Copper Mountain Mining Corporation

Rod Shier - Chief Financial Officer Jim O’Rourke - Chief Executive Officer

Tom Meyer - CIBC World Markets Mark Turner - Scotia Bank Steve Parsons - National Bank Financial Jackie Przybylowski - Desjardins Capital Markets Adam Low - Raymond James Peter Campbell - Jennings Capital

Thank you Chris. After opening remarks by management in which we will review the business and operational results for the 2014 third quarter we’ll open the lines to all participants as noticed by Chris.

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 2014 third quarter results of operation for Copper Mountain Mine. I’ll briefly summarize the financial results and provide an update on various activities after which Rod will provide financial details for the 2014 third quarter.

The 2014 third quarter continued to show improvement in the operation. This quarter marks our eight consecutive quarter of improved copper production.

Year to date copper production remains on track to meet our guidance level of 80 million to 90 million pounds of copper for the year, commissioning of the new secondary crusher is gone well. And there is operating at rate that allows the mill to reach its design capacity of 35,000 ton per day.

Additional fine tuning of the crusher in the SAG Mill is a top priority to maximize the Mill throughput. Performance to date provides confident of the milling rate above 35,000 ton per day are achievable.

During the period the company completed a total of five shipments of copper concentrate generating $82.5 million in revenue and of precious metal treatment charges and provisional pricing adjustments. Mine production, the mine produce 21.7 million pound of copper, 6100 ounces of Gold and 124,100 ounces of Silver.

This quarter production is in-line with guidance and is 22% increase in copper production over the same period last year. The total cash cost for the three months ended September 30 2014 was US$1.73 per pound copper sold net of precious metal credit.

While the site cost for the period were US$1.19 per pound produce net of precious metal credit. During this quarter the site unit cash cost of copper were reduced mainly because of the reduce cost from discontinuing the temporary pre-crushing.

The favorable Canadian dollar exchange rate plus the higher copper head grade that contributed to the record production of 21.7 million pound of copper. Mining activities continued with a majority of ore from Pit 3 during the quarter.

More specifically mining continued with the Stage 2 push back in Pit 3 and start of the Stage 3 push back to the West side of Pit 3. Mining activities in the Pit 2 area continued on the South West of the Pit.

During the quarter a total of 15.3 million tons of material was mined. Including 4.5 million tons of ore and 10.8 million tons of waste.

The average strip ratio was 2.4 to 1 as compared to an average of 2 to 1 strip ratio for the current life of mine plan. During the third quarter the mine moved and average of approximately 178,000 tons of material per day.

The new dispatch system is working very well and has helped us attain improved truck factor and improved utilization of our mining equipment. Preliminary numbers indicate that the productivity gains from the dispatch system are equivalent to having an additional haulage truck.

Mining fleet continues to enjoy favorable mechanical availabilities and the mine operating cost for 2014 third quarter averaged $1.74 per ton move. For the three months ended September 30 the average head grade was 0.42% copper which was our above our guidance levels of 0.375% copper.

A significant portion of the ore will continue to be mine from Pit 3 during the balance of 2014 with ore grades planned to be slightly higher than guidance. The mill continued to make steady progress with increasing throughput as a result of the addition of the new secondary crushing facility and improved copper production with higher ore grade from Pit 3.

2014 third quarter reflects two months of operating with the new secondary crusher. During the 2014 third quarter the concentrator processed 2.8 million tonnes of ore as compared to 2.7 million tonnes of ore for the same period last year.

On a tonnes per day basis, the 2014 third quarter averaged 30,700 tonnes per day which represents a 5.5% improvement from the third quarter last year. The new secondary crusher is reducing 100% of the mill feed to the 2 inch size range.

The supplier of the crusher has a few modifications to allow the crusher to provide an even finer product. We continue to optimize the newly installed crusher and SAG mill operation to maximize mill throughput and mill throughput to-date in November has averaged about 37,000 tonnes per day.

