Copper Mountain Mining Corporation

Rodney A. Shier – Chief Financial Officer James C.

O’Rourke – Chief Executive Officer

Mark Turner – Scotia Bank Adam Low – Raymond James Stefan Ioannou – Haywood Securities, Inc. Peter S.

Campbell – Jennings Capital, Inc. Gary Lampard – Canaccord Genuity

Thank you Elizabeth. After opening remarks by management in which we will review the business and operational results from fiscal year end 2013, we’ll open the lines to all participants as noticed by Elizabeth for questions.

Please note that the comments made today that are not of a historical factual nature may contain forward-looking statements. This information by its nature is subject to risks and uncertainties that may cause the stated outcomes to differ materially from the actual outcomes.

Please refer to the bottom of our latest news release for more information. I will now turn the call over to Jim O’Rourke, for his remarks.

Thank you, Rod. Good morning everyone and thank you for joining us.

Today we will discuss the year end results of operation for Copper Mountain Mining Corporation. I’ll briefly summarize the financial results, providing an update on various activities after which Rod will provide financial details for the 2013 fiscal year.

2013 was a turn around year for the company, by year end mill operating time increased 10.5% to budget level and the mill tonnage was up 31.6% from the first quarter. Copper production was up by the same 31% by year end.

Earlier in the year we confirmed a key issue that had to be overcome to meet our mill throughput in resolving copper production target. Plant production test confirms a sufficient pre-crushing of our mill operates above the design capacity of 35,000 tonne a day.

Short-term pre-crushing measures were implemented during the year resulting in increased mill throughput and provided the cost for us to proceed with the $40 million permanent secondary crusher as our long-term solution. During the 2013 fiscal year the company completed a total of 12 shipments of concentrate generating $233.1 million in revenue after provisional pricing adjustments.

The mine produced a total of 66.2 million pound of copper, 21,600 ounces of gold and 320,400 ounces of silver. Gross profit for the year was $31 million.

The total cash cost per pound sold net of precious metal credit was $2.22. Site cost per pound of copper produced net of precious metal credit was $1.70 for the period.

Copper production was above 17% below our initial guidance, the largest negative variance due to the hard ore and resulting low mill throughput. During the year the mine faced two incidents of grind mill motor transformer failures, during the repair period the mill continued to operate at a rate in excess of 20,000 tonnes per day with only one of our two ball mills operating.

Although the transformer outage was a disappoint event for the operation, it demonstrated that the ball mills circuit is capable of processing at a rate in the 40,000 tonne per day range. Short-term initiatives of pre-crushing ore in December resulted in the mill achieving an average of 32,800 tonne per day, additional operating costs associated with the extra blasting of three temporary portable crushers in December totaled about $1.3 million.

Mining activities progressed well during the year from both Pit 2 and Pit 3 areas and averaged about 166,000 tonnes per day mined for the year. A total of 57 million tones were mined during the year, which included 16.6 million tones of ore and 40.1 million tones of waste.

The average strip ratio 2.4 to 1 as compared with average 2.1 strip ratio projected for the current life of mine plan. Mine operating costs averaged $1.69 per tonne mined, which includes the extra temporary flows of cost for improved fragmentations to assist the mill throughput.

For the year ending December 31 the average head grade was 0.35% copper which was on track with our guidance. Looking at 2014, about 65% of the ore is scheduled from Pit 3 areas to provide an average grade for the year in the range of 0.375% copper, the concentrator milled a total of 10.1 million tonnes of ore as compared to 9.12 million tonnes of ore in 2012.

Copper recovery and mill operating time were from the previous period compared to the previous period averaged 85.3% and 87.9% respectively as compared to 79.5% and 82.1% for the year-ended December 31, 2012. Although 2013 was still a challenging year significant gains purchased during the year, and we ended the year on a positive note.

Copper production increased 31% from 14.2 million pounds in Q1 to 18.6 million pounds in Q4. Operational results improved quarter-over-quarter in production throughput and mill availability.

The overall improvement in the mill was a direct result of the resolution of a number of supplier related equipment issues that saw plant availability improve from a low of 86% in early 2013 to a high of 95% for the month of December 2013. However, the main reason for the increased SAG throughput annual production as a result of the temporary crushing measures taken by the company during the year.

At the start of the year, the company increased the powder factor in the blasting of ore to increase the fragmentation and create more fines in the feed to the SAG Mill. By year end, the company had added three independent portable crushing plants ahead of the SAG Mill at a cost of approximately $1.3 million per month.

