AMEX:ROY TSX:IRC
DENVER, CO, March 10 /PRNewswire-FirstCall/ - International Royalty
Corporation (AMEX: ROY, TSX: IRC) (the "Company", or "IRC") today reported
its fourth quarter and fiscal 2007 financial results. All figures are in
United States dollars unless noted otherwise.
Financial Highlights
Revenues for 2007 increased 245% to $49.9 million, as compared to $20.3
million for 2006. Royalty revenues in the fourth quarter of 2007 were $12.7
million, compared to $9.5 million in the fourth quarter of 2006.
Cash flow from operations increased 677% to $26.5 million or $0.39 per
share for 2007, as compared to $3.9 million or $0.07 per share in 2006. For
the fourth quarter of 2007, cash flow from operations was $7.4 million or
$0.10 per share, compared to $5.7 million or $0.10 per share in the fourth
quarter of 2006.
For all of 2007, earnings from operations were $19.1 million or $0.28
per share compared to $4.3 million or $0.07 per share in 2006. This
represents an increase of 447%. Earnings from operations for the fourth
quarter of 2007 were $3.0 million or $0.04 per share compared to $3.7
million or $0.06 per share in the fourth quarter of 2006. The decrease
during the fourth quarter of 2007 was related to a one time charge of $1.7
million related to the pursuit of a business opportunity, as well as an
increase in royalty impairments of $0.7 million.
Net earnings during the fourth quarter of 2007 were $5.3 million or
$0.07 per share compared to $3.0 or $0.05 in the fourth quarter of 2006.
The fourth quarter of 2007 was positively impacted by a future tax credit
of $5.9 million during the quarter related to a reduction in income tax
rates by the Canadian government and negatively impacted by a $2.6 million
foreign currency loss.
Net earnings for 2007 were $11.2 million or $0.16 per share compared to
$11.7 million or $0.20 per share in 2006.
Payable production from the Voisey's Bay royalty was 33.8 million
pounds of nickel, a record 42.2 million pounds of copper and 1.5 million
pounds of cobalt in concentrate for the fourth quarter of 2007, compared to
27.9 million, 22.0 million and 0.8 million pounds, respectively, in the
fourth quarter of 2006.
Business Development Activities
On December 13, 2007, the Company purchased four royalties from
Goldcorp Inc. ("Goldcorp Royalties") for $4.0 million in cash, including
transaction costs.
On December 21, 2007, the Company agreed to acquire 16 mineral
royalties from Rio Tinto PLC ("Rio Tinto"), including interests on the
near-producing Las Cruces copper and Avebury nickel mines, for $61.5
million in cash ($61.7 million with transaction costs), plus a potential
contingency payment. This transaction will close in two parts. The
acquisition of the eleven non-Australian royalties covered by the agreement
closed on December 21, 2007. On February 25, 2008 IRC received approval
from the Australian Foreign Investment Review Board for the acquisition of
the Australian royalties (Avebury, Bell Creek, Melba Flats, Merlin and
Westmoreland). Completion of this transaction is expected to occur upon
resolution of outstanding rights of first refusal.
On February 22, 2007, the Company announced that it had entered into an
agreement to acquire a royalty on the Legacy Sand Project ("Legacy") in
Nance County, Nebraska for $12.0 million in cash. The project began
production in the second quarter of 2007, but has experienced technical
problems in reaching targeted output levels. Resolution of these technical
issues was stalled by on-going disputes between the former owners of
Legacy. To resolve the dispute, the partners have sold all of their
interests in Legacy to a privately-held purchaser (the "Buyer"). Under the
terms of the sale, the Buyer will become the manager of a new limited
liability company, Preferred Rocks of Genoa Holding Company, LLC ("Genoa"),
formed to finance, own and operate the Legacy project. A detailed plan has
been formed to address existing technical issues and at the same time
double the Legacy plant production capacity to 1,000,000 short tons per
year of frac and other products.
To enable the sale and new investment, the Company restructured its
interest in Legacy, originally a fixed royalty of $4.75 per ton on the
first 500,000 tons produced annually for a period of 12 years and a 2%
gross royalty thereafter, as well as a security interest in the sand lease.
Accordingly, on December 24, 2007, the Company and the Buyer completed a
restructuring of its interest in Legacy, wherein the Company received the
following:
- $6.0 million in cash,
- a membership interest in Genoa paying a 10% preferred return on a
deemed $8.0 million investment, including return of all capital before
distribution of any cash to the manager, and
- a residual net profits interest of 5.25% in the restructured Legacy
project.
Developments on Existing Royalties
In the fourth quarter of 2007, Mercator Gold Plc began gold production
at its Meekatharra operations in Western Australia at an initial rate of
120,000 ounces per year. Production began in the Yaloginda project area,
where the Company owns a .045% net smelter return royalty and is expected
to expand into the Paddy's Flat project area in 2009, with a royalty rate
of 1.5%.
St. Barbara Limited also has announced the expected start of production
at its Gwalia Deeps underground project at an initial annual rate of
100,000 ounces of gold and ramping up to 200,000 ounces per year within 18
months. The Company holds a 1.5% net smelter return royalty on Gwalia
Deeps.