Commissioning of the secondary crusher continues to meet expectations. The crusher processed its first ore on August 4th and is operating at the designed rate of 3,000 tonnes per hour.

During the month of August and September, all of the mill feed was crushed for the new facility. Minor changes have to be overcome initially, nuisance [stoppages] of the conveyer bear belt feeding the crusher caused by the detection of tramp metal adversely affected the crushers operating time and in September magnets were installed on the feed conveyer to remove the tramp metal.

And additional permanent metal detector with a plough has recently been installed as an added long term solution for metal removal. Copper recovery for the third quarter averaged 83% while mill operating time for the quarter was 90.5%.

Recoveries during this quarter were slightly lower than the prior quarter partly because of the treatment of some near surface oxidized ore in the Pit 2 pushback. A safety milestone for the mine was reached at the end of the quarter over 400 days without a lost time incident.

This equates to over 1 million employee hours worked without a lost time incident. There is a major achievement and a test to the team’s dedication to ensuring a safe production environment.

We’re looking forward to completing the last quarter of 2014 on a strong note with improved throughput from the optimized secondary crusher and continued favorable head grades from Pit 3. We’re confident that the mine will deliver production results within the forecasted guidance levels of 80 million to 90 million pounds of copper.

Plans for any specific questions at the end of the period and if you are wishing more detail I’ll turn it back over to Rod.

Thank you, Jim. For the three months ended September 30, 2014, the company recognized net revenues of 82.5 million after pricing adjustments and smelter charges based on sales of 25.3 million pounds of copper, 7,800 ounces of gold and 133,800 ounces of silver with an average realized copper price of US$3.17 per pound.

This compares to net revenues after pricing adjustments and smelter charges of 67.6 million based on our average provisional copper price of US$3.22 for the three months ended September 30, 2013. Despite decreasing copper prices net revenues were up for this quarter by almost 22% as compared to the same period last year because of increased copper sales.

Third quarter sales also include a recovery of proceeds from the ship loading error which occurred during the quarter. Cost of sales for the three months ended September 30, 2014 was 63.7 million which resulted in a gross profit of 18.8 million as compared to cost of sales of 51.2 million which resulted in the gross profit of 16.4 million for the three months ended September 30, 2013.

The increase in cost as compared to the third quarter of 2013 is a result of the mine processing more ore. General and administrative expenses for the three months ended September 30, 2014 were 1.7 million as compared to 1.2 million for the prior period of -- compared to period of 2013.

Non-cash share based compensation reflected in the expense of 0.4 million for the three months ended September 30, 2014 compared to an expense of 0.02 million for the three months ended September 30, 2013. The increase in non-cash share based compensation as a result of divesting the stock options in the period and an increase in the [DSGL] expenses as a result of the higher share price of company.

For the three months ended September 30, 2014 the company recorded finance income of 0.04 million and finance expense of 1.9 million as compared with finance expense of 0.03 million and finance expense of 2.1 million for the three months ended September 30, 2013. Finance expense primarily consists of interest on loans and the amortization of financing fees.

For the three month ended September 30 2014 the company recognize a non cash unrealized foreign exchange loss of 15.3 million compared with a non cash unrealized foreign exchange gain of 6.6 million for the three months ended September 30 2013 which primarily relates the company’s debt as it denominated in U.S dollar. During the third quarter the company recognized a non-cash unrealized gain on interest swap of 0.2 million as compared with the non-cash unrealized loss on the interest rate swap of 0.3 million for the three months ended September 30, 2014 which is related to the revaluation of the interest rate swap liability required under the companies loan agreement.

It should be noted that this adjustments to income are required under IFRS and our non-cash in nature as outlined in the company’s MD&A and statement of cash flow. For the three months ended September 30 2014 the company recorded a current and differed income and resource tax expense of 3.7 million as compared with a current and differed income in resource tax expense of 4.3 million for the three month ended September 30 2013.

