NYSE: TC
TSX: TCM, TCM.WT
Frankfurt: A6R
TORONTO, Aug. 6 /CNW/ -
Overview (all in U.S. dollars):
- Molybdenum production rose by 9.8% to 6.7 million pounds in the
second quarter of 2009 from 6.1 million pounds in the first quarter.
- Weighted-average cash costs in the second quarter were reduced by
12.1% to $5.21 per pound produced from $5.93 per pound in the first
quarter.
- 2009 guidance remains unchanged for molybdenum production and sales
at 22 to 26 million pounds and for cash costs at $5.75 to $7.00 per
pound.
- Total cash, cash equivalents and short-term investments at June 30,
2009 were $262 million, compared with $260.6 million on March 31,
2009. Total debt was reduced to $15.6 million on June 30, 2009 from
$16.9 million on March 31, 2009.
- Average realized price on molybdenum and upgraded product sales
declined to $9.41 per pound in the second quarter from $10.14 per
pound in the first quarter, although due to recent developments in
the molybdenum market, the Company expects its average realized price
to be higher in the second half of 2009.
- Income from mining and processing operations rose to $15.3 million in
the second quarter from $12 million in the first quarter. However,
due primarily to a foreign exchange loss, the Company recorded a net
loss in the second quarter of $0.4 million or $0.00 per basic and
diluted common share, compared with net income of $11.2 million or
$0.09 per basic and diluted share in the first quarter of 2009.
- The Board of Directors has approved the resumption of the Endako mill
expansion project. As a result, the Company's estimate of 2009 total
capital expenditures has been revised upward to $80 million from
previous guidance of $60 million.
Note: A conference call and webcast for analysts and investors is
scheduled for Friday, August 7, 2009 at 8:30 a.m. Eastern.
Thompson Creek Metals Company Inc. ("the Company"), one of the world's
largest publicly traded, pure molybdenum producers, today announced financial
results for the three and six months ended June 30, 2009 prepared in
accordance with Canadian generally accepted accounting principles. All dollar
amounts are in U.S. dollars unless otherwise indicated.
"Thompson Creek's mining operations generated higher production and lower
cash costs in the second quarter of 2009 compared with first-quarter levels
and, as a result, the Company is in an excellent position to achieve its
production and cost guidance for the year," said Kevin Loughrey, Chairman and
Chief Executive Officer.
"Another positive development for the Company is the recent improvement
in molybdenum prices to more than $16 per pound. The price rise didn't occur
early enough to have a significant impact on the Company's second-quarter
sales revenues, which primarily reflected molybdenum market conditions in the
March-to-May period when average monthly Metals Week molybdenum oxide prices
were in the range of $7.90 to $9.16 per pound.
"The molybdenum price increase will have a positive impact on the
Company's third-quarter financial results and it raises our confidence that a
sustained recovery of the molybdenum market is underway," Mr. Loughrey added.
Due to the molybdenum market improvement, the Company's Board of
Directors has approved the resumption of the Endako mill expansion project,
which was postponed in December 2008. The resumption is subject to approval by
the joint venture partner. The expansion project will raise the mill's
ore-processing capacity to 55,000 tons from 31,000 tons per day and reduce
cash costs per pound of molybdenum produced. The Company's 75% share of total
project capital expenditures are currently estimated at approximately $252
million (including $43 million spent on the project in 2008 and $10 million
spent in the first half of 2009). Project completion is expected in 2011.
For 2009, the Company's total capital expenditures are expected to be $80
million, comprised of sustaining capital expenditures of $38 million
(unchanged from previous guidance) and Endako expansion capital expenditures
of $42 million (up from previous guidance of $22 million). The remaining
estimated Endako expansion project expenditures of approximately $167 million
are expected to be incurred in 2010.
Second-Quarter Financial Results
The Company's revenues declined by 70% to $73.8 million in the second
quarter of 2009 from $243.9 million a year earlier primarily due to a 71%
decline in the average realized price for molybdenum and upgraded products to
$9.41 per pound from $32.68 per pound. Sales volume was slightly higher at 7.5
million pounds in the latest quarter versus 7.3 million pounds a year earlier.
After the deduction of operating, selling, marketing, depreciation,
depletion and accretion costs, the Company generated income from mining and
processing operations totaling $15.3 million the second quarter, down from
$105.4 million a year earlier.
