THOMPSON CREEK ANNOUNCES THIRD-QUARTER 2010 REVENUES UP 41% AND CASH FLOW
FROM OPERATIONS UP 143%
NYSE: TC
TSX: TCM, TCM.WT
TSX-V:TRX.WT, TRX.WT.A
TORONTO, Nov. 4 /CNW/ - Thompson Creek Metals Company Inc. ("Company" or "Thompson Creek"), a growing, diversified, North American mining company, today announced financial results for the three and nine months ended September 30, 2010 prepared in accordance with United States generally accepted accounting principles ("US GAAP"). All dollar amounts are in United States ("US") dollars unless otherwise indicated.
Highlights for the Quarter:
- Revenues for the third quarter of 2010 were $161.8 million, up 41.4%
from $114.4 million for the third quarter of 2009.
- Net Income for the third quarter of 2010 was $31.1 million, or $0.22
per basic and diluted share, which included a non-cash unrealized
loss on common stock warrants of $20.5 million, or $0.15 per basic
and $0.14 per diluted share. Net loss for the third quarter of 2009
was $1.4 million, or $0.01 per basic and diluted share, which
included a non-cash unrealized loss on common stock warrants of $15.7
million, or $0.12 per basic and diluted share.
- Non-GAAP Adjusted Net Income for the third quarter of 2010 (excluding
the non-cash unrealized loss on the warrants) was $51.6 million, or
$0.37 per basic and $0.36 per diluted share. Non-GAAP adjusted net
income for the third quarter of 2009 (excluding the non-cash
unrealized loss on the warrants) was $14.3 million, or $0.11 per
basic and diluted share.
- Molybdenum Production for the third quarter of 2010 was 8.0 million
pounds, up 28% from 6.2 million pounds for the third quarter of 2009.
- Cash Flow From Operations was $59.0 million for the third quarter of
2010, up 143.8% from $24.2 million for the third quarter of 2009.
- Capital Costs for the nine months ended September 30, 2010 were
$169.7 million, comprised of $65.0 million of capital costs for the
mines, the Langeloth facility and corporate, and $104.7 million for
the Company's 75% share of capital costs for the Endako mill
expansion project. The capital costs for the first nine months of
2010 included accrued amounts of $22.4 million at September 30, 2010;
therefore, capital expenditures for the first nine months of 2010
were $147.3 million.
- Cash, Cash Equivalents and Short-term Investments as of September 30,
2010 were $493.0 million, compared to $511.5 million as of December
31, 2009. Total debt as of September 30, 2010 was $9.9 million,
compared to $12.9 million as of December 31, 2009.
"Thompson Creek's third-quarter financial performance was significantly improved from a year earlier mainly as a result of strengthening molybdenum prices," said Kevin Loughrey, Chairman and Chief Executive Officer. "The Company's average realized molybdenum sales price for the third quarter of 2010 increased by 20% to $15.30 per pound from $12.75 per pound in the third quarter of 2009. We anticipate that over the balance of 2010 and in 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," said Mr. Loughrey.
On October 20, 2010, Thompson Creek completed the acquisition of Terrane Metals Corp. which was acquired to diversify the Company's current asset base to include contributions from copper and gold subsequent to the expected start-up of Terrane's Mt. Milligan Project in 2013.
"We are extremely pleased to have completed the Terrane acquisition and transition our Company from a pure molybdenum producer to a diversified base metals company. We are excited to begin construction of the Mt. Milligan Project, which we expect will generate substantial growth in earnings and cash flow for the Company once production commences," Mr. Loughrey stated.
The Company's financial performance continues to be affected by the previously disclosed requirement under US GAAP to account for the Company's outstanding common stock warrants as a derivative liability, with changes in the fair market value recorded in net income (loss). During the third quarter of 2010, the value of the outstanding warrants (and the Company's reported derivative liability) was increased by $20.5 million, resulting in a non-cash loss of the same amount. Excluding the non-cash loss related to the warrants, the Company's non-GAAP adjusted net income for the third quarter of 2010 was $51.6 million. Additionally, the Terrane warrants that continue to remain outstanding will also be accounted for under US GAAP as a derivative liability. The Company will continue to present non-GAAP adjusted net income on a quarterly basis related to both the Thompson Creek and Terrane outstanding warrants.
2010 Updated Annual Guidance and Outlook
- Estimated molybdenum production of approximately 31 million pounds,
with the Thompson Creek Mine at approximately 24 million pounds and
the 75% share of the Endako Mine at approximately 7 million pounds
(changed from previous guidance of 29 to 32 million pounds, with the
Thompson Creek Mine at 22 to 24 million pounds and the 75% share of
the Endako Mine at 7 to 8 million pounds).
