THOMPSON CREEK ANNOUNCES 2011 SECOND QUARTER REVENUE UP 28.6% TO $190.9 MILLION AND CASH FLOW FROM OPERATIONS UP 30% TO $53.6 MILLION
DENVER, CO, Aug. 8, 2011 /CNW/ --
NYSE: TC
TSX: TCM, TCM.WT
TSX-V:TRX.WT
DENVER, CO, Aug. 8, 2011 /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 six
months ended June 30, 2011, prepared in accordance with United States
generally accepted accounting principles ('US GAAP'). All dollar
amounts are in United States ('US') dollars unless otherwise indicated.
Financial Highlights:
-- Revenue for the second quarter of 2011 was $190.9 million, up
28.6% from $148.4 million in the second quarter of 2010.
Revenue for the first six months of 2011 was $397.6 million, up
44% from $276.2 million for the same period in 2010. Sales
volumes for the second quarter of 2011 were 10.8 million
pounds, up 25% from 8.6 million pounds in the second quarter of
2010. Sales volumes for the first six months of 2011 were 22.4
million pounds, up 30.4% from 17.2 million pounds for the same
period in 2010.
-- Net Income for the second quarter of 2011 was $116.8 million,
or $0.70 per basic and $0.68 per diluted share, down 7.7% from
$126.5 million, or $0.90 per basic and $0.87 per diluted share
for the second quarter of 2010. Net income for the second
quarter of 2011 included a non-cash unrealized gain on common
share purchase warrants of $60.4 million, or $0.36 per basic
share and $0.35 per diluted share. Net income for the second
quarter of 2010 included a non-cash unrealized gain on common
share purchase warrants of $74.8 million, or $0.54 per basic
and $0.51 per diluted share.
Net income for the first six months of 2011 was $245.7 million,
or $1.48 per basic and $1.41 per diluted share, up 92.6% from
$127.6 million, or $0.91 per basic and $0.86 per diluted share
for the same period in 2010. Net income for the first six
months of 2011 included a non-cash unrealized gain on common
share purchase warrants of $126.4 million, or $0.76 per basic
and $0.72 per diluted share. Net income for the first six
months of 2010 included a non-cash unrealized gain on common
share purchase warrants of $50.3 million, or $0.36 per basic
and $0.34 per diluted share.
-- Non-GAAP Adjusted Net Income for the second quarter of 2011
(excluding the non-cash unrealized gain on the warrants) was
$56.4 million, or $0.34 per basic and $0.33 per diluted share,
up 9.1% from $51.7 million, or $0.37 per basic and $0.36 per
diluted share for the second quarter of 2010.
Non-GAAP adjusted net income for the first six months of 2011
(excluding the non-cash unrealized gain on the warrants) was
$119.3 million, or $0.72 per basic and $0.68 per diluted share,
up 54.3% from $77.3 million, or $0.55 per basic and $0.52 per
diluted share for the same period in 2010.
The Company's net income continues to be affected by the
previously disclosed requirements 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.
-- Molybdenum Production for the second quarter of 2011 was 10.0
million pounds, up 42.3% from 7.0 million pounds in the second
quarter of 2010. Molybdenum produced for the first six months
of 2011 was 20.3 million pounds, up 32.9% from 15.3 million
pounds for the same period in 2010.
-- Non-GAAP Average Cash Cost Per Pound Produced for the second
quarter of 2011 was $5.74 per pound, down 18.7% from $7.06 per
pound for the second quarter of 2010. Non-GAAP average cash
cost per pound produced for the first six months of 2011 was
$5.54 per pound, down 10% from to $6.14 per pound for the same
period of 2010.
-- Cash Flow From Operations for the second quarter of 2011 was
$53.6 million, up 30% from $41.2 million in the second quarter
of 2010. Cash flow from operations for the first six months of
2011 was $130.2 million, up 94.9% from $66.8 for the same
period in 2010.
-- Capital Costs incurred for the first six months of 2011 were
$294.5 million, comprised of $153.7 million for the development
of Mt. Milligan, $113.5 million for the mill expansion project
at the Endako mine (75% share) and $27.3 million for the mines,
the Langeloth facility and corporate. The capital costs for
the first six months of 2011 included amounts accrued of $43.4
million and capitalized interest of $3.0 million at June 30,
2011; therefore, cash used for capital expenditures for the six
months was $248.1 million.
