(“Revett” or the “Company”) is pleased to report the operating and financial results for the fourth quarter and the year ending December 31, 2006. All currency in this release is in United States dollars unless otherwise indicated.

 

 

In summarizing the performance of the Company during its second year of operations, Mr.  William Orchow, President and CEO of Revett Minerals, stated “We are pleased with the progress we have made in improving the operating performance at the Troy Mine (“Troy”) and with the re-issuance of the favorable biological opinion for our Rock Creek project (“Rock Creek”).  Some other notable achievements in 2006 include:

 

For the year ended December 31, 2006, the Company recorded revenues of $31.4 million. The direct operating costs to generate that revenue was $25.0 million and depreciation and depletion expense was $1.3 million implying a profit from mining operations (a non-GAAP measure) of $5.1 million. Profit from mining operations is a non-GAAP measure and is unlikely to be comparable to similar measures presented by other issuers, but management believes it is a useful supplementary measure of the performance of Troy. Other expenses included the non-cash accretion for reclamation and remediation liability of $0.6 million, general and administrative costs of $3.6 million, exploration and development expenditures at Troy and Rock Creek of $1.4 million, interest expense net of interest income of $0.8 million and a foreign exchange loss on cash balances held in Canadian dollars of $0.2 million. This resulted in a loss before income taxes and non-controlling interest of $1.6 million and for the year a loss after non-controlling interest and taxes of $1.7 million or ($0.03) per share.  Metal sales for the first twelve months of 2006 were 6.5 million pounds of copper and 824,049 ounces of silver. During the year ending December 31, 2006, the Company generated a net of approximately $3.9 million in cash from its operating activities.  Overall, the Company experienced difficulty in ramping up production to the levels originally forecast, although steady improvements are now being made. This issue is discussed in more detail further in this release.

 

Revenues for the fourth quarter of 2006 were $4.0 million. The revenues recorded for the fourth quarter were adjusted downward to reflect the affect of the year end decline in the price of copper on the sales for which prices have not yet been finalized. The rise in the price of copper by the end of March will serve to partially offset the fourth quarter results. During the fourth quarter, the mine shipped and received provisional payment for 1.4 million pounds of copper and 165,176 ounces of silver. The direct costs of production for the fourth quarter were $7.1 million and depreciation and depletion expense was $0.2 million implying a loss from mining operations of $3.3 million (a non-GAAP measure). Other expenses during the fourth quarter included exploration and development costs of $0.5 million, general and administrative costs of $1.6 million, interest expense net of interest income of $0.6 million, a loss of foreign exchange balances held in Canadian dollars of $0.2 million, and the reclamation and remediation liability accretion  of $0.5 million. The loss for the fourth quarter before income taxes and non-controlling interest was $6.7 million and the loss for the quarter after non-controlling interest and taxes was $4.9 million or ($0.07) per share. The most significant factors affecting the fourth quarter were below average metal production and the decline in the copper price which reduced revenue for sales for which the quotational period was still open.  For the three month period ending December 31, 2006, the Company generated a net of approximately $0.6 million in cash from operating activities.

  

The following is a summary of the production, sales and shipment results from the Troy Mine (100% basis) for the fourth quarter and the twelve month period ending December 31, 2006.

 

 

For the year ended December 31, 2006, 944,783 tons of ore (2,588 tpd) were processed through the mill, which is less than expected levels. Mill throughput for the fourth quarter was only 2,246 tons per day, which was well below the daily average for the first nine months of the year. The primary reason for the shortfall in mill throughput is a shortfall in the production of ore from the mine. This mining shortfall is due to underutilization of the new jumbo drills, delays in developing a sufficient number of mining areas caused by the lower productivity from the new jumbo drills and difficult ground condition in parts of the mine. In addition, December production was very low because the primary conveyor was under repair and over 3 days of production was lost due to power outages.  Management of the Company continues to work aggressively to rectify the production shortfalls and to date in 2007 good progress has been made in increasing mill throughput. During the fourth quarter, the grade of copper milled averaged 0.42% and the silver head grade was 1.01 ounces per ton. For the year, the copper grade was 0.46% and the silver grade was 1.13 ounces per ton. Recoveries have been satisfactory given the below normal grades and the low mill throughput.

 

 

At December 31, 2006 the proven and probable reserves at the Troy Mine are estimated to be 13.24 million tons grading 1.14 ounces of silver per ton and 0.54% copper per ton. These reserves were calculated by using a cut-off NSR of $16.00 per ton. At projected production rates, the operating life of the Troy Mine is projected to exceed six years. The reserve estimates are based upon the Troy Mine N.I. 43-101 reported and updated by Mr. Larry Erickson, a qualified person in accordance with N.I. 43-101. Mr. Erickson is an employee of the Company and is not considered independent.

 

At Rock Creek, the Company continues with its efforts to advance the project. In October, the United States Fish and Wildlife Service re-issued its favorable biological opinion for the project. During the year, the Company commenced design work on the water treatment plant and provided the initial mitigation funding in the amount of $250,000 to the Montana Department of Fish, Wildlife and Parks as required by the Record of Decision. Other work on Rock Creek includes work on the Rock Creek scoping study, base line water quality and hydrology studies for the water treatment plant, and an application to the Montana Department of Environmental Quality to commence with the Rock Creek evaluation adit.

 

Revett Minerals, through its subsidiaries, owns the Rock Creek project and the Troy Mine  both located in northwest Montana. Based on the drilling to date, Rock Creek contains an estimated inferred resource of 136.6 million tons grading 1.67 ounces silver per ton and 0.72% copper, containing approximately 229 million ounces of silver and over 2 billion pounds of copper using a cut off grade of US $10.00 per ton. Further information on both the Troy Mine and the Rock Creek project may be found in the National Instrument 43-101 reports at www.sedar.com. These reports were prepared on behalf of the Company by Jean-Francois Couture, P.Geo. and Ken Reipas, P.Eng. of SRK Consulting (Canada). Both Mr. Couture and Reipas are Qualified Persons in accordance with National Instrument 43-101. All of these issues are discussed in greater detail in the Company’s official filings at www.sedar.com. 

 

William Orchow

President  & CEO

 

For more information, please contact:

Scott Brunsdon, CFO or Doug Ward, VP Corporate Development at (509) 921-2294 or visit our website at www.revettminerals.com.