Copper Mountain Mining Announces Q3 2022 Financial Results

09 Nov 2022 07:05 CET

Vancouver, British Columbia – November 9, 2022 – Copper Mountain Mining
Corporation (TSX: CMMC | ASX:C6C) (the “Company” or “Copper Mountain”) announces
third quarter 2022 financial and operating results. All currency is in Canadian
dollars, unless otherwise stated. All results are reported on a 100% basis.
The Company’s Financial Statements and Management’s Discussion & Analysis
(“MD&A”) are available at www.CuMtn.com and www.sedar.com.
SUMMARY

• Production in Q3 2022 was 16.5 million pounds of copper equivalent, including
13.2 million pounds of copper, 6,053 ounces of gold, and 64,331 ounces of
silver.
• Revenue for Q3 2022 was $58.3 million from the sale of 12.3 million pounds of
copper, 4,902 ounces of gold, and 59,790 ounces of silver.
• C1 cash cost (1) per pound of copper produced in Q3 2022 was US$3.70.
• All-in sustaining cost (“AISC”) (1) per pound of copper produced in Q3 2022
was US$4.50 and all-in cost (“AIC”) (1) per pound of copper produced was
US$4.95.
• Net loss for Q3 2022 was $39.4 million, or ($0.15) per-share, and adjusted net
loss (1) was $22.9 million, or ($0.11) per-share (1).
• Cash flow from operating activities for Q3 2022 was negative $7.5 million, or
$(0.04) per-share (1).
• Cash, cash equivalents, and restricted cash at September 30, 2022 was $49.6
million.
• Announced a 57% increase in mineral reserves at the Copper Mountain Mine
supporting a new life of mine plan with a mill expansion to 65,000 tonnes per
day (“tpd”), producing a total of 4.1 billion pounds of copper equivalent over a
mine life of 32 years, based on mineral reserves only, with robust economics
including an after-tax net present value at an 8% discount rate of $1.24 billion
(2).
• Released the Company’s inaugural Environmental, Social and Governance Report.
• Subsequent to the quarter-end:
o On October 6, 2022, the Company announced an agreement to sell the Eva Copper
Project and the Australian exploration tenements to Harmony Gold Mining Company
Limited for gross proceeds of up to US$230 million, which includes upfront cash
consideration of US$170 million.
o Announced the appointment of Letitia Wong as the Company’s Chief Financial
Officer.
o In early October, the expansion to the rougher flotation circuit was
successfully commissioned, with all plant improvement and optimization projects
planned at the mine now complete.
o The Company is commencing a public succession planning process for its
President and Chief Executive Officer, Gil Clausen. Mr. Clausen has been
engaged with the Board for the past year on executive succession planning as he
begins to prepare for his long-contemplated retirement. The Company has engaged
Korn Ferry to assist with the process, which will include a comprehensive global
executive search. Mr. Clausen will remain as President and CEO until a
successor is in place.

(1) The Company reports the non-GAAP financial measures of C1 cash cost, AISC,
and AIC per pound of copper produced, adjusted net loss and cash flow from
operating activities per share to manage and evaluate its operating performance.
See “Cautionary Note Regarding Non-GAAP Performance Measures” in this press
release.
(2) Based on a C$1.30 to US$1.00 exchange rate and consensus metal prices for
years 1, 2, 3 and long-term, respectively, of: US$3.73, US $3.86, US$3.94 and
US$3.60 per pound copper; US$1,796, US$1,762, US$1,749 and US$1,650 per ounce of
gold; and US$21.86, US$22.30, US$22.24 and US$21.35 per ounce of silver.

Gil Clausen, Copper Mountain’s President and CEO commented, “Our third quarter
clearly did not meet our expectations. Lower grade and lower mill throughput
impacted our copper output. We experienced a grade reduction as most of the ore
processed in the third quarter came from the lower-grade North Pit as opposed to
the planned Phase 4 of the main pit. Our higher-grade main pit Phase 4 ore
release lagged due to spotty ore continuity in the upper benches of that
pushback. In the second half of September, we advanced mining to consistently
large zones of continuous higher-grade ore in Phase 4. We expect that result to
continue throughout the fourth quarter and solidify into higher-grade ore
production through 2023. The North Pit ore impacted recoveries due to the higher
oxide content in the upper benches of pioneering that pit. We also encountered a
SAG mill steel grinding ball quality issue, forcing reduced milling rates for
about a month. The balls were breaking apart in the mill, significantly
affecting throughput during August and into September. Overall, a disappointing
quarter and nine months of 2022.”

“However, we are now past an inflection point in the operation with main waste
movement of Phase 4 completed. Ore grades are higher, recoveries are up, and the
North Pit development has advanced beyond the higher oxide transitional zone.
Our project team has also completed all our plant optimization projects. The
mill has been operating at the designed 45,000 tpd throughput rate and achieving
daily rates up to 53,000 tpd in October, with AIC reduced materially. In the
fourth quarter, we expect AIC to improve significantly and be in the US$2.90 to
US$3.10 per pound range from our operational turnaround and benefit from the
higher grades from Phase 4, where we expect an average of 0.27% Cu in Q4.”

