THOMPSON CREEK REPORTS SIGNIFICANTLY IMPROVED
FINANCIAL RESULTS FOR SECOND QUARTER 2010 WITH
REVENUE UP 100% AND CASH FLOW FROM OPERATIONS UP 575%
FROM THE SAME PERIOD ONE YEAR AGO
Toronto, ON - August 5, 2010 - Thompson Creek Metals Company Inc. (NYSE: TC, TSX: TCM, TCM.WT, Frankfurt: A6R) (�Company� or �TCM�), one of the world�s largest publicly traded, pure molybdenum producers, today announced financial results for the three and six months ended June 30, 2010 prepared in accordance with United States generally accepted accounting principles (�US GAAP�). All dollar amounts are in United States (�US�) dollars unless otherwise indicated.
Overview (all in U.S. dollars):
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Net income for the second quarter of 2010 was $126.5 million, or $0.90 per basic and $0.87 per diluted share, which included a non-cash gain of $74.8 million, or $0.54 per basic and $0.51 per diluted share, related to the previously announced requirement under US GAAP to account for the Company�s outstanding common stock purchase warrants as a derivative liability and to record changes in the fair market value in net income.
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Non-GAAP adjusted net income for the second quarter of 2010 (excluding the non-cash gain on the warrants) was $51.7 million, or $0.37 per basic and $0.36 per diluted share.
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Net income and non-GAAP net income were positively affected during the quarter by a net refund of certain state income taxes related to prior year tax returns in the amount of $10.7 million, or $0.08 per basic and $0.07 per diluted share.
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Cash flow from operations totaled $41.2 million in the second quarter of 2010.
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Total cash, cash equivalents and short-term investments at June 30, 2010 were $482.8 million. Total debt was $10.5 million.
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The Company reaffirmed previous estimates for 2010 molybdenum production of 29 to 32 million pounds, sales of molybdenum produced at the Company�s mines of 27 to 30 million pounds, and average cash cost per pound produced of $6 to $7 per pound. Estimated 2010 cash costs at the Thompson Creek Mine were lowered to $5.25 to $6.25 per pound (down from previous guidance of $5.50 to $6.50 per pound) while cash costs at the Endako Mine were raised to $8 to $9 per pound (up from previous guidance of $7 to $8 per pound).
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The Company�s anticipated capital costs for 2010 have been revised to approximately $293 million, down from previous guidance of $298 million.
�Thompson Creek improved its financial performance in the second quarter of 2010 as a result of strengthening molybdenum prices. The Company�s average realized molybdenum sales price for the second quarter of 2010 increased by 16% from the first quarter of 2010 and nearly 80% from one year ago. The Company�s operations also performed well in the second quarter and remain on track to achieve previously announced production and cost guidance for the year,� said Kevin Loughrey, Chairman and Chief Executive Officer.
�Molybdenum prices have edged lower recently due to slightly softer demand from steel companies and also to a lessening of the confidence of molybdenum market participants in the strength and timing of the world economic recovery. Despite this correction to pricing, we believe the fundamental supply and demand projections for molybdenum remain quite favorable and should contribute to an improving financial performance for the Company over the medium term,� Mr. Loughrey added.
The Company�s financial performance continues to be affected by the previously disclosed requirement under US GAAP to account for the Company�s outstanding common stock purchase warrants as a derivative liability, with changes in the fair market value recorded in net income (loss). During the second quarter of 2010, the value of the outstanding warrants (and the Company�s reported derivative liability) was reduced by $74.8 million, resulting in a non-cash gain of the same amount. Excluding the non-cash gain related to the warrants, the Company�s adjusted net income for the second quarter of 2010 was $51.7 million. The Company will continue to make the US GAAP adjustments on a quarterly basis until all of the outstanding warrants have been exercised or until they expire in October 2011.
On July 15, 2010, the Company entered into a definitive agreement to acquire all of the issued and outstanding equity of Terrane Metals Corp. (�Terrane�). The transaction, if consummated, will be implemented by way of a court-approved plan of arrangement under British Columbia law. Thompson Creek has also concurrently entered into a letter agreement with Royal Gold, Inc. with respect to the purchase and sale of 25% of the payable gold from Terrane�s Mt. Milligan Copper Gold Project.
�The acquisition of Terrane fits well in our strategic growth plan, which is expected to provide us with production and revenue growth � anticipated to commence in 2013 � while diversifying our commodity exposure. We believe with our Endako expansion, and now Terrane�s Mt. Milligan project, we expect to substantially improve Thompson Creek�s growth profile,� said Mr. Loughrey.
THIS PRESS RELEASE CONTAINS TABLES AND FINANCIAL STATEMENTS, CLICK HERE TO VIEW THE ENTIRE DOCUMENT IN PDF FORMAT.
Conference call and webcast
Thompson Creek will hold a conference call for analysts and investors to discuss its second quarter 2010 financial results on Friday, August 6, 2010 at 8:30 a.m. Eastern Time. Kevin Loughrey, Chairman and Chief Executive Officer, and Pamela Saxton, Chief Financial Officer, will be available to answer questions during the call.
