Achievements to date in 2007 position Campbell for strong second
half MONTREAL, Aug. 3 /PRNewswire-FirstCall/ -- Campbell Resources
Inc. (TSX:CCH; OTC Bulletin Board:CBLRF,
http://www.campbellresources.com/) today announced financial and
operating results for the second quarter and six months ended June
30, 2007. During and subsequent to the second quarter, the Company:
- Raised $11 million in convertible debt and equity, including the
final $4 million to finance completion of development of the
high-grade Corner Bay copper deposit. - Awarded contract for Corner
Bay development to CMAC-Thyssen, who began mine development in
early May and to date has completed approximately 350 metres of the
700 metre decline. - Initiated dewatering and other preliminary
work on the Merrill Pit copper deposit while waiting for the
obtention of the environmental permit. - Implemented the Alimak
mining system to increase ore production and improve ground
conditions at Copper Rand with blasting of the first block and
completion of the second Alimak raise in July. - Increased gold
production by 26%, copper production by 9% and silver production by
25% over the first quarter of 2007. "We are very pleased with the
progress we are making in getting Copper Rand production to where
we feel it should be," said Andre Fortier, President and CEO. "With
the implementation of the Alimak mining system, which will increase
ore availability, decrease waste and improve ground control, we are
forecasting much improved results from Copper Rand in the second
half of the year. This increased production, along with high grade
ore from Corner Bay and the mining of the Merrill Pit, will go a
long way toward achieving our objecting of maximizing throughput at
the Copper Rand mill, decreasing unit costs and improving financial
performance." FINANCIAL RESULTS In the second quarter, consolidated
metal production improved sequentially, increasing over the first
quarter of 2007 as follows: gold production by 26%, silver
production by 25%, and copper production by 9%. On January 1, 2007,
the Company signed a concentrate sales agreement with Ocean
Partners UK Limited. Under terms of the agreement, Campbell
recognizes revenue once Ocean Partners takes delivery of the
concentrate. The first shipment will be made shortly, with at least
two more shipments of a minimum of 5,000 tons of concentrate to be
made before year end. As a result, $8.5 million of inventory,
representing concentrate produced by Campbell during the first and
second quarters of 2007 and stored at the Port of Quebec, will be
recognized as revenue during the third and fourth quarters.
Provisional payment of $7.6 million for concentrate inventory
shipped but not priced has been booked under current liabilities.
Inventories at June 30, 2007 were 5,511 ounces of gold and
2,018,582 pounds of copper, compared with 426 ounces of gold and
18,432 pounds of copper at the end of the second quarter of 2006.
For the second quarter, Campbell recorded a net loss of $4.3
million or $0.01 per share on net metal sales of $1.2 million. This
compares with a net loss of $1.8 million, or $0.02 per share, on
net metal sales of $3.5 million for the same period in 2006. Cash
used by operating activities was $1.2 million in the second quarter
of 2007, compared with $0.9 million in the second quarter of 2006.
For the first six months of 2007, the net loss was $6.1 million, or
$0.02 per share, on net metal sales of $2.8 million, compared with
a net loss of $4.1 million, or $0.04 per share, on net metal sales
of $5.9 million for the corresponding period in 2006. Cash used in
operating activities was $2.7 million for the first six months of
2007, compared with $1.6 million for the same period in 2006.
Mining costs in the second quarter were $4.5 million, compared with
$3.4 million in the second quarter of 2006. In the first six months
of 2007, mining costs were $9.6 million, versus $6.2 million in the
first six months of 2006. The increase in mining costs was
primarily due to the inclusion of expenses from the Copper Rand
Mine, which achieved commercial production on January 1, 2007.