“Although we experienced challenges at the mine, we completed several primary
corporate objectives: growing reserves and resources at the Copper Mountain
Mine, including a 70% increase in measured and indicated mineral resources
compared to the prior technical report dated November 30, 2020; publishing a new
NI 43-101 life of mine/ mill expansion study to 65,000 tpd; announcing a
definitive agreement for the sale of the Eva Copper project; and publishing the
Company’s inaugural ESG report” added Mr. Clausen.

SUMMARY OF OPERATING RESULTS
Copper Mountain Mine (100% Basis) 2022
Q3 2021
Q3 2022
Q1 - Q3 2021
Q1 - Q3
Mine
Total tonnes mined (000s) 14,248 14,483 41,305 45,529
Ore tonnes mined (000s) 3,660 3,053 9,072 10,335
Waste tonnes (000s) 10,588 11,430 32,233 35,194
Stripping ratio 2.89 3.74 3.55 3.41

Mill
Tonnes milled (000s) 3,378 3,417 9,604 10,282
Feed Grade (Cu%) 0.24 0.37 0.24 0.41
Recovery (%) 74.4 79.7 78.4 79.8
Operating time (%) 89.0 92.2 88.1 93.4
Tonnes milled (TPD) 36,721 37,141 35,181 37,664


Production
Copper (000s lb) 13,159 22,406 39,634 73,447
Gold (oz) 6,053 7,449 16,980 23,263
Silver (oz) 64,331 134,987 181,953 443,444

Sales
Copper (000s lb) 12,319 24,416 38,698 73,613
Gold (oz) 4,902 8,308 15,047 23,406
Silver (oz) 59,790 142,128 117,481 425,076

C1 cash cost per pound of copper produced (US$)(1) 3.70 1.50 3.40 1.34
AISC per pound of copper produced (US$)(1) 4.50 1.77 4.20 1.68
AIC per pound of copper produced (US$)(1) 4.95 2.17 4.99 1.97

Average realized copper price (US$/lb) $3.52 $4.27 $4.09 $4.15

(1) The Company reports the non-GAAP financial measures of C1 cash costs, AISC
and AIC per pound of copper produced to manage and evaluate its operating
performance. For further information, see “Cautionary Note Regarding Non-GAAP
Performance Measures” in this press release.

Production
The Copper Mountain Mine produced 13.2 million pounds of copper, 6,053 ounces of
gold, and 64,331 ounces of silver in Q3 2022, compared to 22.4 million pounds of
copper, 7,449 ounces of gold, and 134,987 ounces of silver in Q3 2021.
Production was lower during the quarter due to lower mill feed grade, lower mill
throughput and lower copper recoveries.

Mill feed grade in Q3 2022 was 0.24% Cu as compared to 0.37% Cu in Q3 2021.
Mill feed was delivered from Phase 4 (approximately 40%), and the North Pit
(approximately 60%) during the quarter. Phase 4 delivered higher grade tonnes
as planned, but lower tonnages of higher grade were present at the top of the
deposit, thus more North Pit ore was used for mill feed than planned, resulting
in the lower overall grade in the quarter. Phase 4 grades averaged 0.28% Cu
during the quarter compared to North Pit grades averaging 0.21% Cu. Ore feed
grades are expected to improve for the remainder of the year, with the
higher-grade Phase 4 ore being the primary ore supply for the remainder of 2022
as the Company begins to mine the bulk of the deposit. Phase 4 higher grade ore
is also planned to be the main ore supply for 2023, driving increased
production. Phase 4 has an average grade of 0.33% Cu.

The mill processed a total of 3.4 million tonnes of ore during the quarter as
compared to 3.4 million tonnes in Q3 2021. The crushing circuit was optimized
in the quarter and consistently achieved the designed rate to allow the mill to
reach 45,000 tpd during the second half of the quarter, producing a large
crushed-ore stockpile in front of the mill. Mill throughput improved following
availability of crushed ore from the crushing circuit. However, a SAG ball
quality issue was encountered in mid-August which restricted mill throughput
until the SAG ball charge was fully replaced in mid-September. Following
resolution of this issue, the mill demonstrated the ability to process the
targeted 45,000 tpd, achieving daily tonnage rates up to 50,000 tpd in
September.

Copper recovery was 74.4% in Q3 2022 as compared to 79.7% in Q3 2021. The
milling of higher oxide material from the North Pit negatively impacted
recovery. Higher oxide levels did project further than expected in the North
Pit, but consistently reduced to normal levels in mill feed and blast hole
samples, in the later part of the quarter. Copper recovery is expected to
improve with lower oxides, the successful operation of the rougher flotation
expansion, and optimization of the grinding circuit to achieve consistent fine
grinds.

Mill availability averaged 89.0% for Q3 2022 as compared to 92.2% in Q3 2021.
The largest scheduled annual mill shutdown was completed during the quarter,
replacing SAG mill liners including the pulp lifters, upgrading site supply
powerlines, and commissioning the rougher expansion project. The Ball Mill #3
feed modifications completed in Q2 2022 continue to perform well supporting
stable mill production.

