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THOMPSON CREEK REPORTS THIRD QUARTER AND NINE MONTH 2012 FINANCIAL RESULTS



Thompson Creek Reports Third Quarter and Nine Month 2012 Financial Results

Thompson Creek Reports Third Quarter and Nine Month 2012 Financial Results



NYSE: TC
TSX: TCM

DENVER, CO, Nov.

9, 2012 /CNW/ - Thompson Creek Metals Company Inc.

(the "Company"), a growing, diversified North American mining company, today announced financial results for the three and nine months ended September 30, 2012, prepared in accordance with United States generally accepted accounting principles ("US GAAP").

All dollar amounts are in United States ("US") dollars unless otherwise indicated.

The Company reported for the third quarter ended September 30, 2012, a net loss of $48.2 million, or $0.29 per basic and diluted share, which included a goodwill impairment loss of $47.0 million, or $0.28 per basic and diluted share, and an adjusted net loss of $1.2 million, or $0.01 per basic and diluted share (excluding the goodwill impairment for 2012), on consolidated revenue of $74.9 million.

This compares to net income of $45.6 million, or $0.27 per basic and diluted share, and adjusted net income of $3.6 million, or $0.02 per basic and diluted share, on consolidated revenue of $154.8 million for the prior year period.

For the nine months ended September 30, 2012, the Company reported a net loss of $61.9 million, or $0.37 per basic and diluted share, which included a goodwill impairment loss of $47.0 million, or $0.28 per basic and diluted share and a non-cash unrealized gain on common stock purchase warrants of $1.8 million, or $0.01 per basic and diluted share.

Non-GAAP adjusted net loss for the first nine months of 2012 was $16.7 million, or $0.10 per basic and diluted share (excluding the goodwill impairment and the unrealized gain on common stock purchase warrants for 2012), on consolidated revenue of $302.0 million.

This compares to net income of $291.3 million, or $1.75 per basic share and $1.67 per diluted share, and adjusted net income of $122.9 million, or $0.74 per basic share and $0.70 per diluted share, on consolidated revenue of $552.4 million for the prior year period.

For the third quarter and first nine months of 2012, the Company realized operating losses of $37.4 million and $72.3 million, respectively.

The operating losses were primarily the result of declining molybdenum market prices, lower production and higher unit costs from our mines, which resulted in lower-of-cost-or-market product inventory write-downs of $29.5 million and $57.2 million in the third quarter and first nine months of 2012, respectively.

Combined with this were significantly lower sales volumes from our mines in the third quarter and first nine months of 2012 due to lower production volumes.

During the third quarter of 2012, the Company suspended waste stripping activity associated with the next phase of production at the Thompson Creek Mine.

As a result of this decision and the recent decline in molybdenum prices, the Company was required to evaluate its goodwill for impairment on an enterprise-wide basis at September 30, 2012.

As a result of this evaluation, an impairment charge of $47.0 million was recorded.

Production and costs during the third quarter and first nine months of 2012 were negatively impacted by lower-than-anticipated ore grades and mill recoveries at the Endako Mine, planned mine pit sequencing and waste stripping activities at the Thompson Creek Mine, and the May 2012 pit wall slough at the Thompson Creek Mine.  Although the pit wall slough at the Thompson Creek Mine had a negative impact on production from the mine during the second quarter of 2012, the Company believes that the impact of the slough on total production from the Thompson Creek Mine for 2012 will not be material, as we are currently mining higher-grade ore at the Thompson Creek Mine and plan to continue doing so throughout the fourth quarter of 2012.

A planned third quarter shut-down of the Langeloth Facility for scheduled repairs and maintenance activities also resulted in higher inventory levels in the third quarter of 2012.  The average realized molybdenum sales price for the third quarter and nine months of 2012 was $12.85 and $14.15 per pound, respectively, compared to $15.64 and $16.83 per pound for the same periods in 2011.

