Good morning. My name is Christine, and I will be your conference operator today. At this time, I would like to welcome everyone to the Copper Mountain Mining Corporation First Quarter 2019 Earnings Conference Call. [Operator Instructions] Please note that comments made today that are not of historical factual nature may contain forward-looking statements. This information by nature is subject to risks and uncertainties that may cause the stated outcome to differ materially from actual outcomes. Please refer to slide two of today's presentation and Copper Mountain's First Quarter 2019 Management Discussion & Analysis for more information. I will now turn the call over to Gil Clausen, President and CEO of Copper Mountain Mining.

Good morning, everyone, and thank you for joining us. As you can see on slide three, I have with me Rod Shier, Copper Mountain's Chief Financial Officer; and Don Strickland, our Chief Operating Officer. And I'll begin by providing some brief highlights on the quarter. Rod will provide a more detailed discussion on our financial results, followed by Don, who will speak to our operation. Then we'll wrap up and open up the call to questions. Starting on slide four, we finished the year strong, and we started the year in a solid position. Revenue, earnings, and cash flow increased year-over-year, and production was in line with expectations. We produced a little over 22 million pounds of copper equivalent, which is comprised of 18.6 million of copper, 7,100 ounces of gold, and about 65,000 ounces of silver. We had solid production for the quarter, and we are maintaining our 2019 production guidance. We also saw significant improvements in our -- in both our C1 cash cost per pound and all-in sustaining cost per pound in the first quarter when compared to Q1 last year. C1 cash cost declined 10% to CAD1.77 per pound of copper produced, and AISC declined 13% to CAD1.87. Of particular note in the quarter, we announced our new integrated production plant for the Copper Mountain Mine. The new mine includes a planned modest mill expansion to 45,000 tonnes per day from 40,000 tonnes per day and integrates the ore from the New Ingerbelle pit, which is only about a kilometer away from the Copper Mountain mine. Based on this new plan, we more than doubled the reserve, increased annual production 27% to 116 million equivalent pounds, extended the mine life 12 years to 26 years, and reduced our C1 cash cost to CAD1.74 per pound. All of this for a modest capital investment, which will be done in two phases; first, the planned mill expansion for CAD25 million and then development of access to the new Ingerbelle pit a couple of years later for CAD23 million. Our goal with the integrated plan in a little bit more detail later on the call, but overall you can see a huge value-driving catalyst for the mine as the project increases and advances cash flow for the near-term of Copper Mountain's mine life. All right, now, I'll turn the call over to Rod to go over our quarterly financial results.

Thank you, Gil. As noted on slide six, revenue for the first quarter was CAD87 million on the sale of 19.3 million pounds of copper, approximately 7,000 ounces of gold and approximately 65,000 ounces of silver. Revenue in Q1, 2019 was up 11%, despite having lower sales in metal prices as compared to Q1, 2018. This is mainly a result of a positive mark-to-market adjustment at CAD6 million in Q1, 2019, as compared to a negative mark-to-market adjustment in Q1, 2018 of nearly CAD10 million, a net difference of CAD16 million quarter-over-quarter. Mark-to-market adjustments are a requirement under IFRS -- for shipments outstanding at the end of the quarter or year. As noted on the slide, cost of sales for the first quarter of 2019 decreased 11% to CAD64 million from CAD72 million in the first quarter of 2018. Cost of sales in Q1, 2019 excluded some mining costs associated with additional striping during the quarter, and included a lower depreciation charge of CAD6.3 million as compared to CAD15.4 million in Q1, 2018. Depreciation is lower as a result of the increased reserve base announced late in 2018, which we are now depreciating cost over. The impact at the new integrated mine plant announced this quarter will be incorporated into subsequent statements; this all results in an increase in gross profit to CAD23.3 million for Q1, 2019, as compared to CAD6.3 million for Q1, 2018. Turning to slide seven, net income was CAD17.8 million in Q1, 2019 or CAD0.07 per share, as compared to a loss of CAD6.5 million or CAD0.04 per share in Q1, 2018. Net income included a non-cash unrealized foreign exchange gain of about CAD6 million, as compared to a non-cash unrealized foreign exchange loss of about CAD8 million in Q1, 2018, a differential of approximately CAD14 million, which was primarily related to the company's debt that is denominated in U.S. dollars. On an adjusted basis, adjusted net income in Q1, 2019 was CAD6 million or CAD0.03 per share as compared to CAD11 .6 million or CAD0.09 per share in Q1, 2018. EBITDA was nearly CAD32 million and adjusted EBITDA was about CAD20 million in Q1, 2019, as compared to EBITDA of CAD11.5 million and adjusted EBITDA at CAD29.5 million in Q1, 2018. Cash flow from operations was up tenfold to CAD23.7 million after working capital changes, which allowed us to end the quarter with approximately CAD52 million in cash on hand. And now, I'll ask Don to provide an operational update.