Supply chain issues continue to impact the mine and the mill with low
availabilities of supply, long deliveries due to low supply chain inventories,
and lower quality product challenges. These challenges continue to be managed
by the site team.

Costs

C1 cash cost, AISC and AIC per pound of copper produced are non-GAAP financial
measures. See “Cautionary Note Regarding Non-GAAP Performance Measures” in this
press release.

C1 cash cost per pound of copper produced, net of precious metal credits, for Q3
2022 was US$3.70, as compared to US$1.50 in Q3 2021. The variance in C1 cash
costs for Q3 2022, as compared to Q3 2021, was due to several items, including:

• Lower mill throughput, lower mill feed grade and lower copper recovery, which
resulted in lower production; and
• Inflationary pressures, which increased the cost of fuel, grinding
media/steel, explosives and mobile equipment repairs.

With production levels expected to increase for the remainder of the year, the
Company anticipates C1 cash cost per pound of copper produced to improve
materially in the fourth quarter of 2022.

AISC per pound of copper produced for Q3 2022 was US$4.50, compared to US$1.77
in Q3 2021. AISC carries forward from C1 cash costs with the addition of $13.9
million in sustaining capital, lease, and applicable administration expenditures
in Q3 2022 compared to $7.7 million in Q3 2021. The increase in AISC is carried
forward from higher C1 cash costs and higher sustaining capital of $10.3 million
in Q3 2022 compared to sustaining capital of $4.7 million in Q3 2021.

Sustaining capital costs for Q3 2022 were higher than Q3 2021 mainly due to $6.8
million of expenditures for the mine’s continued environmental water management
systems currently underway. The mine’s continued environmental water management
projects are substantially advanced and are expected to be fully completed in Q4
2022.

AIC per pound of copper produced for Q3 2022 was US$4.95, as compared to US$2.17
in Q3 2021. AIC carries forward from AISC with the addition of $7.6 million in
deferred stripping as compared to $11.3 million deferred stripping in Q3 2021.
Deferred stripping costs in Q3 2022 were from regular development activities, as
the Company continued to advance the development of the higher-grade Phase 4
pushback of the Main Pit.

SUMMARY OF FINANCIAL RESULTS
Results and Highlights (100%) Three months ended
September 30, Nine months ended
September 30,
(In thousands of CDN$, except for per share amounts) 2022
$ 2021
$ 2022
$ 2021
$
Financial
Revenue 58,256 137,176 211,188 441,447
Gross profit (loss) (11,123) 66,641 (1,734) 248,707
Gross profit (loss) before depreciation(1) (6,217) 73,927 15,282 269,978
Net income (loss) (39,430) 25,824 (47,540) 116,604
Earnings (loss) per share – basic (0.15) 0.08 (0.19) 0.39
Adjusted earnings (loss)(1) (22,920) 41,389 (27,383) 106,969
Adjusted earnings (loss) per share – basic(1) (0.11) 0.20 (0.13) 0.51
EBITDA(1) (24,226) 61,550 (5,769) 238,493
Adjusted EBITDA(1) (7,716) 77,115 14,562 228,858
Cash flow from operating activities (7,518) 90,869 34,799 265,036
Cash flow from operating activities per share – basic(1) 0.16 1.27
Cash, cash equivalents and restricted cash – end of period 49,651 199,436

(1) The Company reports the non-GAAP financial measures of gross profit before
depreciation, adjusted earnings, adjusted earnings per share, EBITDA and
adjusted EBITDA to manage and evaluate its operating performance. For further
information, see “Cautionary Note Regarding Non-GAAP Performance Measures” in
this press release.

In Q3 2022, revenue was $58.3 million, net of pricing adjustments and treatment
charges, compared to $137.2 million in Q3 2021. Revenue in Q3 2022 is based on
the sale of 12.3 million pounds of copper, 4,902 ounces of gold, and 59,790
ounces of silver. This compares to 24.4 million pounds of copper, 8,308 ounces
of gold, and 142,128 ounces of silver sold in Q3 2021. The decrease in revenue
was due to lower quantities of all metal sold and at a lower average price.
Lower quantities of metal sold was a result of lower metal production in Q3 2022
compared to Q3 2021.

Cost of sales in Q3 2022 was $69.4 million as compared to $70.5 million for Q3
2021. The elevated cost of sales despite lower revenues can largely be
attributed to cost increases associated with fuel, mill grinding media/steel,
explosives, and mobile equipment repairs, as well as increased maintenance
contractor support required to assist with managing both COVID-19 related
absences and above-normal workforce absences.

The Company generated a gross loss of $11.1 million in Q3 2022 as compared to a
gross profit of $66.6 million for Q3 2021. The Company reported a net loss of
$39.4 million for Q3 2022 as compared to a net income of $25.8 million for Q3
2021. The variance in net income for Q3 2022, as compared to Q3 2021, was due
to several items, including:

• Lower revenue in Q3 2022 due to a 50% decrease in pounds of copper sold in Q3
2022 as compared to Q3 2021, as well as lower average realized copper prices;
• Lower revenue in Q3 2022 due to a 43% decrease in gold and silver revenues in
Q3 2022 as compared to Q3 2021 due to lower ounces of gold and silver sold at
lower prices; and
• Elevated cost of sales in Q3 2022 of $69.4 million as compared to $70.5
million in Q3 2021, despite significantly lower revenues, largely due to
inflationary pressures.