Kevin Loughrey, Chairman and Chief Executive Officer of Thompson Creek, said, "Although our financial results continued to be negatively impacted in the third quarter and first nine months of 2012 for the reasons discussed above, I am pleased to report that we have achieved higher production and lower costs for the third quarter of 2012, as compared to the second quarter of 2012.  Total production for the third quarter of 2012 was 6.1 million pounds of molybdenum, compared to 4.1 million pounds in the second quarter of 2012, an increase of 49%.  Weighted-average cash costs for the third quarter of 2012 were $9.46 per pound, compared to $14.57 per pound in the second quarter of 2012, a decrease of 35%.  We anticipate that the previously announced revised mine plans for the Endako and Thompson Creek Mines, as well as our other ongoing initiatives will continue to increase production and lower costs and enable us to meet our 2012 updated production and cash cost guidance."

"In the third quarter, we continued to make significant progress in the construction and development of our Mt.

Milligan copper-gold mine," said Mr.

Loughrey.  "The total capital expenditure since inception of the project on a cash basis is approximately C$935 million and overall project completion is estimated to be at 75%.  The project remains on budget and on schedule, with completion expected in the third quarter of 2013 and commercial production of copper and gold expected in the fourth quarter of 2013.  As we look forward, we are on track to diversifying our portfolio of assets and strengthening the Companys longer-term financial profile," added Mr.

Loughrey.

Selected Consolidated Financial and Operational Information
(US$ in millions, except per share and per pound amounts)

    Three Months Ended
September 30,
  Nine Months Ended
September 30,
 
    2012   2011   2012   2011  
    (unaudited)  
Financial                  
Revenues                  
  Molybdenum sales   $ 72.6   $ 150.4   $ 291.8   $ 539.0  
  Tolling, calcining and other   2.3   4.4   10.2   13.4  
           Total revenues   74.9   154.8   302.0   552.4  
Costs and expenses                  
  Operating expenses   85.9   98.9   296.1   284.7  
  Depreciation, depletion and amortization   17.0   19.6   48.1   59.5  
      Total costs of sales   102.9   118.5   344.2   344.2  
  Selling and marketing   1.4   1.8   4.5   6.7  
  Accretion expense   0.5   0.5   1.6   1.4  
  General and administrative   7.0   7.3   22.1   21.6  
  Exploration   0.5   4.3   1.9   11.1  
    Total costs and expenses   112.3   132.4   374.3   385.0  
Operating (loss) income   (37.4 ) 22.4   (72.3 ) 167.4  
Other expense (income)   (26.8 ) (17.6 ) (28.5 ) (144.9 )
(Loss) income before income and mining and taxes   (64.2 ) 40.0   (100.8 ) 312.3  
Income and mining taxes (benefit) expense   (16.0 ) (5.6 ) (38.9 ) 21.0  
Net (loss) income   $ (48.25 ) $ 45.6   $ (61.9 ) $ 291.3  
Net (loss) income per share                  
  Basic   $ (0.29 ) $ 0.27   $ (0.37 ) $ 1.75  
  Diluted   $ (0.29 ) $ 0.27   $ (0.37 ) $ 1.67  
Cash (used) generated by operating activities   $ (18.8 ) $ 51.4   $ (36.1 ) $ 181.6  
Adjusted non-GAAP Measures: (1)                          
Adjusted net (loss) income (1)   $ (1.2 ) $ 3.6   $ (16.7 ) $ 122.9  
Adjusted net (loss) income per share - basic (1)   $ (0.01 ) $ 0.02   $ (0.10 ) $ 0.74  
Adjusted net (loss) income per share - diluted (1)   $ (0.01 ) $ 0.02   $ (0.10 ) $ 0.70  
Operational Statistics                  
Mined molybdenum production (000s lb) (2)   6,139   3,696   14,682   24,035  
Cash cost ($/lb produced) (3)   $ 9.46   $ 15.62   $ 11.95   $ 7.09  
Molybdenum sold (000s lb):                  
  Thompson Creek and Endako Mine product   3,280   7,426   12,657   26,438  
  Purchased and processed product   2,369   2,191   7,964   5,595  
    5,649   9,617   20,621   32,033  
Average realized sales price ($/lb) (1)   $ 12.85   $ 15.64   $ 14.15   $ 16.83  

______________________________________

(1)      See "Non-GAAP Financial Measures" for the definition and reconciliation of these non-GAAP measures.
(2)      Mined production pounds reflected are molybdenum oxide and high performance molybdenum disulfide ("HPM") from the Companys share of production from the mines; excludes molybdenum processed from purchased product.
(3)      Weighted-average of Thompson Creek Mine and Endako Mine (75% share) cash costs (mining, milling, mine site administration, roasting and packaging) for molybdenum oxide and HPM produced in the period, including all stripping costs.

