Imperial Announces Second Quarter Production Results and Non-Compliance with Certain Bank Debt Covenants
imperialmetals.com
News Release
Imperial Announces Second Quarter Production Results and Non-Compliance with Certain Bank Debt Covenants
Vancouver | July 6, 2017 | Imperial Metals Corporation (the “Company”) (TSX:III) reports that second quarter production results
from Red Chris were 15.4 million pounds of copper and 6,159 oun ces of gold. These results were weaker than expected and
similar to the production levels achieved in the first quarter of the year. Copper recovery continues to be lower than planned and
even though higher grades of ore are scheduled to be mined in the second half of the year, the Company is unlikely to meet the
lower end of its 2017 targeted copper production level of 85 mi llion pounds of copper. The revised production target for the
year is in the range of 80 to 83 million pounds of copper. Gold production at Red Chris for 2017 is expected to be approximately
40 thousand ounces, the lower end of the targeted range of 40 to 45 thousand ounces.
At Mount Polley, production for the second quarter was 5.6 mill ion pounds of copper and 13,958 ounces of gold. Copper
production was lower than targeted as copper grades from the Cariboo pit continued to be lower than expected. Gold production
was near the targeted levels. Given the lower copper grades in the Cariboo pit, copper production for the year is not expected to
meet the lower end of the original target of 26 to 29 million p ounds. It is now estimated that copper production for 2017 wil l
be in the range of 22 to 24 million pounds. Gold production at Mount Polley for the year is estimated to be within the origina l
target of 55 to 60 thousand ounces, but towards the lower end of the range.
As a result of the lower than expected production in the first half of 2017, the Company will not meet certain of the financia l
covenants under its Bank Senior Credit Facility. The Company ha s initiated discussions with its Senior Credit Facility lenders
and has requested a waiver of these covenants.
The Company is in the process of revising the ongoing mine plan s for both the Red Chris and Mount Polley mines. As an
additional consequence of the weak production results achieved in the first half of 2017, the Company will require additional
financing and will consider all of its options, including a review of strategic alternatives.
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About Imperial
Imperial is a Vancouver based exploration, mine development and operating company. The Company, through its subsidiaries, owns the Red Chris,
Mount Polley and Huckleberry copper mines in British Columbia. Imperial also holds a 50% interest in the Ruddock Creek lead|zinc property in
British Columbia.
Company Contacts
Brian Kynoch | President | 604.669.8959
Andre Deepwell | Chief Financial Officer | 604.488.2666
Steve Robertson | Vice President Corporate Affairs | 604.488.2669
Gordon Keevil | Vice President Corporate Development | 604.488.2677
Sabine Goetz | Shareholder Communications | 604.488.2657 | [email protected]
Forward-Looking Information and Risks Notice
Forward-looking statements relate to future events or future performance and reflect Company management's expectations or beliefs regarding future events and include,
but are not limited to, specific statements regarding: expectations that the Company is unlikely to meet the lower end of its 2017 targeted copper production level despite
higher grades of ore scheduled to be mined in the second half of the year, and gold production for the year will likely be near the low end of the original target;
expectations that Mount Polley copper production for the year will not meet the lower end of the original target, and gold production for the year will likely be near the
low end of the target; revised copper production targets for both Red Chris and Mount Polley mines; expectations that the Company will not meet certain financial
covenants unless it receives its requested waiver of such covenants from the Senior Credit Facility lenders; revisions of ongoing mine plans for both the Red Chris and
Mount Polley mines; the Company’s need for additional financing and its intention to consider all of its options, including a review of strategic alternatives. In certain
cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "outlook", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events
or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative of these terms or comparable terminology. In this document
certain forward-looking statements are identified by words including "guidance", "expectations", "targeted", "plan", "planned", "estimated", "calls for" and "expected".
By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or
achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
Such factors include, among others, risks related to changes in project parameters as plans continue to be refined; future prices of mineral resources; possible variations
in ore reserves, grade or recovery rates; accidents; dependence on key personnel; labour pool constraints; labour disputes; availability of infrastructure required for the
development of mining projects; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; that additional
required financing may not be available to the Company on terms acceptable to the Company or at all; that the Company may not receive its requested waivers of
certain financial covenants contained in its credit facilities and other loan documents and could be found to be in default; counterparty risks associated with sales of our
metals; changes in general economic conditions; increased operating and capital costs; and other risks of the mining industry as well as those factors detailed from time
to time in the Company's interim and annual financial statements and management's discussion and analysis of those statements, all of which are filed and available for
review on sedar.com. Although the Company 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. There can be no
assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward looking statements.