To participate in the call, please dial 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 and www.thompsoncreekmetals.com.
An archived recording of the conference call will be available at 416-849-0833 or 1-800-642-1687 (Passcode 86690991 followed by the number sign) from 11:30 a.m. on August 6 to 11:59 p.m. on August 13. 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 one of the largest publicly traded, pure molybdenum producers in the world. The Company owns the Thompson Creek open-pit molybdenum mine and mill in Idaho, a metallurgical roasting facility in Langeloth, Pennsylvania and a 75% share of the Endako open-pit mine, mill and roasting facility in northern British Columbia. Thompson Creek is evaluating the Mount Emmons Deposit, a high-grade underground molybdenum deposit near Crested Butte, Colorado. Thompson Creek has an option to acquire up to 75% of the property. The Company is continuing to pursue permitting of the Davidson Deposit, a high-grade underground molybdenum deposit near Smithers, B.C. The Company has approximately 850 employees. Its principal executive office is in D enver, Colorado, and it also has an office in Toronto, Ontario. More information is available at www.thompsoncreekmetals.com.
THIS PRESS RELEASE CONTAINS TABLES AND FINANCIAL STATEMENTS, CLICK HERE TO VIEW THE ENTIRE DOCUMENT IN PDF FORMAT.
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Cautionary Note Regarding Forward-Looking Statements
This news release contains ��forward-looking information�� within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Often, but not always, forward-looking statements can be identified by the use of words such as ��plans��, ��expects��, ��is expected��, ��budget��, ��scheduled��, ��estimates��, ��forecasts��, ��intends��, ��anticipates��, or ��believes�� or variations (including negative variations) of such words and phrases, or state that certain actions, events or results ��may��, ��could��, ��would��, ��might�� or ��will�� be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Thompson Creek and its subsidiaries to be materially different from any future results, perf ormance or achievements expressed or implied by the forward-looking statements. Examples of forward-looking information include, but are not limited to, statements with respect to the future financial or operating performance of Thompson Creek or its subsidiaries and its projects, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital, operating and exploration expenditures, costs and timing of the development of new deposits of Thompson Creek including Mt. Emmons and Davidson, costs and timing of future exploration, requirements for additional capital, benefits of the Terrane acquisition to Thompson Creek shareholders including: the ability for Thompson Creek to diversify its assets; the benefits of the Gold Stream Transaction, if consummated; the ability to finance future projects without equity dilution and Thompson Creek�s potential to obtain significant production growth by 2013; the achievement of the mine plan at Mt. Milligan including: the estimated mine life; the expected annual production; and ability to create up to 400 direct permanent jobs, the breakdown of how Thompson Creek intends to fund the initial capital cost at Mt. Milligan; the commissioning of a mine and mill complex at Mt. Milligan in 2013; Thompson Creek�s expected 2010 molybdenum production, the expected increase in Thompson Creek�s share of annual production resulting from the expansion of the Endako mine; the execution of a definitive Gold Stream Transaction, Thompson Creek�s expected fully diluted share count following the transaction, the objectives and timing of the Arrangement and Gold Stream Transaction, the ability for the closing conditions to be satisfied in connection with the Arrangement, disruption to Thompson Creek�s business as a result of the Arrangement, and Thompson Creek�s ability to achieve its expected growth strategy.
Such factors include, among others, risks related to general business, economic, competitive, political and social uncertainties including the current global recessionary economic conditions, the associated low molybdenum prices and the levels of disruption and continuing illiquidity in the credit markets; risks related to foreign currency fluctuations; energy prices & fluctuations; title disputes or claims; limitations of insurance coverage; changes in governmental regulation of mining operations; risks related to the volatility of Thompson Creek�s share price; changes in environmental regulation; the actual results of current exploration activities; actual results of reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; possible variations of ore grade or recovery rates; impurities and toxic substances in the mined mat erial, failure of plant, equipment or processes to operate as anticipated; the age of the Langeloth Facility; structural integrity and old equipment at the Endako Mine; accidents, labor disputes and other risks of the mining industry; access to skilled labor; relations with employees; dependence upon key management personnel and executives; political instability, insurrection or war; disruption of transportation services; increased transportation costs and delays in obtaining governmental permits and approvals, or financing or in the completion of development or construction activities. Additional factors that could cause Thompson Creek�s results to differ from those described in the forward-looking information can be found in the section entitled ��Risk Factors�� in Thompson Creek�s current Annual Report on Form 10-K, as amended, and subsequent documents filed on EDGAR at www.sec.gov and on SEDAR at www .sedar.com. Although Thompson Creek has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of this news release and Thompson Creek disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by law. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.
Readers should refer to Thompson Creek�s current Annual Report on Form 10-K, as amended, which is available on SEDAR at www.sedar.com and EDGAR at www.sec.gov and other continuous disclosure documents available at www.sedar.com and www.sec.gov for further information on ore reserves and mineralized material, which is subject to the qualifications and notes set forth therein. |
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