- Estimated sales of molybdenum produced at the Company's mines of
approximately 29 million pounds (changed from previous guidance of 27
to 30 million pounds). Thompson Creek currently has fixed-price sales
contracts for approximately 0.3 million pounds at an average fixed
price of $16.53 per pound for molybdenum oxide for the remainder of
the year.
- Estimated average cash costs per pound produced of approximately
$6.50 per pound (changed from previous guidance of $6 to $7 per
pound), with approximately $5.50 per pound at the Thompson Creek Mine
(changed from previous guidance of $5.25 to $6.25 per pound) and
approximately $9 per pound at the Endako Mine (changed from previous
guidance of $8 to $9 per pound), assuming a US to Canadian dollar
exchange rate of US$1.00 = C$1.00 for the last three
months of 2010. For the Endako Mine, a $0.01 change in the Canadian
foreign exchange rate would result in a change in the cash cost per
pound produced of approximately $0.10 per pound.
Capital expenditures for 2010 are expected to be approximately $300 million (changed from previous guidance of $293 million), comprised of $87 million in capital expenditures for the mines, the Langeloth facility and corporate (changed from previous guidance of $94 million), $180 million for Thompson Creek's 75% share of capital expenditures required for the mill expansion project at the Endako Mine (changed from previous guidance of $199 million), and $33 million for Mt. Milligan.
In 2010, Thompson Creek's expenditures for exploration drilling activities at both of its operating mines is expected to total approximately $3 million (changed from previous guidance of $2 to $4 million). For 2010, the Company's expenditures are expected to be approximately $7 million (changed from previous guidance of $5 to $7 million) under the option agreement with U.S. Energy Corp. for the Mount Emmons Project for an ongoing pre-feasibility study, further engineering evaluations, and ongoing project maintenance. Thompson Creek is not expecting to have significant expenditures on the Davidson Project (unchanged from previous guidance).
Net income for the fourth quarter of 2010 is expected to be impacted by the final closing costs related to the Terrane acquisition, which will be expensed, no anticipated foreign exchange gains, and an effective income tax rate of 17 to 20%. Also impacting net income for the fourth quarter of 2010 will be the changes in fair value for the outstanding Thompson Creek and Terrane warrants.
2011 Annual Guidance and Outlook
- Estimated molybdenum production of 30 to 33 million pounds, with the
Thompson Creek Mine at 22 to 24 million pounds and the 75% share of
the Endako Mine at 8 to 9 million pounds.
- Estimated sales of molybdenum produced at the Company's mines of 30
to 34 million pounds. Given expected market conditions, Thompson
Creek does not anticipate a significant change in its product
inventory position in 2011.
- Estimated average cash cost per pound produced of $7 to $8 per pound,
with $6 to $7 per pound at the Thompson Creek Mine and $9 to $10 per
pound at the Endako Mine, assuming a US to Canadian dollar exchange
rate of US$1.00 = C$1.00.
The mill expansion project at the Endako Mine is expected to be completed in the fourth quarter of 2011, with additional production expected to ramp up from the Endako Mine during that quarter. For the Thompson Creek Mine, the first half of 2011 is expected to have higher production (14 to 15 million pounds) and lower cash costs ($4.50 to $5.50 per pound) than during the second half of 2011 (8 to 9 million pounds and higher cash costs of $8.50 to $10 per pound). This should primarily be the result of the Thompson Creek Mine pit sequencing, with the tapering off of higher-grade production in the first half, and more stripping activities and significantly lower-grade production in the second half of 2011.
Capital expenditures for 2011 are expected to be approximately $525 million, comprised of $60 million in capital expenditures for the mines, the Langeloth facility and corporate, $115 million for Thompson Creek's 75% share of capital expenditures required for the mill expansion project at the Endako Mine and a preliminary estimate of $350 million related to the Mt. Milligan Project.
In 2011, exploration expenditures are expected to be $20 to $23 million. This includes exploration drilling at both of Thompson Creek's operating mines totaling $6 to $7 million, $11 to $12 million of exploration expenditures under the option agreement with U.S. Energy Corp. for the Mount Emmons Project (primarily for preparatory work for exploration drilling, further engineering evaluations, the ongoing pre-feasibility study, and ongoing project maintenance activities) and $2 to $3 million on the exploration projects acquired with the Terrane acquisition (primarily related to further evaluation work on the Berg property). Further work on the Davidson Project will be deferred until the evaluation of the Berg property is completed. Thompson Creek is expecting to have ongoing maintenance expenditures on the Davidson Project of approximately $1 million in 2011.
