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MINTO METALS DELIVERS A RECORD FIRST QUARTER WITH 9.1 MILLION LBS OF COPPER PRODUCTION AND AN ADJUSTED EBITDA[1] OF $19.2 MILLION

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WHITEHORSE, YT, May 26, 2022 /CNW/ - Minto Metals Corp. (TSXV: MNTO) ("Minto" or the "Company") is pleased to announce the Company's financial and operating results for the three months ended March 31, 2022 ("QTR 1 2022") for the Minto Mine located within the Selkirk First Nation's Territory in the central Yukon, Canada. Copper Production totaled 9.1 million pounds of copper, a 70.7% increase over Quarter 1, 2021, at a consolidated cash cost of USD $2.44 per payable pound produced.

Minto Metals Logo (CNW Group/Minto Metals Corp.)
Minto Metals Logo (CNW Group/Minto Metals Corp.)

First Quarter Highlights:

  • Copper sales increased 70.7% to 9.1 million pounds compared to 5.3 million pounds in Quarter 1 2021.

  • Revenue grew 109.0% to $53.3 million, a $27.8 million increase from $25.5 million in Quarter 1, 2021.

  • Net Operating Cash flow generated was $15.0 million, an increase of $8.0 from $7.0M in Quarter 1, 2021

  • Improved operating results

  • Qualified exploration investment totaled $1.8 million in Quarter 1 or 29% of our 2021 Flow-Through Share commitment.

  • Adjusted EBITDA1 totaled $19.2 million, a $20.1 million increase from a loss of $0.9 million in Quarter 1 2021.

  • Fully diluted Earnings per Share total $0.20 cents, a $0.24 increase from a loss of ($0.04) in Quarter 1 2021.

  • Minto reiterates the previous 2022 forecasted guidance.

  1. Refers to Adjusted Earnings before Interest, Taxes, Depreciation, and Amortization "Alternative Performance Measures" on page 18 of the Company's Q1 2022 MD&A.

  2. Refers to Cash Costs and All-In Sustaining Costs "Alternative Performance Measures" on page 19 of the Company's Q1 2022 MD&A.

"Our excellent operating performance and cost containment in a higher copper price environment has surpassed our expectations. Our team has strong momentum and has delivered a positive performance for the second consecutive quarter", said Chris Stewart, President & Chief Executive Officer of Minto Metals.

"Our Quarter 1, Adjusted EBITDA improved to $19.2 million dollars compared to a loss of $0.9 million dollars a year ago. These great results highlight the extraordinary performance and are a testament to the drive and passion to win shown by everyone who works here at Minto." Stewart added.

Q1 2022 Financial Highlights

Adjusted EBITDA1 Reconciliation to Net Income









Q1 2022

Q1 2021

Net income (loss) and comprehensive
income (loss)



$ 14,536

$  (2,765)

Finance costs



2,064

1,106

Depletion and amortization



3,166

2,386

Income tax expense (recovery)



258

(250)

EBITDA



$ 20,024

$       477

Share-based compensation expense



90

-

Unrealized foregin exchange loss (gain)  



538

(627)

Mark-to-market revenue adjustments



(960)

(908)

Amortization of flow thru shares benefit



(485)

-

Loss on lease termination



-

192

Adjusted EBITDA



$ 19,207

$     (866)

  1. Refers to Adjusted Earnings before Interest, Taxes, Depreciation, and Amortization "Alternative Performance Measures" on page 18 of the Company's Q1 2022 MD&A.

 

2022 Q1 Interim Consolidated Statements of Loss and Comprehensive Loss – Unaudited



Three months ended



March 31, 2022

March 31, 2021

Revenue


$                      53,282

$                      25,469

Production costs


(33,133)

(25,200)

Royalty expense


(1,190)

(762)

Depletion and amortization


(3,166)

(2,386)

Income (loss) from mine operations


15,793

(2,879)

Expenses




Related party management fees


-

(125)

Stock-based compensation expense


(90)

-

Other expenses


(38)

(263)

Income (loss) from operations


15,665

(3,267)

Other income 


1,193

1,358

Finance costs


(2,064)

(1,106)

Income (loss) before income taxes


14,794

(3,015)

Income tax (expense) recovery


(258)

250

Net Income (loss) and comprehensive income (loss)


$                      14,536

$                       (2,765)





Per share amounts




Basic and diluted


$                          0.20

$                         (0.04)

Weighted Average Number of Common Shares Outstanding


72,709,253

60,228,864

 