The Company recorded an adjusted net loss (1) of $22.9 million in Q3 2022, or
$(0.11) per share (1), compared to adjusted net income (1) of $41.4 million in
Q3 2021, or $0.20 per share (1).

PROJECT DEVELOPMENT UPDATE
Copper Mountain Mine, Canada
During the quarter, the Company continued to advance the expansion to the
rougher flotation circuit, its final plant improvement and optimization project
planned at the mine in 2022. Subsequent to the quarter-end, in early October,
the rougher flotation circuit was successfully commissioned, which is expected
to now support higher recoveries, especially on slower kinetic ore types.

The prior plant improvement and optimization projects completed earlier this
year at the mine include the installation of an additional large column
flotation cell to increase cleaner circuit capacity, which was completed and
fully commissioned during the second quarter. The large new flotation cell
provides additional cleaner circuit capacity to handle higher mill feed grades
at higher tonnage rates. The new filter press was also installed and
commissioned during the year. This second filter press will allow for
maintaining design mill tonnage rates during extended periods of higher grades,
eliminating the requirement to reduce mill tonnage as was experienced in 2021.
The new filter will also fully support the planned increased production levels
in 2023 at any grade. All projects were completed without lost time injuries.

Exploration Update
Canada
A large resource expansion drilling program was completed at the Copper Mountain
Mine earlier this year. Data from this successful drilling program were used to
update the mineral resource and mineral reserve models, resulting in a 57%
increase in the copper mineral reserve and an updated life-of-mine plan, as
reported in the Company’s press release dated September 28, 2022.

Copper-gold mineralization at the Copper Mountain Mine occurs over a 5 x 2 km
area and remains open both laterally and at depth, providing further reserve
expansion potential. Multiple historical drill holes end in copper-gold
mineralization and geophysical data suggest that the mineralizing system extends
well below the current known resource.

To evaluate this upside potential, a geoscience-based target definition program
began in June 2022. This program aims to define new drill targets outboard of,
and below, the current resource, particularly high grade “root zones”, like the
deeper parts of the Red Chris porphyry in British Columbia (also an alkalic
porphyry and of similar age), and deposits in the Cadia-Ridgeway alkalic
porphyry district in Australia. The 2022 program includes relogging and
resampling of historical drill core for multi-element geochemical analysis and
petrographic study and the creation of a new 3D geological model of the deposit.
Reinterpretation of historical geophysical data, including IP
chargeability/resistivity data, magnetotelurics, and airborne
magnetic/radiometric data is also ongoing, with additional geophysical surveys
planned for early 2023. These geophysical data, together with geochemical and
alteration/mineralization style data from drill holes will be used to rank and
prioritize drill targets for testing in 2023.

OUTLOOK
This section of the press release provides management’s production and cost
estimates for 2022. See “Cautionary Note Regarding Forward-Looking Statements”
in this press release. AIC per pound of copper produced is a non-GAAP financial
measure. See “Cautionary Note Regarding Non-GAAP Financial Measures” in this
press release.
As a result of production results to date in 2022, the Company now expects
annual copper production to be in the range of 55 million to 60 million pounds
compared to prior guidance of 65 million to 75 million pounds of copper. This
revised estimate also reflects a week of unplanned downtime due to repair
maintenance of the primary crusher in October. Such maintenance included
regular planned annual maintenance, as well as additional required unplanned
work to change worn bushings in the lower part of the crusher and machine
eccentric. It is expected that production in the fourth quarter will increase
as the Company is now mining higher grade ore from Phase 4 of the Main Pit.
When mining in the Phase 4 area, the Company has been experiencing grades of
approximately 0.28% Cu, and has achieved the design capacity of 45,000 tpd,
milling up to 53,000 tpd in October, as well as higher copper recoveries. The
higher-grade Phase 4 ore is expected to be the main source of ore in the fourth
quarter of 2022 and in 2023, with grades expected to average 0.27% and 0.33% Cu,
respectively. Production in the fourth quarter is forecast to be the strongest
quarter in 2022 and is expected to be 15 to 20 million pounds of copper.

The Company expects AIC to improve in the fourth quarter of 2022 to between
US$2.90 and US$3.10 per pound because of increased production, minimal
sustaining capital costs and minimal to no deferred stripping. In addition,
several non-recurring expenses are now complete. Further, the Company has
completed all plant improvement projects and therefore expects development
capital to also be minimal in the fourth quarter of 2022. AIC for the full year
2022 is thus expected to be between US$4.25 and US$4.50 per pound which compares
to prior guidance of between US$2.75 and US$3.25 per pound.

At this time, 2023 production guidance remains unchanged. The Company will
announce its 2023 production and cost guidance in early 2023, as per usual
practice.

Q3 2022 FINANCIAL AND OPERATING RESULTS CONFERENCE CALL AND WEBCAST

Copper Mountain will host a conference call on Wednesday, November 9, 2022 at
7:30 am (Pacific Time) for senior management to discuss third quarter 2022
results.