2012 Annual Guidance
The Company is currently preparing revised National Instrument 43-101 reports for the Thompson Creek Mine and the Endako Mine that are expected to be filed in the first quarter of 2011. Preliminary estimates for 2012 indicate estimated molybdenum production of 26 to 28 million pounds, with the Thompson Creek Mine at 15 to 16 million pounds and the 75% share of the Endako Mine at 11 to 12 million pounds. The expanded Endako Mill is expected to be in full production as of January 1, 2012. The 2012 estimated average cash cost per pound produced is $7.75 to $9.00 per pound, with the Thompson Creek Mine at approximately $8.50 to $9.50 per pound, and the Endako Mine at $7 to $8 per pound (assuming a US to Canadian dollar exchange rate of US$1.00 = C$1.06).
Selected Consolidated Financial and Operational Information
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
(US$ in millions except per
share and per pound amounts) 2010 2009 2010 2009
------------------------------- --------- --------- --------- ---------
(unaudited)
Financial
Revenues
Molybdenum sales............. $ 157.1 $ 111.8 $ 426.6 $ 258.6
Tolling, calcining and other 4.7 2.6 11.4 8.6
--------- --------- --------- ---------
161.8 114.4 438.0 267.2
--------- --------- --------- ---------
Costs and expenses
Operating expenses........... 89.8 62.5 239.9 173.2
Selling and marketing........ 2.3 1.9 5.6 4.6
Depreciation, depletion and
amortization................ 12.7 11.6 35.6 32.0
Accretion expense............ 0.4 0.3 1.2 1.0
General and administrative... 7.7 4.5 21.9 17.6
Exploration.................. 3.3 1.2 6.8 4.9
--------- --------- --------- ---------
Total costs and expenses... 116.2 82.0 311.0 233.3
--------- --------- --------- ---------
Operating income............... 45.6 32.4 127.0 33.9
Other (income) and expense..... 13.3 22.1 (38.9) 108.5
--------- --------- --------- ---------
Income (loss) before income
and mining taxes.............. 32.3 10.3 165.9 (74.6)
Income and mining taxes........ 1.2 11.7 7.2 7.4
--------- --------- --------- ---------
Net income (loss).............. $ 31.1 $ (1.4) $ 158.7 $ (82.0)
--------- --------- --------- ---------
--------- --------- --------- ---------
Net income (loss) per share
Basic...................... $ 0.22 $ (0.01) $ 1.14 $ (0.66)
Diluted.................... $ 0.22 $ (0.01) $ 1.08 $ (0.66)
Cash generated by operating
activities.................... $ 59.0 $ 24.2 $ 125.8 $ 67.7
Adjusted non-GAAP Measures:(1)
Adjusted net income(1)......... $ 51.6 $ 14.3 $ 128.9 $ 17.0
Adjusted net income per
share - basic(1).............. $ 0.37 $ 0.11 $ 0.92 $ 0.14
Adjusted net income per
share - diluted(1)............ $ 0.36 $ 0.11 $ 0.88 $ 0.14
Operational Statistics
Mined molybdenum production
(000's lb)(2)................. 7,958 6,221 23,261 18,992
Cash cost ($/lb produced)(3)... $ 6.24 $ 5.67 $ 6.17 $ 5.59
Molybdenum sold (000's lb):
Thompson Creek and Endako
Mine product................ 7,750 7,445 21,498 20,499
Purchased and processed
product..................... 2,513 1,324 5,959 3,219
--------- --------- --------- ---------
10,263 8,769 27,457 23,718
--------- --------- --------- ---------
Average realized sales
price ($/lb)(1)............... $ 15.30 $ 12.75 $ 15.54 $ 10.90
--------- --------- --------- ---------
(1) See "Non-GAAP Financial Measures" below for the definition and
calculation of these non-GAAP measures.
(2) Mined molybdenum production pounds reflected are molybdenum oxide and
high performance molybdenum disulfide ("HPM") from our share of
production from the mines; excludes molybdenum processed from
purchased product.
(3) Weighted-average of Thompson Creek Mine and Endako Mine 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, stock-based
compensation, other non-cash employee benefits and depreciation,
depletion, amortization and accretion. The cash cost for the Thompson
Creek Mine, which only produces molybdenum sulfide on site, includes
an estimated molybdenum loss, an allocation of roasting and packaging
costs from the Langeloth Facility, and transportation costs. See
"Non-GAAP Financial Measures" for additional information.
