Thompson Creek announces first-quarter 2009 financial
TSX: TCM, TCM.WT
TORONTO, May 7 /PRNewswire-FirstCall/ -
Overview (all in U.S. dollars):
- Molybdenum production in the first quarter of 2009 was 6.1
pounds, up from 5.6 million pounds in the same period a year
The first-quarter production level was in line with current
production plans for the year.
- Weighted-average cash costs were reduced to $5.93 per pound
in the first quarter from $8.29 per pound a year earlier.
- 2009 guidance for cash costs has been revised to $6.25 to $7.25
pound from previous guidance of $7.25 to $8.25 per pound.
and sales guidance remains unchanged at 20 to 24 million pounds
- Operating cash flows were $44.7 million in the first quarter,
compared with $63.4 million a year earlier.
- Total debt was reduced to $16.9 million on March 31, 2009
$17.3 million on December 31, 2008. Total cash, cash equivalents
short-term investments at March 31, 2009 were $260.6 million,
compared with $258 million on December 31, 2008.
- First-quarter net income was $11.2 million or $0.09 per basic
diluted common share, compared with $46.8 million or $0.41 per
and $0.37 per diluted common share in the first quarter of
- The decline in net income was due primarily to a 69% reduction in
average realized price on molybdenum and upgraded product sales
$10.14 per pound in the first quarter from $32.69 per pound a
earlier, which resulted in a year-over-year decrease in revenues
$78.9 million from $254.8 million.
Note: A conference call and webcast for analysts and investors
scheduled for Friday, May 8, 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 months ended March 31,
2009 prepared in accordance with Canadian generally accepted
accounting principles. All dollar amounts are in U.S. dollars
unless otherwise indicated.
"Thompson Creek's mine production during the first quarter of 2009
was consistent with our current plans to produce 20 to 24 million
pounds of molybdenum in 2009," said Kevin Loughrey, Chairman and
Chief Executive Officer.
"However, the reduction in molybdenum production costs exceeded
expectations and as a result we have lowered our 2009 estimated
range for cash production costs to $6.25 to $7.25 per pound from
previous guidance of $7.25 to $8.25 per pound.
"While overall the molybdenum market continues to experience weaker
conditions than it did for most of last year, we are encouraged by
the upturn in price in the past two weeks and we continue to expect
a sustained recovery in molybdenum demand and prices in the
medium-term future as the world economy recovers from recession,"
Mr. Loughrey stated.
"Given our strong cash position and recent actions to reduce
production and conserve cash, Thompson Creek is well positioned not
only to weather additional market weakness should it occur but also
to raise production again relatively quickly when demand recovers
and to consider possible acquisitions that will benefit
First-Quarter Financial Results
The Company's revenues declined by 69% to $78.9 million in the
first quarter of 2009 from $254.8 million a year earlier primarily
due to a 69% decline in the average realized price for molybdenum
and upgraded products to $10.14 per pound from $32.69 per pound.
Sales volume was slightly lower at 7.5 million pounds in the latest
quarter versus 7.7 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 $12 million the first
quarter, down from $77.3 million a year earlier.
Net income was $11.2 million or $0.09 per basic and diluted common
share, compared with $46.8 million or $0.41 per basic and $0.37 per
diluted share in the first quarter of 2008.
The per-share figures are based on a weighted-average number of
shares outstanding of 122.3 million (basic and diluted) in the
first quarter of 2009, compared with 113.5 million (basic) and
127.7 million (diluted) in the first quarter of 2008. At May 6,
2009, there were 122.5 million common shares, 24.5 million warrants
and 8.5 million employee options outstanding.
First-quarter cash flow from operating activities was $44.7
million, compared with $63.4 million a year earlier.
Capital expenditures totaled $18.7 million in the first quarter of
2009, comprised of $14.9 million of sustaining capital expenditures
and $3.8 million for the Company's 75% share of capital
expenditures for the Endako mill expansion.
Cash, cash equivalents and short-term investments were $260.6
million at March 31, 2009, compared with $258 million at December
The Company's total debt (primarily equipment loans) on March 31,
2009 was $16.9 million, down from $17.3 million on December 31,
Selected Consolidated Operations Information
Three months ended
Molybdenum production from mines (000's lb)(1) 6,057 5,589
Cash cost ($/lb produced)(2) $ 5.93 $ 8.29
Molybdenum sold (000's lb) from:
Thompson Creek Mine and Endako Mine
production 6,549 4,082
Product purchased, processed and resold 898 3,572
Average realized price ($/lb) $ 10.14 $ 32.69
(1) Mined production pounds are molybdenum oxide and high
molybdenum disulfide ("HPM") from the Corporation's share of
production from the mines; excludes molybdenum processed from
(2) Weighted-average of Thompson Creek Mine and Endako Mine cash
(mining, milling, roasting and packaging) for molybdenum oxide
HPM produced in the period, including all stripping costs. Cash
excludes: the effect of purchase price adjustments, the effects
changes in inventory, and depreciation, depletion, amortization
accretion. The cash cost for Thompson Creek, which only
sulfide on site, includes an estimated molybdenum loss and an
allocation of roasting and packaging costs from the Langeloth
The Company's mines produced 6.1 million pounds of molybdenum in
the first quarter, up from 5.6 million pounds in the first quarter
of 2008. The Thompson Creek Mine produced 4.4 million pounds, up
from 3.6 million pounds a year earlier, while the Company's 75%
share of the Endako Mine's production was 1.7 million, compared
with 2 million pounds a year earlier.