Dial-in information:
Toronto and international: 1 (416) 764 8650
North America (toll-free): 1 (888) 664 6383
Webcast: https://app.webinar.net/o02KkbQGrNJ

Replay information:
Toronto and international: 1 (416) 764 8677, Passcode: 740492#
North America (toll-free): 1 (888) 390 0541, Passcode: 740492#

The conference call replay will be available until 8:59 pm (Pacific Time) on
November 16, 2022. An archive of the audio webcast will also be available on the
company’s website at http://www.cumtn.com.

About Copper Mountain Mining Corporation

Copper Mountain is a Canadian mining company focused on the development and
production of base and precious metals. The Company, through its subsidiaries,
owns 75% of the Copper Mountain Mine located in southern British Columbia. The
Copper Mountain Mine produces approximately 100 million pounds of copper
equivalent per year and is expected to increase to approximately 140 million
pounds of copper equivalent per year, with a large resource that remains open
laterally and at depth. Copper Mountain has entered into a definitive agreement
to sell its Eva Copper Project and its 210,000 hectare exploration land package
in Queensland, Australia, with closing anticipated to occur in the first quarter
of 2023. Copper Mountain trades on the Toronto Stock Exchange under the symbol
“CMMC” and Australian Stock Exchange under the symbol “C6C”.

Additional information is available on the Company’s web page at www.CuMtn.com.

On behalf of the Board of

COPPER MOUNTAIN MINING CORPORATION
“Gil Clausen”

Gil Clausen
President and Chief Executive Officer

For further information, please contact:
Tom Halton
Director, Investor Relations & Corporate Communications
Telephone: 604-682-2992
Email: Tom.Halton@CuMtn.com

Website: www.CuMtn.com

Cautionary Note Regarding Forward-Looking Statements
This document may contain “forward looking information” within the meaning of
Canadian securities legislation and “forward-looking statements” within the
meaning of the United States Private Securities Litigation Reform Act of 1995
(collectively, “forward-looking statements”). These forward-looking statements
are made as of the date of this document and Copper Mountain does not intend,
and does not assume any obligation, to update these forward-looking statements,
whether as a result of new information, future events or otherwise, except as
required under applicable securities legislation.

All statements, other than statements of historical facts, are forward-looking
statements. Generally, forward-looking statements relate to future events or
future performance and reflect our expectations or beliefs regarding future
events.

In certain circumstances, forward-looking statements can be identified, but are
not limited to, statements which use terminology such as “plans”, “expects”,
“estimates”, “intends”, “anticipates”, “believes”, “forecasts”, “guidance”,
scheduled”, “target” or variations of such words, or statements that certain
actions, events or results “may”, “could”, “would”, “might”, “occur” or “be
achieved” or the negative of these terms or comparable terminology. In this
document, certain forward-looking statements are identified, including
production and cost guidance, anticipated production at the Copper Mountain
Mine, anticipated timing for the closing of the sale of the Company’s Eva Copper
Project and Australian exploration land package to Harmony Gold Mining Company
Limited (the “Transaction”), expectations regarding the impact of the COVID-19
pandemic on operations, financial condition and prospects, anticipated metals
prices and the anticipated sensitivity of the Company’s financial performance to
metals prices, the timing and results of the Company’s exploration and
development programs, the timing of the Company’s environmental water management
projects at the Copper Mountain Mine, the timing of studies, announcements, and
analysis, events that may affect its operations and development projects,
anticipated cash flows from operations and related liquidity requirements, the
anticipated effect of external factors on revenue, such as commodity prices,
estimation of mineral reserves and resources, mine life projections, reclamation
costs, economic outlook, the impact of inflation, government regulation of
mining operations, and business and acquisition strategies. Forward-looking
statements involve known and unknown risks, uncertainties and other factors that
could cause actual results, performance, achievements and opportunities to
differ materially from those implied by such forward-looking statements. Factors
that could cause actual results to differ materially from these forward-looking
statements include, among others, the successful exploration of the Company’s
properties in Canada and Australia, market price, continued availability of
capital and financing and general economic, market or business conditions,
extreme weather events, material and labour shortages, the reliability of the
historical data referenced in this document, the parties’ ability to consummate
the Transaction, the ability of the parties to satisfy, in a timely manner, all
conditions to the closing of the Transaction, assumptions concerning the
Transaction and the operations and capital expenditure plans of the Company
following completion of the Transaction, the potential impact of the
announcement or consummation of the Transaction, the diversion of management
time on the Transaction, and risks set out in Copper Mountain’s public
documents, including in each management’s discussion and analysis and the
Company’s most recent annual information form, filed on SEDAR at www.sedar.com.
The impact of COVID-19 on Copper Mountain’s business and operations is dependent
on a number of factors outside of the Company’s control and knowledge, including
the effectiveness of the measures taken by public health and governmental
authorities to combat the spread of the disease, global economic uncertainties
and outlook due to the disease, and the evolving restrictions relating to mining
activities and to travel in certain jurisdictions in which Copper Mountain
operates. Although Copper Mountain has attempted to identify important factors
that could cause the Company’s actual results, performance, achievements and
opportunities to differ materially from those described in its forward-looking
statements, there may be other factors that cause the Company’s results,
performance, achievements and opportunities not to be as anticipated, estimated
or intended. While the Company believes that the information and assumptions
used in preparing the forward-looking statements are reasonable, undue reliance
should not be placed on these statements, which only apply as of the date of
this news release, and no assurance can be given that such events will occur in
the disclosed time frames or at all. Accordingly, readers should not place undue
reliance on the Company’s forward-looking statements.