Summary of Quarterly Results
(US$ in millions except per pound and per share amounts - unaudited)
Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
2010 2010 2010 2009 2009
---------------------------------------------
Financial
Revenue $ 161.8 $ 148.4 $ 127.8 $ 106.2 $ 114.4
Operating income (loss) $ 45.6 $ 50.3 $ 31.1 $ 15.8 $ 32.4
Net income (loss) $ 31.1 $ 126.5 $ 1.1 $ 26.0 $ (1.4)
Income (loss) per share:
- basic $ 0.22 $ 0.90 $ 0.01 $ 0.19 $ (0.01)
- diluted $ 0.22 $ 0.87 $ 0.01 $ 0.18 $ (0.01)
Cash generated by
operating activities $ 59.0 $ 41.2 $ 25.6 $ 38.2 $ 24.2
Adjusted non-GAAP
Measures:(1)
Adjusted net income
(loss)(1) $ 51.6 $ 51.7 $ 25.6 $ 20.4 $ 14.3
Adjusted net income (loss)
per share:(1)
- basic(1) $ 0.37 $ 0.37 $ 0.18 $ 0.15 $ 0.11
- diluted(1) $ 0.36 $ 0.36 $ 0.17 $ 0.14 $ 0.11
Operational Statistics
Mined molybdenum production
(000's lb) 7,958 7,034 8,269 6,268 6,221
Cash cost ($/lb produced)(1) $ 6.24 $ 7.06 $ 5.36 $ 6.61 $ 5.67
Molybdenum sold (000's lb):
Thompson Creek and
Endako Mine 7,750 7,013 6,735 6,889 7,445
Purchased and processed
product 2,513 1,626 1,820 1,464 1,324
---------------------------------------------
10,263 8,639 8,555 8,353 8,769
---------------------------------------------
Average realized sales
price ($/lb)(1) $ 15.30 $ 16.84 $ 14.50 $ 12.37 $ 12.75
---------------------------------------------
-----------------------
(1) See "Non-GAAP Financial Measures" below for the definition and
calculation of these non-GAAP measures.
Non-GAAP Financial Measures
In addition to the consolidated financial statements presented in accordance with US GAAP, the Company uses certain non-GAAP financial measures of its financial performance for the reasons described further below. The presentation of these measures is not intended to be considered in isolation from, as a substitute for, or as superior to, the financial information prepared and presented in accordance with US GAAP, and the presentation of these measures may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the results of operations as determined in accordance with US GAAP.
Adjusted Net Income, Adjusted Net Income Per Share - Basic and Diluted
Adjusted net income, and adjusted net income per share - basic and diluted, are referred to in this press release. These are considered key measures by management in evaluating the Company's performance. These measures do not have standard meanings prescribed by US GAAP, and may not be comparable to similar measures presented by other companies. Management believes these measures provide useful supplemental information to investors in order for them to evaluate the Company's financial performance using the same measures as management.
Adjusted net income represents the net income prepared in accordance with US GAAP, adjusted for significant non-cash items. For the third quarter and first nine months of 2010 and 2009, the significant non-cash items were the non-cash gains and losses on the fair value adjustment related to the Company's outstanding common stock purchase warrants.
On January 1, 2009, Thompson Creek was required to adopt the guidance issued by the Emerging Issues Task Force that common stock purchase warrants with a strike price denominated in a currency other than the entity's reporting currency are not considered linked to equity and therefore are to be accounted for as derivatives. As a result of adopting this guidance, the Company's outstanding common stock purchase warrants are accounted for as derivatives beginning January 1, 2009. Thompson Creek recorded a cumulative adjustment to retained earnings upon adoption, and subsequent changes to the fair value of the outstanding warrants were recorded to the statements of operations at each quarter end. The warrant holders' right to exercise at C$9.00 per share expires in October 2011. The Company notes that up until the expiration date of the warrants in October 2011, only one of two scenarios will occur. One is that the warrants are exercised, and the Company receives cash (in C$). The second is that the warrants expire unexercised, and no cash proceeds are received. Thompson Creek does not have an obligation related to the recorded fair value that would require a cash payment, other than minor administrative expenses related to the exercise of warrants.
Since a cash payment will never be required at the settlement of the Warrants, management does not consider gains or losses on the warrants in its evaluation of the Company's financial performance.
Adjusted net income per share (basic and diluted) is calculated using adjusted earnings, as defined above, divided by the weighted average basic and weighted average diluted shares outstanding during the period as determined in accordance with US GAAP.
