International Royalty Corporation reports first quarter results
Fri May 16, 2:02 PMAMEX:ROY
TSX:IRC
DENVER, CO, May 16 /CNW Telbec/ - International Royalty Corporation (AMEX: ROY, TSX: IRC) (the "Company") today reported its first quarter 2008 financial results. All figures are in United States dollars unless noted otherwise.
Financial Highlights
Royalty revenues increased from $10,178,000 for the three months ended March 31, 2007 to $10,283,000 for the three months ended March 31, 2008. Increases from the Company's Southern Cross gold royalty of $159,000 and the second royalty payment received on the Meekatharra royalty of $43,000 more than offset the decrease in gross revenues from the Voisey's Bay royalty from $9,705,000 in the quarter ended March 31, 2007 to $9,598,000 for the same period in 2008.
The Voisey's Bay royalty payment during the quarter ended March 31, 2008 was based on total contained nickel in concentrate of approximately 38.0 million pounds compared to approximately 27.0 million pounds for the quarter ended March 31, 2007. The increase in paid production was partially offset by a decrease in the average price of nickel during the quarter from $16.59 per pound in the quarter ended March 31, 2007 to $12.38 per pound in the same quarter in 2008. The increase in production was also offset during the quarter by an adjustment to deductions from the net smelter return by the operator of the mine, Vale Inco.
Net earnings during the quarter were $2.4 million, or $0.03 per share, compared to $2.2 million, or $0.03 in the same quarter in 2007.
Cash flow from operations was $6.4 million during the quarter or $0.08 per share, compared to $5.0 million or $0.08 per share in the first quarter of 2007.
Developments on Existing Royalties
In the fourth quarter of 2007, Mercator Gold Plc began gold production at its Meekatharra operations in Western Australia at an expected initial rate of 120,000 ounces of gold per year. Production began in the Yaloginda project area, where the Company owns a 0.045% net smelter return royalty and is expected to expand into the Paddy's Flat project area in 2009, with a royalty rate of 1.5%. Production in the Yaloginda project area for the quarter ended March 31, 2008 totalled 11,000 ounces.
St. Barbara Limited has announced the expected start of production at its Gwalia Deeps underground project in the third quarter of 2008 at an initial annual rate of 100,000 ounces of gold and ramping up to 200,000 ounces per year within 18 months. The Company holds a 1.5% net smelter return royalty on Gwalia Deeps.
Inmet Mining Corporation ("Inmet") is currently constructing the mine at its Las Cruces copper project in Spain and expects production to begin in the fourth quarter of 2008 with a projected annual average production rate over 15 years of 142 million pounds of copper. The Company holds a 1.5% net smelter return royalty on Las Cruces.
Zinifex Limited ("Zinifex") is expected to begin production on the Avebury nickel project in Tasmania, Australia in the second quarter of 2008. The Company will hold a 2.0% net smelter return royalty on Avebury. The agreement to purchase this royalty was made during the fourth quarter of 2007 but closing has been deferred pending approval from the Australian Foreign Investment Review Board ("FIRB") and upon resolution of outstanding rights of first refusal on two other royalties acquired in the same transaction. On February 26, 2008, the Company received approval from FIRB. In May 2008, all rights of first refusal lapsed and the Company expects to proceed to closing in late May 2008.
In early 2009 production is expected to begin at Wega Mining's Inata gold project (Belahouro) in Burkina Faso, West Africa on which the Company holds a 2.5% net smelter return royalty. Belahouro is expected to produce 144,000 ounces in the first year of operation.
Summary of Financial Information:
($ thousands, except per share data)
(unaudited) Three months
ended March 31
-------------------------
2008 2007
------------ -----------
Statement of Operations
Royalty revenues $10,283 $10,178
Earnings from operations 2,800 4,033
Earnings before income taxes 3,248 3,275
Net earnings 2,411 2,165
Basic and diluted earnings from operations
per share 0.04 0.06
Basic and diluted earnings before income
taxes per share 0.04 0.05
Basic and diluted earnings per share 0.03 0.03
Statement of Cash Flows
Cash provided by operating activities 6,397 4,966
March December
31, 2008 31, 2007
------------ -----------
Balance Sheet
Total assets $384,450 $384,482
Shareholders' equity 296,891 295,679
Payable production and revenues on the Company's royalties and average
metal prices received were as follows:
Production and revenue (unaudited)
Payable Revenue
Production (1) (thousands)
Quarter Ended Quarter Ended
March 31, March 31,
----------------- -----------------
Mine Commodity Royalty 2008 2007 2008 2007
----------------------------------- ----------------- -----------------
Williams Gold 0.25% NSR 38 64 $ 87 $ 102
Southern Cross Gold 1.5% NSR 36 38 529 370
Meekatharra Gold 0.45% NSR 11 - 43 -
Voisey's Bay 9,598 9,705
Nickel 2.7% NSR 37,956 27,005
Copper 2.7% NSR 33,857 12,618
Cobalt 2.7% NSR 1,570 1,095
(1) Gold is in thousands of ounces; nickel, copper and cobalt are in
thousands of contained pounds in concentrate. Silver ounces are
converted to gold ounce equivalents by dividing silver revenue by the
average price of gold during the period.