Cautionary Note Regarding Non-GAAP Performance Measures
This document includes certain non-GAAP performance measures that do not have a
standardized meaning prescribed by International Financial Reporting Standards
(“IFRS”). These measures may differ from those used and may not be comparable
to such measures as reported by other issuers. The Company believes that these
measures are commonly used by certain investors, in conjunction with
conventional IFRS measures, to enhance their understanding of the Company’s
performance. These performance measures are intended to provide additional
information and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS. These measures have
been derived from the Company’s financial statements and applied on a consistent
basis. The calculation and an explanation of these measures is provided in the
Company’s MD&A and such measures should be read in conjunction with the
Company’s financial statements.
Cash Costs per Pound
Copper cash costs per pound is a key performance measure that management uses to
monitor performance. Management uses these statistics to assess the performance
and overall efficiency and effectiveness of mining operations. Cash costs is
not an IFRS measure and, although it is calculated according to accepted
industry practice, the Company’s disclosed cash costs may not be directly
comparable to other base metal producers. Cash costs per pound produced is
calculated by dividing the aggregate of the applicable costs by copper pounds
produced. These measures are calculated on a consistent basis for the periods
presented.
C1 Cash Costs
C1 cash costs is a metric representing the cash cost per unit of extracting and
processing the Company’s principal metal product, copper, to a condition in
which it may be delivered to customers net of gold and silver credits from
concentrates sold. It is provided in order to support peer group comparability
and to provide investors and other stakeholders with additional information
about the underlying cash costs of Copper Mountain and the impact of gold and
silver credits on the operations’ cost structure. C1 cash costs are relevant to
understanding the Company’s operating profitability and ability to generate cash
flow. When calculating costs associated with producing a pound of copper, the
Company deducts gold and silver revenue credits as the production cost is
reduced as a result of selling these products.
All-in Sustaining Costs (AISC)
AISC is an extension of C1 cash costs discussed above and is also a key
performance measure used by management to measure performance. Management uses
this measure to analyze margins achieved on existing assets while sustaining and
maintaining production at current levels. Development capital, including
deferred stripping and certain exploration costs are excluded from this
definition as these are costs typically incurred to extend mine life or
materially increase the productive capacity of existing assets, or for new
operations. As this measure seeks to present a full cost of copper production
associated with sustaining current operations, mining costs associated with
sustaining capital, certain applicable corporate administration costs and mining
equipment lease costs are included.
All-in Costs (AIC)
AIC is an extended cash-based cost metric providing further information on the
total cash, capital, and overhead outlay per unit of copper produced in both the
short-term and over the full life cycle of the Company’s operations. As a
result, deferred stripping and mining costs allocated to the low-grade stockpile
on a cash basis are included as these development activities are performed in
support of future mining operations under the existing life-of-mine plan. As
this measure seeks to present the total cost of copper production associated
with sustaining current and future operations, it allows Copper Mountain to
assess the ability to support current and future production from the generation
of operating cash flows.

A reconciliation of site cash costs, C1 cash costs, AISC, and AIC is provided
below:
Cash Costs per Pound Produced (100%) Three months ended
September 30, Nine months ended
September 30,
(In thousands of CDN$, unless otherwise noted) 2022
$ 2021
$ 2022
$ 2021
$
Cost of sales 69,379 70,535 212,922 192,740
Adjustments
Depreciation and depletion (4,906) (7,286) (17,016) (21,272)
Change in inventory 8,264 (5,105) 7,727 (1,030)
Transportation costs (4,196) (5,567) (10,253) (16,332)
Site cash costs 68,541 52,577 193,380 154,106
Adjustments
Transportation costs 4,196 5,567 10,253 16,332
Treatment and refining costs 3,038 5,579 9,136 16,747
By-product credits (gold and silver) (12,274) (21,442) (39,847) (64,367)
C1 cash cost 63,501 42,281 172,922 122,818
Adjustments
Sustaining capital 10,308 4,700 29,464 18,102
Lease payments 2,901 2,403 9,414 11,578
Applicable administration 670 636 1,870 2,191
All-in sustaining costs (AISC) 77,380 50,020 213,670 154,689
Adjustments
Deferred stripping 7,607 11,316 39,818 26,504
All-in costs (AIC) 84,987 61,336 253,488 181,193