The following tables reconcile net income presented in accordance with US GAAP to the non-GAAP financial measures of adjusted net income, and adjusted net income per share - basic and diluted, for the three and nine months ended September 30, 2010 and 2009:
For the Three Months Ended September 30, 2010 (unaudited - US$ in
millions except shares and per share amounts)
Weighted Average Weighted Average
Basic Shares Diluted Shares
------------------- -------------------
Net Shares Shares
Income (000's) $/share (000's) $/share
---------- --------- --------- -------- ----------
US GAAP measures...... $ 31.1 139,800 $ 0.22 142,869 $ 0.22
Add (Deduct):
Unrealized loss on
common stock
warrants........... 20.5 139,800 0.15 142,869 0.14
----------
Non-GAAP measures..... $ 51.6 139,800 $ 0.37 142,869 $ 0.36
----------
----------
For the Three Months Ended September 30, 2009 (unaudited - US$ in
millions except shares and per share amounts)
Weighted Average Weighted Average
Basic Shares Diluted Shares
------------------- -------------------
Net Shares Shares
Income (000's) $/share (000's) $/share
---------- --------- --------- -------- ----------
US GAAP measures...... $ (1.4) 125,850 $ (0.01) 125,850 $ (0.01)
Add (Deduct):
Unrealized loss on
common stock
warrants........... 15.7 125,850 0.12 136,159 0.12
----------
Non-GAAP measures..... $ 14.3 125,850 $ 0.11 136,159 $ 0.11
----------
----------
For the Nine Months Ended September 30, 2010 (unaudited - US$ in millions
except shares and per share amounts)
Weighted Average Weighted Average
Basic Shares Diluted Shares
------------------- -------------------
Net Shares Shares
Income (000's) $/share (000's) $/share
---------- --------- --------- -------- ----------
US GAAP measures...... $ 158.7 139,741 $ 1.14 146,517 $ 1.08
Add (Deduct):
Unrealized (gain)
loss on common
stock warrants..... (29.8) 139,741 (0.21) 146,517 (0.20)
----------
Non-GAAP measures..... $ 128.9 139,741 $ 0.92 146,517 $ 0.88
----------
----------
For the Nine Months Ended September 30, 2009 (unaudited - US$ in millions
except shares and per share amounts)
Weighted Average Weighted Average
Basic Shares Diluted Shares
------------------- -------------------
Net Shares Shares
Income (000's) $/share (000's) $/share
---------- --------- --------- -------- ----------
US GAAP measures...... $ (82.0) 123,531 $ (0.66) 123,531 $ (0.66)
Add (Deduct):
Unrealized loss on
common stock
warrants........... 99.0 123,531 0.80 125,073 0.79
----------
Non-GAAP measures..... $ 17.0 123,531 $ 0.14 125,073 $ 0.14
----------
----------
Cash Cost per Pound Produced and Average Realized Sales Price per Pound Sold
Cash cost per pound produced, weighted average cash cost per pound produced and average realized sales price per pound sold are considered key measures in evaluating the Company's operating performance. Cash cost per pound produced, weighted average cash cost per pound produced and average realized sales price per pound sold are not measures of financial performance, nor do they have a standardized meaning prescribed by US GAAP, and may not be comparable to similar measures presented by other companies. Thompson Creek believes that these non-GAAP measures provide useful supplemental information to investors in order that they may evaluate the Company's performance using the same measures as management and, as a result, the investor is afforded greater transparency in assessing the Company's financial performance. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with US GAAP.
Cash cost per pound produced represents the mining (including all stripping costs), milling, mine site administration, roasting and packaging costs for molybdenum oxide and HPM produced at each mine in the period. Stripping costs represent the costs associated with the activity of removing overburden and other mine waste materials in the production phase of a mining operation. Stripping costs that provide access to mineral reserves that will be produced in future periods are expensed under US GAAP as incurred. Cash cost per pound produced excludes the effects of purchase price adjustments, the effects of changes in inventory, stock-based compensation, other non-cash employee benefits and depreciation, depletion, amortization and accretion. 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. The weighted average cash cost per pound produced represents the cumulative total of the cash costs for the Thompson Creek Mine and the Endako Mine divided by the cumulative total production from the Thompson Creek Mine and the Endako Mine.
The average realized sales price per pound sold represents molybdenum sales revenue divided by the pounds sold.
