Mr. Jacques Perron reports
THOMPSON CREEK REPORTS SECOND QUARTER 2016 FINANCIAL RESULTS
Thompson Creek Metals Company Inc. is releasing its financial results for the three and six months ended June 30, 2016, prepared in accordance with United States generally accepted accounting principles (GAAP). All dollar amounts are in U.S. dollars unless otherwise indicated.
Jacques Perron, president and chief executive officer of Thompson Creek, said: "During the second quarter of 2016, we continued to achieve solid performance with our company-wide safety program. We reduced unit cash costs on a byproduct basis by 23 per cent compared to the second quarter of 2015, generated net cash flows from our molybdenum business of approximately $3-million and ended the quarter with working capital of approximately $130-million, including approximately $120-million of cash.
"We had a challenging quarter at Mount Milligan mine, with decreased copper and gold payable production quarter over quarter as a result of lower recoveries resulting mainly from lower ore grades, together with operational inefficiencies in the mill from higher throughput. The performance for the quarter was also impacted by lower mill availability due to a scheduled relining of the SAG mill and the planned relocation of the reclaim barge. Additionally, the operation incurred some unscheduled downtime associated with a tear to the main conveyor belt feeding the mill and electrical issues with one ball mill. Based on our forecast for the balance of the year, we expect annual production to be in line with our 2016 guidance of 55 million to 65 million pounds of copper and 240,000 to 270,000 ounces of gold, with payable copper production near the high end of the range and payable gold production at the low end of the range. For the remainder of 2016, our primary operational focus is to continue to optimize the mine and mill with the expectation to gradually increase recoveries," said Mr. Perron.
As previously announced, on July 5, 2016, Thompson Creek entered into an arrangement agreement with Centerra Gold Inc., pursuant to which Centerra will acquire all of the outstanding common shares of Thompson Creek, pursuant to a statutory plan of arrangement under the Business Corporations Act (British Columbia). The closing of the arrangement is subject to satisfaction of certain conditions, including, among others, approval of the arrangement by Thompson Creek's shareholders, approval by the Supreme Court of British Columbia, and receipt of any regulatory or stock exchange approvals, including approval of the Toronto Stock Exchange, and other customary closing conditions. The company anticipates that the arrangement will be consummated in the second half of 2016.
Highlights for the second quarter of 2016:
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Total cash and cash equivalents at June 30, 2016, were $119.7-million, compared with $176.8-million at Dec. 31, 2015. Total debt, including capital lease obligations and excluding unamortized debt issuance costs and debt discounts, was $873.2-million at June 30, 2016, compared with $885.9-million at Dec. 31, 2015.
- Working capital at June 30, 2016, was $129.5-million, compared with $174.7-million at Dec. 31, 2015.
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Cash generated by operating activities was $6.3-million in the second quarter of 2016, compared with $23.9-million in the second quarter of 2015.
- Consolidated revenues for the second quarter of 2016 were $128.7-million, compared with $134.1-million in the second quarter of 2015. Copper and gold sales contributed $102.2-million in revenue in the second quarter of 2016, compared with $105.6-million in the second quarter of 2015. Molybdenum sales were $22.3-million for the second quarter of 2016, compared with $20.9-million in the second quarter of 2015. During the second quarter of 2016, the company completed four shipments of copper-gold concentrate and recorded four sales, compared with three shipments and four sales in the second quarter of 2015.
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Sales volumes and average realized sales prices for copper and gold for the second quarter of 2016 were 20.3 million pounds of copper at an average realized price of $2.15 per pound and 62,314 ounces of gold at an average realized price of $1,041 per ounce, compared with 21.2 million pounds of copper at an average realized price of $2.63 per pound and 57,920 ounces of gold at an average realized price of $975 per ounce for the second quarter of 2015. In the second quarter of 2016, the company sold 3.0 million pounds of molybdenum, which consisted of roasted molybdenum concentrate sourced from third parties, at an average realized price of $7.38 per pound. In the second quarter of 2015, it sold 2.3 million pounds of molybdenum, which consisted of inventory produced at its mines in 2014, in addition to third party sourced product, at an average realized price of $9.23 per pound.