Average foreign exchange rate (CDN$ to US$) 0.7657 0.7937 0.7795 0.7992

Copper production (000s lb) 13,159 22,406 39,634 73,446

C1 cash costs (US$/lb produced (net)) $3.70 $1.50 $3.40 $1.34
All-in sustaining costs (AISC) (US$/lb produced (net)) $4.50 $1.77 $4.20 $1.68
All-in costs (AIC) (US$/lb produced (net)) $4.95 $2.17 $4.99 $1.97

Average realized copper price (US$/lb) $3.52 $4.27 $4.09 $4.15

 
Adjusted Net Income
Adjusted net income removes the effects of the following transactions from
operating income as reported under IFRS:
• Pricing adjustments on concentrate and metal sales;
• Derivative gains/losses;
• Foreign exchange gains/losses; and
• Non-recurring transactions.
Management believes that these transactions do not reflect the underlying
operational performance of the Company’s mining operations and are also not
indicative of future operating results.
Adjusted Net Income Three months ended
September 30, Nine months ended
September 30,
(In thousands of CDN$, except per share amounts) 2022
$ 2021
$ 2022
$ 2021
$
Net income (loss) (39,430) 25,824 (47,540) 116,604
Adjustments
Pricing adjustments on concentrate sales 1,892 7,601 10,804 (16,685)
(Gain) loss on derivative (5,024) 794 (13,859) 2,709
Foreign exchange loss 19,642 7,170 23,212 4,341
Adjusted net income (loss) (22,920) 41,389 (27,383) 106,969
Weighted average number of common shares outstanding, as reported – basic
(thousands) 213,791 209,921 212,508 209,320
Adjusted earnings per share (loss) - basic $(0.11) $0.20 $(0.13) $0.51
EBITDA and Adjusted EBITDA
EBITDA and adjusted EBITDA are non-GAAP performance measures and represent net
earnings before interest, income taxes, and depreciation. EBITDA is presented
because it is an important supplemental measure of the Company’s performance and
is frequently used by securities analysts, investors, and other interested
parties in the evaluation of companies in the industry, many of which present
EBITDA when reporting their results. The Company believes EBITDA is an
appropriate supplemental measure of debt service capacity and performance of its
operations.
Adjusted EBITDA is presented as a further supplemental measure of the Company’s
performance and ability to service debt. Adjusted EBITDA is prepared by
adjusting EBITDA to eliminate the impact of several items that are not
considered indicative of ongoing operating performance.
Adjusted EBITDA is calculated by adding to EBITDA certain items of expense and
deducting from EBITDA certain items of income that are not likely to recur or
are not indicative of the Company’s future operating performance consisting of:
• Pricing adjustments on concentrate and metal sales;
• Derivative gains/losses;
• Foreign exchange gains/losses; and
• Non-recurring transactions.

While some of the adjustments are recurring, other non-recurring expenses do not
reflect the underlying performance of the Company’s core mining business and are
not necessarily indicative of future results. Furthermore, gains/losses on
derivative instruments, and foreign currency translation gains/losses are not
necessarily reflective of the underlying operating results for the reporting
periods presented.
 
EBITDA and Adjusted EBITDA Three months ended
September 30, Nine months ended
September 30,
(In thousands of CDN$) 2022
$ 2021
$ 2022
$ 2021
$
Net income (loss) (39,430) 25,824 (48,864) 116,604
Adjustments
Finance income (120) (88) (418) (137)
Finance expense 9,538 10,240 24,934 23,640
Depreciation 4,906 7,286 17,016 21,272
Current tax expense - 4,420 418 8,010
Deferred income and resource tax expense 880 13,868 1,145 69,105
EBITDA (24,226) 61,550 (5,769) 238,493
Adjustments
Mark to market adjustments on concentrate sales 1,892 7,601 10,804 (16,685)
(Gain) loss on derivative (5,024) 794 (13,859) 2,709
Foreign exchange loss 19,642 7,170 23,212 4,341
Adjusted EBITDA (7,716) 77,115 14,388 228,858
 
Copper Mountain Mining Corporation
Condensed Consolidated Statements of Financial Position
(In thousands of Canadian dollars)
September 30, 2022
$ December 31, 2021
$

Assets

Current assets
Cash and cash equivalents 32,414 171,902
Restricted cash 17,237 6,512
Accounts receivable and prepaid expenses 13,735 31,624
Inventory 44,816 32,635
Other financial assets 7,482 -
Assets held for sale 86,184 -

201,868 242,673

Reclamation bonds and security deposits 4,554 5,783
Property, plant and equipment 748,383 710,583
Low grade stockpile 64,250 64,879

1,019,055 1,023,918
Liabilities

Current liabilities
Accounts payable and accrued liabilities 87,164 60,482
Current portion of lease liabilities 13,811 10,403
Current portion of long-term debt 13,707 12,678
Liabilities held for sale 2,914 -
Taxes payable - 2,143
117,596 85,706

Provisions and other liabilities 18,689 23,961
Lease liabilities 48,529 50,669
Long-term debt 303,870 284,829
Deferred tax liability 100,459 99,314
589,143 544,479

Equity
Attributable to shareholders of the Company:

Share capital 292,836 287,724
Contributed surplus 17,331 18,973
Accumulated other comprehensive loss (6,541) (3,929)
Retained earnings 26,327 68,940
329,953 371,708
Non-controlling interest 99,959 107,731
Total equity 429,912 479,439

