NYSE-A: ROY TSX: IRC DENVER, CO, Nov. 13 /PRNewswire-FirstCall/ --
International Royalty Corporation (NYSE-Amex: ROY, TSX: IRC) (the
"Company" or "IRC") today reported its 2009 third quarter financial
results. All figures are in United States dollars unless noted
otherwise. Complete financial results are available on SEDAR, EDGAR
and on the Company's website at
http://www.internationalroyalty.com/. Highlights for the third
quarter of 2009: - Royalty revenue was $6.6 million, compared to
$13.8 million for the quarter ended September 30, 2008. - Earnings
from operations were $1.3 million, compared to $3.0 million for the
quarter ended September 30, 2008. - Cash flow from operations was
$1.6 million, compared to $3.7 million for the quarter ended
September 30, 2008. - The Las Cruces copper mine began production
during the third quarter. The mine produced 3.0 million pounds of
copper cathode during the quarter and IRC received $125,000 on its
1.5% Net Smelter Return ("NSR") royalty. - The Johnson Camp copper
mine, which began production during the second quarter of 2009,
produced 2.6 million pounds of copper during the third quarter, a
28% increase over the prior quarter. - IRC successfully closed a
CA$57.6 million common share financing in July 2009. This share
issue provided IRC with $49.1 million in net proceeds, which exceed
the Company's senior secured debentures as of September 30, 2009 by
approximately $23.8 million. Financial Highlights Royalty revenues
for the three months ended September 30, 2009 were $6.6 million, as
compared to $13.8 million for the three months ended September 30,
2008. The decrease is mainly due to an $8 million decline in
revenue from the Voisey's Bay mine, offset by royalty revenue from
the Skyline thermal coal mine of $192,000, the Johnson Camp copper
mine of $175,000, the Gwalia Deeps gold mine of $411,000 and the
recently commissioned Las Cruces copper mine of $125,000. Revenue
recognized from the effective 2.7% NSR royalty on the Voisey's Bay
nickel, copper and cobalt mine was $4.9 million for the quarter
ended September 30, 2009 compared to $12.9 million in 2008. The
decrease in revenue from the Voisey's Bay mine was due to a
decrease in production of contained nickel in concentrate, a
decrease in production of contained copper in concentrate and
significantly lower nickel and copper prices in 2009 as compared to
2008. Total contained nickel in concentrates paid on the Voisey's
Bay mine during the quarter ended September 30, 2009 was
approximately 30.1 million pounds compared to approximately 53.2
million pounds for the quarter ended September 30, 2008. Total
contained copper in concentrates paid on the Voisey's Bay mine
during the quarter ended September 30, 2009 was approximately 9.9
million pounds compared to approximately 37.6 million pounds for
the quarter ended September 30, 2008. The average nickel price
during the quarter decreased from $9.29 per pound in 2008 to $7.16
per pound in 2009 and the average copper price during the quarter
decreased from $3.69 per pound in 2008 to $2.78 per pound in 2009.
Earnings from operations were $1.3 million for the third quarter of
2009 compared to $3.0 million for the third quarter of 2008. This
was due to a decrease in royalty revenues of $7.2 million, offset
by a decrease in amortization of $1.7 million, a decrease of
royalty taxes of $1.4 million and decreases in other expenses. In
the third quarter of 2008, the Company recorded impairments of
royalty interests in mineral properties and an impairment of
long-term assets totaling $1.7 million. There were no impairments
recorded in 2009. For the first nine months of 2009, earnings from
operations were $1.4 million compared to $8.0 million in 2008. This
was due to a decrease in royalty revenues of $12.9 million offset
by a decrease of royalty taxes of $3.0 million and decreases in
other expenses. In 2008, the Company recorded impairments of
royalty interests in mineral properties and an impairment of
long-term assets totaling $1.7 million. There were no impairments
recorded in 2009. Net loss for the third quarter of 2009 was
$575,000 compared to net earnings of $1.3 million for the third
quarter of 2008. This loss was primarily due to the revenue and
expense changes discussed above. The Company had a net foreign
currency loss of $927,000 in the third quarter of 2009, compared to
$904,000 in the third quarter of 2008. Cash flow from operations
for the quarter ended September 30, 2009 decreased by $2.1 million
to $1.6 million compared to the quarter ended September 30, 2008.
