INTL ROYALTY CORP. 
By
NYSE-A: ROY
TSX: IRC
Highlights for the second quarter of 2009:
- Royalty revenue was $6.1 million, compared to $8.6 million the quarter
ended June 30, 2008.
- Earnings from operations were $134,000, compared to $2.2 million the
quarter ended June 30, 2008.
- Cash flow from operations increased by $3.4 million to $2.9 million,
compared to $(467,000) the quarter ended June 30, 2008.
- As a result of the McWatters transaction, IRC was not required to pay
taxes to Canada Revenue Agency in June 2009, compared to $7.5 million
paid in June 2008. The Company also reduced its current taxes payable
by approximately $4.6 million from its liability at March 31, 2009.
- Production began at the Las Cruces and Johnson Camp copper projects on
which the Company has royalties of 1.5% and 2.5% Net Smelter Return
("NSR"), respectively.
- The Gwalia Deeps mine produced 31,000 ounces of gold in the second
quarter, a 31% increase over the prior quarter.(3) IRC holds a
1.5% NSR royalty on this project.
- IRC successfully closed a CA$57.6 million common share financing in
July 2009. This share issue provided IRC with $46.8 million in cash,
which exceeds the Company's senior secured debentures as of June 30,
2009 by approximately $23.1 million.
Financial Highlights
Royalty revenues for the three months ended
Revenue recognized from the effective 2.7% NSR royalty on the Voisey's Bay nickel, copper and cobalt mine was
Earnings from operations were
On
McWatters was reorganized effective on
As a result of the McWatters transaction, the Company expensed transaction costs of
Net loss for the second quarter of 2009 was
Cash flow from operations for the quarter ended
Bought Deal Financing
On
Developments on Existing Royalties
The Wolverine zinc project is scheduled for commissioning during 2010. Excavation work has continued as concrete footings are being poured for the mill building, concentrate load-out facility, power plant, maintenance shops and administrative buildings.(1) IRC holds a sliding-scale royalty on all precious metals production from this project.
Saracen Mineral Holdings Limited's Carosue Dam gold project is slated for commissioning during 2010. Initial gold production is expected to be 120,000 ounces per year from the South Laverton region.(2) IRC's holds a 1.5% NSR royalty on this project.
Production at Gwalia Deeps for the first six months of 2009 totalled 54,000 ounces of gold. Production is expected to ramp up to 200,000 ounces per year within 18 months of its fourth quarter 2008 start-up.(3) IRC holds a 1.5% NSR royalty on Gwalia Deeps.
On
The Johnson Camp copper mine produced 2.1 million pounds of copper during the three months ended
The Las Cruces copper project produced its first copper cathodes in
In the fourth quarter of 2009, production is expected to begin at Avocet Mining's Inata gold project (Belahouro) in
China Minmetals has announced that they are investigating the restart of the Avebury nickel project in
References:
1. Yukon Zinc Wolverine Report, July 21, 2009
2. www.saracen.com.au
3. St Barbara Ltd Financial Results for the Twelve Months Ended
June 30, 2008.
