Coppernico Metals Inc

Rodney Shier - Chief Financial Officer James O’Rourke - President & Chief Executive Officer

Stefan Ioannou - Haywood Securities Marco Rodriguez - Stonegate Securities, Inc. Derick MA - TD Securities, Inc.

Thank you, Sally. After remarks by management, we will open the lines to participants for questions as noted by Sally.

Please note that 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 outcome to differ material from actual outcomes.

Please refer to the bottom of our latest news release for more information for those who are following on the webcast, it's on Slide number 2 and we will briefly referring to page numbers as we go through the presentation. I will now turn the call over to our CEO, Jim O'Rourke, for his remarks.

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

Today, we will discuss 2016 third quarter results of the operation at Copper Mountain mine, and our corporate financials. I will briefly summarize the financial results and provide an update on the various operational activities, after which Rod will provide the financial details for the 2016 third quarter.

So those of you following with the supporting slides refer to page three for the highlights. The past three months ended September 30, 2016 has been our best quarter since the start of operation, new record for achieve with regard to mill throughput, metal produced and net unit operating cost.

As a result, we ended the quarter with an increase in cash to $25 million. Copper Mountain continues to focus on our priority of cost reductions and production improvements, the recent modest increase in the copper price will further strengthen our operating base.

During the quarter, the company completed a total of three shipments of copper concentrate containing approximately 23.5 million pounds of copper plus precious metals. These shipments generated CAD72.2 million in revenue net of treatment and refining charges and price adjustments.

Approximately 20% of the revenue was from precious metals. The average realized copper price was U.S.

$2.13 per pound copper for the quarter. This is compared to an average copper price of U.S.

$2.39 per pound for the period ending September 30, 2015, in which revenues were CAD63.7 million net of treatment refining in price adjustments. The 13% increase in revenue during the quarter is due to the increase in sales volumes, and weaker Canadian dollar, which was partially offset by the 10% lower copper price received.

Production for 2016 third quarter was 27.8 million pounds copper equivalent based on the quarter end metal prices. This production includes 22 million pounds of copper, 8,200 ounces of gold and 81,500 ounces of silver, as compared to 20.4 million pounds of copper and 6,300 ounces of gold and 64,900 ounces of silver in the third quarter of 2015.

Again, as mentioned, the precious metals continues to account for approximately 20% of the production value. For those following the slides, moving on to page five.

Mining activities continued to be focused in Pit #2 area as well as the Virginia pit and the Saddle area for a majority of 2016 third quarter. Mining in the Virginia pit was completed at the end of September.

During the quarter, the total of 15.9 million tonnes of material was mined, including 5.9 million tonnes of ore and 9.9 million tonnes of waste, for an average strip ratio of 1.68 to 1.The mining rate for the quarter average 173,100 tonnes per day bringing the year-to-date average at 187,200 tonnes per day, 7% ahead of our plans. Open pit mining costs averaged CAD1.76 per tonnes, a reduction of 8% from the mining costs reported during the same quarter last year.

The lower unit costs were achieved with improved utilization of our dispatch system, reduced diesel fuel prices, and reduced haulage cycle time as a result of shorter waste haulage distances. Improvements in the haulage options are key and are continuously being optimized.

Our mining fleet continues to enjoy favorable mechanical availabilities. In 2016, the mobile production equipment averaged 85% mechanical availability as noted on Slide 7.

The mill processed a total of 3.68 million tonnes of ore grading 0.33% copper during the quarter. Copper recovery averaged 82.9%, while gold and silver recoveries averaged 63% and 70% respectively.

Mill operating time during the third quarter averaged 92.2%. The mill continues to achieve monthly improvements in throughput during the quarter and set a new record of 39,980 tonnes per day for the quarter.

In October, further improvements produced a new record milling rate of 42,275 tonnes per day. Mill throughput for the first nine months of 2016 averaged 38,100 tonnes per day, and the increase of 7.6% as compared to the average rate 35,400 tonnes per day during the same period in 2015.

Total cash cost for the month's end of September 30, were U.S. $1.45 per pound of copper sold net of precious metal credits, while site unit costs were U.S.

$0.97 per pound produced, net of precious of metal credits. This represents a reduction of 16% and 20% respectively, compared to the total unit costs and site cost during the third quarter of 2015.

Moving onto to Slide 11, for those who have the book. The company is well on track to meet our 2016 guidance level of 80 million pounds of copper, with 62.1 million pounds of copper produced by the end of the third quarter.