-- Total Cash and Cash Equivalents as of June 30, 2011 were $560.4
million, compared to $316.0 million as of December 31, 2010.
Total debt as of June 30, 2011 was $369.2 million, compared to
$22.0 million as of December 31, 2010.
'Thompson Creek achieved excellent financial performance for the second
quarter and first half of the year, with significant increases in
revenue, cash flow from operations and adjusted net income,' said Kevin
Loughrey, Chairman and Chief Executive Officer of Thompson Creek. 'For
the first half of 2011, the Company produced 20.3 million pounds of
molybdenum and sold 19.0 million pounds of molybdenum from its mines
for an average realized molybdenum sales price of $17.33, up 10.5% from
$15.68 in the first half of 2010. While we expect our production to be
lower and our cash costs to be higher in the second half of the year,
the Company is on track to achieve its previously announced production
and cash cost guidance for the year,' added Mr. Loughrey.
The Company also announced that the capital expenditures for the mill
expansion project at the Endako mine may be approximately 15% higher
than the previously announced revised estimate of C$550 million (100%)
and the start-up of the new mill to be in the first quarter of 2012.
'We look forward to the near-term completion of the Endako
state-of-the-art mill facility and are confident that our liquidity and
capital resources are sufficient to complete this project, as well as
the Mt. Milligan copper-gold project,' added Mr. Loughrey.
Selected Consolidated Financial and Operational Information
Three Months Ended Six Months Ended June 30,
June 30,
(US$ in millions
except per share
and per pound
amounts) 2011 2010 2011 2010
(unaudited)
Financial
Revenues
Molybdenum $ 186.2 $ 145.5 $ 388.6 $ 269.5
sales
Tolling, 4.7 2.9 9.0 6.7
calcining and
other
190.9 148.4 397.6 276.2
Costs and expenses
Operating 91.7 73.8 189.7 150.1
expenses
Depreciation, 17.6 11.9 36.0 22.9
depletion and
amortization
Total costs 109.3 85.7 225.7 173.0
of sales
Selling and 2.5 1.8 4.9 3.3
marketing
Accretion 0.4 0.4 0.9 0.8
expense
General and 6.4 7.3 14.3 13.1
administrative
Acquisition - 1.1 - 1.1
costs
Exploration 3.2 1.8 6.8 3.5
Total costs 121.8 98.1 252.6 194.8
and expenses
Operating income 69.1 50.3 145.0 81.4
Other (income) and (62.3) (77.3) (127.3) (52.2)
expenses
Income before 131.4 127.6 272.3 133.6
income and mining
taxes
Income and mining 14.6 1.1 26.6 6.0
taxes
Net income $ 116.8 $ 126.5 $ 245.7 $ 127.6
Net income per
share
Basic $ 0.70 $ 0.90 $ 1.48 $ 0.91
Diluted $ 0.68 $ 0.87 $ 1.41 $ 0.86
Cash generated by $ 53.6 $ 41.2 $ 130.2 $ 66.8
operating
activities
Adjusted non-GAAP
Measures: (1)
Adjusted net income $ 56.4 $ 51.7 $ 119.3 $ 77.3
(1)
Adjusted net income $ 0.34 $ 0.37 $ 0.72 $ 0.55
per share - basic
(1)
Adjusted net income $ 0.33 $ 0.36 $ 0.68 $ 0.52
per share - diluted
(1)
Operational
Statistics
Mined molybdenum 10,010 7,034 20,339 15,303
production (000's
lb) (2)
Cash cost ($/lb $ 5.74 $ 7.06 $ 5.54 $ 6.14
produced) (3)
Molybdenum sold
(000's lb):
Thompson Creek 8,952 7,013 19,012 13,748
and Endako Mine
product
Purchased and 1,824 1,626 3,404 3,446
processed
product
10,776 8,639 22,416 17,194
Average realized $ 17.28 $ 16.84 $ 17.33 $ 15.68
sales price ($/lb)
(1)
_________
(1) See 'Non-GAAP Financial Measures' for the definition and
reconciliation of these non-GAAP measures.
(2) Mined production pounds reflected are molybdenum oxide and high
performance molybdenum disulfide ('HPM') from our share of
production from the mines; excludes molybdenum processed from
purchased product.
