Mr.
Jacques Perron reports
THOMPSON CREEK REPORTS FIRST QUARTER 2015 FINANCIAL RESULTS
Thompson Creek Metals Company Inc. has released financial results for the three months ended March 31, 2015, prepared in accordance with U.S. generally accepted accounting principles. (All dollar amounts are in U.S. dollars unless otherwise indicated.)
Highlights for the first quarter 2015:
-
Total cash and cash equivalents at March 31, 2015, were $238.2-million compared with $265.6-million at Dec. 31, 2014.
- Total debt, including capital lease obligations, at March 31, 2015, was $938.8-million, compared with $944.7-million at Dec. 31, 2014.
- During the quarter, the company completed four shipments of copper and gold concentrate and recorded three sales. On April 17, the company received $27-million for the payment of the fourth shipment.
- Cash used in operating activities was $5.3-million in the first quarter of 2015 compared with cash generated by operating activities of $16.2-million in the first quarter of 2014.
- Consolidated revenues for the first quarter of 2015 were $123.0-million compared with $161.0-million in the first quarter of 2014.
- Copper and gold sales contributed $68.2-million in revenue in the first quarter of 2015 compared with $54.2-million in the first quarter of 2014. Molybdenum sales for the first quarter of 2015 were $42.8-million compared with $102.9-million in the first quarter of 2014.
- Sales volumes and average realized sales prices for copper and gold for the first quarter of 2015 were 14.8 million pounds of copper at an average realized price of $2.47 per pound and 36,750 ounces of gold at an average realized price of $986 per ounce, as compared with 10.8 million pounds of copper at an average realized price of $3.01 per pound and 23,874 ounces of gold at an average realized price of $1,025 per ounce for the first quarter of 2014. Molybdenum sales volumes in the first quarter of 2015, which consisted of the sale of molybdenum inventory produced at the company's mines in 2014 and molybdenum sourced from third parties, were 4.3 million pounds at an average realized price of $10 per pound compared with 9.8 million pounds at an average realized price of $10.45 per pound for the first quarter of 2014.
- Consolidated operating income for the first quarter of 2015 was $5.2-million compared with $13.1-million for the first quarter of 2014. Consolidated operating income for the first quarter of 2015 and 2014 was impacted by non-cash lower-of-cost-or-market molybdenum product inventory writedowns of $5.6-million and $6.8-million, respectively. Consolidated operating income for the first quarter of 2015 was also impacted by $5.6-million of costs related to idle molybdenum mining operations.
- Net loss for the first quarter of 2015 was $87.2-million, or 41 cents per share, compared with a net loss of $39.1-million, or 23 cents per share, for the first quarter of 2014. The net loss for the first quarter of 2015 and 2014 included non-cash foreign exchange losses of $88.2-million and $46.5-million, respectively, primarily on intercompany notes.
- Non-generally accepted accounting principles adjusted net loss for the first quarter of 2015 was $14.2-million, or seven cents per diluted share, compared with non-GAAP adjusted net income for the same period of 2014 of $4.3-million, or two cents per share. Non-GAAP adjusted net income (loss) excludes foreign exchange losses.
- Payable production at the Mount Milligan mine for the first quarter of 2015 was 15.4 million pounds of copper and 46,119 ounces of gold, compared with payable production of 14.2 million pounds of copper and 39,243 ounces of gold for the first quarter of 2014.
- Non-GAAP unit cash cost per pound of copper produced for the first quarter of 2015 was, on a byproduct basis, $1.12 per pound and, on a co-product basis, $1.64 per pound of copper and $498 per ounce of gold. Non-GAAP unit cash costs in the first quarter of 2014 was, on a byproduct basis, $2.48 per pound and, on a co-product basis, $2.27 per pound of copper and $606 per ounce of gold.
- Capital expenditures for the first quarter of 2015 were $13.2-million, composed of $12.7-million for the Mount Milligan mine and $500,000 for the Langeloth facility and corporate combined, compared with $21.8-million for the first quarter of 2014.
Jacques Perron, president and chief executive officer of Thompson Creek, said: "Our first quarter results did not meet our expectations, as throughput and production at Mount Milligan mine were negatively impacted by several operational and mechanical issues in the mill. We gained valuable knowledge as we worked through these challenges and are confident that we have developed solutions, some of which are already in place, to address these issues. It is still our objective to achieve daily mill throughput of approximately 60,000 tonnes by year-end. In light of our recent operational results, we believe this objective may be more challenging to achieve than originally anticipated. Accordingly, we have revised our internal ramp-up schedule and our guidance for Mount Milligan. With our recent improvements in the mill and the utilization of the temporary secondary crushing circuit, we expect to positively impact throughput and recoveries to steadily improve production at Mount Milligan over the course of the remainder of the year."