By year end these facilities collectively were able to crush approximately 10,000 tonnes per day of ore to minus 2 inch size range for the SAG Mill feed and resulted in increased mill throughput and copper production for the year. Copper production increased from 14.2 million pounds of copper in the first quarter to 18.6 million pounds in the fourth quarter.

During the 2013 fiscal year, it became clear that a secondary crusher was required to achieve our target design capacity of 35,000 tonnes per day on a consistent basis. The mine had tried all possible low costs fixes but simply put, the mill was still underperforming and we needed to finance $30 million to arrange our portion of the $40 million capital necessary for the installation of a permanent secondary crusher.

An engineering study was completed to verify the options of adding a permanent secondary crush on our full scale production tests, which was conducted during the year further confirmed that a SAG mill size was critical to achieving our target throughput levels on a consistent basis. Currently, contraction of the secondary crush and it’s well underway the foundations were on schedule and the component pieces are scheduled to arrive at the mine for assembly in the first quarter of 2014.

The project is on track to be completed by mid-summer. The company has ordered virtually all of the equipment and has engaged in the same construction managers and general contractor that we used to build the original facilities that came into completion on time and on budget.

Looking forward to 2014 we are focused on maximizing our production of the mine and meeting our guidance of 80 million to 90 million pounds of copper which represents a 29% increase above our 2013 levels. For the month of January, the mine produced 7.1 million pounds of copper with the short-term crushing strategies.

Reported well crusher produced above 30% of the mill feed or about 10,000 tonne per day to the minus 2-inch level. With the installation of the secondary crusher 100% of the SAG Mill feed will be crushed to 80% passing 1.5 inch material.

Our estimates indicate that the pre-crushing will allow us to operate in the plus 35,000 tonnes per day range on a consistent basis. In addition, I’m sorry this will be the major improvement and will strengthen our financial position from the increased production.

I’ll answer any specific questions at the end of the period for those wishing more detail. I would like now to turn it over to Rod to discuss the financial results.

Thank you Jim. For the year ended December 2013, the company recognized revenue after pricing adjustments and smelter charges of $233 million based on an average realized copper price of 325 per pound, this compares to net revenues after pricing adjustments and smelter charges of $229 million based on an average provisional copper price of $361 per pound for the year ending December 31, 2012.

The mine shipped and sold a total of 64.8 million pounds of copper, 24,000 ounces of gold, and 301,000 ounces of silver for the year ended December 31. Compares to a total of 59.2 million pounds of copper, 20,000 ounces of gold, and 402,000 ounces of silver during the year ended December 31, 2012.

Increase in sales volume is the result of the mill processing more ore and overall improve deficiencies in the mill that were implemented during the year that Jim touched on. Cost of sales for the year ended December 31, 2013 was $202 million, which resulted in a gross profit of $31 million, this compared to cost of sales of $174 million and a gross profit of $56 million for the prior year.

The increase in cost during the year is resulted company processing more ore the introduction of high energy blasting in the mine and additional temporary crushing measures added throughout the year. General and administrative expenses for the year ended December 31, 2013 were $5.5 million compared to the $4.2 million for the year ended December 31, 2012.

Non-cash share-based compensation reflected an expense of $0.4 million for the year ended December 31, 2013 as compared to an expense $2.4 million for the year ended June 31, 2012. The decrease in non-cash share-based compensation was a result of the full investing of stock options issued in prior periods.

For the 2013 year ended, the company recorded finance income of $0.4 million and finance expense of $8.8 million as compare with finance income of $1.6 million and finance expense of $8.4 million for the year ended December 31, 2012. Finance expense primarily consists of interest on loans and amortization of financing fees.

For the year ended December 31, 2013, the company recognized a non-cash unrealized foreign exchange loss of $19.1 million compared with a non-cash unrealized foreign exchange loss of $3.7 million for the year ended December 31, 2012 which primarily relates for the company’s debt that is denominated in U.S. dollars.

During the year, the company recognized non-cash unrealized gain on the interest rate swap of $2.2 million as compared with non-cash unrealized gains on the interest rate swap of $4.8 million for the prior year. This relates to the reevaluation of the interest rates swap liability required on the company under the company’s loan agreements.

It should be noted that these adjustments to income are required under the IFRS and are non-cash in nature as outlined in the company’s statements of cash flow. For the 2013 fiscal year the company recorded the deferred income and resource tax expense of 3.6 million as compared to a deferred income and resource tax expense of $2.8 million for the prior year.

