FNX Mining Company Inc.
TSX : FNX

FNX Mining Company Inc.

February 26, 2010 06:30 ET

FNX Reports $32.1 Million Net Earnings in Q4-2009

TORONTO, ONTARIO--(Marketwire - Feb. 26, 2010) - FNX Mining Company Inc. (TSX:FNX) ("FNX" or "the Company") reports unaudited operating and financial results for the fourth quarter and the full year 2009. The key operating and financial results for 2009 and comparable numbers for 2008 are shown in Table 1 and the unaudited financial statements are attached.

The Company recorded consolidated net earnings for the fourth quarter of $32.1 million ($0.31 per share) and a 2009 full year net loss of $40.1 million ($0.44 per share). Adjusting the 2009 full year results for previously announced 2009 non-cash write downs produces an adjusted net income of $49.1 for the year ($0.54 per share). The consolidated adjusted EBITDA for the fourth quarter and 2009 full year was $40.0 million and $69.2 million respectively.

Consolidated revenues in the fourth quarter were $108.6 million and were $238.2 million for the 2009 full year. Production from the Company's 100%-owned Sudbury Mining Operations generated revenues of $94.9 million in the fourth quarter and $185.2 million for the 2009 full year. Consolidated cash flow from operating activities before changes in non-cash working capital for the fourth quarter and 2009 full year was 29.7 million ($0.29 per share) and $41.5 million ($0.46 per share) respectively and, after changes in non-cash working capital, was ($1.1 million) and $22.5 million respectively. The lower than normal cash flows were a result of shutdowns at the Company's third party processing facilities, which resulted in delaying deliveries of third quarter ore to the fourth quarter and the subsequent delay of cash receipts for ore shipped in the second half of 2009 until the first half of 2010. This resulted in an accounts receivable of $85.7 million compared to $59.3 million in 2008 for the same period.

Terry MacGibbon, Chairman and CEO of FNX, stated that, "The Company started 2009 in a survival mode but through the hard work and dedication of its employees and improved commodity prices turned it into a very successful and profitable year. During 2009, the Company strengthened its balance sheet, met or exceeded guidance and advanced development of its high grade Levack Footwall Deposit ("LFD") toward scheduled commencement of production in mid-2010. The Company also changed its strategy from survival to growth with a mid-year re-vitalization and significant increase in its exploration efforts, which resulted in a promising discovery at the Victoria Property."

Mr. MacGibbon continued, "FNX's 2009 operating plan drastically reduced capital expenditures, conserved cash and focused on copper-precious metal production. In addition, disruptions at the Company's custom processor's Sudbury operations created challenges to the 2009 operating plan. In spite of these challenges, FNX met or exceeded its 2009 metal production targets while simultaneously improving our safety and environmental performance. Going forward we expect the Company to significantly increase its payable metal production levels with the addition of high margin production from the high grade Cu-Ni-precious metal rich LFD."

The cost to produce a pound of copper, net of by-product credits, for the 2009 full year was US$1.01, compared to US$1.15 for 2008. The average minesite cash revenue per ton of ore shipped for the fourth quarter and 2009 full year were $284 and $298 respectively, while the average minesite cash operating costs per ton of ore shipped were $146 and $160 respectively, yielding an average minesite cash operating margin per ton shipped of $138 and $138 respectively.

The cash balance increased during 2009, primarily as a result of $144.9 million received from a bought-deal financing that closed in September 2009. Cash and cash equivalents and working capital as at December 31, 2009 were $238.6 million and $262.3 million respectively, compared to $129.6 million and $130.1 million respectively as at December 31, 2008. Total assets were $974.9 million as at December 31, 2009, compared to $853.9 million at the end of 2008. The Company continues to have zero debt.

The Company's 2010 operating forecast guidance was provided in a December 23, 2009 news release.

Table 1 - (Unaudited) Financial and Operating Highlights Q4 2009 Q4 2008 YTD 2009 YTD 2008
Consolidated                
Revenue 108,589   48,723   238,193   378,062  
Net Earnings (Loss) (C$000) 32,124   (397,402 ) (40,075 ) (388,540 )
Basic and Diluted Earnings (Loss) per Share (C$) 0.31   (4.68 ) (0.44 ) (4.59 )
Cash and Cash Equivalents (C$000) 238,571   129,561   238,571   129,561  
Cash Flow from Operating Activities (C$000) (1,136 ) 7,966   22,507   77,166  
Cash Flow per Share (C$) (0.01 ) 0.09   0.25   0.91  
Adjusted EBITDA (C$000) 39,986   (28,223 ) 69,170   53,548  
                 