Bought Deal Financing On July 15, 2009, the Company completed an
offering of 14,100,000 common shares at a price of CA$3.55 per
common share for total gross proceeds of $44,728,000
(CA$50,055,000). The Company also granted to the underwriters an
over-allotment option of up to 2,115,000 common shares which were
fully subscribed on July 24, 2009 at a price of CA$3.55 per share
for gross proceeds of $6,926,000 (CA$7,508,000). Closing of the
over-allotment option brought total gross proceeds from the
offering to $51,654,000 (CA$57,563,000), and net proceeds to
approximately $49,461,000 (CA$55,118,000). IRC paid share issuance
costs of $2,193,000 (CA$2,445,000) related to the offering. The
number of common shares outstanding after the offering was
94,695,356 shares. Developments on Existing Royalties On October
16, 2009, IRC, as general partner of Labrador Nickel Royalty
Limited Partnership, filed a claim in the Supreme Court of
Newfoundland and Labrador against Vale Inco Limited ("Vale Inco")
and its wholly-owned subsidiaries, Vale Inco Atlantic Sales Limited
("VIASL") and Vale Inco Newfoundland and Labrador Limited ("VINL"),
related to the calculation of the Net Smelter Return ("NSR") on the
sale of nickel concentrates from VINL's Voisey's Bay mine to Vale
Inco. The claim requests damages for the alleged underpayment of
past royalties and an order to correct calculations of future
payments. The claim asserts that Vale Inco is incorrectly
calculating the NSR in two ways. First, the claim alleges that
payments made to VINL for the sale of concentrates, including
nickel concentrates, under the terms of non-arms length contracts
between Vale Inco, VIASL and VINL do not represent fair market
value and Vale Inco has incorrectly calculated the NSR paid to VINL
through these contracts. Second, the claim alleges that VINL has
deducted certain income taxes that it pays to the Province of
Newfoundland and Labrador in determining the NSR, which is not
allowable under the royalty agreement. If its claim is successful
successful, IRC estimates that its share of the royalty
underpayments up to June 30, 2009 would exceed $26.0 million,
before deduction of royalty taxes. Vale Inco, VIASL and VINL have
retained counsel and a response to IRC's claim is expected in due
course. On August 1, 2009, employees at the Voisey's Bay nickel
mine rejected a contract offer and elected to go on strike.(1) The
operator, Vale Inco, has continued to make shipments of stockpiled
concentrates through October 2009 and is expected to do so through
November 2009(2). However, it is unclear when all of these
shipments will be settled and IRC will receive its royalty thereon.
Due to the payment timing and price mechanisms in our royalty
contract with Vale, we expect the impact of the strike on IRC's
royalty to occur in the fourth quarter of 2009 and until the
resumption of operations. Likewise, we expect that there will be a
lag time from the resumption of operations until normal levels of
concentrate shipments are attained and settled. Because the IRC
royalty applies to pounds of metal produced, the impact of the
strike would be to defer revenue, not to reduce it. On July 13,
2009, employees at Vale Inco's Sudbury operation went on strike
shutting down its Sudbury smelter which processes most of the
mid-grade nickel concentrates from Voisey's Bay. Vale Inco's
Thompson smelter, which processes most of the Voisey's Bay
high-grade nickel concentrates, remains operational. The quantity
of high grade concentrates on hand at the Voisey's Bay site, at a
storage facility in Quebec City or in transit which might be
processed at Thompson is currently unknown. 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.(3) 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 in the first quarter of 2010. Initial gold
production is expected to be 120,000 ounces per year from the South
Laverton region.(4) IRC holds a 1.5% NSR royalty on this project.
Production at Gwalia Deeps for the first nine months of 2009
totalled 83,000 ounces of gold. Production is expected to ramp up
to 190,000 to 210,000 ounces per year by June 2012.(5) IRC holds a
1.5% NSR royalty on Gwalia Deeps. The Johnson Camp copper mine
produced 2.6 million pounds of copper during the three months ended
September 30, 2009. By the end of 2009, the operator expects to
ramp-up to an average production rate of 25 million pounds of
copper per year.(6) IRC acquired a 2.5% NSR royalty on the project
on March 31, 2009. The Las Cruces copper project was commissioned
in June 2009 and produced 3.0 million pounds of copper during the
three months ended September 30, 2009. Annual production at Las
Cruces is planned to average 72,000 tonnes of cathode copper over
the life of the mine.(7) IRC holds a 1.5% NSR royalty on the Las
Cruces project. In the first quarter of 2010, Avocet Mining's Inata
gold project (Belahouro) in Burkina Faso, West Africa is expected
to be commissioned. Avocet recently took over Wega Mining and is
expected to give the project access to sufficient resources for
timely completion and start up.(8) Annual production is expected to
be 120,000 ounces over the life of the mine.(9) IRC holds a 2.5%
NSR royalty on this project. China Minmetals has announced that
they are investigating the restart of the Avebury nickel project in
Tasmania, subject to the price of nickel being sustained around
recent levels of greater than $7.00 per pound.(10) IRC holds a 2.0%
NSR royalty on the Avebury project. References: 1. Canadian Press
update, July 8, 2009 2.
http://vinl.valeinco.com/MarineTrafficSchedule.asp 3. Yukon Zinc
Wolverine Report, July 21, 2009 4. http://www.saracen.com.au/ 5. St
Barbara Ltd Annual Report for the Twelve Months Ended June 30,
2009. 6. Nord Resources Corporation News Release, August 6, 2009 7.