(3) Weighted-average of Thompson Creek mine and Endako mine (75%
share) cash costs (mining, milling, mine site administration,
roasting and packaging) for molybdenum oxide and HPM produced in
the period, including all stripping costs. Cash cost excludes: the
effect of purchase price adjustments, the effects of changes in
inventory, corporate allocations, stock-based compensation, other
non-cash employee benefits and depreciation, depletion,
amortization and accretion. The cash cost for the Thompson Creek
mine, which only produces molybdenum sulfide on site, includes an
estimated molybdenum loss, an allocation of roasting and packaging
costs from the Langeloth facility, and transportation costs. See
'Non-GAAP Financial Measures' for additional information.
Summary of Quarterly Results
(US$ in millions except per share and per pound amounts - unaudited)
Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
2011 2011 2010 2010 2010 2010 2009 2009
Financial
Revenues $ 190.9 $ 206.7 $ 156.8 $ 161.8 $ 148.4 $ 127.8 $ 106.2 $ 114.4
Operating $ 69.1 $ 75.9 $ 47.4 $ 45.6 $ 50.3 $ 31.1 $ 15.8 $ 32.4
income (loss)
Net income $ 116.8 $ 128.9 $ (45.0) $ 31.1 $ 126.5 $ 1.1 $ 26.0 $ (1.4)
(loss)
Income (loss)
per share:
- basic $ 0.70 $ 0.78 $ (0.28) $ 0.22 $ 0.90 $ 0.01 $ 0.19 $ (0.01)
- diluted $ 0.68 $ 0.73 $ (0.28) $ 0.22 $ 0.87 $ 0.01 $ 0.18 $ (0.01)
Cash generated $ 53.6 $ 76.6 $ 31.6 $ 59.0 $ 41.2 $ 25.6 $ 38.2 $ 24.2
by operating
activities
Adjusted
non-GAAP
Measures: (1)
Adjusted net $ 56.4 $ 62.9 $ 34.4 $ 51.6 $ 51.7 $ 25.6 $ 20.4 $ 14.3
income (loss)
(1)
Adjusted net
income (loss)
per share: (1)
- basic (1) $ 0.34 $ 0.38 $ 0.22 $ 0.37 $ 0.37 $ 0.18 $ 0.15 $ 0.11
- diluted $ 0.33 $ 0.36 $ 0.20 $ 0.36 $ 0.36 $ 0.17 $ 0.14 $ 0.11
(1)
Operational
Statistics
Mined 10,010 10,329 9,316 7,958 7,034 8,269 6,268 6,221
molybdenum
production
(000's lb)
Cash cost $ 5.74 $ 5.37 $ 5.81 $ 6.24 $ 7.06 $ 5.36 $ 6.61 $ 5.67
($/lb
produced) (1)
Molybdenum
sold (000's
lb):
Thompson 8,952 10,060 7,574 7,750 7,013 6,735 6,889 7,445
Creek and
Endako
Mine product
Purchased 1,824 1,580 1,896 2,513 1,626 1,820 1,464 1,324
and
processed
product
10,776 11,640 9,470 10,263 8,639 8,555 8,353 8,769
Average $ 17.28 $ 17.39 $ 16.05 $ 15.30 $ 16.84 $ 14.50 $ 12.37 $ 12.75
realized sales
price ($/lb)
(1)
______________________
(1) See 'Non-GAAP Financial Measures' for the definition and
reconciliation of these non-GAAP measures.
Capital Projects Update
Endako Mill Expansion
Due to delays in material deliveries, delays in final project
engineering and weather related issues, Thompson Creek is currently
reviewing the details of the remaining costs to complete the mill
expansion at the Endako mine. Subject to the final review, Thompson
Creek currently believes that the total capital costs for the Endako
mill expansion project may be approximately 15% higher than the
previously announced revised estimate of C$550 million (100% basis),
primarily due to increased labor hours and related costs resulting from
such delays and weather issues. Additionally, given such delays,
start-up of the new mill is now expected to occur in the first quarter
of 2012. The existing mill at Endako is expected to continue to be
fully operational until the start-up of the new mill. Since inception
of the project through June 30, 2011, approximately C$454.3 million has
been spent (approximately C$340.7 million for Thompson Creek's 75%
share). Thompson Creek's joint venture partner in the Endako mine
approved the initial budget of C$498 million, and Thompson Creek is in
discussions with such joint venture partner regarding the portion of
the previously announced revised estimate of C$550 million that will be
borne by such joint venture partner. Thompson Creek has not submitted
to such joint venture partner any projected increases beyond such
amount.