Average metal prices realized (in US$)
(unaudited)
Quarter Ended
March 31,
2008 2007
------------------------
Gold, per ounce 976 648
Nickel, per pound (1) 12.38 16.59
Copper, per pound (1) 2.65 2.38
Cobalt, per pound (1) 45.95 25.18
(1) Before transportation, smelting and refining costs.
Complete financial results are available on SEDAR and on the Company's
website at www.internationalroyalty.com.
IRC invites you to participate in its conference call to discuss the first
quarter results.
The Company will host this conference call Tuesday, May 20, 2008 at 1:00pm
EDT, 11:00am MDT.
To participate in the conference call, please dial (647) 427-3411 or toll
free (888) 241-0326, conference ID 4577 5640. To ensure your participation,
please call approximately five minutes prior to the scheduled start of the
call.
Replay archive: Please dial 1-888-566-0885, passcode 4577 5640. The
conference call will be replayed from Tuesday, May 20, 2008 3:00pm EDT to
Friday, June 20, 2008 11:59pm EDT.
International Royalty Corporation
---------------------------------
International Royalty Corporation (IRC) is a global mineral royalty
company. IRC holds over 80 royalties including an effective 2.7% NSR on the
Voisey's Bay mine, a sliding-scale NSR on the Pascua gold project, and a 1.5%
NSR on more than 3.0 million acres of gold lands in Western Australia. IRC is
senior listed on the Toronto Stock Exchange (TSX: IRC.TO) as well as the American
Stock Exchange (AMEX: ROY).
On behalf of the Board of Directors,
INTERNATIONAL ROYALTY CORPORATION
Douglas B. Silver
Chairman and CEO
Cautionary Statement Regarding Forward-Looking Statements
---------------------------------------------------------
Some of the statements contained in this release are forward-looking
statements, such as statements that describe IRC's expectations as to royalty
revenue from the Meekatharra project and the production start dates for the
Gwalia Deeps, Las Cruces and Belahouro projects on which IRC has royalties,
other forward-looking statements include the production start date at Avebury
and the Company's completion of the acquisition of the Avebury Royalty.
Financial information contained in this press release is unaudited. In certain
cases, forward-looking statements can be identified by the use of words such
as "plans", "expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates", or "does not
anticipate", or "believes" or variations of such words and phrases, or state
that certain actions, events or results "may", "could", "would", "might" or
"will" be taken, occur or be achieved. Since forward-looking statements are
not statements of historical fact and address future events, conditions and
expectations, forward-looking statements by their nature inherently involve
unknown risks, uncertainties, assumptions and other factors well beyond the
Company's ability to control or predict. Actual results and developments may
differ materially from those contemplated by such forward-looking statements
depending on, among others, such key factors as the ability of the mine
operators to finance and successfully place their projects into production.
IRC's forward-looking statements in this release regarding royalty revenue,
ongoing production and royalties, anticipated production and the anticipated
timing of the start of production on several of the projects on which it has
royalties is based on certain assumptions. Such assumptions include, but are
not limited to, the validity of statements made by the project operators in
the public domain, and their ability to finance, construct and successfully
operate these properties. Statements with respect to Meekatharra, Gwalia
Deeps, Las Cruces, Abebury and Belahouro come from the following sources:
Mercator Gold PLC press release 8/9/07, Mercator Gold PLC press release
2/26/08, St Barbara Ltd. Press release 2/7/07,
http://www.inmetmining.com/Theme/Inmet/files/pdf/2008_Q1_Las%20Cruces%20Sectio
n.pdf, www.allegiance-mining.com.au, Goldbelt Resources Ltd. Press release
10/4/07, The forward-looking statements included in this release represent
IRC's views as of the date of this release. While IRC anticipates that
subsequent events and developments may cause IRC's views to change, IRC
specifically disclaims any obligation to update these forward-looking
statements unless required by law. These forward-looking statements should not
be relied upon as representing IRC's views as of any date subsequent to the
date of this release. Although IRC has attempted to identify important factors
that could cause actual actions, events or results to differ materially from
those described in forward-looking statements, there may be other factors that
cause actions, events or results not to be as anticipated, estimated or
intended. Accordingly, readers should not place undue reliance on any
forward-looking statements.
ContactsJack Perkins Investor Relations
(303) 991-9500 Douglas B. Silver
Chairman and CEO
(303) 799-9020
info@internationalroyalty.com
www.internationalroyalty.com Renmark Financial Communications Inc.: Barbara Komorowski
bkomorowski@renmarkfinancial.com Jen Power
jpower@renmarkfinancial.com
(514) 939-3989
Fax: (514) 939-3717
www.renmarkfinancial.com
133.18 (0.94%)