1,019,055 1,023,918
Copper Mountain Mining Corporation
Condensed Consolidated Statements of Income and Comprehensive Income
(In thousands of Canadian dollars, except for number of and earnings per share)
Three months ended
September 30, Nine months ended
September 30,
2022
$ 2021
$ 2022
$ 2021
$

Revenue 58,256 137,176 211,188 441,447
Cost of sales (69,379) (70,535) (212,922) (192,740)
Gross profit (loss) (11,123) 66,641 (1,734) 248,707

Other income and expenses
General and administration (4,008) (2,015) (14,633) (11,120)
Share based compensation 617 (2,141) 4,258 (12,632)
Operating income (loss) (14,514) 62,485 (12,109) 224,955

Finance and other income 120 88 418 137
Finance expense (9,538) (10,240) (24,933) (23,639)
Gain (loss) on derivatives 5,024 (794) 13,859 (2,709)
Foreign exchange (loss) gain (19,642) (7,575) (23,212) (4,737)
Gain (loss) on sale of equipment - 400 - 388
Income (loss) before tax (38,550) 44,364 (45,977) 194,395

Current tax recovery (expense) - (4,420) (418) (8,010)
Deferred income recovery (expense) (880) (13,868) (1,145) (69,105)
Net income (loss) from continuing operations (39,430) 26,076 (47,540) 117,280
Net loss from discontinued operations (1,521) (252) (2,845) (676)
Net income (loss) (40,951) 25,824 (50,385) 116,604

Other comprehensive income (loss)
Foreign currency translation adjustment (503) (1,073) (2,612) (3,612)
Total comprehensive income (loss) (41,454) 24,751 (52,997) 112,992

Net income from continuing operations (loss) attributable to:
Shareholders of the Company (31,342) 18,049 (39,768) 81,292
Non-controlling interest (8,088) 8,027 (7,772) 35,988
(39,430) 26,076 (47,540) 117,280

Net income (loss) attributable to:
Shareholders of the Company (32,863) 17,797 (42,613) 80,616
Non-controlling interest (8,088) 8,027 (7,772) 35,988
(40,951) 25,824 (50,385) 116,604




Earnings (loss) per share from continuing operations:
Basic (0.15) 0.08 (0.19) 0.39
Diluted (0.15) 0.08 (0.19) 0.37

Earnings (loss) per share:
Basic (0.15) 0.08 (0.20) 0.39
Diluted (0.15) 0.08 (0.20) 0.37

Weighted average shares outstanding, basic
(thousands) 213,791 209,921 212,508 209,320
Weighted average shares outstanding, diluted
(thousands) 213,791 219,453 212,508 218,840
Shares outstanding at end of the period
(thousands) 213,791 210,166 213,791 210,166

 
Copper Mountain Mining Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands of Canadian dollars)
Three months ended September 30, Nine months ended
September 30,
2022
$ 2021
$ 2022
$ 2021
$
Cash flows from operating activities
Net income (loss) for the period (40,951) 25,824 (50,385) 116,604

Adjustments for:
Depreciation 4,971 7,342 17,308 21,457
(Gain) Loss on sale of equipment - (400) - (388)
Unrealized foreign exchange (gain) loss 19,873 10,448 25,206 3,975
(Gain) Loss on derivatives 1,354 794 (7,482) 2,709
Deferred income tax (recovery) expense 880 13,868 1,145 69,105
Finance expense 9,538 10,240 24,933 23,640
Share based compensation (617) 2,141 (4,258) 12,632
(4,952) 70,257 6,467 249,734
Net changes in working capital items (2,566) 20,612 28,332 15,303
Net cash from (used in) operating activities (7,518) 90,869 34,799 265,037

Cash flows from investing activities
Purchase of copper puts - - - (3,397)
Deferred stripping activities (7,607) (11,316) (39,818) (26,504)
Purchase of property, plant and equipment (24,919) (27,729) (98,721) (77,208)
Reclamation bonds 6 (77) 912 (323)
Net cash used in investing activities (32,520) (39,122) (137,627) (107,432)

Cash flows from financing activities
Net proceeds from issuance of bonds - - - 287,785
Proceeds on exercise of options - 6 3,358 1,725
(Increase) decrease in restricted cash (11,489) 29,951 (11,673) (15,664)
Advances from non-controlling interest - - - 20,393
Payments made to non-controlling interest - - - (178,310)
Loan principal paid - (40,064) (6,311) (154,052)
Interest paid (993) (1,948) (15,390) (10,208)
Finance lease payments (2,901) (2,403) (9,414) (11,577)
Net cash used in financing activities (15,383) (14,458) (39,430) (59,908)

Effect of foreign exchange rate changes on cash and cash
equivalents 3,208 1,582 3,682 65

(Decrease) increase in cash and cash
equivalents (52,213) 38,871 (138,576) 97,762
Cash and cash equivalents - Beginning of period 85,539 144,462 171,902 85,571
Cash and cash equivalents - End of period
(Includes $912 cash held for sale) 33,326 183,333 33,326 183,333

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