Project engineering and design are nearly complete, procurement is
substantially complete, and most of the major mill components are in
place. The new mill facility is on schedule for completion in the
first quarter of 2012.
Upon completion of the mill expansion project, the Company expects
throughput to increase from 31,000 to 55,000 tons per day, recovery to
increase from 75 to 80%, and total annual production to increase from
approximately 11 to 16 million pounds per year (the Company's 75% share
will increase from 6 - 8 to 11 - 12 million pounds per year).
Mt. Milligan Copper-Gold Mine
Thompson Creek initiated construction and development activities at the
Mt. Milligan site in November 2010. The development of the mine and
the construction of the processing plant are proceeding in accordance
with the planned schedule. There are approximately 400 construction
personnel currently on site and the Company expects that number to
increase as construction activities accelerate.
The Company's current capital expenditure estimate to construct and
develop the Mt. Milligan mine is C$1.265 billion, of which
approximately $207.7 million has been spent since inception of the
project through June 30, 2011 and an additional $466 million has been
committed since inception of the project.
Project engineering, design and procurement are more than half complete,
construction of the camp is complete and available to house 660
contract workers, purchase orders have been placed for the entire
mining fleet, and the key dam structure for water retention is in
place. The current status of the Mt. Milligan project is consistent
with the Company's original construction and development timeline and
is on schedule for completion in the fourth quarter of 2013.
Thompson Creek intends to fund the remaining Endako mill expansion costs
and the Mt. Milligan development costs from a combination of cash on
hand, cash from operations, funds from various financing facilities,
the remaining proceeds from the gold stream transaction with Royal
Gold, and any additional funds from the exercise of Thompson Creek
warrants that expire in October 2011.
Updated 2011 Guidance
As planned, due to pit sequencing, higher stripping, and significantly
lower-grade production, the Company expects that the Thompson Creek
mine will have lower production and higher cash cost per pound produced
in the second half of 2011 compared to the first half of 2011.
However, the full year 2011 production and cash costs for the Thompson
Creek mine remain essentially in line with previously announced
guidance.
The Company expects that the Endako mine will have higher production and
lower cash cost per pound produced in the second half of 2011 compared
to the first half of 2011. Full year 2011 production and cash costs
for the Endako mine remain in line with previously announced guidance.
Production and Cash Costs
-- Thompson Creek Mine - estimated 2011 production is expected to
be 22 - 24 million pounds of molybdenum (unchanged from
previous guidance) and estimated cash costs are expected to be
$5.50 - $6.50 per pound (changed from previous guidance of $6 -
$7 per pound).
Production Average
(millions pounds) Cash Costs/lb
First Half 2011 Actual 17.0 $4.24
Second Half 2011 Forecast 5 - 7 $10 - $12
2011 Annual Guidance 22 - 24 $5.50 - $6.50*
____________________
*Weighted average cash cost per/lb
-- Endako Mine - estimated production (Thompson Creek's 75%) is
expected to be 6 - 8 million pounds of molybdenum (unchanged
from previous guidance) and estimated cash costs are expected
to be $10 - $12 per pound, assuming a US to Canadian foreign
exchange rate of US$1.00 - C$1.00 for the last six months of
the year (unchanged from previous guidance).
Production Average
(millions pounds) Cash Costs/lb
First Half 2011 Actual 3.3 $12.17
Second Half 2011 Forecast 3 - 5 $9 - $11
2011 Annual Guidance 6 - 8 $10 - $12*
____________________
*Weighted average cash cost per/lb
-- Total 2011 production is expected to be 28 - 32 million pounds
of molybdenum and 2011 average cash costs are expected to be $7
- $8 per pound (unchanged from previous guidance).
Molybdenum Sales
-- Total 2011 molybdenum sales from mined production are expected
to be 31 - 34 million pounds (changed from previous guidance of
30 - 34 million pounds).
