted $ 0.27 $ 0.18
Nine months Nine months
ended Sep 30, ended Sep 30,
2011 2010
-----------------------------------
(All amounts in millions of United States
dollars except per share amounts)
Net earnings - IFRS 374.3 111.0
Adjusting items:
(Gain) loss on derivatives (45.4) 14.4
Gain on marketable securities (34.2) (7.4)
Transaction costs for FNX merger - 7.2
Accounting gains from investment in
Gold Wheaton (133.9) (8.8)
Dilution gain from the formation of
Sierra Gorda JV (292.5) -
Inventory write down 87.0 -
Impairment of non-current assets 162.0 -
Tax impact of the above items 29.3 (1.9)
-----------------------------------
(227.7) 3.5
-----------------------------------
Net earnings - Adjusted 146.6 114.5
-----------------------------------
-----------------------------------
Weighted-average number of shares
outstanding - basic 190.9 143.1
Earnings per share - adjusted $ 0.77 $ 0.80
November 9, 2011
FORWARD-LOOKING INFORMATION
This MD&A contains "forward-looking information" that is based on Quadra FNX's
expectations, estimates and projections as of the dates as of which those
statements were made. This forward-looking information includes, among other
things, statements with respect to the Company's business strategy, plans,
outlook, financing plans, long-term growth in cash flow, earnings per share and
shareholder value, projections, targets and expectations as to reserves,
resources, results of exploration (including targets) and related expenses,
property acquisitions, mine development, mine operations, mine production costs,
drilling activity, sampling and other data, estimating grade levels, future
recovery levels, future production levels, capital costs, costs savings, cash
and total costs of production of copper, gold and other minerals, expenditures
for environmental matters, projected life of Quadra FNX's mines, reclamation and
other post closure obligations and estimated future expenditures for those
matters, completion dates for the various development stages of mines,
availability of water for milling and mining, future copper, gold, molybdenum
and other mineral prices (including the long-term estimated prices used in
calculating Quadra FNX's mineral reserves), end-use demand for copper, currency
exchange rates, debt reductions, use of future tax assets, timing of expected
sales and final pricing of concentrate sales, the percentage of anticipated
production covered by option contracts or agreements, anticipated outcome of
litigation and anticipated impact of converting to IFRS,. Generally, this
forward-looking information can be identified by the use of forward-looking
terminology such as "outlook", "anticipate", "project", "target", "believe",
"estimate", "expect", "intend", "should", "scheduled", "will", "plan" and
similar expressions. Forward-looking information is subject to known and unknown
risks, uncertainties and other factors that may cause Quadra FNX's actual
results, level of activity, performance or achievements to be materially
different from those expressed or implied by such forward-looking information,
and developed based on assumptions about such risks, uncertainties and other
factors set out herein, including but not limited to:
-- Fluctuations in metal prices;
-- The ability to expand or replace depleted reserves and the possible
recalculation or reduction of the reserves and resources;
-- Actual capital costs, operating costs and expenditures, production
schedules and economic returns from the Company's mining projects;
-- The need to attract and retain qualified personnel;
-- Dewatering at the Robinson Mine in 2012 and beyond;
-- The successful development of the Sierra Gorda Project, a large joint
venture project with significant capital expenditure, permitting and
infrastructure requirements;
-- Inherent risks associated with joint ventures;
-- The ongoing litigation and potential future litigation at the Sierra
Gorda Project
-- Production estimates which may be materially different from actual
mining performance and mineral recoveries;
-- Underground mining at the Levack Mine including reserves replacement,
and risks associated with the transition to the use of the Craig shaft
and other facilities;
-- Geotechnical issues at all properties; specifically pit slope stability
at open pit operations and structural issues at the underground mines;
-- The mineralogy and block model assumptions at all mines and projects;
-- The leaching rate and recoveries achievable at the Carlota Mine due to
the high content of fines within the ore and other processing factors;
-- The leaching rate and recoveries at the Franke and China deposits at the
Franke Mine;
-- The Vale offtake agreement, including the risk of potential adjustment
to final payable metal and processing cost terms;
-- The Vale buy back right, including Vale's right to acquire an interest
in the Victoria Project;
-- Potential challenges to title to the properties;
-- The dependence on transportation facilities and infrastructure;
-- Labour relations;
-- The potential need for a temporary shutdown of any of our operations,
such as related to unplanned maintenance or extreme climatic conditions;
-- The actual costs of reclamation;
-- The impact of the availability and cost of key operating supplies and
services;
-- Increased energy prices;
-- The acquisition and integration of businesses and assets;
-- Inherent hazards and risks associated with mining operations;
-- Inherent uncertainties associated with mineral exploration;
-- The mining industry is competitive;
-- Being subject to government regulation, including changes in regulation;
-- Being subject to extensive environmental laws and regulations, including
change in regulation;
-- Need for governmental licenses and permits;
-- Derivative contracts and exposure to the credit risk of counter-parties;
-- Taxation;
-- Political and country risk;
-- Conflicts of interest;
-- Fluctuations in foreign currency exchange rates; and
-- Global financial conditions.
A discussion of these and other factors that may affect Quadra FNX's actual
results, performance, achievements or financial position is contained in the
filings by Quadra FNX with the Canadian provincial securities regulatory
authorities, including Quadra FNX's Annual Information Form and the Annual
Information Form filed by FNX prior to the merger between Quadra and FNX.
Forward- looking statements are based on assumptions management believes to be
reasonable, including but not limited to the continued operation of Quadra FNX's
mining operations, no material adverse change in the market price of
commodities, that the mining operations will operate in accordance with Quadra
FNX's public statements and achieve its stated production outcomes, and such
other assumptions and factors as set out herein. Although Quadra FNX has
attempted to identify important factors that could cause actual results to
differ materially from those contained in forward-looking statements, there may
be other factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that forward-looking statements will prove
to be accurate. Accordingly, readers should not place undue reliance on
forward-looking statements. Quadra FNX disclaims any intent or obligations to
update or revise publicly any forward-looking statements whether as a result of
new information, estimates or options, future events or results or otherwise,
unless required to do so by law.
Calypso Uranium Corp. (TSXV:CLP)
Historical Stock Chart
From May 2024 to Jun 2024
Calypso Uranium Corp. (TSXV:CLP)
Historical Stock Chart
From Jun 2023 to Jun 2024