Cash cost excludes: the effect of purchase price adjustments; the effects of changes in inventory; corporate allocations; stock-based compensation; other non-cash employee benefits; depreciation, depletion, amortization and accretion; and commissioning and start-up costs for the Endako mill.  The cash cost for the Thompson Creek Mine, which only produces molybdenum sulfide and HPM on site, includes an estimated molybdenum loss (sulfide to oxide), an allocation of roasting and packaging costs from the Langeloth Facility, and transportation costs from the Thompson Creek Mine to the Langeloth Facility.

See "Non-GAAP Financial Measures" for additional information.

Mt.

Milligan Copper-Gold Mine

During the three and nine months ended September 30, 2012, the Company made cash capital expenditures of C$187.0 ($186.5) million and C$492.2 ($490.6) million, respectively, for the Mt.

Milligan project.

Including accruals and capitalized depreciation, the Company incurred C$161.5 ($162.2) million and C$511.6 ($510.3) million of capital expenditures, respectively, for Mt.

Milligan during the three and nine months ended September 30, 2012, excluding capitalized interest and debt issuance costs of $15.1 million and C$32.4 ($32.3) million, respectively. Capital expenditures were primarily related to the ongoing construction of the tailing storage facility, buildings and facilities (concentrator, truck shop, administration building, and primary and pebble crushers), plant site earthworks, cement works, steel erection, construction camp costs, mine development, mining equipment and engineering design costs.  Since inception of the project, C$934.6 million has been spent on a cash basis through September 30, 2012, including approximately C$40.9 million spent prior to the acquisition of Terrane Metals Corp.

("Terrane"), a wholly-owned subsidiary of the Company.

The Mt.

Milligan copper-gold project remains on schedule, with commissioning and start-up expected to commence in the third quarter of 2013, and commercial production of copper and gold expected in the fourth quarter of 2013.  Overall project completion is estimated to be at 75%.  The Company currently estimates an aggregate of approximately C$1.5 billion to construct and develop Mt. Milligan, of which approximately C$515 to C$585 million of cash expenditures remain to be spent as of September 30, 2012.

Updated 2012 and 2013 Guidance

As a result of lower than expected production through the third quarter of 2012, the Companys share of 2012 production guidance for Endako is expected to be at the low end of previous guidance with revised guidance for Endako cash costs per pound produced for 2012 of $13.50 - $14.50.  The Thompson Creek Mine is expected to meet the previous guidance for 2012.  The Companys revised total 2012 estimated production guidance is currently approximately 22.5 to 24.5 million pounds of molybdenum at an average cash cost of approximately $9.25 to $10.25 per pound as set forth in the table below.

The Thompson Creek Mine is now mining in the higher grade ore in Phase 7 and, given that increased production from the Thompson Creek Mine is back-end loaded in the last half of 2012, we expect to increase inventory in the fourth quarter of 2012 as the production volume will exceed our sales contract volumes.  This excess production is expected to be sold over the course of 2013.

The Company anticipates that the completion and start up of Mt.

Milligan will take place in the third quarter of 2013, with commercial production of copper and gold occurring in the fourth quarter of 2013.  Average annual production will be higher during the first full six years of production (approximately 89 million pounds of copper and 262,000 ounces of gold), compared to annual life-of-mine production.  The Company will provide formal production and cash cost guidance for 2014 once Mt.

Milligan is operational.

               
          Nine Months Ended   Years Ended December 31,
          September 30, 2012   2012   2013   2014
          (Actual)   (Estimated,
including YTD
Q3 2012)
  (Estimated)   (Estimated)
Molybdenum Production (000s lb): (1)                    
  TC Mine   10,268   16,000 - 17,000     20,000 - 22,000     17,000 - 19,000
  Endako Mine (75% Share)   4,414   6,500 - 7,500       9,000 - 10,500     10,500 - 11,500
Total molybdenum production (000s lb)   14,682   22,500 - 24,500     29,000 - 32,500     27,500 - 30,500
Cash cost ($/lb produced): (2)                    
  TC Mine $ 10.08 $ 7.50 - 8.50  



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