Some may argue that Imperial Metals got off the hook regarding cleaning up after the tailings pond breach at it Mount Polley mine two years ago. However, financial statements released yesterday show that the company has definitely been affected by the one-year shut down of the mine. However, revenues are starting to increase, even though the company has reported a loss. Revenues were $116.2 million in the three-month period to the end of June this year, compared to $1.7 million in the 2015 comparative quarter. The increase of $114.5 million is related to the restart of operations at the Mount Polley mine on August 5, 2015 and the start of commercial production at the Red Chris mine on July 1, 2015. There were five concentrate shipments in the June 2016 quarter from the Red Chris mine and one concentrate shipment from the Mount Polley mine. Net loss for the June 2016 quarter was $4.2 million ($0.05 per share) compared to net income of $1.6 million ($0.02 per share) in the 2015 comparative quarter. The increase in net loss from the June 2015 quarter to the June 2016 quarter of $5.8 million was primarily due to the following factors: Income/loss from mine operations went from a loss of $3.0 million in June 2015 to income of $20.2 million in June 2016, an increase to net income of $23.2 million. Foreign exchange gains/losses on current and non- current debt went from a gain of $7.2 million in June 2015 to a loss of $1.6 million in June 2016, a decrease to net income of $8.8 million. Interest expense went from $2.3 million in June 2015 to $17.1 million in June 2016, a decrease to net income of $14.8 million. Loss/gain on derivative instruments went from a loss of $3.1 million in June 2015 to a gain of $0.4 million in June 2016, an increase to net income of $3.5 million. Insurance recoveries net of idle mine costs went from a gain of $4.6 million in June 2015 to $nil in June 2016, a decrease to net income of $4.6 million. The June 2016 quarter net income included a foreign exchange losses related to changes in CDN/US Dollar exchange rates of $2.1 million compared to a foreign exchange gains of $7.1 million in the 2015 comparative quarter. The $2.1 million foreign exchange loss is comprised of a $1.2 million loss on the senior notes, a $0.1 million loss on long term equipment loans, and a loss of $0.8 million on short-term debt and operational items. The average CDN/US Dollar exchange rate in the June 2016 quarter was 1.289 compared to an average of 1.229 in the 2015 comparative quarter. In the June 2016 quarter the Company recorded net gains on derivative instruments of $0.4 million compared to net losses of $3.1 million in the 2015 comparative quarter. The $0.4 million gain in the June 2016 quarter consisted of a $0.4 million unrealized gains on the foreign currency swap due to an increase in the CDN/US Dollar exchange rate compared to the exchange rate at the end of the March 2016 quarter. In the 2015 comparative quarter the $3.1 million loss consisted of realized gains of $0.7 million or gold derivative instruments, unrealized losses of $1.4 million for gold derivative instruments and unrealized losses of $2.4 million on the foreign currency swap. During the June 2016 quarter the company did not have any commodity derivative instruments. The company recorded a $1.7 million equity loss as its share of Huckleberry's net loss during the June 2016 quarter compared to a $0.6 million equity gain in the 2015 comparative quarter. Huckleberry had one shipment in the June 2016 quarter compared to three shipments in the 2015 comparative quarter. Capital expenditures were $24.2 million in the June 2016 quarter, down from $48.9 million in the 2015 comparative quarter. During the June 2015 quarter capital expenditures were significantly higher than the June 2016 quarter as they included $13.0 million in capitalized interest and $5.2 million in capitalized preproduction operating costs net of preproduction revenues related to the Red Chris mine. Capitalization of interest and preproduction costs related to Red Chris mine ceased on July 1, 2015 with the commencement of commercial production.
Revenue up for Imperial Metals