Mining Operations                
Total Revenue (C$000) 94,935   27,265   185,217   244,958  
Cash Operating Costs (C$000) 52,802   55,983   106,486   200,570  
Cash Operating Margin (C$000) 42,133   (28,718 ) 78,731   44,388  
Depreciation and Amortization (C$000) 4,970   12,496   10,319   47,472  
Operating Margin (C$000) 37,163   (41,214 ) 68,412   (3,084 )
Net Earnings (Loss) (C$000) 33,251   (391,364 ) (36,434 ) (370,430 )
Cash Flow From Operating Activities (C$000) (749 ) 278   21,928   68,699  
                 
Total Ore Sold (tons) 359,896   271,336   666,265   1,255,987  
Total Ore in Inventory (tons) 10,858   18,065   10,858   18,065  
Nickel Ore Sold (tons) 4,967   103,629   38,996   682,681  
Grade of Nickel Ore Sold (%Ni) 3.1   1.5   2.2   1.2  
Payable Metal Sold – Nickel (000 lbs) 1,671   3,011   4,430   13,140  
Copper Ore Sold (tons) 354,929   167,707   627,269   573,306  
Grade of Copper Ore Sold (%Cu) 2.7   5.3   3.2   3.7  
Payable Metal Sold – Copper (000 lbs) 16,500   11,501   34,494   35,214  
Payable Metal Sold – Total Precious Metals (oz) 34,150   16,801   59,094   52,034  
                 
Minesite Revenue per Ton Sold (C$) 284   100   298   195  
Cash Operating Costs per Ton Sold (C$) 146   206   160   160  
Minesite Cash Operating Margin per Ton Sold (C$) 138   (106 ) 138   35  
                 
Realized Nickel Price (US$/lb) 7.74   3.02   7.11   8.56  
Realized Copper Price (US$/lb) 3.17   0.66   2.65   2.53  
Exchange Rate (C$ /US$) 1.06   1.21   1.14   1.07  
                 
DMC Mining Services                
Total Revenue (C$000) 13,654   21,458   52,976   133,104  
Cash Operating Costs (C$000) 12,751   21,769   49,829   129,031  
Cash Operating Margin (C$000) 903   (311 ) 3,147   4,073  
Net Earnings (Loss) (C$000) (1,127 ) (6,038 ) (3,641 ) (18,110 )
Cash Flow from Operating Activities (C$000) (387 ) 7,688   579   8,467  
Certain of the above items are considered to be non-GAAP performance measures (see below)

Mining Operations

FNX shipped a total of 359,896 tons in the fourth quarter of 2009, resulting in a net reduction in third quarter inventories by165,000 tons. Payable metals for the 2009 fourth quarter were 16.5 million pounds of copper, 1.7 million pounds of nickel and 34,150 ounces of platinum, palladium and gold. Ore inventories as at December 31, 2009 were 10,858 tons, compared to 176,194 tons at the end of the third quarter of 2009. The total ore shipped in 2009 full year was 666,265 tons of primarily copper-precious metal ore: 347,842 tons from the Podolsky Mine and 318,423 tons from the Levack Complex. This compares to the 2009 full year budget of 679,000 tons and 2008 full year ore shipments of 1,255,987 tons. The decline in the total tons of ore shipped from 2008 to 2009 resulted from the suspension of all primary nickel production at the end of 2008. Tables 2 and 3 show a summary of the Podolsky Mine and Levack Complex production data.

Table 2 – Production and Sales Summary Three months ended Dec 31 Year ended Dec 31
Podolsky Mine 2009 2008 2009 2008
Copper Ore Inventory (tons) 4,310 3,034   4,310 3,034
Copper Ore Sold (tons) 184,650 82,017   347,842 243,239
Grade of Copper Ore Sold (%Cu) 4.2 6.8   4.8 6.4
Payable Metal Sold          
  Copper (000s lbs) 13,013 9,110   28,187 25,538
  Nickel (000s lbs) 836 596   1,968 1,800
  TPM (ozs) 15,140 8,202   27,738 24,072
Metal Sales and Costs          
  Minesite Revenue ($/ton of ore sold) 361 162   368 377
  Cash Operating Cost ($/ton of ore sold) 168 248   182 233
  Minesite Cash Operating Margin ($/ton of ore sold) 193 (86 ) 186 144
Table 3 – Production and Sales Summary Three months ended Dec 31 Year ended Dec 31
Levack Complex 2009 2008 2009 2008
Copper Ore Inventory (tons) 4,900 15,031   4,900 15,031
Nickel Ore Inventory (tons) 1,648 -   1,648 -
Copper Ore Sold (tons) 170,279 85,690   279,427 330,067
Nickel Ore Sold (tons) 4,967 103,629   38,996 682,681
Total Ore Sold 175,246 189,319   318,423 1,012,748
Grade of Copper Ore (%Cu) 1.1 1.3   1.2 1.1
Grade of Nickel Ore (%Ni) 3.1 1.5   2.2 1.2
Payable Metal Sold          
  Copper (000s lbs) 3,488 2,391   6,308 9,676
  Nickel (000s lbs) 835 2,415   2,462 11,340
  TPM (ozs) 19,010 8,599   31,356 27,962
Metal Sales and Costs          
  Minesite Revenue ($/ton of ore sold) 203 74   222 151
  Cash Operating Cost ($/ton of ore sold) 125 189   136 142
  Minesite Cash Operating Margin ($/ton of ore sold) 78 (115 ) 86 9