Inmet Mining Corporation Investor Presentation, BMO Capital Markets
2009 Global Metals & Mining Conference, February 23, 2009 8.
Avocet Mining PLC, News Release, April 29, 2009 9.
http://www.avocet.co.uk/ 10. OZ Minerals press release dated May 6,
2009 Three Months Nine Months Summary of Financial Information:
Ended Ended ($ thousands, except per share data, September 30,
September 30, unaudited) ----------------- --------------- 2009
2008 2009 2008 ----------------- --------------- Statement of
Operations Royalty revenues $6,593 $13,791 $19,790 $32,684 Earnings
from operations 1,325 2,966 1,379 7,964 Earnings (loss) before
income taxes (575) 1,344 (8,454) 6,057 Net earnings (loss) (774)
460 (5,377) 3,798 Basic and diluted net earnings (loss) per share
$(0.01) $0.01 $(0.06) $0.05 Statement of Cash Flows Cash provided
by operating activities $1,582 $3,703 $9,183 $9,634 Decemb- June
30, ber 31, 2009 2008 ------------------ Balance Sheet Total assets
$418,744 $376,570 Shareholders' equity 338,485 297,280 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)
--------------------------------- Quarter Ended Nine Months Ended
September 30, September 30, -------------- ----------------- Mine
Commodity Royalty 2009 2008 2009 2008
-------------------------------------- ------ ------ --------
------- Voisey's Bay Nickel 2.7% NSR 30,102 53,150 125,416 121,610
Copper 2.7% NSR 9,934 37,616 35,226 80,102 Cobalt 2.7% NSR 1,787
2,325 6,054 5,446 Southern Cross Gold 1.5% NSR 35 38 111 111
Skyline Thermal Coal 1.413 657 261 1,988 261 Gwalia Deeps Gold 1.5%
NSR 29 - 83 - Williams Gold 0.25% NSR 58 31 149 100 Johnson Camp
Copper 2.5% NSR 2,645 - 4,715 - Las Cruces Copper 1.5% NSR 2,961 -
2,961 - Meekatharra Gold 0.45% NSR - 15 - 39 Avebury Nickel 2.0%
NSR - 1,291 - 1,291 Revenue (thousands)
------------------------------------- Quarter Ended Nine Months
Ended September 30, September 30, -----------------
------------------ Mine 2009 2008 2009 2008 -----------------
----------------- ------------------- Voisey's Bay $ 4,923 $ 12,937
$ 15,502 $ 30,521 Southern Cross 504 488 1,555 1,495 Skyline 315
123 899 123 Gwalia Deeps 411 - 1,149 - Williams 138 70 344 226
Johnson Camp 174 - 280 - Las Cruces 125 - 125 - Meekatharra - 58 -
151 Avebury (2) - 114 (104) 114 (1) Gold is in thousands of ounces;
thermal coal is in thousands of short tons; 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) Quarter Ended Nine Months Ended September 30, September
30, ----------------- ------------------ 2009 2008 2009 2008
----------------- ------------------- Gold, per ounce (1) $ 963 $
866 $ 933 $ 896 Thermal coal, per tonne 33.99 30.24 32.02 30.24
Nickel, per pound (1) 7.16 9.29 5.39 11.17 Copper, per pound (1)
2.78 3.69 1.99 3.37 Cobalt, per pound (1) 15.36 31.60 12.42 35.97
(1) Before transportation, smelting and refining costs. Complete
financial results are available on SEDAR, EDGAR and on the
Company's website at http://www.internationalroyalty.com/. IRC
invites you to participate in its Third Quarter 2009 Results
conference call. The Company will host its 2009 Q3 Results
conference call on Monday, November 16, 2009 at 11:00 AM (EST). To
participate in the conference call, please dial 1-800-814-3911 or
1-416-644-3419 or North American toll free 1-877-974-0447, at least
five minutes prior to the scheduled start of the call. A replay of
the conference call will be available until November 23, 2009.
Please dial 1-877-289-8525 and enter the following access code
4181211#. An archive of the conference call will be available on
IRC's website at http://www.internationalroyalty.com/. Peter Clarke
of SRK Consulting, a qualified person for the purposes of National
Instrument 43-101, has reviewed this press release. International
Royalty Corporation International Royalty Corporation (IRC) is a
global mineral royalty company. IRC holds 84 royalties including an
effective 2.7% NSR on the Voisey's Bay mine, a sliding scale NSR on
the Chilean portion of the Pascua-Lama project, a 1.5% NSR on the
Las Cruces project and a 1.5% NSR on approximately 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 NYSE Amex
(NYSE-A: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, 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, mine lives, litigation
claims, the effect of labour stikes on revenue and results of
operations, expected start up of projects 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
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, commodity prices, pending permits, and
access to financial resources; operators' abilities to maintain
ongoing production; and to resolve labor, regulatory and
operational issues and continue operations. IRC's forward-looking
statements in this release regarding 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 and litigation
claims 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
unless required by law. 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. DATASOURCE: INTERNATIONAL ROYALTY
CORPORATION CONTACT: Jack Perkins, Director of Investor Relations,
(303) 991-9500; Douglas B. Silver, Chairman and CEO, (303)
799-9020, ; http://www.internationalroyalty.com/; Renmark Financial
Communications Inc.: Barbara Komorowski: , (514) 939-3989, Fax:
(514) 939-3717; http://www.renmarkfinancial.com/
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