This all resulted in a net loss attributable to shareholders of the company for three month September 30 2014 of 2.8 million or $0.02 per share as compared to a net income of 11.2 million or $0.11 per share for the three September 30 2013, if we take all the accounting non-cash items out, the company reported on an adjusted EBITDA of 61.7 million an adjusted earnings of 18.2 million or about $0.15 per share for the three months ended September 30 2014 compared with adjusted EBITDA of 42.9 million and adjusted earnings of 0.5 million or nil per share for the three months ended September 30 2013. As of September 30 2014 the company had cash on hand of 17.8 million and receivable of 32.8 million.

The increase in receivable over the prior period as result is having the last shipment during the quarter occurring on September 29. Funds of approximately 15 million for these shipments was received very early in October.

On the hedging front I’d 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 we look forward to completing the year on a strong note and are confident our production targets will be met.

I will now like to open the lines up for questions that people may have.

Thank you and good morning I’m just curious on the sales front October 8 the press release you sold approximately 37,000 wet metric ton and then we learned that it was 46,000 dry metric tonnes today. So with transpire since October 8 till today?

Yes Tom Meyer, good question and we do apologies for that clarity error. The last shipment the guys -- we neglected to include that last shipment in the total on that initial release on October 8 as well as the miss loaded Cargo.

So upon going to our quarterly review that was detected and hence they increase in sales figure number.

Okay and then on the material -- oversized material that was still in the stock pile ahead of SAG Mill. Have you worked through that completely or is there is still residual over size that has to go through the SAG in Q4.

We are pretty well worked all through it now in the last couple of months. We’ve had dozers on the pile.

We may be get a little short of that periodically. We’re still getting a little bit a course material from the crusher the throw on the crusher 88 millimeter and the opening of [30] millimeter on the close side setting.

So we can get some three inch material through there.

But does that occur -- obviously you are making the adjustment on it but is that disruptive to the overall like flotation side?

Don’t affect the flotation side it does effect the SAG Mill tonnage periodically if we get a slug of it and but it’s just a question working through it. We’re averaging in often the order of 37,000 ton a day now with situation.

I think I did mentioned that the supplier have some minor modification to make to the crusher and we have a conference call today with them to see what we’re going to do and that would minimize plus three inch material that tends to flow through the open side sending.

Okay thanks I’ll live it there.

Thanks, I’ll ask my pretty obviously sales revenue question there. So just in terms of the operation into [MEE], MD&A that just came out here.

Looks like the actual onsite operating costs were both CAD41 million in the quarter, so about 14.15 per tonne milled. Just wondering if you can give us sort of any clarity on that?

Because clearly there is sort of a, it sounds like a $2 sort of improvement on that metric in the quarter. So not all the improvement of the cash cost here just sort of grade related.

But if you could break that down maybe like a little more clarity on mining versus maybe some of the savings that you’re seeing already at the mill?

Well, I guess, obviously, we’ve been working on trying to minimize our cost and I think as I mentioned in my talk that we had three things. Number one, we’ve discontinued the temporary crushing which was about 1.3 million a month.

But then again we’re running secondary crusher so that’s about 300,000. So we’ve got a net gain there.

Also the Canadian dollar is helping us when you talk about cost in terms of U.S. terms anyway on the copper.

And also what we’ve found is that some of our supplies for example our grinding balls previously we’re coming from the U.S. and we’re priced in U.S.

dollars and we’re now switch to Canadian supplier in Canadian dollars and also they’re cheaper. So we have been making considerable strides in reducing the cost.

And we’ll continue to do so.

Maybe I’ll follow up sort of offline with some granularity if I could. I guess the next sort of question so you’ve been making and there is still some modifications to come on the crusher or secondary crusher.

Have some of the changes that you were planning on in terms of the SAG mill actually been implemented? Like have you moved that far down on the literal process of what kind of increased throughput here, like in terms of grade sizing that type of thing in the SAG?

