Imperial Metals NR – Imperial Announces Second Quarter Production Results and Non-Compliance with Certain Bank Debt Covenants
Vancouver | July 6, 2017 | Imperial Metals Corporation (the “Company”) (TSX:III) reports that second quarter production results from Red Chris were 15.4 million pounds of copper and 6,159 ounces of gold. These results were weaker than expected and similar to the production levels achieved in the first quarter of the year. Copper recovery continues to be lower than planned and even though higher grades of ore are scheduled to be mined in the second half of the year, the Company is unlikely to meet the lower end of its 2017 targeted copper production level of 85 million pounds of copper. The revised production target for the year is in the range of 80 to 83 million pounds of copper. Gold production at Red Chris for 2017 is expected to be approximately 40 thousand ounces, the lower end of the targeted range of 40 to 45 thousand ounces.
At Mount Polley, production for the second quarter was 5.6 million pounds of copper and 13,958 ounces of gold. Copper production was lower than targeted as copper grades from the Cariboo pit continued to be lower than expected. Gold production was near the targeted levels. Given the lower copper grades in the Cariboo pit, copper production for the year is not expected to meet the lower end of the original target of 26 to 29 million pounds. It is now estimated that copper production for 2017 will be in the range of 22 to 24 million pounds. Gold production at Mount Polley for the year is estimated to be within the original target of 55 to 60 thousand ounces, but towards the lower end of the range.
As a result of the lower than expected production in the first half of 2017, the Company will not meet certain of the financial covenants under its Bank Senior Credit Facility. The Company has initiated discussions with its Senior Credit Facility lenders and has requested a waiver of these covenants.
The Company is in the process of revising the ongoing mine plans for both the Red Chris and Mount Polley mines. As an additional consequence of the weak production results achieved in the first half of 2017, the Company will require additional financing and will consider all of its options, including a review of strategic alternatives.