The copper grade is forecast to average 0.33% copper and mill throughput is forecasted to continue to exceed the 37,500 tonnes per day guidance level. Similarly, the average mining rate is forecasted to exceed the 174,000 tonnes per day guidance range.

During the quarter, the mine’s cost saving initiatives and improvements in both mine and mill performance have been positive. Lower diesel fuel prices, shareholders deferral of the crusher tolling fees, contributions by our employees and suppliers plus the deferral of electric payments to be BC Hydro are significant and are greatly strengthened our operating base and our cash position.

I will answer any specific questions in the question-and-answer period for those wishing more details. And I would now like to turn it back to Rod to review Q3, 2016 financials.

Thank you, Jim. As noted on Slide 12, the company recognized revenue of CAD72.2 million after pricing adjustments and treatment charges for the third quarter ended September 30, 2016.

This was based on sales of 23.5 million pounds of copper, 8,600 ounces of gold and 75,700 ounces of silver. The average realized copper price for the third quarter of 2016 was $2.15 U.S.

per pound as compared to U.S. $2.39 per pound for the quarter ended September 30, 2015.

Comparative revenues for Q3 2015 were CAD63.7 million after pricing adjustments and smelter charges. While average realized copper prices declined 10% year-over-year, net revenues increased by 13% for the third quarter of 2016 as compared to the same period last year.

The revenue increased during the quarter despite the decrease in the average realized copper price received as sales were stronger and a higher U.S. exchange rate was achieved as all sales are settled in U.S.

dollars. As noted on Slide 13, cost of sales for the third quarter ended September 30, 2016, were CAD68 million, which resulted in a gross profit of CAD4.2 million as compared to cost of sales of CAD65.8 million, which resulted in a loss of CAD2.1 million for the third quarter ended September 30, 2015.

Production efficiencies and cost savings realized as part of the company's cost-saving initiatives helped minimize the increase in cost of sales associated with the increased sales volume as noted by Jim. General and administrative expenses, which include some mine site administrative expenses, were CAD1.4 million for the quarter ended September 30, 2016, on par was CAD1.4 million for the third quarter ended September 30, 2015.

For the quarter ended September 30, 2016, the company recorded finance expense of CAD3.2 million as compared with finance expense of CAD2.8 million for the third quarter ended September 30, 2015. Finance expense primarily consists of interest on loan and the amortization of financing fees.

For the third quarter ended September 30, 2016, the company recognized a non-cash unrealized foreign exchange loss of CAD4.9 million, compared with a non-cash unrealized foreign exchange loss of CAD21.9 million for the third quarter ended September 30, 2015, which primarily relates to the company's debt that is denominated in U.S. dollars.

During the third quarter 2016, the company recognized a non-cash unrealized gain on the interest rate swap of CAD0.65 million as compared with the non-cash unrealized loss on the interest rate swap of CAD2.3 million for the third quarter ended September 30, 2015, which is related to the revaluation of the interest rate swap liability required under company's loan agreements. It should be noted that these adjustments to income are required under IFRS, and are non-cash in nature as outlined in the company's MD&A and statement of cash flows.

For the third quarter ended September 30, 2016, the company recorded a current resource tax expense of CAD0.25 million as compared with the current resource tax expense of CAD0.12 million for the third quarter ended September 30, 2015. This all resulted in a net loss attributable to shareholders of the company for the third quarter ended September 30, 2016 of CAD6.1 million or CAD0.0.5 per share as compared to a net loss of CAD21 million or CAD0.18 per share for the third quarter ended September 30, 2015.

As you can see on our income statement, foreign exchange gains and losses can vary significantly on a quarter and yearly basis. Therefore, we really need to look at adjusted earnings and adjusted EBITDA to better measure the company's financial performance.

After removal of all the accounting non-cash items, the company reported adjusted EBITDA of CAD16.6 million, and an adjusted loss of CAD1.3 million or about CAD0.01 per share for the third quarter ended September 30, 2016, compared with adjusted EBITDA of CAD14.7 million and adjusted earnings of CAD2 million or CAD0.02 per share for the third quarter ended September 30, 2015. This decrease in adjusted earnings is primarily due to the 10% drop in average realized copper price.

As noted on Slide 14, the company had cash flow from operations of CAD15.8 million during the third quarter of 2016, as compared to CAD4.8 million for the same period last year. The company saw an increase in cash and cash equivalents, of CAD19.6 million as a result of the cash flow from operations and a small equity issue that netted the company CAD6.8 million during the quarter.