2022 Q1 Interim Consolidated Statements of Financial Position – Unaudited






As at


March 31, 2022


December 31, 2021

Assets





Current assets





Cash

$

11,872

$

9,979

Accounts Receivable


25,617


20,762

Inventories


8,858


6,212

Prepaid expenses


3,857


2,855



50,204


39,808

Non-current assets





Mineral properties, plant and equipment


56,281


53,702

Right-of-use assets


12,557


9,245

Long-term deposits


13,250


13,399

Total assets

$

132,292

$

116,154

Liabilities





Current liabilities





Accounts payable and accrued liabilities

$

40,688

$

36,370

Current portion of Sumitomo loan


6,595


10,221

Current portion of Note payable to Pembridge


6,248


-

Current portion of Due to Pembridge


4,246


4,000

Current portion of lease liability


6,169


5,436



63,946


56,027

Non-current liabilities





Lease liabilities


5,715


3,895

Due to Pembridge


-


1,174

Note payable to Pembridge


-


6,368

Long-term debt


11,631


11,702

Deferred revenue


13,947


14,463

Deferred income tax liabilities


3,367


3,109

Asset retirement obligation


33,621


35,288

Total liabilities


132,227


132,026

Shareholders' equity (deficiency)





Share capital


223,241


221,840

Deficit


(223,176)


(237,712)

Total shareholders' equity (deficiency)


65

$

(15,872)

Total liabilities and shareholders' equity (deficiency)

$

132,292

$

116,154

 

2022 Q1 Interim Consolidated Statements of Cash Flows – Unaudited


Three months ended


March 31, 2022

March 31, 2021

Operating activities



Net income (loss) for the period

$                     14,536

$                    (2,765)

Adjustments for the following items:



Depletion, depreciation and accretion

3,166

2,386

Finance costs

2,064

401

Other income (loss), net

(1,193)

2

Stock-based compensation expense

90

-

Amortization of deferred revenue

(786)

311

Income tax expense (recovery)

258

(250)

Change in non-cash working capital

(2,751)

7,351


15,384

7,436

Interest paid

(384)

(483)

Net cash provided by operating activities

15,000

6,953




Investing activities



Additions to mineral properties, plant and equipment

(5,897)

(1,147)

Right-of-use asset additions

(768)

-

Net cash used in investing activities

(6,665)

(1,147)




Financing activities



Advances from Sumitomo

-

3,784

Repayments on Sumitomo loan

(3,525)

(585)

Payment of lease liabilities

(1,917)

(1,482)

Repayment of Due to Pembridge

(1,000)

-

Long-term deposits

-

(946)

Return of capital

-

(6,306)

Net cash provided by (used in) financing activities

(6,442)

(5,535)

Change in cash

1,893

271

Cash, beginning of period

9,979

507

Cash, end of period

$                     11,872

$                         778

 

Operational Outlook

Minto is pleased to reconfirm the financial guidance for 2022 as we continue to ramp up our ore production throughout the year. We are committed to a cost control strategy while improving our mine and milling operations.

Production  Volumes



Dec 31, 2022

Payable Copper (million pounds)



27.0 - 31.0

Gold (ounces) (1)



11,000 - 12,100

Silver (ounces) (1)



140,000 - 150,000






Production Costs



Dec 31, 2022

Cash Costs ($USD/lb) (2)



$2.70 -$2.90

AISC ($USD/lb) (2)



$3.85 -$4.00

Exploration ($ millions)



$9.2

Sustaining Capital (2)



 $27.0- $31.0 

  1. 100% amounts. Under the agreement with Wheaton Precious Metals, the Company receives 65% of the value of the gold shipments up to 11,000 ounces.  Silver receipts are the lesser of the prevailing market price and US $4.35/oz. 

  2. Refers to Cash Costs, All-In Sustaining Costs and Sustaining Capital "Alternative Performance Measures" on pages 19 and 20 of the Company's Q1 2022 MD&A.

 

The Yukon received between 150% and 400% of the normal annual snowfall during this past winter which generated a significant volume of water across the territory as it melted. With the warmer temperatures over the past couple of weeks, the Minto mine site saw daily water volume inflow exceed the mine's discharge capacities which caused the storage pond water levels to rise.

Underground mining operations continued uninterrupted during this temporary mill shutdown with ore being stockpiled ahead of the milling facility restart.  The Mill is permitted to process an average of 4,200 tonnes/day of ore and underground production is currently averaging around 3,000 tonnes/day.  With the milling facility restart, the stockpiled ore will be processed at a higher rate which means that there will be no metal production impact on the original guidance in 2022.

The Company temporarily suspended its milling operations until Spring Freshet ended, ensuring all water arriving on the mine site was properly managed within our water management system and that the environment was protected.  The Company took full advantage of this temporary mill shutdown to complete future planned maintenance work in the mill thereby avoiding another shutdown in the coming months.

Once freshet ended, the company restarted its milling operations. The Mill is expected to run steadily for the balance of 2022.

