Mr. Jacques Perron reports
THOMPSON CREEK REPORTS FOURTH QUARTER AND YEAR ENDED DECEMBER 31, 2015 FINANCIAL RESULTS
Thompson Creek Metals Company Inc. has released its financial results for the three months and year ended Dec. 31, 2015, prepared in accordance with United States generally accepted accounting principles (U.S. GAAP). All dollar amounts are in U.S. dollars unless otherwise indicated.
Jacques Perron, president and chief executive officer of Thompson Creek, said: "We achieved several operational and financial milestones during 2015. Operationally, we significantly improved our companywide safety performance, achieved 2015 production and cash cost guidance, and 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 byproduct basis of 55 cents per pound of copper produced and ended the year with approximately $177-million of cash. Looking ahead, our immediate 2016 objectives include continuing the optimization of Mount Milligan mine to maximize the value of the asset, and executing a strategic plan to address the company's outstanding debt and strengthen the balance sheet."
Highlights for 2015:
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Total cash and cash equivalents at Dec. 31, 2015, were $176.8-million compared with $265.6-million at Dec. 31, 2014. Total debt, including capital lease obligations, at Dec. 31, 2015, was $884.6-million, compared with $944.7-million at Dec. 31, 2014.
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Cash generated by operating activities was $37.4-million in 2015 compared with $184.8-million in 2014.
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Consolidated revenues for 2015 were $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 decrease in revenues was due primarily to the company's molybdenum mines being on care and maintenance, partially offset by slightly higher gold revenue.
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Payable production at Mount Milligan mine for 2015 was 71.4 million pounds of copper and 218,081 ounces of gold, compared with 2014 payable production of 64.6 million pounds of copper and 177,606 ounces of gold.
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Non-generally accepted accounting principles unit cash cost per pound of copper produced for 2015 was, on a byproduct basis, 55 cents per pound, and, on a co-product basis, $1.55 per pound of copper and $478 per ounce of gold. Non-GAAP unit cash costs in 2014 were, on a byproduct basis, $1.15 per pound and, on a co-product basis, $1.97 per pound of copper and $525 per ounce of gold.
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Sales volumes and average realized sales prices for copper and gold for 2015 were 76.5 million pounds of copper at an average realized price of $2.28 per pound and 221,902 ounces of gold at an average realized price of $950 per ounce, as compared with 64.7 million pounds of copper at an average realized price of $3.02 per pound and 172,741 ounces of gold at an average realized price of $1,002 per ounce for 2014. Molybdenum sales volumes in 2015 were 12.1 million pounds at an average realized price of $8.55 per pound compared with 36.6 million pounds at an average realized price of $12.06 per pound for 2014.
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Consolidated operating income for 2015 was $31.0-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 the company's molybdenum business and non-cash lower-of-cost-or-market product inventory writedowns of $15.8-million. Consolidated operating income for 2014 was impacted by non-cash asset impairments of $104.8-million and non-cash lower-of-cost-or-market product inventory writedowns of $25.5-million. Year-over-year consolidated operating income was lower due to the company's molybdenum mines being on care and maintenance.
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Net loss for 2015 was $134.9-million or 62 cents per share, compared with a net loss of $124.2-million or 64 cents per share for 2014. The net loss for 2015 and 2014 included non-cash foreign exchange losses of $168.4-million and $99.8-million, respectively, primarily on intercompany notes.
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Non-GAAP adjusted net loss for 2015 was $49.8-million or 23 cents per diluted share compared with a non-GAAP adjusted net income for 2014 of $54.6-million or 25 cents per diluted share. Non-GAAP adjusted net (loss) income excludes the non-cash impact of asset impairment losses and foreign exchange losses, net of the related tax impacts and a non-cash release of tax valuation allowances.
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Senior notes repurchased during 2015 resulted in the principal retirement of $41.4-million of 2017, 2018 and 2019 notes, reducing future interest payments by approximately $11.6-million. Total cash used during 2015 for this program was $44.8-million. During 2014 the company's senior note repurchases resulted in the principal retirement of $25.7-million of 2018 and 2019 notes, reducing future interest payments by approximately $9.9-million. Total cash used during 2014 for this program was $23.4-million.
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Cash capital expenditures in 2015 were $61.3-million, comprising $54.9-million for Mount Milligan mine, and $6.4-million of other capital costs primarily related to Endako mine, TC mine and the Langeloth facility compared with $82.1-million in 2014.
