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Thompson Creek's revenue, net surge

Nov 13, 2013 | 04:44 PM | Daniel Fitzgerald

Tags  Thompson Creek Metals, molybdenum, molybdenum pricing, copper production, Jacques Perron, Mark A. Wilson, Mount Milligan, Daniel Fitzgerald


 

NEW YORK — Thompson Creek Metals Co. Inc. posted higher revenue in the third quarter despite ongoing weakness in molybdenum pricing, while its Mount Milligan copper-gold mine in British Columbia continues to ramp up.

The Denver-based company recorded net income of $13.8 million for the three months ended Sept. 30 in contrast to a $48.2 million net loss in the same period last year on revenue that increased 21.2 percent to $90.8 million from $74.9 million, attributing the gains in part to a 39-percent rise in molybdenum production and 37-percent reduction in production costs at its Endako and Thompson Creek Mines.

Molybdenum production for the quarter totaled 8.5 million pounds, up 39.3 percent from 6.1 million pounds a year earlier. Sales increased 48.2 percent to 8.3 million pounds from 5.6 million pounds, but the average realized sales price fell 19.8 percent to $10.30 per pound from $12.85 per pound.

Thompson Creek executive vice president and chief commercial officer Mark A. Wilson acknowledged to AMM that molybdenum prices remain at suboptimal levels, despite a recent recovery in domestic spot pricing over the past two months.

"We are seeing increased steel production in developed markets, but the growth has been tepid at best," he said. "Steel capacity utilization is still below 80 percent, so there’s room for a lot more growth there."

Chief executive officer Jacques Perron said the company was also continuing to consider options for its Thompson Creek Mine, emphasizing that a resumption of stripping is still a possibility if molybdenum prices improve in the near future. Stripping was suspended in October 2012 as part of cost-cutting measures (amm.com, Oct. 3, 2012).

"I suspect we will make a decision sometime in the first quarter of 2014," he said.

The company added that while operating results continue to improve at Endako, "management expects to continue optimizing production operating activities, undertake additional cost savings and evaluate other measures at Endako in response to molybdenum market conditions."

Meanwhile, the Mount Milligan site has produced 1.1 million pounds of copper in concentrate since starting up in September, with the company expecting to make its first concentrate sale in the fourth quarter of 2013.

Perron said the project has experienced minor glitches in its grinding and flotation circuits as part of the ramp-up, although nothing serious enough to require additional capital investment.

While the majority of commissioning activities have been completed, start-up activities at Mount Milligan are expected to continue into the first quarter of 2014. The company does not expect to achieve commercial production, defined as 30 days of 60-percent design capacity mill throughput, until the first quarter of 2014.

The company has also held off on providing production, cash cost and capital spending guidance for 2014 until Mount Milligan is fully operational.




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