Thank you, Rod. Starting on slide nine, mine team continues to deliver on plan during the quarter. A total of 17.5 million tonnes were mined in the first quarter, which included 2.8 million tonnes of ore and 14.6 million tonnes of waste. The strip ratio in Q1 was abnormally high as the mine continued to Pit West pushback and started a new pushback of Pit 3 to expose higher grade ore for 20/20 production. The strip ratio for 2019 will decrease as the year advances, and is expected to be about 2.5 for the year. Turning to slide 10, during the quarter, the mill processed a total of 3.55 million tonnes of ore or about 39,400 tonnes per day. The mill feed grade averaged 0.29%, and was lower when compared to Q1 of last year, due to 1.3 million tonnes of lower grade feed to the mill from the ore stockpile. The decrease in grade however, was partially offset by higher through put and recovery. Copper recovery averaged 81.6% for the quarter. The flash flotation circuit that was installed in the third quarter of 2018 continues to support higher copper and low recovery. And with that, I will turn the call back to Gil to conclude.

Thanks, Don, and Rod. Turning to slide 12, as mentioned earlier, we announced that new integrated production plant for Copper Mountain Mining, the new plant takes a two-phased approach as I mentioned, which includes the mill expansion, which requires the installation of a 3rd ball mill and new two-stage cleaner floatation, modifications, and some additional filtration capacity. It's planned to increase the mill throughput to 45,000 tonnes per day. Capital to install the 3rd ball mill is on our original estimates. And we are planning for an investment of approximately USD25 million. The second phase, of course, is the integration of New Ingerbelle which is as you all know a past producing open pit. It's about 1 kilometer from Copper Mountain Mine mill. The capital required for the development of New Ingerbelle is about CAD23 million. And this is for that three kilometers of access down the hillside to the river level and a bridge across to truck ore from New Ingerbelle to the Copper Mountain Mine crusher. Turning to slide 13, so for a total investment of about CAD48 million over three years, we significantly increased production. We increased recoveries. We extend the mine life. We lowered cash cost and increased mine cash flow. The total after tax MPV of the integrated production planning 8% discount rate is about USD620 million. And this is low risk, low capital for near-team growth. Organic growth plan at the Cooper Mountain Mine is expected to be funded from our internal cash flow after a planned a debt restructuring is completed. Our Eva development project is advancing with exploration of close satellite deposits and additional value engineering of the mill flow sheet. We are excited about the potential of the Eva project, and we will continue to update our progress regularly. And that wraps up our comments. Operator, if we could open up the call for questions?

Thank you. [Operator Instructions] And your first question comes from the line of Orest Wowkodaw from Scotiabank. Your line is open.

Hi, good morning. A couple of questions from me, first of all, just with regards to strip ratio this year, it was obviously very high in Q1, and I think you are guiding to now 2.5 to 1 this year. Why has that changed so much from the tech report, which I think was 1.66, just given how recent your tech report is, and I am just curious what that means with respect to total capitalized stripping dollars in 2019 now?

Well, I think -- Orest, hi, it's Gil. I think the life of mine stripping ratio that we had in the October, steady was about 2.881. And on the new integrated plan, it's dropped down to about 1.75 or roughly 1.78 I believe. So when we are looking at this quarter, we are starting a pushback of pit 3 as Don mentioned and that is the pit or the part of our production schedule for 2020 that drives and brings in a lot of the high grade ore that we are mining in 2020, which is why we have such high production rates in that year. So, as we are opening up Pit 2 as we have been in the couple of quarters now, and now in the first quarter, we are starting -- we are actually starting to drive in to open up and start the stripping of pit 3, you have some lumpiness. And overall, the year should be anywhere from 2.2 to 2.6. And Don mentioned, 2.5 to 1, it will be roughly 2.5 to 1 we anticipate for this year, which is still below the life of mine average on our plan from last year, but above the life of mine planned stripping in the new integrated production plan. So, we anticipate a slight deviation with respect to some more stripping. But it's really not material to the overall production plan.

And what do you expect that to cost you this year dollars wise for caps stripping?