4. Canadian Press update, July 8, 2009
5. Nord Resources Corporation News Release, August 6, 2009
6. Inmet Mining Corporation Investor Presentation, BMO Capital Markets
2009 Global Metals & Mining Conference, February 23, 2009
7. Avocet Mining PLC, News Release, April 29, 2009
8. OZ Minerals press release dated May 6, 2009
Summary of Financial Information:
($ thousands, except per Three Months Ended Six Months Ended
share data, unaudited) June 30, June 30,
------------------- ------------------
2009 2008 2009 2008
--------- --------- --------- ---------
Statement of Operations
Royalty revenues $6,098 $8,610 $13,197 $18,893
Earnings from operations 134 2,198 54 4,998
Earnings (loss) before income
taxes (8,798) 1,465 (7,879) 4,713
Net earnings (loss) (7,908) 927 (4,603) 3,338
Basic and diluted net earnings
(loss) per share $(0.10) $0.01 $(0.06) $0.04
Statement of Cash Flows
Cash provided by (used in)
operating activities $2,921 $(467) $7,601 $5,931
June 30, December
2009 31, 2008
Balance Sheet --------- ---------
Total assets $370,024 $376,570
Shareholders' equity 291,507 297,280
Payable production and revenues on the Company's royalties and average
metal prices received were as follows:
Production and revenue (unaudited)
Payable Metal Production(1)
--------------------------------
Six
Quarter Ended Months Ended
June 30, June 30,
-------------------------------
Mine Commodity Royalty 2009 2008 2009 2008
--------------------------------------- --------------- ---------------
Voisey's Bay
Nickel 2.7% NSR 42,047 30,504 95,314 68,460
Copper 2.7% NSR 9,063 8,629 25,292 42,486
Cobalt 2.7% NSR 1,732 1,551 4,267 3,121
Southern Cross Gold 1.5% NSR 39 37 76 73
Skyline Thermal Coal 1.413 574 - 1,331 -
Gwalia Deeps Gold 1.5% NSR 31 - 54 -
Williams Gold 0.25% NSR 37 31 91 69
Meekatharra Gold 0.45% NSR - 13 - 24
Johnson Camp Copper 2.5% NSR 2,070 - 2,070 -
Revenue (thousands)
----------------------------------------
Six
Quarter Ended Months Ended
June 30, June 30,
-------------------- -------------------
Mine 2009 2008 2009 2008
-------------------- -------------------- -------------------
Voisey's Bay $ 4,646 $ 7,986 $ 10,579 $ 17,584
Southern Cross 545 478 1,051 1,007
Skyline 259 - 584 -
Gwalia Deeps 424 - 738 -
Williams 85 69 206 156
Meekatharra - 51 - 93
Johnson Camp 106 - 106 -
Avebury(2) - - (104) -
(1) Gold is in thousands of ounces; thermal coal is in thousands of
tonnes; 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. Production reports are received from the operators
of the properties.
(2) 2009 amount represents an adjustment upon settlement of revenue from
the fourth quarter of 2008.
Average metal prices realized (in US$) (unaudited)
Six
Quarter Ended Months Ended
June 30, June 30,
-------------------- -------------------
2009 2008 2009 2008
-------------------- -------------------
Gold, per ounce $ 926 $ 851 $ 919 $ 912
Thermal coal, per tonne 31.92 - 31.04 -
Nickel, per pound(1) 4.99 12.93 4.82 12.63
Copper, per pound(1) 1.80 5.00 1.66 3.09
Cobalt, per pound(1) 15.15 47.17 13.05 46.55
(1) Before transportation, smelting and refining costs.
Complete financial results are available on SEDAR, EDGAR and on the Company's website at www.internationalroyalty.com.
IRC invites you to participate in its Second Quarter 2009 Results conference call.
The Company will host this conference call
To participate in the conference call, please dial 416 644-3416 or toll free 800 733-7571. 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 2131 1601 followed by the pound # sign. The conference call will be archived from
International Royalty Corporation
International Royalty Corporation (IRC) is a global mineral royalty company. IRC holds more than 85 royalties including an effective 2.7% NSR on the Voisey's Bay mine, a sliding-scale NSR on the Pascua gold project in
On behalf of the Board of Directors,
INTERNATIONAL ROYALTY CORPORATION
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 in regards to the production start dates for the projects on which IRC has royalties, expected rates of production, lives of mine and expected cash costs. Financial information contained in this press release is unaudited. In certain cases, forward-looking statements can be identified by the use of words or phrases such as "plans", "expects", "anticipates", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", 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, develop, reopen, restart or successfully place their projects into production, including commodity prices, pending permits, and access to financial resources; maintain ongoing production; resolve labor, regulatory and operational issues and continue operations. IRC's forward-looking statements in this release regarding the effect of new tax legislation, benefits of tax legislation, projected royalty revenue, ongoing production and royalties, projected amortization and royalty tax exposure, anticipated governmental or regulatory impact on projects and the anticipated timing of the start of production on several of the projects on which it has royalties are 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, commodity prices, accuracy of project operator projections, governmental regulation, and project operators' 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