"At the beginning of 2022 Minto committed to spending $8 million dollars to improve the mine water management system at the Minto Mine.  Our investment included an upgrade to our water treatment plant, the installation of a new microfiltration plant, and the purchase of evaporation units, all to support improved environmental stewardship.  As outlined in an article from the Yukon government, the snowpack levels are unusually high and above the normal level across the Yukon, and in areas in the vicinity of the mine. Minto Metals takes the protection of the environment seriously and the temporary mill shutdown highlights our commitment", stated Chris Stewart, President & CEO of Minto Metals.

About Minto Metals Corp.

Minto operates the producing Minto mine located in the Minto Copper Belt, Yukon. The Minto mine has been in operation since 2007 with underground mining commencing in 2014. Since 2007, approximately 500Mlbs of copper have been produced from the Minto mine. The current mine operations are based on underground mining, a process plant to produce high-grade copper, gold, and silver concentrate, and all supporting infrastructure associated with a remote location in Yukon. The Minto property is located west of the Yukon River, about 20 km WNW of Minto Landing, the latter on the east side of the river, and approximately 250 road-km north of the City of Whitehorse, the capital city of Yukon.

Forward-Looking Information

This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements"), within the meaning of applicable Canadian securities laws and "forward-looking information" within the meaning of applicable U.S. securities laws, which we refer to collectively as "forward-looking statements". Forward-looking statements are statements and information regarding possible events, conditions, or results of operations that are based upon assumptions about future conditions and courses of action. All statements and information other than statements of historical fact may be forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as "seek", "expect", "anticipate", "budget", "plan", "estimate", "continue", "forecast", "intend", "believe", "predict", "potential", "target", "may", "could", "would", "might", "will" and similar words or phrases (including negative variations) suggesting future outcomes or statements regarding an outlook. Forward-looking statements or assumptions in this press release include, but are not limited to: statements with respect to when milling operations will restart, ore will be processed at a higher rate, and no metal production is expected to be lost in 2022 as a result of the temporary Mill shutdown.

Such forward-looking statements are based on a number of material factors and assumptions, including, but not limited to: that required financing and permits will be obtained; general economic conditions; no labour disputes or disruptions, no flooding, ground instability, geotechnical failure, fire, failure of the plant; that equipment and  processes continue to operate as anticipated and other risks of the mining industry will not be encountered; that contracted parties provide goods or services in a timely manner; that there is no material adverse change in the price of copper, gold or other metals; competitive conditions in the mining industry; title to mineral properties; costs; taxes; the retention of the Company's key personnel; no changes in-laws, and no material worsening of the direct and indirect impact of COVID-19 including rules and regulations applicable to Minto.

Forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause actual results, performance, or achievements to differ materially from those anticipated in such forward-looking statements. The Company believes the expectations reflected in such forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and you are cautioned not to place undue reliance on forward-looking statements contained herein. Some of the risks and other factors which could cause actual performance and results to differ materially from those expressed in the forward-looking statements contained in this news release, include, but are not limited to: changes in commodity prices, general economic conditions, mineral reserve and mineral resource estimates may change and may prove to be inaccurate; Minto has a limited operating history and is subject to risks associated with establishing new mining operations; sustained increases in costs, or decreases in the availability, of commodities consumed or otherwise used by the Company may adversely affect the Company; adverse geotechnical and geological conditions (including geotechnical failures) may result in operating delays and lower throughput or recovery, closures or damage to mine infrastructure; the Company's operations may encounter delays in or losses of production due to equipment delays or the availability of equipment; the Company's operations are subject to continuously evolving legislation, compliance with which may be difficult, uneconomic or require significant expenditures; the Company may be unsuccessful in attracting and retaining key personnel; labour disruptions could adversely affect the Company's operations; risks related to the Company's use of contractors; the hazards and risks normally encountered in the exploration, development and production of copper, gold and silver; the Company's operations are subject to environmental hazards and compliance with applicable environmental laws and regulations; the Company's operations and workforce are exposed to health and safety risks; the Company's title to exploration, development and mining interests can be uncertain and may be contested; the Company's properties may be subject to claims by various community stakeholders; risks related to limited access to infrastructure and water; the Company may not be able to secure additional financing when needed or on acceptable terms; the Company may be subject to litigation; and those risk factors set out in the Company's annual information form dated March 31, 2022 for the year ended December 21, 2021 as filed on SEDAR. Although the Company has attempted to identify important factors that could cause actual performance, results, or events to differ materially from those described in the forward-looking statements, you are cautioned that this list is not exhaustive and there may be other factors that the Company has not identified. Furthermore, the Company undertakes no obligation to update or revise any forward-looking statements included in or incorporated by reference in, this news release if these beliefs, estimates, and opinions or other circumstances should change, except as otherwise required by applicable law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information:

For further information:

David J. Birch,
Chief Financial Officer
(416) 895-4824
E-mail: info@mintomine.com

Chris A. Stewart,
President & Chief Operating Officer
(647) 523-6618

SOURCE Minto Metals Corp.

Cision
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