Hi, Orest. It's Rod. The balance of the year is as I said it's going to be in that sort of that 2.5-ish range. So to normalize that down to 1.8, I don't have a number off the top of my head, but it's certainly not going to be anywhere near where you saw on this first quarter, but I am going to say in that sort of say CAD4 million to CAD5 million range max.

Okay, great. And then with the change this year, do you still think the strip ratio is going to be the really low one times in 2020 per the mine plan, or could there be -- has there been anything to change that?

Well, we don't anticipate any changes from our or deviation from our life of mine plan that we just put out, Orest. So, like I said we are going to get a little bit of up and down on a quarter-to-quarter basis depending on where we are in the plan. And as you know, sometimes as you are starting off a pit and you have got to the upper phases of a push back, you will come into to some ore or you might have some ore come in that's unexpected potentially and that may have an impact. But generally speaking, I think we are right on our life of mine plan. And we don't expect any deviation from that in terms of stripping.

Okay. Thanks, Gil. And just finally on Eva, just wondering if there has been any change with respect to your plan sequencing whether you still see development of Eva coming ahead of the New Ingerbelle, or whether Eva might get sequenced after New Ingerbelle?

Well, I think what we are finding with Eva is that we have a lot of resource around the mine that wasn't in the feasibility study. And our real focus in the near-term is to accelerate that understand. Do a little bit of work, do a little drilling. We are also doing some optimization of the flow sheet there to try and reduce the overall energy consumption per tonne. And I think we are making some pretty good headway with some test work that we are doing. And that test work should continue for the next six months or six to eight months or so. Our goal with the Eva is to integrate those resource additions, hopefully moving them into the reserved category. And updating our modified flow sheet and updating our feasibility study so that we can move into our final project financing phase for Eva. So, generally speaking, I would expect a feasibility update around the end of the year or early in the first quarter. And then, we will be ready to move into our project finance phase for Eva. So in terms of timing, as you know, our construction -- once the project decision is made to move forward with Eva, I would say the earliest that decision could be made would be probably roughly a year now, that would be with financing announced concurrent. And then it's a two-year construction phase The construction at Copper Mountain is about a year in length. And when that's wrapped up and commissioned we will be moving our project team fully on to the Eva project. So, it's sequential. Ingerbelle is just part of our long-range plan. I mean that bridge construction is a relatively straightforward thing. And it's not a major project. It's about CAD23 million of capital, but it's a standard highway bridge basically across Similkameen River. And the rest is just phased stripping and development at Ingerbelle.

Thank you.

Your next question comes from line of Stefan Ioannou from Cormark Securities. Your line is open.

Great. Thanks very much guys. Could you just maybe give us a little bit more color on sort of where things are at with regards to the some of the debt restructuring initiatives you talked about in the past? And how they layer in with obviously New Ingerbelle? And then in the future possibly even Eva and stuff?

All right, Stefan, I think we are just -- we are on track with what we want to do even we are ready to -- we have been looking at some potential restructuring with respect to corporate financing perhaps a bond. We have talked about this a little bit in the past. We have been watching the markets carefully and waiting for an opportunity. We're actually in no rush, as you can see that the operation is performing well, and we're generating good cash at Copper Mountain. We want to make sure that whatever we do, we were significantly decreasing risk, and we're improving our balance sheet and our cash flow, but there's no rush from our perspective on this. So, we're watching carefully and making sure that we can get -- we can advance that debt restructuring at an opportunity time, and an opportunity time for us is when we can drive the lowest cost of debt that we get in the market.

Okay, got it. Thanks very much guys.

Your next question comes from the line of Don DeMarco from National Bank Financial. Your line is open.

Hi, thanks so much. I think most of my questions have been answered, but maybe to Eva, can give me an idea of how much you're going to spend this year on exploration or whatever other initiatives working toward the FS that might be involved?

Well, we're starting off I think relatively modestly, we've got a lot of network that we're doing on, especially on the Blackard pit, which is in our resource model. If you refer to the feasibility study, Don, you'll see that there's a deposit that's just South of the plan concentrator, and it's a relatively large deposit and has a large, measured, and indicated resource on it. It's called the Blackard deposit. And it's overlaid by a really nice, high-grade copper, it's kind of a copper-only zone, it's high in native copper, and relatively low in sulfide, but it caps the sulfide resource that is below that layer, that native copper layer, and that's what we want to focus on doing some drilling on this to expand the sulfide resource in that deposit. And if we're successful at it, and it won't take a lot of drilling to do it for success, because there is drilling in it now, we need to basically infill, but if we're successful at it, it could have the potential to double the size of the reserves if we're successful at Eva, and that's getting to be pretty material for that operation, and we want to -- because it's about a 12-year mine life, 10 to 12-year mine life that are at our plant capacity and we want to be able to look at that flow sheet for optimization again and see if we can't do a couple of things, one is improve the energy consumption, improve the productive capacity of the plant, and keep the capital costs in line with where they are now.