Payable metals produced in 2009 full year totaled 34.5 million pounds of copper, 4.4 million pounds of nickel and 59,094 ounces of platinum, palladium and gold. In spite of a very challenging 2009, payable metal production essentially met or exceeded the original 2009 guidance of 35.2 million pounds of copper, 3.7 million pounds of nickel and 58,000 ounces of precious metals recovered from slightly fewer tons of ore shipped.

Production totals for 2009 exclude the fourth quarter shipment of 3,445 tons of LFD pre-production, development ore from the metallurgical sample taken in 2008, yielding 0.5 million pounds of copper, 0.1 million pounds of nickel and 540 ounces of precious metals. The value of this pre-production, development LFD ore was credited to the LFD capital.

The 2009 full year capital expenditures totaled $64.2 million, compared to $167.7 million in 2008 and were $6.0 million less than the 2009 budget of $70.2 million. The 2009 capital expenditures are detailed in Table 4. The Company incurred $6.9 million of Canadian Exploration Expenditures ("CEE") of the total $15.0 million raised from the flow-through common share issuance, which amount is included in the 2009 capital expenditures.

Table 4 – 2009 Capital Expenditures  
  $000s
   
Levack Complex 5,278
Podolsky Mine 13,333
LFD 36,654
Victoria 6,909
Falconbridge Footwall 416
Other Properties 509
Corporate 57
DMC 1,027
  64,183

Sudbury Operations and Exploration in 2009 had a record low Total Medical Injury Frequency Rate ("TMIFR") of 5.03 per every 200,000 hours worked, compared to 8.00 in 2008 full year. FNX realized a considerable improvement in its environmental performance in 2009. The water quality issues experienced in 2008 concerning ammonia were eliminated in 2009 through enhancements to the environmental management system and process changes in the Podolsky water treatment plant.

Development

Development of the LFD remained the highest corporate priority in 2009, which led to the decision during the year to reduce pre-production development ore production to ensure uninterrupted development of the LFD. As a result of this decision, total development footage related to the LFD was 7,987 ft in 2009, which was 117% of the footage budgeted in the original development plan for 2009. By the end of 2009, the main access ramp for the LFD had reached the 3800 Level and was slightly ahead of schedule. The main LFD access ramp is scheduled to reach the 4000 Level crosscut from Xstrata's Craig Mine by the second quarter of 2010. The main LFD access ramp will continue to be driven deeper throughout 2010 in order to further access the LFD at depth and to provide drill platforms for reserve and resource definition.

Development at the Podolsky Mine continued to focus on internal connection of the main access ramp to facilitate future stope sequencing and operational flexibility. The main access ramp was completed late in 2009, as planned. Total development advance at the Podolsky Mine in 2009 was 5,304 ft.

At the McCreedy West Mine, the 2009 development plan was completed as scheduled for a total of 3,012 ft. The 2009 development plan focused on the PM Deposit to support future production.

Exploration

The original reduced exploration budget for 2009 received a significant boost from a $15.0 million flow-through share financing completed in April 2009. Approximately $6.9 million in flow-through funds were spent in 2009 and the balance of $8.1 million is budgeted for 2010. The initial flow-through expenditures in 2009 focused on the Victoria Property, which resulted in the announcement in January 2010 of the discovery of multiple Offset Dyke deposits. There are currently five surface drill rigs deployed at Victoria engaged in expanding the new discovery and targeting several additional untested downhole geophysical anomalies.

In 2009, exploration drilling totaled 84,969 ft in 28 completed holes and five holes in progress. This does not include 93,532 ft completed in 2009 at the LFD, 59,994 ft at the Podolsky Mine and 70,862 ft at the McCreedy West Mine to support production planning and expand reserves and resources.