(US$ in millions except per pound amounts - Unaudited)
Three months ended Three months ended
September 30, 2010 September 30, 2009
-------------------------- ---------------------------
Pounds Pounds
Operating Produced Operating Produced
Expenses (1) Expenses (1)
(in (000's (in (000's
millions) lbs) $/lb millions) lbs) $/lb
---------- -------- ------- --------- -------- --------
Thompson Creek Mine
Cash costs -
Non-GAAP(2)....... $ 32.1 6,006 $ 5.35 $ 23.7 4,436 $ 5.35
Add/(Deduct):
Stock-based
compensation.... 0.4 -
Inventory and
other
adjustments..... 1.5 6.3
-------- --------
GAAP operating
expenses.......... $ 34.0 $ 30.0
-------- --------
Endako Mine
Cash costs -
Non-GAAP(2)....... $ 17.4 1,952 $ 8.91 $ 11.5 1,785 $ 6.47
Add/(Deduct):
Stock-based
compensation.... 0.2 -
Inventory and
other
adjustments..... (1.1) 0.9
-------- --------
GAAP operating
expenses.......... $ 16.5 $ 12.4
-------- --------
Other operations
GAAP operating
expenses(3)....... $ 39.3 $ 20.1
-------- --------
GAAP consolidated
operating
expenses.......... $ 89.8 $ 62.5
-------- -------- -------- -------- -------- --------
-------- --------
Weighted-average
cash cost -
Non-GAAP.......... $ 49.7 7,958 $ 6.24 $ 35.3 6,221 $ 5.67
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
(US$ in millions except per pound amounts - Unaudited)
Nine months ended Nine months ended
September 30, 2010 September 30, 2009
-------------------------- ---------------------------
Pounds Pounds
Operating Produced Operating Produced
Expenses (1) Expenses (1)
(in (000's (in (000's
millions) lbs) $/lb millions) lbs) $/lb
---------- -------- ------- --------- -------- --------
Thompson Creek Mine
Cash costs -
Non-GAAP(2)....... $ 94.4 17,441 $ 5.41 $ 74.3 13,513 $ 5.50
Add/(Deduct):
Stock-based
compensation.... 1.4 -
Inventory and
other
adjustments..... (0.8) 14.7
-------- --------
GAAP operating
expenses.......... $ 95.0 $ 89.0
-------- --------
Endako Mine
Cash costs -
Non-GAAP(2)....... $ 48.8 5,820 $ 8.38 $ 31.9 5,479 $ 5.82
Add/(Deduct):
Stock-based
compensation.... 0.9 -
Inventory and
other
adjustments..... (4.0) 2.5
-------- --------
GAAP operating
expenses.......... $ 45.7 $ 34.4
-------- --------
Other operations
GAAP operating
expenses(3)....... $ 99.2 $ 49.8
-------- --------
GAAP consolidated
operating
expenses.......... $ 239.9 $ 173.2
-------- -------- -------- -------- -------- --------
-------- --------
Weighted-average
cash cost -
Non-GAAP.......... $ 143.5 23,261 $ 6.17 $ 106.2 18,992 $ 5.59
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
--------------------
(1) Mined production pounds are molybdenum oxide and HPM from the
Company's share of the production from the mines; excludes molybdenum
processed from purchased product.
(2) Cash costs represent the mining (including all stripping costs),
milling, mine site administration, roasting and packaging costs for
molybdenum oxide and HPM produced in the period. Cash cost excludes:
the effect of purchase price adjustments, the effects of changes in
inventory, stock-based compensation, other non-cash employee benefits
and depreciation, depletion, amortization and accretion. 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.
(3) Other operations represent activities related to the roasting and
processing of third-party concentrate and other metals at the
Langeloth Facility and exclude product volumes and costs related to
the roasting and processing of Thompson Creek Mine and Endako Mine
concentrate. The Langeloth Facility costs associated with roasting
and processing of Thompson Creek Mine and Endako Mine concentrate are
included in their respective operating results above.
Additional information on the Company's financial position is available in Thompson Creek's Quarterly Report on Form 10-Q for the period ended September 30, 2010, which will be filed on EDGAR (www.sec.gov) and 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 third quarter 2010 financial results on Friday, November 5, 2010 at 8:30 am Eastern Time. Kevin Loughrey, Chairman and Chief Executive Officer, and Pamela Saxton, Chief Financial Officer, will be available to answer questions during the call.
To participate in the call, please dial 1 (647) 427-7450 or 1 (888) 231-8191 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 conference call will be available at 1 (416) 849-0833 or 1 (800) 642-1687 (access code 16794588 followed by the number sign) from 11:30 a.m. on November 5 to 11:59 p.m. on November 12. An archived recording of the webcast will also be available at Thompson Creek's website.
About Thompson Creek Metals Company Inc.
Thompson Creek Metals Company Inc. is a growing, diversified, North American mining company. 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. Among the Company's development projects are the Mount Emmons molybdenum deposit in Colorado and the Davidson molybdenum and Berg copper-molybdenum-silver deposits in northern British Columbia. Thompson Creek has approximately 875 employees. Its principal executive office is in Denver, Colorado, and it also has offices in Toronto, Ontario and Vancouver, British Columbia. More information is available at www.thompsoncreekmetals.com.