I think you noticed that the operating time for the quarter was 90.5% I believe which is little under our plan. And part of the reason why it is that, with the crusher coming on we want to make a number of changes in the SAG mill.

So we had a fairly lengthy shutdown where we did change the grades. We have now half grades or 65 millimeter in the other half for 85.

We were going to go to 65 and we just want to go halfway first. But, some other changes were made in the mill -- in the SAG mill, with regard to the pulp lifters and also some liners in preparation for operating with the finer product.

So, we don’t anticipate that that will be a necessity in the future and we’ll get back for 92% operating time. But we have made changes.

Okay. But there is still I guess more to come in the mill too as you figure out the secondary?

Correct.

And then just one last question so I understand I think some I mean the nuance you care. So the mill is doing sort of around 37,000 tonnes per day so far this month.

Has the secondary crusher been able to keep up with that because we -- I mean I guess have been announced at a few times we know that when you get that 2 inch material it slices the mill better than 30,700 tonnes per day. So just wondering if you’ve been achieving that and maintain sort of your crushed ore stock piles where you’d like them to be.

Yes. In fact months to-date in the secondary we’ve averaged 42,230 in the secondary crusher, 42,000 tonnes a day.

Great, thanks guys.

Thanks a lot. Good morning guys.

Question for Jim first of all, it sounds like there is going to be ore proportion of Pit 3 or in the mine plan for Q4, and then for higher grades. Are there some changes to the mine sequencing here?

And is there a chance that you will see the higher Pit 3 ratios into 2015?

We’re just working on the mine plans right now, Steve. And I think as you know, there is some other considerations there.

We have the Virginia Pit, the Oriole Pit, which are higher grade pits. And we’re looking at sequencing them in for next year.

But in fact we’re going up to the site today to talk about it. But the schedule for next year is really mainly from Pit 2.

We’re doing the pushback of phase 3 on Pit 3 but we should be finished in the bottom part of Pit 3 this year.

Got it, okay. And just as it relates to the Canadian dollar what percentage of your onsite and offsite costs are in C dollars?

There is direct cost -- U.S. dollar direct cost and we’re probably running on average you’ve got in the order of about 15% to 18% or to probably consider direct U.S.

dollar item. But then you’ve got U.S.

dollar influenced item such as still could be steel, could be fuel those types of things. So you’re probably in that 30%-35% that are held in U.S.

influence cost.

Got it.

Of our biggest cost Steve, labor which has Canadian based at 23% and power which is BC hydros 12%. So there is 35% right there.

Diesel is generally U.S based I guess because of price of oil but it doesn’t seem to be reflecting the price of oil and it’s about 17% of our cost. But what we are noticing is some of the things like as I mentioned earlier grinding media, tires some of this items are coming down in price with the slackness I guess in industry, less demand we are seeing some improvements in prices.

Okay last question. If you could just remind maybe question for Rod if you could just remind us the status of your tax yielding and when you forecast an uptick -- when you expect to more expose to cash access.

That again that’s going to be an impact of what’s your assumption on pricing on the revenue side.

What like current copper prices?

Yes current copper prices we still have a fair tax shell left over couple of years and so wouldn’t expect any big change of the next few years.

Alright that’s it from me. Thanks guys.

Good evening, thanks guys congratulations on the quarter. Just maybe follow up a little bit on Mark’s question obviously was great to see the cash cost come down through Q3 just wondering in all what sort of half way through Q4.

Do you have any sort of feel for the impact at the secondary crushing counting on over processing cost in sort of dollars per ton or it sort of too early for that?

I think it’s too early for that right now we’re still as Jim said working through optimization of it so I think it’s too early we certainly as Jim noted saw reduction in the quarter of a unit cost on a dollar per pound basis. And that is direct function as we said the increase production U.S dollar change and not having to pay the affordable crusher cost each month.

Sure, sure okay. And then just on the separate note.

