NEW YORK Thompson Creek Metals Co. Inc.s Mount Milligan copper-gold project in British Columbia is on schedule to start up in the third quarter of 2013.
"The engineering . . . is 95 percent complete, procurement is 95 percent complete and construction is 44 percent complete," the Denver-based molybdenum producer said in commentary released with its first-quarter results.
Mount Milligan, which is expected to produce about 81 million pounds of copper and 194,000 ounces of gold annually, is projected to cost between Canadian $1.4 billion and C$1.5 billion ($1.41 billion to $1.51 billion), up from initial estimates of C$1.27 billion due to cost overruns (AMM, Feb. 29).
The companys net income plunged to $1.1 million in the first quarter from $128.9 million in the same period last year on revenue that slid 45 percent to $113.6 million. "The first-quarter results were impacted by significantly lower production, higher unit costs, higher unit depreciation and lower sales volumes and average realized prices compared to the first quarter of 2011," the company said.
Skewing the comparison was a non-cash unrealized gain on common stock purchase warrants of $66 million that boosted Thompson Creeks net income in the first quarter of last year.
Molybdenum sales prices averaged $14.74 per pound during the first quarter, down 15.2 percent from $17.39 a year earlier, while cash costs more than doubled to $12.95 per pound. Molybdenum sales fell to 4.9 million pounds, less than half the 10.1 million pounds recorded a year ago as production fell to 4.4 million pounds from 10.3 million pounds due to the ramp-up of the recently completed mill at the companys Endako Mine in British Columbia (AMM, April 23).
"Production is expected to be higher in the second half of 2012 due to the anticipated ramp-up of production from the newly completed mill, together with the improved ore accessibility at the Thompson Creek Mine," the company said. It reiterated that it expects to meet its previously issued production guidance for 2012 of between 26 million and 28 million pounds.