Copper Mountain Mining Shares Drop After A “Difficult” Q1 2022

Copper Mountain Mining (TSX: CMMC) on Tuesday announced its Q1 2022 operational and financial results. The mining firm recorded $93.9 million in revenue compared to Q1 2021’s $162.2 million.

The quarterly revenue came from the sale of 13.5 million copper pounds, 5,076 gold ounces, and 60,038 silver ounces. This is a sharp drop from 27.5 million copper pounds, 8,553 gold ounces, and 161,657 silver ounces sold last year.

All-in costs shot up to US$5.08 per copper pound during the quarter from US$1.71 per pound last year. Gross margin, on the other hand, dropped to 19.8% from last year’s 59.4%.

Following the release of the quarterly results, the firm’s shares declined by 12.3% on the day, crossing below the $3.00-mark for the first time since October 2021.

The firm’s quarterly production also dwindled to 13.2 million copper pounds, 5,135 gold ounces, and 55,993 silver ounces compared to the year-ago period of 25.5 million copper pounds, 8,187 gold ounces, and 160,484 silver ounces.

“We managed through a very difficult first quarter, which was largely due to temporary impacts to production and costs,” said CEO Gil Clausen. “Lower production was a result of operating at reduced mill throughput and lower grade, as we continued to run the secondary crusher at lower power draw due to the damaged main shaft, resulting in low and very coarse feed to the mill.”

Clausen also said that “this issue is now resolved,” as the firm commissioned a third ball mill operating and brought the secondary crusher back on spec. It expects milling capacity to reach 45,000 tpd.

For Q1 2022, the mining firm milled at an average of 32,978 tpd, down from 38,111 tpd from the year-ago period.

Further down, the company ended with a net loss of $4.2 million, a significant drop from last year’s $52.1 million net income. The quarterly loss translates to $0.03 per share.

At the end of the quarter, cash and cash equivalents balance came in at $143.5 million, putting the current assets balance at $222.1 million. Meanwhile, current liabilities came in at $114.7 million.

Following its Q1 2022 results, the firm said it is now expecting to instead achieve the lower end of its annual guidance range of 80 to 90 million copper pounds. It is also increasing its AIC guidance for 2022 to be between US$2.25 to US$2.75, also due to inflationary pressure.

Copper Mountain Mining last traded at $2.79 on the TSX.

Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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