The weighted-average cash costs were $5.93 per pound produced in
the first quarter of 2009, compared with $8.29 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. 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
At the Thompson Creek Mine, cash costs in the first quarter were
$5.83 per pound produced (including deferred stripping costs of
$1.67 per pound produced), compared with $8.76 per pound produced
(including deferred stripping costs of $0.77 per pound produced) a
year earlier. The Endako Mine's cash costs were $6.17 per pound
produced, compared with $7.41 per pound produced a year earlier.
There were no deferred stripping costs at Endako.
Molybdenum prices declined gradually during the first quarter of
2009, falling in 11 of the first 13 weeks of the year. The monthly
Platts Metals Week published molybdenum oxide price averaged $8.94
per pound during the quarter. For the month of April 2009, this
published price declined further to an average $7.90 per pound. The
published Platts Metals Week price on April 30, 2009 was a range of
$8.30 to $8.80 per pound.
Based on market trends experienced in the January to April period,
the Company expects its average realized price to be lower in the
second quarter than in the first quarter of 2009. Additionally, the
Company's sales volumes are expected to be less during the 2009
second quarter as the Company continues its efforts to match
production with the anticipated level of sales.
For 2009, previous guidance for molybdenum production levels of 20
to 24 million pounds remains unchanged. Expected production from
the Thompson Creek Mine is 15 to 17 million pounds (unchanged from
previous guidance), and the Company's 75% share of Endako Mine's
expected production is 5 to 7 million pounds (unchanged from
Given the lower cash cost per pound produced for the 2009 first
quarter, the anticipated average cash cost per pound produced in
2009 has been revised to an estimated $6.25 to $7.25 per pound
(compared to previous guidance of $7.25 to $8.25 per pound), with
the Thompson Creek Mine expected to be approximately $6.00 to $7.00
per pound (compared to previous guidance of $7.00 to $8.00 per
pound) and the Endako Mine at an estimated cash cost of $7.00 to
$8.00 per pound (compared to previous guidance of $8.00 to $9.00
per pound). This assumes a US$/Cdn$ exchange rate of 1.20 for the
last nine months of 2009.
The revised 2009 Thompson Creek Mine cash cost per pound produced
includes approximately $30 million of stripping costs, amounting to
$1.75 to $2.00 per pound produced (compared to previous guidance of
$40 million of stripping costs or $2.30 to $2.60 per pound
produced) related to future planned production phases. The 2009
Endako Mine operating plan has minimal stripping costs.
The decline in the expected cash cost per pound produced was
primarily due to the result of favorable foreign exchange rates in
the first quarter of 2009 (converting Cdn$ costs to US$ costs) and
lower mining and milling costs, including lower grinding media,
consumables and electrical power costs together with lower
equipment maintenance costs.
For 2009, the Company's share of estimated sustaining capital
expenditures at both mines and the Langeloth Metallurgical Facility
is expected to be $38 million and its 75% share of the estimated
Endako mill expansion capital expenditures is expected to be $22
Due to the slowing demand for molybdenum and sharp decline in
molybdenum prices in the 2008 fourth quarter, the Endako mill
expansion project was postponed until economic conditions improve.
Through March 31, 2009, the Company's 75% share of Endako expansion
capital expenditures was $47.1 million. The Company's remaining
commitment for capital spending on this project while it is
postponed is $18.2 million in the last nine months of 2009 and $18
million in 2010.
The Company's 2009 sales of molybdenum produced from its own mines
are expected to be 20 to 24 million pounds, with additional sales
of molybdenum purchased, processed and resold in 2009 expected to
be 3 to 4 million pounds.
The Company believes the long-term outlook for its business is
positive. The Company is positioned to react quickly to further
changes in the molybdenum market in order to ensure that working
capital levels are maintained. Operating cash flows will be
impacted by approximately $20 to $24 million for every $1.00 per
pound change in the molybdenum price.
Additional information on the Company's financial position is
available in Thompson Creek's Financial Statements and Management's
Discussion and Analysis for the period ended March 31, 2009, which
will be filed with SEDAR (www.sedar.com) and posted on the
Company's website (www.thompsoncreekmetals.com).
Conference call and webcast
Thompson Creek will hold a conference call for analysts and
investors to discuss its first-quarter 2009 financial results on
Friday, May 8, 2009 at 8:30 a.m. (Eastern). Kevin Loughrey,
Chairman and Chief Executive Officer, and Pamela Saxton, Chief
Financial Officer, will be available to answer questions during the
To participate in the call, please dial 416-644-3421 or
1-800-595-8550 about five minutes prior to the start of the call. A
live audio webcast of the conference call will be available at
www.newswire.ca and www.thompsoncreekmetals.com.
An archived recording of the call will be available at 416-640-1917
or 1-877-289-8525 (Passcode 21303485 followed by the number sign)
from 10:30 a.m. on May 8 to 11:59 p.m. on May 15. An archived
recording of the webcast will also be available at Thompson Creek's
About Thompson Creek Metals Company Inc.
Thompson Creek Metals Company Inc. is one of the largest publicly
traded, pure molybdenum producers in the world. The Company owns
the Thompson Creek open-pit molybdenum mine and mill in Idaho, a
metallurgical roasting facility in Langeloth, Pennsylvania and a
75% share of the Endako open-pit mine, mill and roasting facility
in northern British Columbia. Thompson Creek has two high-grade
underground molybdenum deposits, the Davidson Deposit near
Smithers, B.C., and the Mount Emmons Deposit near Crested Butte,
Colorado. The Company is continuing to pursue permitting of the
Davidson Project and is evaluating the Mount Emmons Deposit. The
Company has approximately 750 employees. Its principal executive
office is in Denver, Colorado, and it has other executive offices
in Toronto, Ontario and Vancouver, British Columbia. More
information is available at www.thompsoncreekmetals.com