The non-production exploration expenditures for 2009 focused on the Victoria Offset Dyke targets and tested the footwall potential at both the Podolsky and Falconbridge Footwall properties. Current exploration plans for 2010 include extensive drilling at the Victoria, Podolsky and Falconbridge Footwall properties and also include drill programs at the Kirkwood Property and the Nickel Lake joint venture located on the Foy Offset Dyke. The total non-production exploration budget for 2010 is approximately $16 million.

DMC Mining Services

Operating revenues for DMC in 2009 totaled $53.0 million, which generated a net loss of $3.6 million, compared to revenues of $133.1 million and a net loss of $18.1 million in the 2008 full year. DMC had a cash operating income and net operating cash flow for 2009 of $3.1 million and $0.6 million respectively, compared to $4.1 million and $8.5 million for fiscal 2008. As at December 31, 2009 cash and cash equivalents and working capital were $8.7 million and $14.3 million, respectively.

In spite of DMC's US Division completing its third consecutive year without a lost time injury, DMC's Total Medical Injury Frequency Rate in 2009 climbed to 3.72 from 2.32 in 2008 per every 200,000 hours worked.

The mining contracting business in 2009 faced severe challenges in the wake of the global credit crisis and DMC positioned itself to manage in the downturn. There was a modest recovery underway in the last part of 2009 and the US portion of the business was profitable during the year. At the end of 2009, DMC had a $26.9 million work backlog and was bidding on several large, long term contracts in North America. Both the number and size of the projects DMC is currently being asked to bid has improved going into 2010. The DMC forecast calls for a return to modest profitability in 2010.

Investments

Investments totaled $16.7 million at December 31, 2009, an increase from the $4.0 million at December 31, 2008.

FNX accounts for its investment in Gold Wheaton using the equity method and is, therefore, required to include in earnings FNX's share of Gold Wheaton's earnings or loss for the period and the Company's investment therein is adjusted by an equivalent amount. For the quarter ended December 31, 2009, FNX's 25% share of the earnings of its equity investee, Gold Wheaton, was $0.7 million, and for the full year 2009, was a loss of less than $0.1 million. At December 31, 2009 the market value of FNX's 360,000,000 Gold Wheaton shares was approximately $131.4 million. The carrying value of FNX's equity investment in Gold Wheaton totaled $143.0 million at December 31, 2009, including $46.9 million representing the carrying value of the Gold Wheaton note receivable.

Subsequent to year end, Gold Wheaton announced on February 2, 2010 the consolidation of its common shares on a one for ten basis. The consolidation was effective February 4, 2010 and resulted in FNX owning 36 million common shares in Gold Wheaton with a market price of $2.43 per common share on February 4, 2010.

Share Capital and Warrants

During the fourth quarter of 2009, share capital and warrants increased by less than $0.1 million as a result of the exercise of 3,000 stock options. Year to date share capital increased by $153.3 million as a result of the equity bought deal which closed on September 9, 2009, the exercise of 15,500 stock options and the issuance of 2,173,914 flow-through shares in April.

As at December 31, 2009, outstanding shares were 102,016,191 and stock options to purchase 3,552,667 common shares at a weighted average price of $13.45 per share were outstanding. Including 332,959 outstanding deferred share units, the fully diluted share total was 105,901,817 as at December 31, 2009.

Non-GAAP Performance Measures

Minesite revenue per ton of ore sold, cash operating cost, cash operating margin, operating margin, cash operating cost per ton of ore sold, minesite cash operating margin per ton of ore sold, cash flow per share, EBITDA, adjusted EBITDA and adjusted net income are included in this news release because these statistics are key performance measures that management uses to monitor performance. These performance measures do not have a meaning within GAAP and, therefore, amounts presented may not be comparable to similar data presented by other mining companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

Forward-Looking Statement

Certain information included in this press release, including information relating to future financial or operating performance and other statements that express management's expectations or estimates of future performance constitute "forward-looking statements." Such forward-looking statements include, without limitation, (i) estimates of future capital expenditures; (ii) estimates regarding timing of future development and production; and (iii) estimates of future costs towards profitable commercial operations. Where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Such risks include, but are not limited to, interpretation and implications of drilling and geophysical results; estimates regarding timing of future capital expenditures and costs towards profitable commercial operations. Other factors that could cause actual results, developments or events to differ materially from those anticipated include, among others, increases/decreases in production; volatility in metals prices and demand; currency fluctuations; cash operating margins; cash operating cost per pound sold; costs per ton of ore; variances in ore grade or recovery rates from those assumed in mining plans; reserves and/or resources; the ability to successfully integrate acquired assets; operational risks inherent in mining or development activities, and legislative factors relating to prices, taxes, royalties, land use, title and permits, importing and exporting of minerals and environmental protection. Accordingly, undue reliance should not be placed on forward-looking statements. These forward-looking statements are made as at the date hereof and the Company does not undertake any obligation to update publicly or revise any such forward-looking statements or any forward-looking statements contained in any other documents whether as a result of new information, future events or otherwise, except as may be required under applicable securities law. For a more detailed discussion of such risks and other factors, see the Company's latest filings with Canadian securities regulators.