Previously, results from Copper Rand were capitalized. Consolidated
mining expenses include the development of Alimak raises at both
the Copper Rand and Joe Mann mines, additional rehabilitation costs
and development at the Copper Rand Mine that will improve ground
conditions and improve production going forward, definition
drilling at both Copper Rand and Joe Mann, and training programs
for new employees. Joe Mann Mine In the second quarter of 2007,
metal production at Joe Mann increased over the first quarter of
2007 as follows: gold production increased by 31% to 3,952 oz,
despite a 22% quarter-over-quarter decrease in grade; copper
production increased by 84% to 122,065 pounds; and silver
production increased by 71% to 2,670 ounces. For the first six
months of 2007, Joe Mann produced 6,971 ounces of gold, 188,500
pounds of copper and 4,234 ounces of silver, compared with 7,729
ounces of gold, 282,829 pounds of copper and 5,701 ounces of silver
in the same period of 2006. Copper Rand Mine Gold and copper
production in the second quarter increased by 10% and 3%
respectively over the first quarter to 969 ounces of gold, with a
2% increase in grade, and 922,132 pounds of copper, despite an 8%
decrease in grade, quarter over quarter. Silver production totalled
2,210 ounces. For the first six months of 2007, Copper Rand
produced 1,817,338 pounds of copper, 1,852 ounces of gold and 4,560
ounces of silver, compared with 1,813,447 pounds of copper, 2,199
ounces of gold and 5,133 ounces of silver for the corresponding
period of 2006. OUTLOOK The Company is forecasting a much improved
second half of 2007 due to an expected increase in output at Copper
Rand, the start of mining at Corner Bay, and the delivery of the
long-awaited certificate of authorization by the Quebec Ministry of
Environment that will allow the start of mining at the Merrill
Island open pit. Copper Rand In line with Campbell's goal of
increasing throughput at the Copper Rand Mill, Alimak stope
preparation is progressing well. In addition, the ramp to bypass
the groundfall area will become operational by mid-August and will
facilitate access to levels 4500 and above. Development is also
progressing towards the 01-1 East Extension and the 44-4 veins. In
addition, construction of the ramp to the 4870 level has begun,
with the ore zone expected to be reached by November, and stope
preparation will be initiated shortly on level 3950 in order to
access additional ore. Corner Bay To date, the contractor
CMAC-Thyssen has excavated more than 350 meters of ramp. One
heading is approaching the 55-meter level where ore is expected to
be intersected by the end of August. The second heading is
progressing towards levels 85 and 100 meter from where a bulk
sample of about 40,000 tonnes of development ore at an expected
grade of 3.70% Cu will be extracted. In total, about 700 meters of
decline and 1,500 meters of horizontal development on three levels
will be done, and the milling of material from the bulk sample is
scheduled to begin in October of this year. Following the
extraction of the bulk sample, Campbell's intends to continue the
development of the project in order to bring it to production
stage. Exploration drilling has shown deep ore intersection at
1,250 meter below the surface with a 6.3 meter intercept (true
thickness) @ 9.27% Cu. To date, the Corner Bay project resources
are estimated at: measured: 181 000 T @ 5.07% Cu, indicated: 265
000 T @ 5.93% Cu, inferred: 1 441 000 T @ 6.76% Cu (Ref.: GEOSTAT
Technical Report, July 2006, available on SEDAR at
http://www.sedar.com/). Merrill Pit Site preparation at this former
producer is progressing well, with dewatering of the pit and
upgrading of the access road underway. Engineering work has begun
in order to begin mining as soon as the required environmental
permitting is granted. Joe Mann As previously announced, production
at Joe Mann mine should end at the end of August. The Company still
intends to complete the previously announced drilling program to
test the continuity of the Joe Mann orebody at depth, however this
has been delayed due to the shortage of diamond drill rigs. The
property will be kept on care and maintenance status until the
drilling program is completed. 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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June 30 December 31 2007 2006
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$ $ Assets Current assets Cash and cash equivalents 1,229 1,964
Restricted cash 1,095 2,784 Short-term investments 763 792
Receivables 2,402 1,591 Settlements receivable 11 5,413 Restricted
deposits and exchange agreement - 50,000 Production inventories
9,930 401 Supply inventories 3,684 3,844 Prepaids 992 1,194
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20,106 67,983 Amount receivable from Copper Rand/Portage
Restoration Fiduciary Trust 2,905 2,826 Restricted cash 1,158 1,158
Future income tax assets 1,462 1,484 Property, plant and equipment
37,671 37,135 Accrued benefit asset 4,584 4,427 Deferred charges
and other assets 259 129
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68,145 115,142
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Liabilities Current liabilities Short term loan 2,000 3,891
Accounts payable 11,406 13,973 Accrued liabilities 4,797 5,475
Provisional payments for concentrate inventory shipped and not
priced 7,629 - Current portion of long-term debt 15,854 65,287
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41,686 88,626 Asset retirement obligations 6,911 7,804 Long-term
debt 59 70 Future income tax liabilities 6,614 6,636
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55,270 103,136
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Shareholders' equity Capital stock 92,768 85,572 Warrants, stock
options and conversion rights 7,333 9,263 Contributed surplus 3,991
1,996 Deficit (91,138) (84,825) Accumulated other comprehensive
income (79) -
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12,875 12,006
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68,145 115,142
