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Minto Metals Delivers A Record First Quarter with 9.1 Millions Lbs of Copper Production and an Adjusted EBITDA[1] of $19.2 Million

Press Release

May 26, 2022

WHITEHORSE, YT, May 26, 2022 – 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.

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
    • Mill Feed for Quarter 1 was 237,239 dry metric tonnes (dmt), an 11.7% increase from 212,329 dry metric tonnes (dmt) in Quarter 1 2021.
    • Operating cash costs per pound sold2 averaged USD $2.44/lb, a 31.3% decrease from USD $3.55/lb in Quarter 1 2021.
    • All-In Sustaining Costs (“AISC”)2 per pound sold1 averaged USD $3.44/lb, a 15.9% decrease from USD $4.09/lb in Quarter 1 2021.
  • 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.

Contact Information:

For further information:

David J. Birch,
Chief Financial Officer
(416) 895-4824
E-mail: [email protected]

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

IBF4

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