As a result of a sales disruption during the quarter due to a strike at our largest customer, Pe̱oles, IMPACT only shipped metal concentrates for the first five weeks of the quarter, leaving 59% of first quarter production stockpiled at the end of the quarter. Even with the majority of production not being sold, net income of $68,000 was realized, compared to a net loss of $256,000 in the fourth quarter of 2008. Both reported revenues and net income were significantly reduced in the first quarter.
Cash flows from operations in the first quarter were $1.05 million. Cash flows are expected to increase in the second quarter of 2009 due to the sale of the stockpiled metal concentrate inventories from the first quarter.
In March, IMPACT took action to protect its ongoing operations by successfully negotiating a more favourable sales contract for its zinc concentrates with an alternative customer. The first quarter stockpiled finished goods zinc concentrate inventory was shipped in early April. The Pe̱oles strike ended in mid-April and IMPACT has since resumed shipments of concentrates to the Pe̱oles refinery.
| Three Months Ended | Mar 31 2009 | Dec 31 2008 | Mar 31 2008 |
|---|---|---|---|
| Revenue | $1,457,000 | $2,221,000 | $2,687,000 |
| Mine Operating Earnings | $750,000 | $267,507 | $1,274,000 |
| Net Income | $68,000 | ($256,000) | $846,000 |
| Earnings Per Share | $0.00 | ($0.01) | $0.02 |
| Revenue per production tonne sold | $129.69 | $86.03 | $110.81 |
| Direct costs per tonne produced | $53.19 | $56.82 | $50.63 |
IMPACT's financial position remained strong with $5.4 million in cash and cash equivalents and net working capital of $7.0 million.
The Company's working capital position is expected to remain strong through 2009 as cash flow from mining operations should be sufficient to fund the Company's planned 2009 resource property costs, exploration expenditures and acquisition of property, plant and equipment.
IMPACT intends to further increase throughput at its current Guadalupe mill to ultimately reach its rated capacity of 500 tpd. This involves some additional expenditure for underground equipment, certain equipment replacements and upgrades in the plant and expansion of the tailings dam. Sourcing mill feed from the mines remains the critical factor for increased throughput. With current lower metal price environment the rate of expansion will be adjusted to ensure cash flows remain positive.
IMPACT Silver Corp. is a silver focused mining and exploration company operating in Mexico with a producing silver operation at the Royal Mines of Zacualpan, the 200-square-kilometer advanced Mamatla Silver District and a portfolio of projects with a producing mill at Zacatecas.
On behalf of the Directors of IMPACT Silver Corp.,
"Frederick W. Davidson"
President, CEO
For further information, please contact:
Darrell Rader, Corporate Development
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release.