Cautionary Note Regarding Forward-Looking Statements
----------------------------------------------------
This news release contains "forward-looking information" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved or are "subject" to future events. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Thompson Creek and its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Examples of forward-looking information include, but are not limited to: statements with respect to the future financial or operating performance of Thompson Creek or its subsidiaries and its projects; the estimation of mineral reserves and resources; the realization of mineral reserve estimates; the timing and amount of estimated future production; capital, operating and exploration expenditures; the costs and timing of the development of new deposits including Mount Emmons, Davidson and Berg; the costs and timing of future exploration; requirements for additional capital; the expected increase in Thompson Creek's share of annual production resulting from the expansion of the Endako mine; the benefits of the Terrane acquisition to Thompson Creek shareholders (including the diversification of Thompson Creek's assets; the benefits of the gold stream transaction with Royal Gold; the ability to finance future projects without equity dilution; and Thompson Creek's potential to obtain significant production growth by 2013); the achievement of the mine plan at Mt. Milligan, including estimated mine life, expected annual production, and creation of up to 400 direct permanent jobs; Thompson Creek's plans for funding of initial capital costs at Mt. Milligan; the commissioning of a mine and mill complex at Mt. Milligan in 2013; disruption to Thompson Creek's business as a result of the Terrane acquisition; and Thompson Creek's ability to achieve its expected growth strategy.
Such factors include, among others, risks related to general business, economic, competitive, political and social uncertainties including the current global recessionary economic conditions, the associated low molybdenum prices and the levels of disruption and continuing illiquidity in the credit markets; risks related to foreign currency fluctuations; energy prices and fluctuations; title disputes or claims; limitations of insurance coverage; changes in governmental regulation of mining operations; risks related to the volatility of Thompson Creek's share price; changes in environmental regulation; the actual results of current exploration activities; actual results of reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; possible variations of ore grade or recovery rates; impurities and toxic substances in the mined material, failure of plant, equipment or processes to operate as anticipated; the age of the Langeloth Facility; structural integrity and old equipment at the Endako Mine; accidents, labor disputes and other risks of the mining industry; access to skilled labor; relations with employees; dependence upon key management personnel and executives; political instability, insurrection or war; disruption of transportation services; increased transportation costs and delays in obtaining governmental permits and approvals, or financing or in the completion of development or construction activities. Additional factors that could cause Thompson Creek's results to differ from those described in the forward-looking information can be found in the section entitled "Risk Factors" in Thompson Creek's current Annual Report on Form 10-K, as amended, and subsequent documents filed on EDGAR at www.sec.gov and on SEDAR at www.sedar.com. Although Thompson Creek has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of this news release and Thompson Creek disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by law. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.
Readers should refer to Thompson Creek's current Annual Report on Form 10-K, as amended, which is available on SEDAR at www.sedar.com and EDGAR at www.sec.gov and other continuous disclosure documents available at www.sedar.com and www.sec.gov for further information on ore reserves and mineralized material, which is subject to the qualifications and notes set forth therein.
THOMPSON CREEK METALS COMPANY INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
2010 2009
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(in millions, except
share data)
ASSETS
Current assets
Cash and cash equivalents.................. $ 457.9 $ 158.5
Short-term investments..................... 35.1 353.0
Accounts receivable-trade.................. 63.8 32.4
Accounts receivable-related parties........ 9.6 10.3
Product inventory.......................... 66.0 43.5
Material and supplies inventory............ 33.0 34.5
Prepaid expense and other current assets... 3.2 6.0
Income tax receivable...................... 6.7 4.8
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675.3 643.0
Property, plant and equipment, net........... 735.4 605.7
Restricted cash.............................. 19.9 16.8
Reclamation deposits......................... 26.7 30.3
Goodwill..................................... 47.0 47.0
Other assets................................. 0.5 1.8
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$ 1,504.8 $ 1,344.6
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities... $ 59.4 $ 29.9
Income and mining taxes payable............ - 3.6
Current portion of long-term debt.......... 2.9 3.7
Deferred income tax liabilities............ 6.7 6.7
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69.0 43.9
Long-term debt............................... 7.0 9.2
Other liabilities............................ 25.4 24.6
Asset retirement obligations................. 26.2 24.8
Common stock warrant derivatives............. 85.6 115.4
Deferred income tax liabilities.............. 136.4 141.3
------------ ------------
349.6 359.2
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Commitments and contingencies
Shareholders' equity.........................