- Consolidated operating loss for the second quarter of 2016 was $3.8-million, compared with $12.1-million of operating income for the second quarter of 2015.
- Net loss for the second quarter of 2016 was $27.9-million, or 13 cents per diluted share, compared with net income of $300,000, or nil per diluted share, for the second quarter of 2015. The net loss for the second quarter of 2016 and net income for the second quarter of 2015 included primarily unrealized non-cash foreign exchange loss of $1.4-million and unrealized non-cash foreign exchange gain of $16.9-million, respectively, primarily on intercompany notes.
- Non-GAAP adjusted net loss for the second quarter of 2016 was $26.9-million, or 13 cents per diluted share, compared with non-GAAP adjusted net loss for the second quarter of 2015 of $13.5-million, or six cents per diluted share. Non-GAAP adjusted net loss excludes foreign exchange gains and losses, net of related income tax effects.
- Payable production at the Mount Milligan mine for the second quarter of 2016 was 14.7 million pounds of copper and 46,383 ounces of gold, compared with payable production of 20.2 million pounds of copper and 59,917 ounces of gold for the second quarter of 2015.
- Non-GAAP unit cash cost per pound of copper produced for the second quarter of 2016, on a byproduct basis, net of gold credits, was 37 cents per pound, and, on a co-product basis, $1.84 per pound of copper and $728 per ounce of gold. Non-GAAP unit cash cost in the second quarter of 2015 was, on a byproduct basis, 48 cents per pound of copper, and, on a co-product basis, $1.55 per pound of copper and $434 per ounce of gold.
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Capital expenditures for the second quarter of 2016 were $15.9-million, composed of $15.8-million primarily related to the construction of the permanent secondary crushing circuit at the Mount Milligan mine and $100,000 for the TC mine, compared with $9.7-million for the second quarter of 2015.
SELECTED CONDENSED CONSOLIDATED FINANCIAL AND OPERATIONAL INFORMATION
(in millions of dollars, except per-share, per-pound and per-ounce amounts, and as indicated)
Three months ended Six months ended
June 30, June 30,
2016 2015 2016 2015
Financial information
Revenues
Copper sales $ 37.6 $ 49.3 $ 65.7 $ 81.5
Gold sales 64.6 56.3 109.9 92.3
Molybdenum sales 22.3 20.9 41.9 63.7
Tolling, calcining and other 4.2 7.6 8.6 19.6
--------- --------- --------- ---------
Total revenues 128.7 134.1 226.1 257.1
Costs and expenses
Cost of sales
Operating expenses 86.4 75.3 143.9 158.3
Depreciation, depletion and amortization 29.1 26.8 48.9 46.8
Total cost of sales 115.5 102.1 192.8 205.1
Total costs and expenses 132.5 122.0 222.5 239.8
Operating (loss) income (3.8) 12.1 3.6 17.3
Other expense (income) 23.5 6.7 (11.7) 115.8
(Loss) income before income and mining taxes (27.3) 5.4 15.3 (98.5)
Income and mining tax expense (benefit) 0.6 5.1 8.1 (11.6)
--------- --------- --------- ---------
Net (loss) income $ (27.9) $ 0.3 $ 7.2 $ (86.9)
========= ========= ========= =========
Net (loss) income per share
Basic $ (0.13) $ 0.00 $ 0.03 $ (0.40)
Diluted $ (0.13) $ 0.00 $ 0.03 $ (0.40)
Cash generated by (used in) operating
activities 6.3 23.9 (9.4) 18.6