This all resulted in a net loss attributable to shareholders for the year-ended December 31, 2013 at $3.4 million per share as compared to net income of $40.4 million or $0.30 per share for the prior year. If we takeout all the accounting non-cash items, the company reported adjusted earnings for the year ended December 31, 2013 a $14.5 million or about $0.15 per share.

This compares with adjusted earnings of $41 million or $0.42 per share for the prior year. As at December 31, 2013 the company had cash on hand of about $42.3 million and had a working capital of about $42.6 million in addition to the cash and cash equivalents at year-end.

The company had $10.6 million in receivables from concentrate sales under accounts receivable, as stated in note five, to the notes to the financial statements. It should also be noted that Mitsubishi Materials had not yet contributed their share of the secondary crusher capital at December 31, 2013, which would add an additional $10 million to the year-end cash balances.

On a hedging front I would like to remind everyone on the line today that we have no commodity hedging in place, and an extremely attractive debt financing package. In conclusion 2013 was a turnaround year for the company, because we’ve addressed our throughput issues and have delivered improved operational results quarter-over-quarter, with the addition of the secondary crusher we are confident that our production targets will be met.

I would now like to open up the lines for questions that people may have. Okay Elizabeth we can open the lines for questions.

Hey, good morning guys, and congrats on the 7.1 million pounds in January. Just I guess my first question on the $10 million that Mitsubishi didn’t or hadn’t I guess contributed at the year-end do you have that now or is that part of the – or in the JV?

Yes, they have their board meeting, I think with it January 28 or something, and they approved it at that time.

Okay and then so that cash is now in sort of the operating sub for use as a working capital for you guys.

Yes, it will be, we are just tightening up some agreements.

Okay. And then just I guess questions more in the shorter term before you get the secondary crusher in.

January’s production number I guess certainly to think that the throughput is still probably above the 32,800 achieved in December, I’m just wondering if in the next I guess really month here if there is going to be sort of significant, sort of planned down time that may impact that calendar per day throughput?

No I think, we’ve given guidance of 32,000 tonne a day for the first six months for the year, until permanent crusher is in place and then 35,000 ton day thereafter, with regard to the operating time, operating time has been doing very well we have a excellent crew on site now we’ve really strengthened our management team and we’re in about our fifth months where we’re close to our 92% operating time. We now schedule we have all our liner changes everything central for the year and everything seems to be running very smoothly.

So you know…

Okay and then just be the last question I know in that $40 million for the secondary you have some capitals aside for I guess upgrades for the mill and discharge screen, is there anything else or further in the back half of the plant that you have contemplated changing or that needs sort of any I guess tweaks with new capital?

Not really nothing, nothing of substance, I think as I mentioned, unfortunately we had those transformer failures, but we have run well over 40,000 ton a day with no extra equipment needed and having said that though, we are strengthening or expanding our expert system, we’re putting additional cameras on float shelves [ph] and things like that upgrading various things, with regard to grades you mentioned and that type of thing, those are directly operating cost, those definitely not capital.

Okay, all right thank you very much. I’ll get back in queue.

Thanks.

Good morning everyone.

Good morning Adam

Great production in January. Question on the portable crushers, so I think you guys stay in the path where they have potential throughput of about 12,000 tonnes per day, I think in December they were operating about 10,000 tonnes per day its not quite fully utilized, do you see them getting to for utilization in the near future?

Yes, one of the problems with portable crusher a you will appreciate these are little gravel pit crushers and their operating time is typically about 50%, 55% of the time and the team at the mining are working on that to improve, but two of those little portable crushers are actually contract crushers and our guys have been working with them to help to minimize their down time and get a little more production from them. So our people at the site are quite optimistic they are going to get around 12000 tonne a day total out of the portable crushing.

How soon do you think you could get to that mark?

I think they are now virtually.

Okay and I saw in the press release today you guys included some photos of the site prep for the secondary crusher, just wondering how you guys feel about the site prep right now in terms of the schedule on where you are right now versus where you need to be.

There is no question we have a tight schedule. The construction itself is going very well.

One area where we are a little tight is with regard to all of conveyor deliveries and changes to the conveyor system, but the crusher, I think we put out photos, it’s arrived in Halifax, it’s been loaded on the train. It’s scheduled to be here next month.

So everything in that regard is going smoothly. The foundations will be ready by the time the crusher gets there or if setting on the foundation.