Capital Expenditures
-- Operations - estimated capital expenditures for the mines,
Langeloth facility and corporate are expected to be $62 million
(unchanged from previous guidance).
-- Endako Expansion Project - due to the delays described above,
estimated capital expenditures for Thompson Creek's share of
the mill expansion project at the Endako mine are expected to
be approximately $240 - $260 million (changed from previous
guidance of $181 million).
-- Mt. Milligan copper-gold mine - estimated capital expenditures
for the Mt. Milligan development project are expected to be
$437 million (unchanged from previous guidance).
Exploration Expenditures
-- Thompson Creek and Endako mines - estimated exploration
expenditures are expected to be $6 - $8 million (unchanged from
previous guidance).
-- Berg - estimated exploration expenditures are expected to be $8
- $9 million (unchanged from previous guidance). An advanced
scoping study was initiated in July of 2011.
-- Mount Emmons - estimated exploration expenditures are expected
to be $2 - $3 million (changed from previous guidance of $4 -
$5 million). Estimate includes expenditures prior to the
termination of the Option Agreement with U.S. Energy Corp.
-- Other - estimated exploration expenditures are expected to be
approximately $2 million (unchanged from previous guidance).
-- Total 2011 exploration expenditures are expected to be $18 -
$22 million (changed from previous guidance of $20 - $24
million).
Reaffirmation of 2012 Guidance
The Company is currently preparing revised National Instrument 43-101
reports for the Endako mine and the Mt. Milligan development project
which are expected to be filed in the third quarter of 2011. The
Company expects to prepare a revised 43-101 report for the Thompson
Creek mine in late 2011 or early 2012 and file such report in the
second quarter of 2012. 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 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).
Non-GAAP Financial Measures
In addition to the consolidated financial statements presented in
accordance with US GAAP, the Company uses the following non-GAAP
financial measures of its financial performance in this press release:
adjusted net income, adjusted net income per share (basic and diluted),
cash cost per pound produced, weighted average cash cost per pound
produced, and average realized sales price per pound sold. 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. The Company 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.
The Company believes that the use of these measures affords investors
greater transparency in assessing the Company's financial performance.
Non-GAAP financial measures should not be considered in isolation from,
as a substitute for, or superior to, measures of financial performance
prepared in accordance with US GAAP. 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 represents the net income prepared in accordance
with US GAAP, adjusted for significant non-cash items. For the second
quarter and first six months of 2011 and 2010, 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. The Company has
outstanding common stock purchase warrants denominated in Canadian
dollars. Changes to the fair value of the outstanding warrants are
recorded to the statements of operations at each quarter end. 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 months
and six months ended June 30, 2011 and June 30, 2010:
For the Three Months Ended June 30, 2011 (unaudited — US$ in millions except shares and per share amounts)
Weighted Average Weighted Average
Basic Shares Diluted Shares
Shares Shares
Net Income (000's) $/share (000's) $/share
US GAAP $ 116.8 167,251 $ 0.70 172,321 $ 0.68
measures
Add (Deduct):
Unrealized (60.4) 167,251 (0.36) 172,321 (0.35)
(gain) on
common stock
warrants
Non-GAAP $ 56.4 167,251 $ 0.34 172,321 $ 0.33
measures
For the Three Months Ended June 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 $ 126.5 139,791 $ 0.90 145,440 $ 0.87
Add (Deduct):
Unrealized (74.8) 139,791 (0.54) 145,440 (0.51)
(gain) on
common
stock warrants
Non-GAAP $ 51.7 139,791 $ 0.37 145,440 $ 0.36
measures
For the Six Months Ended June 30, 2011 (unaudited — US$ in millions except shares and per share amounts)
Weighted Average Weighted Average
Basic Shares Diluted Shares
Shares Shares
Net Income (000's) $/share (000's) $/share
US GAAP $ 245.7 166,413 $ 1.48 174,701 $ 1.41
measures
Add (Deduct):
Unrealized (126.4) 166,413 (0.76) 174,701 (0.72)
(gain) on
common stock
warrants
Non-GAAP $ 119.3 166,413 $ 0.72 174,701 $ 0.68
measures
For the Six Months Ended June 30, 2010 (unaudited — US$ in millions except shares and per share amounts)
Weighted Average Weighted Average
Basic Shares Diluted Shares
Shares Shares
Net Income (000's) $/share (000's) $/share
US GAAP $ 127.6 139,711 $ 0.91 147,600 $ 0.86
measures
Add (Deduct):
Unrealized (50.3) 139,711 (0.36) 147,600 (0.34)
(gain) on
common stock
warrants
Non-GAAP $ 77.3 139,711 $ 0.55 147,600 $ 0.52
measures
Cash Cost per Pound Produced, Weighted Average Cash Cost per Pound
Produced, and Average Realized Sales Price per Pound Sold
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.