FINANCIAL INFORMATION
(in millions of U.S. dollars, except per share, per pound and per ounce amounts)
Three months ended
March 31, 2015 March 31, 2014
Revenues
Copper sales $ 32.2 $ 29.8
Gold sales 36.0 24.4
Molybdenum sales 42.8 102.9
Tolling, calcining and other 12.0 3.9
Total revenues 123.0 161.0
Costs and expenses
Cost of sales
Operating expenses 83.0 113.6
Depreciation, depletion and amortization 20.0 22.6
Total cost of sales 103.0 136.2
Total costs and expenses 117.8 147.9
Operating income (loss) 5.2 13.1
Other (income) expense 109.1 67.2
Income (loss) before income and mining taxes (103.9) (54.1)
Income and mining tax (benefit) expense (16.7) (15.0)
Net income (loss) $ (87.2) $ (39.1)
Net income (loss) per share
Basic $ (0.41) $ (0.23)
Diluted $ (0.41) $ (0.23)
Cash generated by (used in) operating activities $ (5.3) $ 16.2
Adjusted non-GAAP measures
Adjusted net income (loss) $ (14.2) $ 4.3
Adjusted net income (loss) per share, basic $ (0.07) $ 0.03
Adjusted net income (loss) per share, diluted $ (0.07) $ 0.02
OPERATIONAL STATISTICS
Three months ended
March 31, 2015 March 31, 2014
Copper
Payable production (000s lb) 15,405 14,243
Cash cost ($/payable lb produced) byproduct $ 1.12 $ 2.48
Cash cost ($/payable lb produced) co-product $ 1.64 $ 2.27
Payable production sold (000s lb) 14,791 10,793
Average realized sales price ($/lb) $ 2.47 $ 3.01
Gold
Payable production (oz) 46,119 39,243
Cash cost ($/payable oz produced) co-product $ 498 $ 606
Payable production sold (oz) 36,750 23,874
Average realized sales price ($/oz) $ 986 $ 1,025
Molybdenum
Mined production (000s lb) -- 7,887
Cash cost ($/lb produced) -- $ 5.75
Molybdenum sold (000s lb)
TC mine and Endako mine product 2,552 8,591
Purchased and processed product 1,733 1,254
Total 4,285 9,845
Average realized sales price ($/lb) $ 10.00 $ 10.45
Current guidance
The company updated its guidance for 2015, based on its first quarter results. This updated guidance for 2015 reflects lower copper and gold production guidance, together with increased copper unit cash costs on a byproduct basis. Despite these revisions, the updated guidance represents an increase in payable copper production from 2014 of approximately 9 per cent to 24 per cent, an increase in payable gold production from 2014 of approximately 13 per cent to 18 per cent, and a decrease in the unit cash costs on a byproduct basis from 2014 of approximately 22 per cent to 35 per cent, making Mount Milligan mine a low-cost producer of copper on a byproduct basis. There are no revisions to the molybdenum business guidance. Management continues to believe that cash flows from the Langeloth facility, together with the sale of inventory from the molybdenum mines, will be more than sufficient to cover the cash costs and cash capital expenditures from the molybdenum business during 2015.
The attached guidance table presents: (i) updated guidance for fiscal year 2015 as of May 6, 2015, and (ii) for comparison purposes, the 2015 guidance previously provided in the company's Form 10-K for the year ended Dec. 31, 2014.
GUIDANCE
Year ended Dec. 31, 2015 Year ended Dec. 31, 2015
(estimated) (updated) (estimated) (previous)
Mount Milligan mine copper and gold
Concentrate production (000s dry tonnes) 140-160 170-190
Copper payable production (000s lb) 70,000-90,000 90,000-100,000
Gold payable production (000s oz) 200-220 220-240
Unit cash cost byproduct ($/payable lb copper produced) $0.70-$0.90 $0.60-$0.85
Molybdenum business cash inflow (outflow) ($ in millions)
Continuing molybdenum operations, Langeloth $10-$15 $10-$15
Suspended molybdenum operations
TC mine
Care and maintenance ($6-$8) ($6-$8)
Phase 8 stripping ($8-$10) ($8-$10)
Sale of inventory ($8/lb-$9/lb oxide price) $25-$28 $25-$28
Endako mine (75% share)
Temporary suspension ($5-$8) ($5-$8)
Sale of inventory ($8/lb-$9/lb oxide price) $9-$10 $9-$10
Total cash flow from molybdenum operations $25-$27 $25-$27
Capital expenditures ($ in millions)
Mount Milligan operations $22-10% $22-10%
Mount Milligan tailings dam $24-10% $24-10%
Mount Milligan secondary crusher engineering $15-10% $15-10%
Langeloth and other $7-10% $7-10%
Total capital expenditures $68-10% $68-10%
Additional information on the company's financial position is available in Thompson Creek's quarterly report on Form 10-Q for the period ended March 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 first quarter 2015 financial results on May 7, 2015, at 8:30 a.m. Eastern Time.
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 at the company's website.
An archived recording of the conference call will be available through May 28, 2015. To access the recording, dial 1-416-849-0833 or 1-855-859-2056 and enter replay code 18330495. The archived recording will also be available at Thompson Creek's website.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
(in millions of U.S. dollars, except per share amounts)
Three months ended March 31,
2015 2014
Revenues
Copper sales $ 32.2 $ 29.8
Gold sales 36.0 24.4
Molybdenum sales 42.8 102.9
Tolling, calcining and other 12.0 3.9
Total revenues 123.0 161.0
Costs and expenses
Cost of sales
Operating expenses 83.0 113.6
Depreciation, depletion and amortization 20.0 22.6
Total cost of sales 103.0 136.2
Selling and marketing 3.0 4.1
Accretion expense 0.6 0.9
General and administrative 5.6 6.6
Exploration -- 0.1
Costs for idle mining operations 5.6 --
Total costs and expenses 117.8 147.9
Operating income (loss) 5.2 13.1
Other (income) expense
(Gain) loss on foreign exchange 88.2 46.5
Interest and finance fees 22.6 23.6
(Gain) loss from debt extinguishment (0.3) --
Interest (income) expense (0.1) (0.1)
Other (1.3) (2.8)
Total other (income) expense 109.1 67.2
Income (loss) before income and mining taxes (103.9) (54.1)
Total income and mining tax expense (benefit) (16.7) (15.0)
Net income (loss) $ (87.2) $ (39.1)
Comprehensive income (loss)
Foreign currency translation (96.5) (45.6)
Total other comprehensive income (loss) (96.5) (45.6)
Total comprehensive income (loss) $ (183.7) $ (84.7)
Net income (loss) per share
Basic $ (0.41) $ (0.23)
Diluted $ (0.41) $ (0.23)
We seek Safe Harbor.
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