So we don’t…

All right, thanks very much.

Much difficult there...

Much appreciated thanks.

Okay.

Great, thanks guys again yes good to see the production up in January as well. Most of my questions have been answered, but just wondering in terms of looking at this year as a whole, do you see the grade bouncing around much coming out of the pits, so is it sort of a flat line number that we should be assuming or how does that head grade look?

Well we are moving and more of the ore will be coming from Pit 3. I think, I said about 65% and it’s just part of our mining schedule.

It should be averaging in the average range of about 0.375% but there is no question month-by-month there will be ups and downs.

Okay, and is that sort of 65% from Pit 3 is that over the course of the year, sort of blended together or is there sort of part of the year that’s going to be focused on Pit 3 versus Pit 2?

No, I will be pretty steady.

Okay.

It will be pretty steady.

Okay, great thanks very much guys.

Okay.

Thank you and good morning everybody. Thanks so much for taking my phone call.

Just a couple of questions. Jim, I believe you’ve said that the mining cost per ton was a $1.69; did you give of the milling cost?

No, we didn’t.

Are you able to?

It’ll be in sort of plus, overall milling for the total site…

Yes.

Will be in the sort of 16 plus range.

Okay, and of course that would be expected to come down over the course of 2014.

Well, that’s correct. I mean it’s directly dependent on denominator which is the tonnes milled right.

Yes. So in that case, what would your expectation be not average for the year, but exiting 2014, what do you think would be your target to be able to get us milling costs?

Well I guess it should be proportionate to the tonnage.

Yes.

Our milling costs in terms of dollars per month are pretty steady, and so the cost per ton is just a more directly proportionate to the tonnes going through?

Okay, and so your milling cost per months being constant is on what order of magnitude?

I don’t think we’ve got into a lot of detail on that Peter.

Okay, no problem Jim. Thank you very much.

Just a couple of questions that I should probably know, but I can’t lay my hands on right now. What are the terms of the provisional pricing?

Hi, Peter provisional pricing we get 90% advanced three days after loading.

Yes.

And then you have – each year they get to elect either one nama [ph] for final pricing.

Yes.

So how its working now is it’s a three nama and so we get 90% after three days it takes about three weeks to get to Japan, and then it’s considered an invoice at that time, and then you have final pricing three months later.

Three months after that?

That’s for copper, precious metal are one month after.

Okay, one month. And then I know that you don’t hedge your production, but any event you are seeing movements in the copper price, do you ever consider hedging your provisional pricing?

Yes, it’s been discussed, but that certainly we are a copper company and our investors like the leverage to copper and right now we’ve taken position not to hedge.

Yes, I was just thinking in terms of hedging though, the provisionally priced portion basically.

Yes, it’s been discussed. At this point in time, we are not in a position to be doing that hedging.

Okay, yes no, absolutely not with copper prices being rather constant here. And then – go ahead.

I was going to say Peter I mean right now I think it’s in backwardation so.

Yes.

We would be fixing a price lower than the current price.

Absolutely I was just thinking about if anything should develop in the copper market, if guys were open to like such a strategy but again only talking about the provisionally priced portion not your overall production?

Sure. And then my final question is you’ve given 2014 guidance on almost everything what is the current TCRC benchmark that you are being like priced against?

Generally 80 and 8.

Okay, perfect. That’s all that I have today.

Thank you very much.

Good morning everyone. Could you please remind me what the status is at the moment of the mine plan, I thought that work was being done on the mine plan towards the end of last year, which could support a revised reserve number, is that true and how is that work progressing if it is true?

Yes, well every year we do our mine plans, usually what we do, we do the one year plan on a month-to-month basis, five year plan on a quarter-by-quarter basis and the 10 year plan on a year-by-year basis. There is no question we did do the complete optimization of the total pit we redid everything, previous to this we were pretty well working off a feasibility study, but this year we did – we have our own in-house life of mine plan, it’s not substantially different from the feasibility study.

So we really haven’t done anything with it.

So I’m sure there must be some differences, can we assume that when the IAS comes out I guess at the end of March that work will be reflected in the reserve statement at that time?

Yes that was our target Gary. And as Jim said if we can get that work done before then it should – will be reflected.

Okay thanks very much. That’s all I have got.

Okay well I would just like to thank everyone on the line today for listening in to our 2013 conference call. We look forward to a very prosperous 2014.

Thank you very much. Bye.