Thompson Creek swings to adjusted Q4 loss

TORONTO (miningweekly.com) – Diversified miner Thompson Creek Metals Company has swung to an adjusted loss of $49.8-million, or $0.23 a share, as sharply lower molybdenum sales and lower prices for gold, copper and molybdenum impacted on the bottom line.

The Denver, Colorado-based company operates the Mt Milligan copper/gold mine, had a 75% interest in the Endako molybdenum mine, in British Columbia, and owned the Thompson Creek molybdenum mine, in Idaho. It widened its net loss to $134.9-million, or $0.62 a share, compared with $124.2-million, or $0.64 a share in 2014, as it booked noncash foreign exchange losses of $168.4-million in 2015, mainly on intercompany notes.

“[We] … successfully transformed our molybdenum business with the expectation of generating sufficient revenue to substantially cover care and maintenance costs and maintain the future option value of our molybdenum mines.

Financially, we achieved average unit cash cost on a by-product basis of $0.55/lb of copper produced, ending the year with about $177-million of cash.

“Looking ahead, our immediate 2016 objectives include continuing the optimisation of Mt Milligan mine to maximise the value of the asset and executing a strategic plan to address the company's outstanding debt and strengthen the balance sheet,” stated president and CEO Jacques Perron.

Consolidated operating income for 2015 was $31-million compared with a consolidated operating income of $36.1-million for 2014. Consolidated operating income for 2015 was impacted by $23.6-million in costs of idle operations related to its Endako and Thompson Creek mines, which remained on care and maintenance pending higher molybdenum prices, as well as owing to noncash lower-of-cost-or-market product inventory write downs of $15.8-million.

Consolidated revenues for 2015 totalleed $494.1-million, compared with $806.7-million in 2014. Copper and gold sales contributed $360.9-million in revenue in 2015, compared with $350.7-million in 2014. Molybdenum sales for 2015 were $103.7-million compared with $441.2-million in 2014. The company attributed the decrease in revenues to its molybdenum mines being on care and maintenance, partially offset by slightly higher gold revenue.

Sales volumes and average realised sales prices for copper and gold for 2015 were 76.5-million pounds of copper at an average realised price of $2.28/lb and 221 902 oz of gold at an average realised price of $950/oz, compared with  64.7-million pounds of copper at an average realised price of $3.02/lb and 172 741 oz of gold at an average realised price of $1 002/oz in 2014. Molybdenum sales volumes in 2015 were 12.1-million pounds at an average realised price of $8.55/lb, compared with 36.6-million pounds at an average realised price of $12.06/lb for 2014.

Mt Milligan was expected to produce between 55 000 lb to 65 000 lb of payable copper and 240 000 oz to 270 000 oz of payable gold at unit cash costs on a by-product basis of $0.25/lb to $0.70/lb. The company did not foresee any molybdenum production in 2016.

The company’s TSX-listed stock on Thursday morning traded up 5.13% at C$0.41 apiece, after the stock had lost nearly 79% in the last 12 months.