Non-cash charges in the 2009 second quarter included an after-tax
compensation charge of $2.8 million, or $0.02 per basic and diluted common
share, related to a voluntary stock option surrender program completed in June
2009, which was offset by a tax benefit of $2.8 million, or $0.02 per basic
and diluted share, related to the reversal of a tax valuation allowance. In
addition, the 2009 second quarter included an after-tax foreign exchange loss
of $6.5 million, or $0.05 per basic and fully diluted common share.
Net loss was $0.4 million or $0.00 per basic and diluted common share,
compared with a net income of $60.4 million or $0.52 per basic and $0.45 per
diluted share in the second quarter of 2008.
The per-share figures are based on a weighted-average number of shares
outstanding of 122.5 million (basic and diluted) in the second quarter of
2009, compared with 116.9 million (basic) and 133.9 million (diluted) in the
second quarter of 2008. At August 6, 2009, there were 123.1 million common
shares, 24.5 million warrants and 5.5 million employee options outstanding.
Second-quarter cash flow from operating activities was $13.4 million,
compared with $62.9 million a year earlier.
Selected Consolidated Operations Information
(Unaudited) Three months ended Six months ended
June 30 June 30
--------------------------------------------
2009 2008 2009 2008
--------------------------------------------
Operations
Molybdenum production from
mines (000's lb)(1) 6,714 6,184 12,771 11,773
Cash cost ($/lb produced)(2) $ 5.21 $ 8.85 $ 5.55 $ 7.75
Molybdenum sold (000's lb)
Thompson Creek Mine and
Endako Mine production 6,505 4,830 13,054 8,912
Product purchased, processed
and resold 997 2,500 1,895 6,072
----------- ---------- ---------- ----------
7,502 7,330 14,949 14,984
----------- ---------- ---------- ----------
Average realized price ($/lb) $ 9.41 $ 32.68 $ 9.81 $ 32.69
(1) Mined production pounds are molybdenum oxide and high performance
molybdenum disulfide ("HPM") from the Corporation's share of the
production from the mines; excludes molybdenum processed from
purchased product.
(2) Weighted-average of Thompson Creek Mine and Endako Mine cash costs
represent mining (including all stripping costs), milling, roasting
and packaging for molybdenum oxide and HPM produced in the period.
Cash cost excludes: the effect of purchase price adjustments, the
effects of changes in inventory, and depreciation, depletion,
amortization and accretion. The cash cost for Thompson Creek, which
only produces sulfide on site, includes an estimated molybdenum loss
and an allocation of roasting and packaging costs from the Langeloth
facility.
Capital expenditures totaled $16 million in the second quarter of 2009,
comprised of $10.3 million of sustaining capital expenditures and $5.7 million
for the Company's 75% share of capital expenditures for the Endako mill
expansion.
Cash, cash equivalents and short-term investments were $262 million on
June 30, 2009, compared with $260.6 million at March 31, 2009 and $258 million
at December 31, 2008.
The Company's total debt (primarily equipment loans) on June 30, 2009 was
$15.6 million, compared with $16.9 million on March 31, 3009 and $17.3 million
on December 31, 2008.
The Company's mines produced 6.7 million pounds of molybdenum in the
second quarter, up from 6.2 million pounds in the second quarter of 2008. The
Thompson Creek Mine produced 4.7 million pounds, up from 4.0 million pounds a
year earlier, while the Company's 75% share of the Endako Mine's production
was 2.0 million, compared with 2.2 million pounds a year earlier.
The weighted-average cash costs were $5.21 per pound produced in the
second quarter of 2009, compared with $8.85 per pound produced a year earlier.
The decline was primarily due to increased production as a result of higher
ore grades and recoveries at the Thompson Creek Mine together with lower
mining and milling costs from both of the Company's mines in the latest
quarter compared to the 2008 quarter, lower costs for grinding media and
consumables, and a favorable change in the Canadian dollar exchange rate. The
cash costs include production costs for the mining, milling, roasting and
packaging of molybdenum oxide and high-performance molybdenum disulfide (HPM)
and deferred stripping costs (mining costs related to future planned
production phases).
At the Thompson Creek Mine, cash costs in the second quarter were $5.32
per pound produced (including deferred stripping costs of $1.51 per pound
produced), compared with $9.02 per pound produced (including deferred
stripping costs of $2.54 per pound produced) a year earlier. The Endako Mine's
cash costs were $4.94 per pound produced, compared with $8.55 per pound
produced a year earlier.