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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 Six months ended June 30 June 30
--------------------------------------------- 2007 2006 2007 2006
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$ $ Gross metal sales 1,482 3,840 3,196 6,484 Treatment charges and
transportation 282 367 404 634
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Net metal sales 1,200 3,473 2,792 5,850
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Expenses Mining 4,542 3,385 9,629 6,186 Depreciation and
amortization 577 778 1,389 1,541 General administration 628 692
1,362 1,316 Reorganisation and CCAA costs 102 306 207 589 Care and
maintenance 34 45 76 121 Exploration - (169) - (158)
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5,883 5,037 12,663 9,595
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Loss before the following items (4,683) (1,564) (9,871) (3,745)
Interest expense on short-term loan (86) (96) (161) (224) Interest
expense on long-term debt (288) (237) (568) (436) Interest income
20 9 28 16
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Loss from operations (5,037) (1,888) (10,572) (4,389) Other income
(expense) Other income 696 177 4,486 389
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Loss before taxes (4,341) (1,711) (6,086) (4,000) Income and mining
tax - (44) - (53)
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Net loss (4,341) (1,755) (6,086) (4,053)
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Weighted average number of common shares ('000) 396,829 108,213
372,925 108,213
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Loss per share undiluted and diluted (0.01) (0.02) (0.02) (0.04)
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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 Six months ended June 30 June 30
--------------------------------------------- 2007 2006 2007 2006
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$ $ Contributed surplus Balance, beginning of period 3,991 1,404
1,996 1,404 Warrants expired - - 1,995 -
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Balance, end of period 3,991 1,404 3,991 1,404
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Deficit Balance, beginning of period, as previously reported 86,797
45,928 84,825 43,630 Financial Instrument- recognition and
measurement - - 227 -
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86,797 45,928 85,052 43,630 Net loss (income) 4,341 1,755 6,086
4,053
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Balance, end of period 91,138 47,683 91,138 47,683
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Expressed in
thousands of Canadian dollars)
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Three months ended Six months ended June 30 June 30
--------------------------------------------- 2007 2006 2007 2006
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$ $ Net Loss 4,341 1,755 6,086 4,053 Other comprehensive income,
net of income tax: Net change in unrealized gain on short term
investments 50 - 79 -
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Comprehensive income 4,391 - 6,165 4,053
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CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED) (Expressed in
thousand of Canadian dollars)
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Three months ended Six months ended June 30 June 30
--------------------------------------------- 2007 2006 2007 2006
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$ $ Operating activities Net loss (4,341) (1,755) (6,086) (4,053)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities Depreciation and amortization 577 778 1,389
1,541 Loss (gain) on sale of short-term investment - 2 105 (262)
Gain on sale of property, plant and equipment (92) - (3,920) (1)
Devaluation of short-term investments - 8 - 10 Excess of pension
plan expenses over amount paid (14) 5 73 10 Amortization of
deferred charges and other assets 32 68 129 123 Deferred interest
accrued on long term debt 288 13 567 26 Accretion of long-term debt
- 58 - 115 Share issued in payment of services 75 - 156 - Asset
retirement obligation accretion expense 57 70 126 141
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(3,418) (753) (7,461) (2,350) Change in non-cash working capital
2,193 (130) 4,812 711
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Cash used in operating activities (1,225) (883) (2,649) (1,639)
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Financing activities Increase (decrease) in short-term loan (1,956)
(567) (1,891) (1,901) Issuance of capital stock 6,448 - 7,105 -
Deferred charges (195) (156) (259) (156) Decrease in long-term debt
(4) (3) (10) (6)
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Cash provided by (used in) financing activities 4,293 (726) 4,945
(2,063)
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Investing activities Restricted cash - (225) (3,053) (225) Increase
in property, plant and equipment (2,636) 1,277 (3,255) 1,591
Acquisition of short-term investments (20) - (20) (12) Proceeds on
sale of short-term investments - (2) 665 362 Proceeds on sale of
property, plant and equipment 92 1,475 2,632 1,515 Amount paid in
excess of the pension plan expenses capitalized to mining
properties - (222) - (444)
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Cash (used in) provided by investing activities (2,564) 2,303
(3,031) 2,787
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Decrease in cash and cash equivalents 504 694 (735) (915) Cash and
cash equivalents, beginning of period 725 163 1,964 1,772
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Cash and cash equivalents, end of period 1,229 857 1,229 857
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DATASOURCE: CAMPBELL RESOURCES INC. CONTACT: Campbell Resources
Inc.: Andre Fortier, President and Chief Executive Officer, (514)
875-9037, Fax: (514) 875-9764, ; Renmark Financial Communications
Inc.: Henri Perron: ; Philippe DeSerres: , (514) 939-3989, Fax:
(514) 939-3717, http://www.renmarkfinancial.com/
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