Common stock, no-par, 139,844,091 and
139,511,257 shares issued and outstanding,
as of September 30, 2010 and
December 31, 2009, respectively........... 700.4 697.1
Additional paid-in capital................... 49.4 45.7
Retained earnings............................ 391.5 232.8
Accumulated other comprehensive income....... 13.9 9.8
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1,155.2 985.4
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$ 1,504.8 $ 1,344.6
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THOMPSON CREEK METALS COMPANY INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ---------------------
2010 2009 2010 2009
--------- --------- --------- ---------
(in millions, except per share amounts)
REVENUES
Molybdenum sales........... $ 157.1 $ 111.8 $ 426.6 $ 258.6
Tolling, calcining
and other................. 4.7 2.6 11.4 8.6
--------- --------- --------- ---------
Total revenues........... 161.8 114.4 438.0 267.2
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COSTS AND EXPENSES
Operating expenses......... 89.8 62.5 239.9 173.2
Selling and marketing...... 2.3 1.9 5.6 4.6
Depreciation, depletion
and amortization.......... 12.7 11.6 35.6 32.0
Accretion expense.......... 0.4 0.3 1.2 1.0
General and administrative. 7.7 4.5 21.9 17.6
Exploration................ 3.3 1.2 6.8 4.9
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Total costs and expenses. 116.2 82.0 311.0 233.3
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OPERATING INCOME 45.6 32.4 127.0 33.9
OTHER (INCOME) AND EXPENSE
Change in fair value of
common stock warrants..... 20.5 15.7 (29.8) 99.0
Loss (gain) on
foreign exchange.......... (6.7) 6.8 (8.0) 10.7
Interest (income)
expense, net.............. (0.1) (0.4) (0.4) (0.8)
Other...................... (0.4) - (0.7) (0.4)
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Total other (income)
and expense............. 13.3 22.1 (38.9) 108.5
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Income (loss) before income
and mining taxes............ 32.3 10.3 165.9 (74.6)
Income and mining
tax expense................. 1.2 11.7 7.2 7.4
--------- --------- --------- ---------
NET INCOME (LOSS)............ $ 31.1 $ (1.4) $ 158.7 $ (82.0)
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NET INCOME (LOSS) PER SHARE
Basic...................... $ 0.22 $ (0.01) $ 1.14 $ (0.66)
--------- --------- --------- ---------
--------- --------- --------- ---------
Diluted.................... $ 0.22 $ (0.01) $ 1.08 $ (0.66)
--------- --------- --------- ---------
--------- --------- --------- ---------
Weighted average number
of common shares
Basic...................... 139.8 125.9 139.7 123.5
--------- --------- --------- ---------
Diluted.................... 142.9 125.9 146.5 123.5
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THOMPSON CREEK METALS COMPANY INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ---------------------
2010 2009 2010 2009
--------- --------- --------- ---------
(in millions)
OPERATING ACTIVITIES
Net income (loss)............ $ 31.1 $ (1.4) $ 158.7 $ (82.0)
Items not affecting cash:
Change in fair value of
common stock warrants..... 20.5 15.7 (29.8) 99.0
Depreciation, depletion
and amortization.......... 12.7 11.6 35.6 32.0
Accretion expense.......... 0.4 0.3 1.2 1.0
Stock-based compensation... 1.6 0.9 5.8 6.3
Deferred income
tax benefit............... 5.5 2.5 2.6 (8.7)
Unrealized loss on
derivative instruments.... (0.6) (0.8) 0.7 0.9
Change in working
capital accounts............ (12.2) (4.6) (49.0) 19.2
--------- --------- --------- ---------
Cash generated by
operating activities...... 59.0 24.2 125.8 67.7
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INVESTING ACTIVITIES
Short-term investments....... 233.9 9.6 319.5 (172.2)
Capital expenditures......... (56.8) (13.1) (147.3) (54.4)
Restricted cash.............. (0.7) (0.1) (3.2) (1.9)
Reclamation deposits......... 3.7 - 3.7 (2.6)
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Cash generated (used) in
investing activities...... 180.1 (3.6) 172.7 (231.1)
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FINANCING ACTIVITIES
Proceeds from issuance of
common shares, net.......... 0.2 199.8 2.3 203.5
Repayment of long-term debt.. (0.7) (1.3) (3.1) (4.0)
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Cash generated (used) by
financing activities...... (0.5) 198.5 (0.8) 199.5
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EFFECT OF EXCHANGE RATE
CHANGES ON CASH............. 3.7 6.9 1.7 9.4
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INCREASE IN CASH AND
CASH EQUIVALENTS............ 242.3 226.0 299.4 45.5
Cash and cash equivalents,
beginning of period......... 215.6 77.5 158.5 258.0
--------- --------- --------- ---------
Cash and cash equivalents,
end of period............... $ 457.9 $ 303.5 $ 457.9 $ 303.5
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For further information: Pamela Solly, Director Investor Relations, Thompson Creek Metals Company Inc., Tel: (303) 762-3526, [email protected]; Christine Stewart, Renmark Financial Communications Inc., Tel: (416) 644-2020, [email protected]
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