COPPER PRODUCTION INCREASED; OPERATING COSTS SIGNIFICANTLY REDUCED
MONTREAL, May 8 /PRNewswire-FirstCall/ - Campbell Resources Inc. (the
"Company") ("Campbell") (TSX: CCH, OTC Bulletin Board: CBLRF) today
announced financial results for the first quarter of fiscal 2008 ended
March 31, 2008. During and subsequent to the period, the Company realized a
number of significant achievements:
- Increased ore production by approximately 140%
- Increased copper production by approximately 125%
- Reduced loss from operations by approximately 46%
- Opened up two new sources of higher-grade ore at the Copper Rand mine
- Confirmed expansion of mineralized zone at Copper Rand mine
- Began development of the high-grade Corner Bay deposit at both the 55
and 75 metre levels and began shipment of ore to the Copper Rand mill.
"During the first quarter, Campbell continued to make significant
progress towards its goals of increasing production and improving its
financial performance," said Andre Fortier, Campbell's President and Chief
Executive Officer. "Our copper production has grown dramatically and our
loss from operations has been cut by 46%. Copper Rand is now producing ore
from three sources and we recently confirmed the expansion of a mineralized
zone that runs parallel to the main ore body now developed to the 4,850
foot level. The development at Corner Bay is also proceeding very well and,
in March, we began to ship higher-grade ore from this mine to the Copper
Rand mill. We expect to be able to steadily ramp up production at Corner
Bay over the coming months and to reach a level of commercial production in
the third quarter."
FINANCIAL RESULTS
As of January 1, 2007, results from the Copper Rand mine have been
included in the consolidated operating results. Prior to this, Copper Rand
mine was considered to be in the preproduction development stage and, as
such, all costs, net of revenue from development ore, were deferred as mine
development costs.
As of September 11, 2007, operations at Joe Mann mine ceased and the
mine was put on care and maintenance.
In October 2007, the Company commenced production at Merrill Pit.
In the first quarter of 2008, Campbell operations produced 91,520 tons
of ore yielding 2,590 ounces of gold and 2,167,067 pounds of copper. In the
first quarter of 2007, 38,787 tons of ore were milled, yielding 3,902
ounces of gold and 961,641 pounds of copper.
A total of 791 ounces of gold and Nil pounds of copper were sold in the
first quarter of 2008 compared to 2,096 ounces of gold and Nil pounds of
copper for the same period of 2007. The average market price for gold in
the first quarter of 2008 was $929 (US$925) per ounce compared to $762
(US$650) per ounce for the same period in 2007. The average market price
for copper in the first quarter of 2008 was $3.54 (US $3.52).In the first
quarter of 2008, the average sale price for gold was $916 per ounce
compared to $763 in the same period of 2007.
Net metal sales for the first quarter of 2008 reached $0.7 million
compared to $1.7 million for the same period last year, a decrease of $1.0
million. The decrease is mainly due to the closure of the Joe Mann mine,
which was Campbell's gold-producing mine.
As per the contract for the sale of concentrate between Campbell and
Ocean Partners UK Limited ("OP"), revenues for concentrate inventory
shipped cannot be recognized until the transfer of ownership is completed
when the concentrate is delivered to the discharge port. As at March 31,
2008, $8.1 million of inventory valued at lowest of cost and net realizable
value was stored at Port of Quebec. On this amount of inventory,
provisional payments in the amount of $10.2 million were received from OP.
The contract was amended in March 2008 to allow the Company to borrow money
on concentrate to be shipped. In March 2008, $2.2 million was borrowed and
by month end $0.3 million was repaid.
The loss from operations, before interest, totalled $2.8 million in the
first quarter of 2008, a reduction of 46% compared to $5.2 million loss
from operations in the prior period.
For the first quarter of 2008, Campbell recorded a net loss of $2.0
million or $0.00 per share, compared to a net loss of $1.7 million or $0.01
per for the same period in 2007.
OPERATING PERFORMANCE
Joe Mann Mine
Production at the Joe Mann mine ceased on September 11, 2007 and the
mine was placed on care and maintenance. In the first quarter of 2007, Joe
Mann produced 16,744 tons of ore grading 0.218 Au oz/t, 0.21% Cu and 0.157
Ag oz/t. The yield was 3,019 ounces of gold, 66,435 pounds of copper and
1,564 ounces of silver. The recovery rate was 82.60% for gold, 92.86% for
copper and 59.55% for silver.