Adjusted non-GAAP measures
Adjusted net (loss) income (26.9) (13.5) (46.2) (27.7)
Adjusted net (loss) income per share, basic $ (0.13) $ (0.06) $ (0.21) $ (0.13)
Adjusted net (loss) income per share, diluted $ (0.13) $ (0.06) $ (0.21) $ (0.13)
Operational statistics
Copper
Payable production (thousand lb) 14,687 20,159 33,749 35,564
Cash cost ($/payable lb produced), byproduct 0.37 0.48 0.60 0.75
Cash cost ($/payable lb produced), co-product 1.84 1.55 1.59 1.59
Copper sold (thousand lb) 20,309 21,195 35,271 35,986
Average realized sales price ($/lb) 2.15 2.63 2.16 2.56
Gold
Payable production (oz) 46,383 59,917 99,712 106,036
Cash cost ($/payable oz produced), co-product 728 434 618 462
Gold sold (oz) 62,314 57,920 106,705 94,670
Average realized sales price ($/oz) 1,041 975 1,035 979
Molybdenum sold (thousand lb)
TC mine and Endako mine product - 576 - 3,128
Purchased and processed product 3,014 1,679 6,050 3,412
--------- --------- --------- ---------
3,014 2,255 6,050 6,540
========= ========= ========= =========
Average realized sales price ($/lb) 7.38 9.23 6.92 9.73
The 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.
SUMMARY OF QUARTERLY RESULTS
(in millions of U.S. dollars, except per-share, per-pound and per-ounce amounts, and as indicated)
June 30, March 31, Dec. 31, Sept. 30, June 30,
2016 2016 2015 2015 2015
Financial information
Revenues $ 128.7 $ 97.4 $ 95.3 $ 141.7 $ 134.1
Operating (loss) income (3.8) 7.4 3.2 10.5 12.1
Net (loss) income (27.9) 35.1 12.9 (60.9) 0.3
Net (loss) income per share
Basic $ (0.13) $ 0.16 $ 0.06 $ (0.28) $ 0.00
Diluted $ (0.13) $ 0.16 $ 0.06 $ (0.28) $ 0.00
Cash generated by (used in) operating activities 6.3 (15.7) (19.7) 38.5 23.9
Adjusted non-GAAP measures
Adjusted net (loss) income (26.9) (19.3) (17.1) (5.0) (13.5)
Adjusted net (loss) income per share
Basic $ (0.13) $ (0.09) $ (0.08) $ (0.02) $ (0.06)
Diluted $ (0.13) $ (0.09) $ (0.08) $ (0.02) $ (0.06)
Operational statistics
Copper
Payable production (thousand lb) 14,687 19,062 19,473 16,363 20,159
Cash cost ($/payable lb produced), byproduct 0.37 0.78 0.79 (0.16) 0.48
Cash cost ($/payable lb produced), co-product 1.84 1.41 1.39 1.66 1.55
Copper sold (thousand lb) 20,309 14,962 16,123 24,427 21,195
Average realized sales price ($/lb) 2.15 2.17 1.92 2.09 2.63
Gold
Payable production (oz) 46,383 53,329 58,254 53,791 59,917
Cash cost ($/payable oz produced), co-product 728 523 463 527 434
Gold sold (oz) 62,314 44,391 51,781 75,451 57,920
Average realized sales price ($/oz) 1,041 1,026 932 926 975
Molybdenum
Molybdenum sold (thousand lb)
TC mine and Endako mine product - - 244 592 576
Purchased and processed product 3,014 3,036 2,410 2,342 1,679
---------- ---------- ---------- ---------- ----------
3,014 3,036 2,654 2,934 2,255
========== ========== ========== ========== ==========
Average realized sales price ($/lb) 7.38 6.47 6.39 7.86 9.23
The 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.Current guidance
The guidance for the full year 2016 remains unchanged from the guidance issued previously. The company currently expects that its 2016 copper production will be on the high end of its guidance range, and its 2016 gold production, byproduct cash costs and capital expenditures, will be at the low end of its guidance.