Conference Call

FNX will be hosting a fourth quarter and full year conference call on February 26, 2010 at 10:00 am Eastern Time.

CONFERENCE CALL numbers are:

Live in North America:
Toll-Free Access: 1-888-789-9572 or 416-695-7806
Enter Passcode: 7852335#

Replay Access information:
Toll-Free Access: 1-800-408-3053 or 416-695-5800
Passcode: 5071353#
Available until March 31, 2010 at Midnight (Toronto Time)

Slides for the conference call may be accessed on the Company's website at www.fnxmining.com. There will be no transcript available for the conference call.

Note: The unaudited balance sheet, statement of operations and statement of cash flow are appended to this news release.

Consolidated Balance Sheets   
As at December 31    
(in thousands of Canadian dollars) (Unaudited)
 
2009 2008
  $   $  
Assets        
Current        
  Cash and cash equivalents 238,571   129,561  
  Accounts receivable 85,744   59,324  
  Inventory 1,232   2,307  
  Prepaid and other assets 1,523   1,504  
  327,070   192,696  
Investments 16,743   4,009  
Investment in Gold Wheaton 143,015   215,620  
Property, plant and equipment 481,567   435,114  
Reclamation deposits 6,485   6,485  
  974,880   853,924  
         
Liabilities        
Current        
  Accounts payable and accrued liabilities 42,677   36,136  
  Deferred revenue 22,106   26,433  
  64,783   62,569  
         
Long-term deferred revenue 357,102   368,969  
Mine closure and site restoration 5,716   5,393  
Future income and resource taxes 58,191   60,499  
  421,009   434,861  
  485,792   497,430  
Shareholders' equity        
  Share capital 711,153   571,750  
  Warrants 13,873   -  
  Contributed surplus 18,542   13,741  
  Deficit (260,655 ) (220,580 )
  Accumulated other comprehensive income (loss) 6,175   (8,417 )
  489,088   356,494  
  974,880   853,924  
       
Consolidated Segmented Balance Sheets
As at December 31, 2009  
(in thousands of Canadian dollars) (Unaudited)
Mining DMC Total
Assets $ $ $
  Cash and cash equivalents 229,901 8,670 238,571
  Accounts receivable 74,988 10,756 85,744
  Other current assets 1,820 935 2,755
  306,709 20,361 327,070
Investments 16,743 - 16,743
Investment in Gold Wheaton 143,015 - 143,015
Property, plant and equipment 459,934 21,633 481,567
Reclamation deposits 6,485 - 6,485
  932,886 41,994 974,880
Liabilities      
  Accounts payable and accrued liabilities 37,391 5,286 42,677
  Deferred revenue 21,367 739 22,106
  58,758 6,025 64,783
Long-term deferred revenue 357,102 - 357,102
Mine closure and site restoration 5,716 - 5,716
Future income and resource taxes 57,439 752 58,191
  420,257 752 421,009
  479,015 6,777 485,792
       
       
As at December 31, 2008 Mining DMC Total
Assets $ $ $
  Cash and cash equivalents 120,131 9,430 129,561
  Accounts receivable 44,459 14,865 59,324
  Other current assets 2,823 988 3,811
  167,413 25,283 192,696
Investments 4,009 - 4,009
Investment in Gold Wheaton 215,620 - 215,620
Property, plant and equipment 409,718 25,396 435,114
Reclamation deposits 6,485 - 6,485
  803,245 50,679 853,924
Liabilities      
  Accounts payable and accrued liabilities 28,469 7,667 36,136
  Deferred revenue 25,456 977 26,433
  53,925 8,644 62,569
Long-term deferred revenue 368,969 - 368,969
Mine closure and site restoration 5,393 - 5,393
Future income and resource taxes 59,374 1,125 60,499
  433,736 1,125 434,861
  487,661 9,769 497,430
Consolidated Statements of Operations    
(in thousands of Canadian dollars except earnings per share) Three months ended December 31 Year ended December 31
(Unaudited) 2009 2008 2009 2008
  $   $   $   $  
Operating revenues 108,589   48,723   238,193   378,062  
                 
