Thompson Creek Produced Record 10.3 Million Pounds Molybdenum
DENVER, CO - "Thompson Creek Metals Company, Inc. achieved excellent financial performance in the first quarter of 2011, mainly as a result of increased production, sales volumes and molybdenum prices," said Kevin Loughrey, Chairman and Chief Executive Officer. "The Company produced a record 10.3 million pounds of molybdenum, and sold a record 10.1 million pounds of molybdenum from its mines for an average realized molybdenum sales price for the quarter of $17.39, up 20% from $14.50 in the first quarter of 2010. We anticipate that over the remainder of 2011, the price for molybdenum oxide will continue to be volatile, but will gradually increase with the expected improvement in worldwide molybdenum bearing steel production."
The Company also announced that it has approved the increased capital expenditure budget for the Mt. Milligan project in British Columbia from C$915 million to C$1.265 billion. The C$350 million increase is attributable to design improvements, increases in labor costs, the cost of steel, concrete and other materials, and changes in the foreign exchange rate.
"Mt. Milligan is an important building block for our Company, both in terms of growth and diversification," said Kevin Loughrey. "We believe that, notwithstanding the capital increase, the economics for the project are still extremely attractive, and our liquidity and capital resources are sufficient to complete the construction of the Mt. Milligan mine. We expect to commence production in late 2013 and produce approximately 81 million pounds of copper and 194,000 ounces of gold annually," said Loughrey.
Thompson Creek had working capital of $392.7 million, including $303.0 million of cash, cash equivalents and short-term investments, $106.8 million of receivables, and $20.5 million of debt related to equipment financings. The Company intends to fund the remaining mill expansion costs at the Endako Mine and the Mt. Milligan development costs from a combination of cash on hand, cash flow from operations, funds from various financing facilities, the remaining proceeds from the gold stream transaction with Royal Gold and expected funds from the exercise of warrants that expire in October 2011. Thompson Creek may consider additional debt financings. The timing of any financing transaction will depend on market conditions. The Company does not currently intend to fund Mt. Milligan development costs through the issuance of equity or equity-linked securities. Thompson Creek Mine estimated production is expected to be 22 - 24 million pounds and estimated cash costs are expected to be $6 - $7 per pound. Endako Mine estimated production is expected to be 6 - 8 million pounds of molybdenum and estimated cash costs are expected to be $10 - $12 per pound, assuming a US to Canadian foreign exchange rate of US$1.00 - C$1.00 for the last nine months of the year. Total 2011 production is expected to be 28 - 32 million pounds and 2011 average cash costs are expected to be $7 - $8 per pound. For the Thompson Creek Mine, the Company expects that the first half of 2011 will have higher production and lower cash costs than the second half of 2011. This is primarily the result of the Thompson Creek Mine pit sequencing and the tapering off of the higher grade production in the first half of 2011, with more stripping activities and significantly lower-grade production in the second half of 2011. This is expected to increase operating expenses and significantly reduce net income in the second half of 2011. The Company produces molybdenum at its 100%-owned Thompson Creek Mine in Idaho and Langeloth Metallurgical Facility in Pennsylvania and its 75%-owned Endako Mine in northern British Columbia. The Company is also in the process of constructing the Mt. Milligan copper-gold mine in northern British Columbia, which is expected to commence production in 2013. The Company's development projects include the Davidson molybdenum property and the Berg copper-molybdenum-silver property, both located in central British Columbia. Thompson Creek has approximately 967 employees. The company's address is 6 West Dry Creek Circle, Suite 810, Littleton, CO 80120, (303) 761-8801, fax: (303) 761-7420, email: [email protected].