Copper Rand Mine
The Copper Rand mine started commercial production on January 1st 2007.
Production at Copper Rand in the first quarter of 2008 was 46,725 tons
grading 0.058 Au oz/t (yielding 2,289 ounces of gold), 2.02% Cu (yielding
1,804,996 lbs of copper) and 0.174 Ag oz/t (yielding 5,847 ounces of
silver) with a recovery rate of 84.15% for gold, 95.67% for copper and
71.87% for silver. In the first quarter of 2007, production totalled 22,043
tons grading 0.047 Au oz/t (yielding 883 ounces of gold), 2.08% Cu
(yielding 895,206 lbs of copper) and 0.157 Ag oz/t (yielding 2,350 oz of
silver) with a recovery rate of 85.38% for gold, 97.62% for copper and
67.81% for silver.
The introduction of the Alimak mining method as well as other
initiatives to diversify the sources of ore at the mine have generated a
constant increase in production output in recent months. There are
currently three production areas at Copper Rand, and a fourth zone should
be in production in the second quarter of 2008. Two new zones should also
be available at the end of 2008 and in the first half of 2009. Further, the
Company has also confirmed the expansion of a mineralized zone that runs
parallel to the main ore body now developed to the 4,850 foot level.
Campbell expects to be able to maintain increased production levels in the
coming months.
Merrill Pit
The first tons of ore from Merrill pit were milled in October 2007. In
the first quarter of 2008, a total of 43,723 tons of ore were milled,
grading 0.39% copper (318,525 pounds), 0.008 oz/t gold (276 oz) and 0.085
oz/t silver (2,524 oz). The recovery rate was 94.02% for copper, 81.67% for
gold and 67.98% for silver.
Production at Merrill was curtailed in early March because of a major
equipment failure, but as of April 14 it is back in full production.
Corner Bay Development
In March 2008, 1,072 tons of mineralized material were extracted and
milled at Corner Bay, grading 2.15% copper (43,546 pounds), 0.027 oz/t gold
(25 oz) and 0.168 oz/t silver (130 oz). The recovery rate was 94.38% for
copper, 86.01% for gold and 72.14% for silver.
During the first quarter of 2008, $4.3 million was invested in the
development of the project. Underground services have been completed.
Development to the 105 metre level continues to progress and mining of the
initial 42,000 tonne bulk sample with an average grade of 3.7% copper is
expected to begin in the second quarter.
At a 3% Cu cut-off, Corner Bay has measured and indicated resources of
446,000 tonnes averaging 5.58% Cu (181,000 @ 5.07% Cu measured and 265,000
@ 5.93% Cu indicated); inferred resources total 1,441,000 tonnes averaging
6.76% Cu (Ref.: GEOSTAT Technical Report, July 2006, available on SEDAR at
http://www.sedar.com).
OUTLOOK
"The operating and development initiatives the Company is pursuing put
us very much on track to reach our objectives for 2008, which include
doubling Campbell's ore production over 2007 totals, improving the
efficiency at the Copper Rand mill, reducing our costs per pound of copper,
and significantly increasing our revenues. Additionally, we are continuing
to look at opportunities to acquire and bring into production additional
assets in the prolific Chibougamau mining camp to further its plan of
maximizing throughput at the Copper Rand mill," Mr. Fortier said.
Campbell Resources will hold a conference call on Thursday, May 8, 2008
at 4 P.M (Eastern Time) to discuss this announcement. Interested parties
can join the call by dialling 1-866-249-5221
About Campbell Resources Limited
Campbell Resources Inc. concentrates on the development and
exploitation of copper and gold mining properties in the Chibougamau region
of Quebec. The geographical grouping of its operations allows the Company
to realize economies of scale and to focus development within access to
existing infrastructures. Campbell's main operations include the Copper
Rand and Merrill mines, the Corner Bay project and the Copper Rand mill.
The Company's headquarters are located in Montreal, Quebec.
The qualified person, Valere Larouche, ing.-geologist, is the Chief
Geologist for Campbell Resources Inc. Analysis was conducted at the
Campbell Resources laboratory in Chibougamau, Quebec.