The following table provides a reconciliation of cash costs and cash
cost per pound produced, by mine, and operating expenses included in
our consolidated statements of income in the determination of net
income (loss):
(US$ in millions except per pound amounts — Unaudited)
Three months ended June 30, 2011 Three months ended June 30,
2010
Operating Pounds Operating Pounds
Produced Produced
Expenses (1) Expenses (1)
(in (000's lbs) (in (000's
millions) $/lb millions) lbs) $/lb
Thompson Creek
Mine
Cash costs $ 36.2 8,322 $ 4.35 $ 32.4 5,137 $ 6.31
— Non-GAAP
(2)
Add/(Deduct):
Stock-based 0.2 0.1
compensation
Inventory and 1.3 (3.5)
other
adjustments
GAAP operating $ 37.7 $ 29.0
expenses
Endako Mine
Cash costs $ 21.3 1,688 $ 12.59 $ 17.1 1,897 $ 9.00
— Non-GAAP
(2)
Add/(Deduct):
Stock-based 0.2 0.2
compensation
Inventory and (1.0) (2.0)
other
adjustments
GAAP operating $ 20.5 $ 15.3
expenses
Other operations $ 33.5 $ 29.5
GAAP operating
expenses (3)
GAAP $ 91.7 $ 73.8
consolidated
operating
expenses
Weighted-average $ 57.5 10,010 $ 5.74 $ 49.5 7,034 $ 7.06
cash cost
—
Non-GAAP
(US$ in millions except per pound amounts — Unaudited)
Six months ended June 30, 2011 Six months ended June 30,
2010
Operating Operating Pounds
Pounds Produced
Expenses Produced Expenses (1)
(in (1) (in (000's
millions) (000's lbs) $/lb millions) lbs) $/lb
Thompson Creek
Mine
Cash costs $ 72.0 17,006 $ 4.24 $ 62.3 11,435 $ 5.45
— Non-GAAP
(2)
Add/(Deduct):
Stock-based 0.5 1.0
compensation
Inventory and 9.2 (2.3)
other
adjustments
GAAP operating $ 81.7 $ 61.0
expenses
Endako Mine
Cash costs $ 40.6 3,333 $ 12.17 $ 31.4 3,868 $ 8.11
— Non-GAAP
(2)
Add/(Deduct):
Stock-based 0.4 0,8
compensation
Inventory and 5.4 (3.0)
other
adjustments
GAAP operating $ 46.4 $ 29.2
expenses
Other operations $ 61.6 $ 59.9
GAAP operating
expenses (3)
GAAP $ 189.7 $ 150.1
consolidated
operating
expenses
Weighted-average $ 112.6 20,339 $ 5.54 $ 93.7 15,303 $ 6.14
cash cost
—
Non-GAAP
_____________________
(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,
processing, and upgrading 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
June 30, 2011, which was filed today 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 2011 second quarter and first half financial results on
Tuesday, August 9, 2011 at 8:30 am Eastern Time. Kevin Loughrey,
Chairman and Chief Executive Officer, and Pamela Saxton, Chief
Financial Officer and Vice President, 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/en/webcast 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 82077886 followed by
the number sign) from 11:30 a.m. ET on August 9 to 11:59 p.m. ET on
August 16. 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 central British Columbia, which is
expected to commence production in 2013. The Company's development
projects include the Berg copper-molybdenum-silver property and the
Davidson molybdenum property, both located in central British
Columbia. Thompson Creek has approximately 972 employees. Its
principal executive office is in Denver, Colorado and its Canadian
administrative office is in Vancouver, British Columbia. More
information is available at www.thompsoncreekmetals.com.