At the end of the quarter the company had CAD41 million of capital resources available in the form of CAD25 million in cash and cash equivalents, CAD11 million in concentrate sales receivables, and CAD5 million of concentrate inventory at the port ready to be shipped. In conclusion, we enjoyed a strong operational quarter that has placed cash on the balance sheet.

As noted on Slide 15, our priorities remain focused on continuing to maximize cash flow and minimize costs. We look forward to a strong final quarter of 2016 and are confident our 2016 production targets will be met.

We would like now to open the lines for any questions that people may have. Thank you.

Thank you so much guys, great to see your cash cost so low this quarter. Just wondering on the mining rate going into Q4 obviously with the Virginia pit sort of winding down now.

Should we expect to see sort of a mining rate that’s similar to Q3 versus some of the high numbers we saw in the first half of the year?

We should see similar rates, but probably a little higher than the last quarter.

So you don’t have the full benefit of the short haul, you still expect to have some pretty decent mine output?

No, we will have benefits of relatively short hauls, throughout the year.

Ok great. And then just maybe for Rod, just on I know a while back we talked about sort of just working to realign the debt repayment schedule to better coincide core with markets and ithe mine plan.

Should we still be expecting some news on that as we get into sort of December?

Good question Stefan. We continue to be in discussions with the bank, as you see from our operational performance, we are doing very, very well.

And that differed a little bit from the more conservative cash flow projections we gave the bank. We will be meeting with the bank over the next four weeks and as part of our annual budgeting process, we will go present our 2017 budget to them and go over our view of the amortization of a loan.

So right now, where we have the cash in the company to make the December payment and we will give news to the market just as soon as we conclude those discussions.

Okay, great. And then maybe just one final question, just to get a fair bit of drilling in and around the pit to sort of convert resources to higher confidence levels.

In terms of the mine planning on the back of that should we expect to see - or where we see sort of a revised mine plan as we get into the New-year?

I guess where we do our mine plant every year and bring it up to date. We did do some drilling at the west end of our Pit #2 area and that was successful.

We converted some inferred resources to indicate it and those all the included in the mine plan. We don’t have any plans to publish a new mine plan or 43 101, I don’t think they have been that substantial.

You know we did finish mining Virginia and we now are looking at the possibility of including [Ordeal] (Ph) in next year's plan to provide a little bit better grades.

Okay, but for now in terms of just from all-in mining using the great profile in that update you guys provided I think is it earlier this year?

Right.

Ok. Thanks very much guys.

OK. Thank you.

Good morning guys. Thank you for taking my question.

I have a couple of real just kind of quick questions, just following up on a liquidity aspect; I know the cash in bank here has gone up quite substantially, sequentially. But can you remind us here the actual cash outflows that are expected for debt repayments in next quarter?

Thanks Marco for the question. We only have one payment coming up in this quarter.

The next one is about U.S. $8.1 million plus interest and that too are seeing at credit facility.

So that bringing the senior credit facility debt down to about U.S. $120 million from our original starting point of $162 million so we have paid significant money down since start up, in addition to interest.

And that cash as you see on the balance sheet is already step aside.

Perfect got you. And then I’m not sure if I missed this on the call or on your filing here.

But you had some inflow here from [indiscernible] from funding, advance funding I‘m assuming about 7.5 million or so in the quarter. Can you just talk a little bit about that and where exactly is that on the balance sheet?

You saw a little bit of funding come in from our partner, Mitsubishi is part of the [JPEG] (Ph) debt structure that we have. So that’s where that funding came in, in August.

You saw that as a reduction in the JPEG debt on the balance sheet.

Oh I see okay. Okay great.

That’s all I have got. Thanks.

Thanks.

Hello thank you for taking my question. In terms of the CapEx requirements, can you provide us with any color on what CapEx would look like in 2017?

How its compared to as the current year? Thank you.

Thanks for question Derick. As noted earlier, we are just in the middle of our 2017 budgeting process and so we haven’t given guidance on capital for 2017.

This year's capital you will see that we gave guidance of approximately CAD5 million and we spent significantly less than to-date. And I would expect that when we come out in early December with our guidance, you will see the capital number there, but should be about the same order of magnitude.

That’s great. Thanks.

Okay. I just like to thank everybody for dialing in on the conference call.

And as usual, Jim and I are available for questions if you have additional ones you want to call us directly on. Thank you very much.

Good-bye.