Copper Mountain looks to shrug off disappointing 2022, sets improved output guidance

Copper Mountain Mining (TSX: CMMC) (ASX: C6C) sees a strong year ahead with a sizeable increase in production, having achieved plant optimization […]
The Copper Mountain mine. Credit: Copper Mountain Mining

Copper Mountain Mining (TSX: CMMC) (ASX: C6C) sees a strong year ahead with a sizeable increase in production, having achieved plant optimization and boosted the mineral reserve base at its flagship southern British Columbia operation.

For 2023, the company is forecasting copper production to reach 88 million to 99 million lb. This guidance represents a significant jump over Copper Mountain's output of 52.9 million lb. of copper produced in 2022, which did not meet expectations. Full year 2022 C1 cash cost per pound of copper produced was US$3.53 per pound, while AISC per pound of copper was US$4.20 and AIC per pound of copper was US$4.78.

The lower-than-expected output coupled with high costs resulted in a net loss from continuing operations of $58.9 million and adjusted net loss of $48 million for 2022.

Commenting on the disappointing year, Copper Mountain CEO Gil Clausen said: "From the start of the year, the mill was running at reduced rates from damage to the secondary crusher main shaft, then we encountered oxidized ore in the North Pit, a worn eccentric bushing in our primary crusher and general quality problems with the grinding balls from our supplier."

On top of that, Clausen noted the year also culminated with a ransomware attack in late December, which affected the internal IT systems at the Copper Mountain mine.

"Concurrently, we were completing all our plant optimization projects, so there was a large amount of committed project capital being spent at the same time we were experiencing operational challenges. We did not meet our expectations in 2022, but with these issues now behind us, we are having a solid start to 2023," he added.

So far this year, Copper Mountain's production is in line with budget. The company is also expecting costs to be materially lower from higher production, shorter haul distances and minimal expansionary capital expenditures.

With the completion of the plant improvement projects in 2022, mill throughput is expected to be higher this year, averaging 45,000 tonnes per day, with recoveries expected to average approximately 84%.

Production and grade are forecast to increase sequentially through the first three quarters, with the third quarter expected to be the strongest of the year. Mill feed is expected to be primarily from the higher-grade Phase 4 area and the North Pit.

In addition to copper production, the company forecast gold production to fall between 20,000 and 30,000 ounces and silver production between 350,000 and 400,000 ounces.

Shares of Copper Mountain Mining surged 7.2% by 12:15 p.m. ET following the release of its full-year results and 2023 guidance. The Vancouver-based miner has a market capitalization of $414.8 million.



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