Is there anything in particular we should be watching for exploration front going forward here or is sort of pretty quiet on the back on rate now with all focus on the secondary crusher get things at the 35000 tons a day?

We did have meeting that long what we did is we have two advisor to the board. One Roman [Shliank] and Bob Young both in copper exploration.

We did have meeting recently and sort of trying to work our long term strategy and what came out of it was proposal to do low level SAG survey support with the helicopter. And not being done this week.

And then once we get those results I think we’ll get the group back together again with Peter and look at our strategy to see where we should be focusing our attention.

Okay would that be over the overall property package or right around interesting mine.

That’s the overall property package.

Okay great thanks guys very much.

Hi thanks and congratulations on the quarter I guess my question following Stefan and Mark and Tom also on the cash cost. I know when we were on the site visit back in September, you guys have talked about bringing your cash cost down around $2 level once the secondary crusher with up and running.

So definitely, pleasantly surprised to see them as well as they were. But I was wondering if we should still be looking at that $2 number that you gave as more of long term guidance or is the sort of $1.70 level more sustainable do you think?

Our year to date number are all in cash cost as $2, so that’s sort of where we were expecting it to go but you are right this quarter we certainly did see reduce cost on profound basis and Jim noted U.S dollar does have an impact on that exchange rate. But I would like to think that the guidance we gave you that $2 all-in is a longer guidance of where it be.

But we need a few more months to sort it out, we’re in the middle of budgeting right now for 2015 and we never look more clarity by the end of the year.

Okay great good I think that’s it from me. Thank you.

Good morning and congrats on the good quarter. My first question is with regards to exchange rates so I mean you guys obviously benefiting on the operating front from the lower Canadian dollar where the same time it means that the revaluation of your debt every quarter pushes it higher.

Now obviously it’s a bit of natural hedge between the two, just curious is to whether or not you would consider hedging out the FX exposure on your debt.

Thanks Adam that’s a good question. We have our interest rate swap that we put in and that’s -- consider that a perfect hedge, it’s over the life of the loans.

And you’re right we also have a natural hedge because we’re paying in U.S. dollars and we get repaid out in U.S.

dollars and we get U.S. dollars back.

So, at this stage, we don’t have a plan to go forward with any additional foreign exchange hedging.

Okay. And modifications you are making to the crusher to fine tune, are you guys expecting any downtime related to that this quarter?

Of the crusher, we believe that we can probably live off the pile, if the crusher is down for a period, usually stockpile in front of the mill is good for a few days. So, I wouldn’t anticipate at this time anyway any downtime related to it.

Okay. And you guys gave us the quote to both how the throughput is doing through the first week of November.

I am curious what was throughput like averaged over the month of October?

Well, I think as we mentioned with regard to October, if you’re talking tonnes per calendar day it would be down because as I mentioned we had fair amount of downtime during October again making some great change, I don’t know about great changes, but some changes to the mill. So it was in the order of the -- again little over 30,000 tonnes a day.

All right thank you.

Thank you for taking my call this morning. Just one quick question.

Am I right in assuming that you’re going to have to renegotiate your TCRCs in this spring?

No, I don’t. I think it’s one more year, its five years and we’re sent it for and we started in 2011.

That is probably going to have one more year.

And then are there any sort of spot adjustments to that like base rate that was negotiated because I guess like where I am getting at is we’re starting to see some upward pressure on TCRCs. And just kind of wondering if that’s going to affect you at all at any point in the coming year?

No.

And so that’s not going to happen then until like you have to renegotiate your TCRCs and that would be a year from now, I mean year from the spring?

Yes, that’s correct.

Perfect, that’s all that I had. Thank you very much.

Well, thank you very much everyone. Appreciate you calling in and showing interest in the third quarter results.

And as usual, Jim and I are available for questions if you have any additional questions, just feel free to call us directly. Thank you very much.

Good bye.

Thanks everyone.