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this news release (including information
incorporated by reference) are ''forward-looking statements' within the
meaning of the United States Private Securities Litigation Reform Act
of 1995, Section 27A of the Securities Act of 1933, Section 21E of the
Securities Exchange Act of 1934 and applicable Canadian securities
legislation. These forward-looking statements generally are identified
by the words 'believe,' 'project,' 'expect,' 'anticipate,' 'estimate,'
'intend,' 'strategy,' 'future,' 'opportunity,' 'plan,' 'may,' 'should,'
'will,' 'would,' 'will be,' 'will continue,' 'will likely result,' and
similar expressions. Our forward looking statements include, without
limitation: estimates of future capital expenditures and other cash
needs for operations, including with respect to the Endako mill
expansion and the development of Mt. Milligan, and expectations as to
the funding thereof; statements as to the projected development of the
Endako mill expansion, Mt. Milligan and other projects, including
expected production commencement dates; statements regarding future
earnings, and the sensitivity of earnings to molybdenum prices;
estimates of future production costs and other expenses for specific
operations and on a consolidated basis; estimates of future mineral
production and sales for specific operations and on a consolidated
basis; estimates of mineral reserves and resources, including estimated
mine life and annual production; estimates as to commodity prices;
statements with respect to the future financial or operating
performance of TCM or its subsidiaries and its projects; statements
with respect to the costs and timing of future exploration projects and
the development of new deposits including the Berg property and the
Davidson property; projected synergies and costs associated with
acquisitions and related matters; and statements as to TCM's ability to
achieve its expected growth strategy.
Where we express an expectation or belief as to future events or
results, such expectation or belief is expressed in good faith and
believed to have a reasonable basis. However, our forward-looking
statements are based on current expectations and assumptions that are
subject to risks and uncertainties which may cause actual results to
differ materially from future results expressed, projected or implied
by those forward-looking statements. Important factors that could
cause actual results and events to differ from those described in such
forward-looking statements can be found in the section entitled ''Risk
Factors'' in Thompson Creek's Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and other documents filed on EDGAR at www.sec.gov and on SEDAR at www.sedar.com. Although we have attempted to identify those factors that could cause
actual results or events to differ from those described in such
forward-looking statements, there may be other factors that cause
results or events to differ from those anticipated, estimated or
intended. Many of these factors are beyond TCM's ability to control or
predict. Given these uncertainties, the reader is cautioned not to
place undue reliance on our forward-looking statements. We undertake
no obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events, or
otherwise.
THOMPSON CREEK METALS COMPANY INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December 31,
2011 2010
(in millions, except share data)
ASSETS
Current assets
Cash and cash equivalents $ 560.4 $ 316.0
Accounts receivable—trade 93.3 63.3
Accounts receivable—related 11.6 10.0
parties
Product inventory 86.7 75.5
Material and supplies inventory 34.3 31.5
Prepaid expense and other current 4.2 7.6
assets
Income tax receivable 6.5 12.9
797.0 516.8
Property, plant and equipment, net 1,990.3 1,696.1
Restricted cash 27.7 23.5
Reclamation deposits 24.5 24.7
Goodwill 47.0 47.0
Other assets 20.9 9.6
$ 2,907.4 $ 2,317.7
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued $ 121.3 $ 64.8