Operating expenses                
  Expenses, excluding depreciation and amortization 65,553   77,752   156,315   329,601  
  Depreciation and amortization 6,084   14,202   14,899   56,151  
  71,637   91,954   171,214   385,752  
  36,952   (43,231 ) 66,979   (7,690 )
Expenses                
  Administration 2,654   2,436   9,703   14,348  
  Capital taxes -   -   -   (1,803 )
  Depreciation 165   229   816   853  
  Stock-based compensation 1,931   637   7,410   4,056  
  Asset impairments -   487,362   57,935   501,490  
  Dilution loss -   -   31,238   -  
  Other expenses (income) (5,617 ) (74 ) (10,265 ) (10,814 )
  (867 ) 490,590   96,837   508,130  
Earnings (loss) before taxes and other 37,819   (533,821 ) (29,858 ) (515,820 )
Income and resource taxes recovery (expense) (6,435 ) 137,010   (10,189 ) 128,880  
Share of income (loss) of equity investee 740   (591 ) (28 ) (1,600 )
Net earnings (loss) for the period 32,124   (397,402 ) (40,075 ) (388,540 )
Basic earnings (loss) per share 0.31   (4.68 ) (0.44 ) (4.59 )
Diluted earnings (loss) per share 0.31   (4.68 ) (0.44 ) (4.59 )
       
Consolidated Segmented Statements of Operations
(in thousands of Canadian dollars) (Unaudited)
For the three months ended December 31, 2009
Mining DMC Total
  $   $   $  
             
Operating revenues 94,935   13,654   108,589  
             
Operating expenses            
  Expenses, excluding depreciation and amortization 52,802   12,751   65,553  
  Depreciation and amortization 4,970   1,114   6,084  
  57,772   13,865   71,637  
  37,163   (211 ) 36,952  
Expenses            
  Administration 2,654   -   2,654  
  Depreciation 165   -   165  
  Stock-based compensation 1,777   154   1,931  
  Other expenses (income) (5,601 ) (16 ) (5,617 )
  (1,005 ) 138   (867 )
Earnings (loss) before taxes and other 38,168   (349 ) 37,819  
Income and resource taxes recovery (expense) (5,657 ) (778 ) (6,435 )
Share of income (loss) of equity investee 740   -   740  
Net earnings (loss) for the period 33,251   (1,127 ) 32,124  
       
For the year ended December 31, 2009 Mining DMC Total
  $   $   $  
Operating revenues 185,217   52,976   238,193  
             
Operating expenses            
  Expenses, excluding depreciation and amortization 106,486   49,829   156,315  
  Depreciation and amortization 10,319   4,580   14,899  
  116,805   54,409   171,214  
  68,412   (1,433 ) 66,979  
Expenses            
  Administration 9,703   -   9,703  
  Depreciation 816   -   816  
  Stock-based compensation 6,648   762   7,410  
  Asset impairments 57,935   -   57,935  
  Dilution loss 31,238   -   31,238  
  Other expenses (income) (9,857 ) (408 ) (10,265 )
  96,483   354   96,837  
Earnings (loss) before taxes and other (28,071 ) (1,787 ) (29,858 )
Income and resource taxes recovery (expense) (8,335 ) (1,854 ) (10,189 )
Share of income (loss) of equity investee (28 ) -   (28 )
Net earnings (loss) for the period (36,434 ) (3,641 ) (40,075 )
       
Consolidated Segmented Statements of Operations
(in thousands of Canadian dollars) (Unaudited)
For the three months ended December 31, 2008
Mining DMC Total
  $   $   $  
             
Operating revenues 27,265   21,458   48,723  
             
Operating expenses            
  Expenses, excluding depreciation and amortization 55,983   21,769   77,752  
  Depreciation and amortization 12,496   1,706   14,202  
  68,479   23,475   91,954  
  (41,214 ) (2,017 ) (43,231 )
Expenses            
  Administration 2,436   -   2,436  
  Depreciation 229   -   229  
  Stock-based compensation 405   232   637  
  Asset impairments 480,574   6,788   487,362  
  Other expenses (income) 61   (135 ) (74 )
  (483,705 ) (6,885 ) (490,590 )
Earnings (loss) before taxes and other items (524,919 ) (8,902 ) (533,821 )
Income and resource taxes recovery (expense) 134,146   2,864   137,010  
Share of income (loss) of equity investee (591 ) -   (591 )
Net earnings (loss) for the period (391,364 ) (6,038 ) (397,402 )
For the year ended December 31, 2008 Mining DMC Total
  $   $   $  
             