Okay, that's great. So it sounds as though there's potentially significant upside there on drilling. Would you be able to quantify how much you might spend this year then, is it sounds like it could be a pretty small program though, but the upside is still big?

Yes, and we're going to test a couple of exciting little opportunities that we have around us, there's the Cabbage Tree Creek deposit, which has -- it's a significantly large target high-grade target to the North of us. But on the Blackard deposit, we're going to do it in a phased approach. Our first phase would be to spend in exploration in the general area just in drilling, et cetera, and some other work about roughly about a CAD1 million. That will step it up from there given success.

Okay, super. That's all for me. Thanks a lot, Gil.

Thanks, Don.

Your next question comes from line of Craig Hutchinson from TD Bank. Your line is open.

Hi, guys. Just a question in terms of the Phase I capital program, I think it's USD25 million based on the technical report. Do you guys still plan to spend that money this year? Or is that going to be deferred till next year to spend based on your refinancing plans?

It'll be about a year's worth of expenditure. So it's going to it's going to cradle boat years. So we will -- we're actually, we've actually done. We're in the detailed engineering phase right now on the project. We just finished completed drilling in the foundations of that Bay Area, the last phase at the middle how it's going to go into. We own the mill, the mills paid for. We're going to be -- we just completed drilling below to the foundations to measure the rock below the basement in that in the mill, so we can get a detailed estimate of the excavation and the foundation design. And so, we're moving forward on that project. So, there's still a final decision that has to be made by our board, the operating companies board and our board to give the final green light once we clean up and get a definitive construction estimate, but we're looking right on, right on plan and we're ready to kick off a construction plan that will be through this summer, into the fall and then completed in the first part of next year.

Okay, so to get to the sort of the 45,000 tonnes per day run rate, probably that's back half of 2020?

Yes, we're probably looking at the second-half to actually get fully up to that run rate.

Okay. There are two objectives here that don't necessarily show itself in the technical report. One is, of course the increase in throughput, and the increase in recovery. We want to work on, continue to work on the recovery side as we go. And we hope to make good progress on recovery, even before we had this mill, mill circuit adjustment fully in place. So we're cautiously optimistic that the grind edition will provide a nice opportunity for us to bring this mind to what its original feasibility study estimates were for recovery to get as close as we can to that, and I think we will probably be in very good shape to be able to do so. So we're continuing to make incremental improvements in the mill, before we even tackle the full expansion project. And we're excited about the backend of the circuit as well. On the cleaner side that we think with the two-stage cleaning, we hope to make inroads into improving our congruence as well, which would have an economic benefit.

Okay. Maybe just one last question for me in terms of next year's production guidance, I think when you originally gave a guidance in January, you serve the mid points 90 million pounds. And then your technical report came out I guess in February and then that sort of targeting somebody they were 150 million pounds, much higher grades, which one should be more relying on, should it be the technical report, should we assume that you're going to kind of get to those point 38% copper grades next year?

Well, I would suggest that we're not changing any of our guidance at this point in time, but I would say that the technical report has an assumption in it that we would have a commissioning done at the end of Q1 and the Q2. So, to be prudent I would say we would probably fall somewhere between those two numbers.

Okay. Thanks, guys.

Your next question comes from the line of Pierre Vaillancourt from Haywood. Your line is open.

Hi, Gil. Just want to clarify if I could with regards to the mill expansion, it's that is independent from your debt restructuring program. In other words, you're going ahead based on cash that you've got and cash flow that you will be generating to finance this and I guess maybe increase current debt. I noticed a debt increase quarter-over-quarter and AVL [ph] continue to go up a little bit, is that reasonable or…

Actually Don. Sorry, Pierre.

Go ahead. Don, why don't you take it, Rod? Sorry.

Okay, thanks. Hi, Pierre. The one thing you have to watch with our debt is obviously the changes in exchange rates where they go up and down quarter-over-quarter that's going to affect your net dollars. Our U.S. dollar debt went down and continues to go down as we make payments, four times a year. With respect to the projects, yes, we certainly are tying in the expansion money that needs to be approved by the Board as Gil pointed out still to the refinancing. So there is a little, it is connected in that sense, Pierre. So that does impact a little bit on our timing.