liabilities
Income and mining taxes payable 3.5 3.7
Current portion of long-term debt 5.5 5.4
Deferred income tax liabilities 12.2 7.7
Other current liabilities 2.1 0.2
144.6 81.8
Gold Stream deferred revenue 226.5 226.5
Long-term debt 363.7 16.6
Other liabilities 21.7 22.4
Asset retirement obligations 31.1 29.2
Common stock warrant derivatives 45.9 174.7
Deferred income tax liabilities 325.8 336.6
1,159.3 887.8
Commitments and contingencies
Shareholders' equity
Common stock, no-par, 167,810,072
and 165,189,873 shares issued and
outstanding,
as of June 30, 2011 and December 31,
2010, respectively 1,012.6 980.9
Additional paid-in capital 49.3 49.2
Retained earnings 592.2 346.5
Accumulated other comprehensive 94.0 53.3
income
1,748.1 1,429.9
$ 2,907.4 $ 2,317.7
THOMPSON CREEK METALS COMPANY INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2011 2010 2011 2010
(in millions, except per share amounts)
REVENUES
Molybdenum sales $ 186.2 $ 145.5 $ 388.6 $ 269.5
Tolling, calcining and 4.7 2.9 9.0 6.7
other
Total revenues 190.9 148.4 397.6 276.2
COSTS AND EXPENSES
Cost of sales
Operating expenses 91.7 73.8 189.7 150.1
Depreciation, 17.6 11.9 36.0 22.9
depletion and
amortization
Total cost of sales 109.3 85.7 225.7 173.0
Selling and marketing 2.5 1.8 4.9 3.3
Accretion expense 0.4 0.4 0.9 0.8
General and 6.4 7.3 14.3 13.1
administrative
Acquisition costs - 1.1 - 1.1
Exploration 3.2 1.8 6.8 3.5
Total costs and 121.8 98.1 252.6 194.8
expenses
OPERATING INCOME 69.1 50.3 145.0 81.4
OTHER (INCOME) AND EXPENSE
Change in fair value of (60.4) (74.8) (126.4) (50.3)
common stock warrants
Gain on foreign exchange (2.4) (1.9) (2.1) (1.3)
Interest and finance 0.8 (0.4) 1.7 (0.3)
fees, net
Other (0.3) (0.2) (0.5) (0.3)
Total other (income) (62.3) (77.3) (127.3) (52.2)
and expense
Income before income and 131.4 127.6 272.3 133.6
mining taxes
Income and mining tax 14.6 1.1 26.6 6.0
expense
NET INCOME $ 116.8 $ 126.5 $ 245.7 $ 127.6
NET INCOME PER SHARE
Basic $ 0.70 $ 0.90 $ $1.48 $ 0.91
Diluted $ 0.68 $ 0.87 $ $1.41 $ 0.86
Weighted average number of
common shares
Basic 167.3 139.8 166.4 139.7
Diluted 172.3 145.4 174.7 147.6
THOMPSON CREEK METALS COMPANY INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2011 2010 2011 2010
(in millions)
OPERATING ACTIVITIES
Net income $ 116.8 $ 126.5 $ 245.7 $ 127.6
Items not affecting cash:
Change in fair value of (60.4) (74.8) (126.4) (50.3)
common stock warrants
Depreciation, depletion 17.6 11.9 36.0 22.9
and amortization
Accretion expense 0.4 0.4 0.9 0.8
Amortization of finance 0.6 - 1.1 -
fees
Stock-based compensation 2.1 1.7 3.9 4.2
Product inventory 5.7 - 5.7 -
write-down
Deferred income tax (0.8) (1.1) (6.1) (2.9)
benefit
Unrealized loss (gain) on (0.5) 0.7 (0.5) 1.3
derivative instruments
Change in working capital (27.9) (24.1) (30.1) (36.8)
accounts
Cash generated by 53.6 41.2 130.2 66.8
operating activities
INVESTING ACTIVITIES
Short-term investments - 115.7 - 85.6
Capital expenditures (155.2) (71.1) (248.1) (90.5)
Restricted cash (2.1) (1.0) (4.0) (2.5)
Reclamation deposit 0.3 - 0.3 -
Cash generated by (157.0) 43.6 (251.8) (7.4)
(used) in investing
activities
FINANCING ACTIVITIES
Proceeds from issuance of 20.4 0.1 25.8 2.1
common shares, net
Proceeds from senior 340.1 - 340.1 -
unsecured note issuance,
net
Debt issuance costs (0.5) - (2.0) -
Repayment of long-term debt (1.3) (0.9) (2.8) (2.4)
Cash generated by 358.7 (0.8) 361.1 (0.3)
(used) financing
activities
EFFECT OF EXCHANGE RATE 2.0 (4.4) 4.9 (2.0)
CHANGES ON CASH
INCREASE IN CASH AND 257.3 79.6 244.4 57.1
CASH EQUIVALENTS
Cash and cash equivalents, 303.1 136.0 316.0 158.5
beginning of period
Cash and cash equivalents, $ 560.4 $ 215.6 560.4 $ 215.6
end of period
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| Pamela Solly Director, Investor Relations Thompson Creek Metals Company Inc. Tel: (303) 762-3526 psolly@tcrk.com | Christine Stewart Renmark Financial Communications Inc. Tel: (416) 644-2020 cstewart@renmarkfinancial.com |