Operating revenues 244,958   133,104   378,062  
             
Operating expenses            
  Expenses, excluding depreciation and amortization 200,570   129,031   329,601  
  Depreciation and amortization 47,472   8,679   56,151  
  248,042   137,710   385,752  
  (3,084 ) (4,606 ) (7,690 )
Expenses            
  Administration 14,348   -   14,348  
  Capital taxes (1,803 ) -   (1,803 )
  Depreciation 853   -   853  
  Stock-based compensation 2,206   1,850   4,056  
  Asset impairments 490,574   10,916   501,490  
  Other expenses (income) (14,332 ) 3,518   (10,814 )
  491,846   16,284   508,130  
Earnings (loss) before taxes and other items (494,930 ) (20,890 ) (515,820 )
Income and resource taxes recovery (expense) 126,100   2,780   128,880  
Share of income (loss) of equity investee (1,600 ) -   (1,600 )
Net earnings (loss) for the period (370,430 ) (18,110 ) (388,540 )
     
Consolidated Statements of Cash Flow
(in thousands of Canadian dollars)
Three months ended December 31 Year ended December 31
(Unaudited) 2009 2008 2009 2008
  $   $   $   $  
Operating activities                
  Net earnings (loss) for the period 32,124   (397,402 ) (40,075 ) (388,540 )
  Non-cash items                
    Depreciation and amortization 6,249   14,431   15,715   57,004  
    Stock-based compensation 1,060   1,742   4,828   5,161  
    Future income and resource taxes 5,643   (125,485 ) (56 ) (114,926 )
    Asset impairments -   487,362   57,935   501,490  
    Dilution loss -   -   31,238   -  
    Amortization of Gold Wheaton deferred revenue (8,970 ) (2,363 ) (15,837 ) (5,575 )
    Gain on disposal of shares -   -   -   (8,461 )
    Gain on Gold Wheaton common shares acquired -   (2,700 ) -   (2,700 )
    Mark-to-market and accretion of Gold Wheaton     note receivable (5,935 ) 14,846   (11,721 ) 14,846  
    Provision for doubtful accounts -   -   -   4,242  
    (Increase) decrease in value of investments held-for-trading 144   19   (607 ) 746  
    Share of (income) loss of equity investee (740 ) 591   28   1,600  
    Other 89   (3,016 ) 86   698  
  29,664   (11,975 ) 41,534   65,585  
  Net change in non-cash working capital (30,800 ) 19,941   (19,027 ) 11,581  
  (1,136 ) 7,966   22,507   77,166  
Financing activities                
  Common shares issued 22   -   144,926   2,814  
  Warrants issued -   -   14,427   -  
  Transaction costs on shares and warrants issued -   -   (8,354 ) -  
  Bank indebtedness – advance -   -   -   45,837  
  Bank indebtedness – payment -   -   -   (45,837 )
  22   -   150,999   2,814  
Investing activities                
  Investments -   -   -   (10,000 )
  Property, plant and equipment (20,235 ) (28,126 ) (64,183 ) (167,751 )
  Proceeds on sale of gold equivalent units -   -   -   175,000  
  Gold Wheaton transaction costs -   -   -   (4,366 )
  Proceeds from disposal of investments -   -   -   21,441  
  (20,235 ) (28,126 ) (64,183 ) 14,324  
Effect of exchange rate changes on cash 1,718   (1,348 ) (313 ) 97  
Change in cash and cash equivalents for the period (19,631 ) (21,508 ) 109,010   94,401  
Cash and cash equivalents – beginning of period 258,202   151,069   129,561   35,160  
Cash and cash equivalents – end of period 238,571   129,561   238,571   129,561  
       