GUIDANCE (ESTIMATED)
Year ending Dec. 31, 2016
Mount Milligan mine copper and gold (1)
Concentrate production (thousand dry tonnes) 125 to 135
Copper payable production (thousand pounds) 55,000 to 65,000
Gold payable production (thousand ounces) (1) 240 to 270
Unit cash cost, byproduct ($/payable pound of copper produced) (2) $0.25 to $0.70
Cash capital expenditures (in millions of dollars, plus or
minus 10 per cent)
Mount Milligan operations $5
Mount Milligan tailings dam $20
Mount Milligan secondary crusher (3) $47
Total capital expenditures $72
(1) The estimates for cash costs and capital expenditures assume an average foreign
exchange rate of $1 (U.S.) to $1.28 (Canadian) for 2016.
(2) The cash cost assumes gold byproduct credits at a weighted average gold price of
approximately $867 per ounce, which takes into account the $435 per ounce under the
streaming arrangement with Royal Gold.
(3) This figure excludes $6.2-million in accruals as of Dec. 31, 2015, which were paid in
2016.
Conference call and webcast
Thompson Creek will hold a conference call for analysts and investors to discuss its second quarter 2016 financial results on Tuesday, Aug. 9, 2016, at 11 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 Aug. 16, 2016. To access the recording, dial 1-416-849-0833 or 1-855-859-2056, and enter replay code 50536918. The archived recording will also be available on the Thompson Creek website.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS and COMPREHENSIVE (LOSS) INCOME (UNAUDITED)
(in millions of U.S. dollars, except per-share amounts)
Three months ended June 30, Six months ended June 30,
2016 2015 2016 2015
Revenues
Copper sales $ 37.6 $ 49.3 $ 65.7 $ 81.5
Gold sales 64.6 56.3 109.9 92.3
Molybdenum sales 22.3 20.9 41.9 63.7
Tolling, calcining and other 4.2 7.6 8.6 19.6
Total revenues 128.7 134.1 226.1 257.1
Costs and expenses
Cost of sales
Operating expenses 86.4 75.3 143.9 158.3
Depreciation, depletion and amortization 29.1 26.8 48.9 46.8
Total cost of sales 115.5 102.1 192.8 205.1
Selling and marketing 2.7 2.2 4.9 5.2
Strategic-initiative-related costs 4.9 - 8.3 -
Accretion expense 0.6 0.6 1.2 1.2
General and administrative 5.0 4.9 9.1 10.5
Exploration 1.4 0.1 1.4 0.1
Costs for idle mining operations 2.4 12.1 4.8 17.7
Total costs and expenses 132.5 122.0 222.5 239.8
Operating (loss) income (3.8) 12.1 3.6 17.3
Other expense (income)
Loss (gain) on foreign exchange 1.4 (16.9) (58.0) 71.3
Interest and finance fees 20.5 22.3 41.6 44.9
Loss from debt extinguishment - 3.1 - 2.8
Interest income (0.1) - (0.2) (0.1)
Other 1.7 (1.8) 4.9 (3.1)
Total other expense (income) 23.5 6.7 (11.7) 115.8
(Loss) income before income and mining taxes (27.3) 5.4 15.3 (98.5)
Total income and mining tax expense (benefit) 0.6 5.1 8.1 (11.6)
Net (loss) income (27.9) 0.3 7.2 (86.9)
Comprehensive (loss) income
Foreign currency translation (2.9) 17.1 66.6 (79.4)
Total other comprehensive (loss) income (2.9) 17.1 66.6 (79.4)
Total comprehensive (loss) income (30.8) 17.4 73.8 (166.3)
Net (loss) income per share
Basic $ (0.13) $ 0.00 $ 0.03 $ (0.40)
Diluted $ (0.13) $ 0.00 $ 0.03 $ (0.40)
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