SELECTED CONSOLIDATED FINANCIAL AND OPERATIONAL INFORMATION
(in millions of U.S. dollars, except per-share, per-pound and per-ounce amounts)
Three months ended Dec. 31, Years ended Dec. 31,
2015 2014 2015 2014 2013
Financial information
Revenues
Copper sales $ 26.1 $ 38.1 $ 151.1 $ 178.4 $ 8.7
Gold sales 48.0 38.8 209.8 172.3 5.6
Molybdenum sales 17.0 87.7 103.7 441.2 400.8
Tolling, calcining and other 4.2 3.4 29.5 14.8 19.3
Total revenues 95.3 168.0 494.1 806.7 434.4
Costs and expenses
Cost of sales
Operating expenses 58.8 128.6 305.6 523.8 328.2
Depreciation, depletion
and amortization 20.9 21.6 98.6 99.9 51.9
Total cost of sales 79.7 150.2 404.2 623.7 380.1
Total costs and expenses 92.1 266.1 463.1 770.6 609.7
Operating income (loss) 3.2 (98.1) 31.0 36.1 (175.3)
Other expense 49.2 53.9 253.4 182.0 103.1
(Loss) before income and mining taxes (46.0) (152.0) (222.4) (145.9) (278.4)
Income and mining tax benefit (58.9) (16.4) (87.5) (21.7) (63.4)
Net income (loss) $ 12.9 $ (135.6) $(134.9) $(124.2) $ (215.0)
Net income (loss) per share
Basic $ 0.06 $ (0.63) $ (0.62) $ (0.64) $ (1.26)
Diluted $ 0.06 $ (0.63) $ (0.62) $ (0.64) $ (1.26)
Cash (used in) generated
by operating activities $ (19.7) $ 34.9 $ 37.4 $ 184.8 $ 44.8
Adjusted non-GAAP Measures (1)
Adjusted net (loss) income (1) $ (17.1) $ (10.0) $ (49.8) $ 54.6 $ (5.0)
Adjusted net (loss) income
per share -- basic (1) $ (0.08) $ (0.05) $ (0.23) $ 0.28 $ (0.03)
Adjusted net (loss) income
per share -- diluted (1) $ (0.08) $ (0.05) $ (0.23) $ 0.25 $ (0.03)
Operational statistics
Copper
Payable production (000s lb) (2) 19,473 18,024 71,400 64,569 10,362
Cash cost ($/payable lb produced)
-- byproduct (1) $ 0.79 $ 1.16 $ 0.55 $ 1.15 $ 7.76
Cash cost ($/payable lb produced)
-- coproduct (1) $ 1.39 $ 1.88 $ 1.55 $ 1.97 $ 5.40
Copper sold (000s lb) 16,123 15,478 76,536 64,692 2,801
Average realized sales
price ($/lb) (1) $ 1.92 $ 2.75 $ 2.28 $ 3.02 $ 3.29
Gold
Payable production (oz) 58,254 40,967 218,081 177,606 19,879
Cash cost ($/payable oz produced)
-- co-product (1) $ 463 $ 506 $ 478 $ 525 1,468
Gold sold (oz) 51,781 38,910 221,902 172,741 5,541
Average realized sales price
($/oz) (1) $ 932 $ 1,003 $ 950 $ 1,002 1,006
Molybdenum
Mined production (000s lb) (3) - 4,328 - 26,256 29,945
Cash cost ($/lb produced) $ - $ 10.34 $ - $ 6.91 $ 6.49
Molybdenum sold (000s lb)
TC mine and Endako mine product 244 5,756 3,964 28,518 31,467
Purchased and processed product 2,410 2,376 8,164 8,061 5,054
2,654 8,132 12,128 36,579 36,521
Average realized sales price ($/lb) $ 6.39 $ 10.79 $ 8.55 $ 12.06 $ 10.97
(1) Non-generally accepted accounting principles financial measures.
(2) Payable production for copper and gold reflects estimated metallurgical losses resulting
from handling of the concentrate and payable metal deductions, subject to metal content,
levied by smelters. The current payable percentage applied is approximately 95.0 per cent for
copper and 96.5 per cent for gold, which may be revised on a prospective basis after
sufficient history of payable amounts is determined.
(3) Mined production pounds reflected are molybdenum oxide and HPM (high-performance molybdenum)
from the company's share of production from the mines (excludes molybdenum processed from
purchased product).
Payable production for copper and gold reflects estimated metallurgical losses resulting from handling of the concentrate and payable metal deductions, subject to metal content, levied by smelters. The current payable percentage applied is approximately 95.0 per cent for copper and 96.5 per cent for gold, which may be revised on a prospective basis after sufficient history of payable amounts are determined.
