Ann: CMMC Announces Q1-2018 Financial Results, page-3

Page 6 not so good


Copper Mountain Mining Corporation
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited in thousands of Canadian dollars, except where otherwise stated)
1 General Information and liquidity
Copper Mountain Mining Corporation (“the Company”) was incorporated under the provisions of the British Columbia Business Corporations Act on April 20, 2006 and is a Canadian development and operating mining company. The Company maintains its head office at Suite 1700 – 700 West Pender Street, Vancouver, British Columbia. The Company through a subsidiary owns 75% of the Copper Mountain mine while Mitsubishi Materials Corporation (“MMC”) owns the other 25% interest in the Copper Mountain mine.
As at March 31, 2018, the Company had negative working capital of $3.2 million compared to working capital of $6.9 million at December 31, 2017. Included in the negative working capital is $59.3 million due to MMC (Note 15 (c)) and this amount is not expected to be repaid within the next twelve months, however the Company does not have the contractual right to extend payment and therefore has classified the balance due to MMC as a current liability. The Company has no future material commitments for capital expenditures as of March 31, 2018.
The strength of US denominated commodity prices have had a positive impact on the Company’s operating results, with operating income of $3.3 million and cash inflows from operations of $2.0 million for the three months ended March 31, 2018. In the next twelve months the Company has contractual obligations which are due in US dollars including senior credit facility and term loan payments of approximately US$33.7 million, which the Company expects to be able to fund through cash on hand and cash flows from operations. A payment of US$9.6 million was made in February 2018 by MMC to Similco Finance on the Company’s behalf.
Despite the strength of copper prices, the Company continues to review its near term operating plans and continues to take steps to reduce costs and maximize cash flow from operations, while still maintaining copper output levels. The Company remains vigilant for ongoing opportunities to reduce costs and improve net cash generation.
Management has received an extension of the required funding of the debt service and capex reserve accounts relating to the Company’s Senior Credit Facility by providing corporate guarantees. The extension expires June 30, 2018 and although such extensions have been obtained in the past there are no guarantees they will continue to be obtained in the future.