Consolidated Segmented Statements of Cash Flow
(in thousands of Canadian dollars) (Unaudited)
For the three months ended December 31, 2009
Mining DMC Total
Operating activities $ $ $
  Net earnings (loss) for the period 33,251 (1,127) 32,124
  Non-cash items      
    Depreciation and amortization 5,135 1,114 6,249
    Stock-based compensation 905 155 1,060
    Future income and resource taxes 5,657 (14) 5,643
    Amortization of Gold Wheaton deferred revenue (8,970) - (8,970)
    Mark-to-market and accretion of Gold Wheaton note (5,935) - (5,935)
    Share of (income) loss of equity investee (740) - (740)
    Other 194 39 233
  29,497 167 29,664
  Net change in non-cash working capital (30,246) (554) (30,800)
  (749) (387) (1,136)
Financing activities      
 Common shares issued 22 - 22
Investing activities      
 Property, plant and equipment (19,259) (976) (20,235)
Effect of exchange rate changes on cash - 1,718 1,718
Change in cash and cash equivalents for the period (19,986) 355 (19,631)
Cash and cash equivalents – beginning of period 249,887 8,315 258,202
Cash and cash equivalents – end of period 229,901 8,670 238,571
For the year ended December 31, 2009 Mining DMC Total
Operating activities $   $   $  
  Net earnings (loss) for the period (36,434 ) (3,641 ) (40,075 )
  Non-cash items            
    Depreciation and amortization 11,135   4,580   15,715  
    Stock-based compensation 4,065   763   4,828  
    Future income and resource taxes 315   (371 ) (56 )
    Asset impairments 57,935   -   57,935  
    Dilution loss 31,238   -   31,238  
    Amortization of Gold Wheaton deferred revenue (15,837 ) -   (15,837 )
    Mark-to-market and accretion of Gold Wheaton note (11,721 ) -   (11,721 )
    Share of (income) loss of equity investee 28   -   28  
    Other (694 ) 173   (521 )
  40,030   1,504   41,534  
  Net change in non-cash working capital (18,102 ) (925 ) (19,027 )
  21,928   579   22,507  
Financing activities            
  Common shares and warrants issued – net 150,999   -   150,999  
Investing activities            
  Property, plant and equipment (63,157 ) (1,026 ) (64,183 )
Effect of exchange rate changes on cash -   (313 ) (313 )
Change in cash and cash equivalents for the period 109,770   (760 ) 109,010  
Cash and cash equivalents – beginning of period 120,131   9,430   129,561  
Cash and cash equivalents – end of period 229,901   8,670   238,571  
       
Consolidated Segmented Statements of Cash Flow
(in thousands of Canadian dollars) (Unaudited)
For the three months ended December 31, 2008
Mining DMC Total
  $   $   $  
Operating activities            
  Net earnings (loss) for the period (391,364 ) (6,038 ) (397,402 )
  Non-cash items            
    Depreciation and amortization 12,725   1,706   14,431  
    Stock-based compensation 405   232   637  
    Future income and resource taxes (123,694 ) (1,791 ) (125,485 )
    Asset impairments 480,574   6,788   487,362  
    Mark-to-market and accretion of Gold Wheaton note 14,846   -   14,846  
    Other (2,122 ) (4,242 ) (6,364 )
  (8,630 ) (3,345 ) (11,975 )
  Net change in non-cash working capital 8,908   11,033   19,941  
  278   7,688   7,966  
Financing activities -   -   -  
Investing activities            
  Property, plant and equipment (25,516 ) (2,610 ) (28,126 )
Effect of exchange rate changes on cash -   (1,348 ) (1,348 )
Change in cash and cash equivalents for the period (25,238 ) 3,730   (21,508 )
Cash and cash equivalents – beginning of period 145,369   5,700   151,069  
Cash and cash equivalents – end of period 120,131   9,430   129,561  
       
For the year ended December 31, 2008 Mining DMC Total
  $   $   $  
Operating activities            
  Net earnings (loss) for the period (370,430 ) (18,110 ) (388,540 )
  Non-cash items            
    Depreciation and amortization 48,325   8,679   57,004  
    Stock-based compensation 3,311   1,850   5,161  
    Future income and resource taxes (113,135 ) (1,791 ) (114,926 )
    Asset impairments 490,574   10,916   501,490  
    Other 5,493   (97 ) 5,396  
  64,138   1,447   65,585  
  Net change in non-cash working capital 4,561   7,020   11,581  
  68,699   8,467   77,166  
Financing activities            
  Common shares issued 2,814   -   2,814  
Investing activities            
  Investments (10,000 ) -   (10,000 )
  Property, plant and equipment (157,704 ) (10,047 ) (167,751 )
  Proceeds on sale of gold equivalent units 175,000   -   175,000  
  Gold Wheaton transaction costs (4,366 ) -   (4,366 )
  Proceeds from disposal of investments 21,441   -   21,441  
  24,371   (10,047 ) 14,324  
Effect of exchange rate changes on cash -   97   97  
Change in cash and cash equivalents for the period 95,884   (1,483 ) 94,401  
Cash and cash equivalents – beginning of period 24,247   10,913   35,160  
Cash and cash equivalents – end of period 120,131   9,430   129,561  

Contact Information

  • FNX Mining Company Inc.
    Terry MacGibbon
    Chairman and Chief Executive Officer
    416-628-5929
    or
    FNX Mining Company Inc.
    Ronald P. Gagel
    Senior Vice President and Chief Financial Officer
    416-628-5929
    or
    FNX Mining Company Inc.
    David Constable
    Vice President Investors Relations
    416-628-5929
    info@fnxmining.com
    www.fnxmining.com