In early 2009, production is expected to begin at Goldbelt Resources
Ltd.'s (recently acquired by Wega Mining) Inata gold project (Belahouro) in
Burkina Faso, West Africa on which the Company holds a 2.5% net smelter
return royalty.
Summary of Financial Information:
($ thousands, Three Months Ended Year Ended
except per share data) December 31, December 31,
------------------ ------------------
2007 2006 2007 2006
-------- -------- -------- --------
Statement of Operations
Royalty revenues $12,734 $9,527 $49,857 $20,346
Earnings from operations 2,973 3,653 19,126 4,277
Earnings (loss) before
income taxes (43) 3,691 9,664 2,622
Net earnings 5,275 2,955 11,233 11,678
Basic earnings per share:
Earnings from operations $0.04 $0.06 $0.28 $0.07
Earnings (loss) before
income taxes $(0.00) $0.06 $0.14 $0.05
Net earnings $0.07 $0.05 $0.16 $0.20
Diluted earnings per share:
Earnings from operations $0.04 $0.06 $0.27 $0.07
Earnings (loss) before
income taxes $(0.00) $0.06 $0.14 $0.05
Net earnings $0.07 $0.05 $0.16 $0.20
Statement of Cash Flows
Cash provided from
operating activities $7,396 $5,669 $26,531 $3,921
Basic cash flow per share $0.10 $0.10 $0.39 $0.07
Diluted cash flow per share $0.10 $0.10 $0.38 $0.07
Payable production and revenues on the Company's royalties and average
metal prices received were as follows:
Production and Revenue
Quarter Ended Year Ended
December 31, December 31,
------------------ ------------------
Mine Commodity Royalty 2007 2006 2007 2006
---------------------------------- --------------------------------------
Total Payable Metal Production (1)
Williams Gold 0.25% NSR 43 64 209 253
Southern
Cross Gold 1.5% NSR 46 55 166 95
Voisey's Bay Nickel 2.7% NSR 33,763 27,866 127,918 67,073
Copper 2.7% NSR 42,179 22,042 89,504 53,362
Cobalt 2.7% NSR 1,540 810 5,521 2,504
---------------------------------- ------------------ ------------------
Revenue (thousands)
Williams $85 $98 $360 $386
Southern Cross 541 497 1,733 870
Voisey's Bay 12,056 8,930 47,660 19,061
Other 52 2 104 29
------------------ ------------------
$12,734 $9,527 $49,857 $20,346
------------------ ------------------
------------------ ------------------
(1) Gold is in thousands of ounces; nickel, copper and cobalt are in
thousands of contained pounds in concentrate.
Average metal prices realized
Quarter Ended Quarter Ended
December 31, December 31,
------------------ ------------------
2007 2006 2007 2006
------------------ ------------------
Gold, per ounce $788 $607 $696 $611
Nickel, per pound (1) 13.87 13.65 16.63 11.62
Copper, per pound (1) 3.59 3.42 3.38 3.25
Cobalt, per pound (1) 32.59 16.46 28.10 15.32
(1) Before transportation, smelting and refining costs.
Complete financial results are available on SEDAR and on the Company's
website at http://www.internationalroyalty.com.
IRC invites you to participate in its conference call to discuss the
year end results.
The Company will host this conference call Wednesday, March 12, 2008 at
1PM EDT, 11 AM MDT. To participate in the conference call, please dial
(416) 644-3418 or toll free (800) 731-5319. To ensure your participation,
please call approximately five minutes prior to the scheduled start of the
call.
Replay archive: Please dial 877-289-8525, passcode 21264360#. The
conference call will be replayed from Wednesday, March 12, 2008 3:00 PM EDT
to Wednesday March 19, 2008 11:59 PM EDT.
The conference call will feature Mr. Douglas B. Silver, Chairman &
Chief Executive Officer, and Ray Jenner, Chief Financial Officer &
Secretary.
International Royalty Corporation
---------------------------------
International Royalty Corporation (IRC) is a global mineral royalty
company. IRC holds over 75 royalties including an effective 2.7% NSR on the
Voisey's Bay mine, a sliding-scale NSR on the Pascua gold project, a 1.5%
NSR on the Las Cruces copper 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) 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, including but not limited to, statements that describe IRC's
expectations as to the closing of the acquisition of the Rio Tinto project,
the resolution of technical issues and beginning of production for the
Legacy project, royalty revenue from the Meekatharra project and the
production start dates for the Gwalia Deeps and Belahouro projects on which
IRC has royalties. 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, 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. 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. 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.
SOURCE INTERNATIONAL ROYALTY CORPORATION
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CONTACT:
Jack Perkins, Investor Relations, (303)
991-9500; Douglas B. Silver, Chairman and CEO,(303) 799-9020,
info@internationalroyalty.com; http://www.internationalroyalty.com;
Renmark Financial Communications Inc.: Barbara Komorowski:
bkomorowski@renmarkfinancial.com; Melanie Lecavalier:
mlecavalier@renmarkfinancial.com; (514) 939-3989, Fax: (514)
939-3717, http://www.renmarkfinancial.com
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