B.C. mine development 85% complete: Imperial Metals

5/16/2013 1:05:42 PM | Stockhouse Editorial
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The company reaffirmed its total Red Chris budget of $500 million, of which $140 million has been spent.

With commodities having another rough day, shares of Imperial Metals Corp. (TSX: T.III, Stock Forum) couldn’t buck the trend Wednesday as the company reported its first quarter, 2013 results. For the quarter, the company reported EPS of $0.14, which was in line with expectations.

In a press release, the company said its adjusted earnings before interest tax, depreciation and amortization (EBITDA) for the quarter came in at US$23 million, which was slightly lower than expectations of US$25 million, with a tax rate of 21%, which was lower than the expected rate of 35%.

The company made no change to its 2013 operating guidance. The company reported cash on its balance sheet of US$97,000 (plus $12.3 million of their share of Huckleberry cash, now reported as a joint venture interest so not shown as cash under the new IFRS accounting standards).

The company’s $150 million debt facility has been drawn to $146 million, and the company is securing a new $11 million term loan at interest of just 3.4%.

Imperial is developing the Red Chris mine in northwestern British Columbia. The project is expected to benefit from a 287 kv Northwest Transmission Line (NTL) from Skeena substation to Bob Quinn. It is under construction by BC Hydro with a planned completion date of May 2014.

Imperial still expects to finalize a new debt agreement for Red Chris during summer 2013, and for now is able to secure short term debt as it is needed. The company reaffirmed its total Red Chris budget of $500 million, of which $140 million had been spent to the end of the quarter.

Imperial also commented that the Red Chris mine development is proceeding with 85% of the engineering complete as of March 31, 2013. The company also noted that site work continued unhindered through the relatively mild winter weather.

A subsidiary of Imperial will construct the 93 kilometre extension (NTL Extension) from Bob Quinn to Tatogga. The permit applications are with the provincial ministries for review and consultation. Construction of power line structures access will begin summer of 2013 upon receipt of permits, with completion scheduled on May 2014.

Imperial Metals shares were unchanged Thursday at $10.9, leaving a market cap of $811.6 million, based on 74.4 million shares outstanding. The 52-week range is $14.95 and $8.13.