Certain information contained in this release contains "Forward-Looking
Statements" within the meaning of the Private Securities Litigation Reform
Act of 1995 and is subject to certain risks and uncertainties, including
those "Risk Factors" set forth in the Campbell's current Annual Report on
Form 20-F for the year ended December 31, 2006. Such factors include, but
are not limited to: differences between estimated and actual mineral
reserves and resources; changes to exploration, development and mining
plans due to prudent reaction of management to ongoing exploration results,
engineering and financial concerns; and fluctuations in the gold price
which affect the profitability and mineral reserves and resources of
Campbell. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
Campbell undertakes no obligation to release publicly any revisions to
these forward-looking statements to reflect events or circumstances after
the date hereof or to reflect unanticipated events or developments.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Expressed in thousands of Canadian dollars)
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March 31 December 31
2008 2007
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$ $
Assets
Current assets
Cash 33 474
Restricted cash 1,113 1,113
Short-term investments 30 33
Receivables 2,185 3,066
Settlements receivable 739 739
Concentrate and metal inventories 9,014 1,218
Supply inventories 2,740 2,882
Prepaids 689 408
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16,543 9,933
Amount receivable from Copper Rand/Portage
Restoration Fiduciary Trust 3,072 3,028
Restricted cash 1,158 1,158
Future income tax assets 1,338 1,317
Property, plant and equipment 48,662 45,017
Accrued benefit asset 4,975 4,897
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75,748 65,350
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Liabilities
Current liabilities
Short-term loan 3,264 1,996
Accounts payable 17,231 15,411
Accrued liabilities 6,809 5,954
Prepayments for concentrate 10,248 965
Current portion of long-term debt 18,394 18,337
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55,946 42,663
Asset retirement obligations 7,503 7,396
Long-term debt 2,919 2,688
Future income and mining tax liabilities 6,656 6,472
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73,024 59,219
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Shareholders' equity
Capital stock 94,854 96,639
Warrants, stock options and conversion rights 9,776 9,432
Contributed surplus 4,191 4,109
Deficit (106,085) (104,040)
Accumulated other comprehensive loss (12) (9)
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(106,097) (104,049)
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2,724 6,131
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75,748 65,350
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CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Expressed in thousands of Canadian dollars except per share amounts)
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Three months ended
March 31
2008 2007
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$ $
Gross metal sales 726 1,714
Treatment charges 4 18
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Net metal sales 722 1,696
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Expenses
Cost of good sold 692 5,191
Depreciation and amortization 1,125 812
General administration 668 734
Warrants issued as fee for short-term
financial arrangement 427 -
Reorganisation and CCAA costs - 105
Care and maintenance 584 42
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3,496 6,884
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Loss before the following items (2,774) (5,188)
Interest expense on short-term loan (124) (75)
Interest and financial expense on long-term debt (475) (280)
Interest income 14 8
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Loss from operations (3,359) (5,535)
Other income (expense)
Other (expense) income (308) 3,790
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Loss before taxes (3,667) (1,745)
Income and mining tax 1,622 -
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Net loss (2,045) (1,745)
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Weighted average number of common shares ('000) 432,605 348,669
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Loss per share undiluted and diluted 0.00 0.01
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CONSOLIDATED STATEMENTS OF CONTRIBUTED SURPLUS AND DEFICIT (UNAUDITED)
(Expressed in thousands of Canadian dollars)
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Three months ended
March 31
2008 2007
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$ $
Contributed surplus
Balance, beginning of period 4,109 1,996
Stock options expired and cancelled 25 -
Warrants expired 57 1,995
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Balance, end of period 4,191 3,991
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Deficit
Balance, beginning of period 104,040 85,052
Net loss 2,045 1,745
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Balance, end of period 106,085 86,797
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Expressed in thousands of Canadian dollars)
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Three months ended
March 31
2008 2007
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$ $
Net Loss (2,045) (1,745)
Other comprehensive income, net of income tax:
Unrealized (losses) gain on available-for-sale
investments arising during the period (3) 29
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Comprehensive loss (2,048) (1,716)
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SOURCE CAMPBELL RESOURCES INC.
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CONTACT:
Campbell Resources Inc.: Andre Fortier,
President and Chief Executive Officer, (514) 875-9037, Fax: (514)
875-9764, afortier@campbellresources.com; Alain Blais,
Vice-president and General Manager of Operations, (418) 748-7691,
Fax: (418) 748-7696, ablais@campbellresources.com; Renmark
Financial Communications Inc.: Henri Perron,
hperron@renmarkfinancial.com; Josh Rivard,
jrivard@renmarkfinancial.com, (514) 939-3989, Fax: (514)
939-3717, http://www.renmarkfinancial.com
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