Current guidance
The attached table presents the company's guidance for the full year 2016.
GUIDANCE FOR YEAR ENDING DEC. 31, 2016
(estimated)
Mount Milligan mine copper and gold (1)
Concentrate production (000s dry tonnes) 125 - 135
Copper payable production (000s lb) 55,000 - 65,000
Gold payable production (000s oz) (1) 240 - 270
Unit cash cost -- byproduct ($/payable lb copper produced) (2) $0.25 - $0.70
Cash capital expenditures ($ in millions, plus or minus 10%)
Mount Milligan operations $5
Mount Milligan tailings dam $20
Mount Milligan secondary crusher (3) $47
Total capital expenditures $72
(1) Estimates for cash costs and capital expenditures assume an average foreign
exchange rate of $1 (U.S.) equals $1.35 for 2016.
(2) Assumes gold byproduct credits at a weighted average gold price of $750 per ounce,
which takes into account the $435 per ounce under the streaming arrangement with
Royal Gold.
(3) Excludes $6.2-million in accruals as of Dec. 31, 2015, that will be paid in 2016.
The guidance that the company issued on Jan. 14, 2016, showed a capital expenditure
estimate for the permanent secondary crusher of $27-million. The company noted that
if it decided to move forward with the construction of the permanent secondary
crusher in 2016, the estimate would increase by approximately $20-million. Now that
the company has made the decision to move forward with construction in 2016, it has
increased the estimated capital expenditure by $20-million (plus or minus 10 per cent)
expected to be incurred in connection with the construction and commissioning of the
permanent secondary crusher.Additional information on the company's financial position is available in Thompson Creek's annual report on Form 10-K for the period ended Dec. 31, 2015, which was filed today on EDGAR and SEDAR, and posted on the company's website.
Conference call and webcast
Thompson Creek will hold a conference call for analysts and investors to discuss its 2015 financial results on Thursday, Feb. 25, 2016, at 11 a.m. ET.
To participate in the call, please dial 1-647-427-7450 or 1-888-231-8191. A live audio webcast of the conference call will be available on the company's website.
An archived recording of the conference call will be available through March 10, 2016. To access the recording, dial 1-416-849-0833 or 1-855-859-2056, and enter replay code 44047097. The archived recording will also be available at Thompson Creek's website.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(U.S. dollars in millions, except per-share amounts)
Years ended Dec. 31,
2015 2014 2013
Revenues
Copper sales $ 151.1 $ 178.4 $ 8.7
Gold sales 209.8 172.3 5.6
Molybdenum sales 103.7 441.2 400.8
Tolling, calcining and other 29.5 14.8 19.3
Total revenues 494.1 806.7 434.4
Costs and expenses
Cost of sales
Operating expenses 305.6 523.8 328.2
Depreciation, depletion and amortization 98.6 99.9 51.9
Total cost of sales 404.2 623.7 380.1
Selling and marketing 10.7 14.1 9.3
Accretion expense 2.3 3.6 2.4
Asset impairments - 104.8 194.9
General and administrative 19.8 23.5 21.6
Exploration 2.5 0.9 1.4
Costs for idle mining operations 23.6 - -
Total costs and expenses 463.1 770.6 609.7
Operating income (loss) 31.0 36.1 (175.3)
Other expense (income)
Start-up costs - - 10.3
Loss on foreign exchange 168.4 99.8 70.8
Interest and finance fees 87.3 92.3 24.1
Loss (gain) from debt extinguishment 2.8 (1.6) -
Interest income (0.2) (0.4) (1.0)
Other (4.9) (8.1) (1.1)
Total other expense 253.4 182.0 103.1
(Loss) before income and mining taxes (222.4) (145.9) (278.4)
Income and mining tax expense (benefit) expense
Current income and mining tax (benefit) expense (11.7) 15.4 13.9
Deferred income and mining tax benefit (75.8) (37.1) (77.3)
Total income and mining tax benefit (87.5) (21.7) (63.4)
Net (loss) $(134.9) $(124.2) $(215.0)
Comprehensive (loss)
Postretirement benefit, net of tax (1.0) (0.4) (0.2)
Foreign currency translation (182.5) (107.2) (88.4)
Total other comprehensive (loss) (183.5) (107.6) (88.6)
Total comprehensive (loss) $(318.4) $(231.8) $(303.6)
Net (loss) per share
Basic $ (0.62) $ (0.64) $ (1.26)
Diluted $ (0.62) $ (0.64) $ (1.26)
We seek Safe Harbor.
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