So yes, just to be -- like I should say based on what you're saying then the completion of the ball mill for Q2 2020. That's kind of a moving target then or more dependent on the debt restructuring then?

No, Pierre, it's always been, it's always -- if you look at a project and a small project there is no different than a large project. When you move into the project execution phase, which we're in now, where we're into the detailed construction engineering phase. So the first phase of the project is actually there's getting the execution plan and the detailed project execution plan done. So I mentioned that we've been in doing the foundation drilling in the mill that we've been doing a lot of other foundational work. There's a shop that we're going to be constructing, and we're doing some test work on the cleaner circuit, to determine whether or not we're going to go with one additional column sell as we had in the planner that we might make some other modifications to. But that kind of stuff is getting ready. And we've done the demolition plan for the existing mill by taking out the infrastructure we're planning. Of course, to have all this construction work done without affecting production in the middle, so that demolition plan and execution plan has to be detailed out. And that, of course takes time. So we're doing that work. And we're timing this such that when we're ready for major expenditures to let the contracts out and go that we do it concurrent with our financing, because what we'd like to be able to do is to have those debt repayments that we have in over the next quarter have that cash be available for the construction and still maintain a really good cash buffer at the operation. So that we're not introducing anymore cash flow risk, we're actually eliminating cash flow risk. So we think everything is going to timeout really well Pierre in that regard.

Okay, so keep the schedule as is and with the expectation that the debt restructuring comes into place in a timely fashion that that's what you're saying?

That's correct. And also, that will be and as I mentioned before, all these things coming together will allow our board to be able to make a solid go forward decision in the near-term.

Okay. And with respect to the amount for the debt restructuring, I guess, is that flexible as well, I mean I know in past discussions with Rod; Rod, you mentioned how you're looking at the entire package and then subsequently and then Gil you reflected that it might be done in pieces with a focus on New Ingerbelle first and then bring Eva a little more into definition and then tackle that, how do you plan to do that?

I would suggest that it's more the ladder, so we'll have a, we'll probably have a smaller financing at first related to Copper Mountain and Copper Mountain debt and the restructuring of the debt on Copper Mountain with a corporate facility. So we will get that accomplished and then we'll be looking at Eva more in light, in line with the traditional project financing for Eva, which would be anywhere from 6,040 to 7,030 roughly in that range get to equity on a project finance, a non-recourse project finance basis is the way we'd like to structure that one. So there's plenty of opportunity especially in the types of jurisdictions within, which we operate to be able to do a solid financings for these that don't, that will not stress our balance sheet will allow us to continue to capture this organic growth potential.

Last thing, so when do you need to have the restructuring done in order to stay on track for doing your bells, or any date, target date that you've got there, Rod, that you want to get this done for?

I think we're -- we sort of guided that we would do -- we would be doing something in the second quarter, and I think we haven't really changed from that perspective. Looks like the markets are quite strong, and it was pretty tough in the second-half of last year. There wasn't a lot of new bond issuance in the North American market. I mean I think the Asian market and the European market stayed strong and stayed flat, but we've seen a lot of improvement in terms of deal flow and we've seen coupon rates come down and things start to normalize again as to what they were, let's say, about this time last year. So, I think things are looking pretty good. We have a number of different alternatives that we're considering, but I think generally speaking, pretty conventional that restructuring is top of our list.

Okay. Last and also, when it comes to Eva, I mean, I know you have been talking about partners, is that a necessary piece of the whole equation there to be able to go ahead with financing and constructing the Eva?

No, I think we're -- we feel pretty comfortable with the approach that we have on Eva right now, but we'll see, I mean look, if we're very successful with the new project, and depending on the scope and size of how Eva might grow or turn out if it indeed does at all, we'll make that decision as we come to it, but I would suggest this is a right-size project for Copper Mountain, and if it looks like we can get an advantage at the end of the day by potentially partnering with another counterparty on, Eva will consider that opportunity at the time.

Great. Okay, thanks.

There are no further questions at this time. Mr. Gil Clausen, I turn the call back over to you.

Thanks, Operator. I just want to thank everybody for listening to our conference call today. This is indeed a very exciting time for Copper Mountain Mining. We have lots of value-driving catalysts that will come into place in the near-term and an incredible amount of growth in the company. So again, thanks everybody. And with that, I'll conclude the conference call.

This concludes today's conference call. You may now disconnect.