Thompson Creek Metals Company Reports Fourth Quarter and Full Year 2012 Financial Results
(firmenpresse) - DENVER, CO -- (Marketwire) -- 02/25/13 -- Thompson Creek Metals Company Inc. (NYSE: TC) (TSX: TCM) (the "Company" or "Thompson Creek"), a growing, diversified North American mining company, today announced financial results for the three months and year ended December 31, 2012, prepared in accordance with United States generally accepted accounting principles ("US GAAP"). All dollar amounts are in United States ("US") dollars unless otherwise indicated.
Full Year 2012 Financial Highlights:
Consolidated revenue of $401.4 million
Net loss of $546.3 million, or $3.24 per diluted share
Adjusted Non-GAAP net loss of $34.7 million, or $0.20 per diluted share
Fixed asset write down of $530.5 million, or $3.15 per diluted share
Goodwill impairment of $47.0 million, or $0.28 per diluted share
Successful completion of $350 million senior secured first priority bond offering, further de-risking the completion of the Mt. Milligan project
Fourth Quarter 2012 Financial Highlights
Consolidated revenue of $99.4 million
Net loss of $484.4 million, or $2.87 per diluted share
Adjusted Non-GAAP net loss of $18.0 million, or $0.11 per diluted share
Fourth Quarter 2012 Operational Highlights
Reached safety milestone at Mt. Milligan with more than 3.5 million work hours without a lost time incident
Increased total molybdenum production by approximately 26% from previous quarter to 7.7 million pounds from 6.1 million pounds
Decreased average cash costs per pound of molybdenum produced by approximately 31% from previous quarter to $6.58/lb from $9.46/lb
Increased total sales of molybdenum by approximately 42% from previous quarter to 8.1 million pounds from 5.6 million pounds
Advanced construction progress at Mt. Milligan by 6% to overall completion of 81%
Approximately 91% of capital expenditures spent or contractually committed since inception of the Mt. Milligan project
Kevin Loughrey, Chairman and Chief Executive Officer of Thompson Creek, said, "While 2012 had some noteworthy highlights, including the significant advancement of the Mt. Milligan project and our achievement of a significant safety milestone at Mt. Milligan, the year proved to be challenging from both a funding and operational perspective. During the year, we raised additional funding to ensure the completion of the Mt. Milligan project, and took several strategic steps to address operational challenges at both of our molybdenum mines. We recorded a significant fixed asset write down at our Endako Mine during the fourth quarter, and our Endako management team is working diligently to address its operational challenges, which are expected to continue through the winter months. As the Mt. Milligan project continues to advance, we very much look forward to its completion and the commencement of copper and gold production and our expectation of near-term increases in revenue, cash flow and net income."
Given the significant decline in molybdenum prices during 2012 and operational challenges at the Company's two mines, the Company closely monitored and evaluated potential write downs throughout the year. During the third quarter of 2012, the Company recognized a non-cash goodwill impairment charge of $47.0 million, representing the remaining balance of its goodwill. During the fourth quarter of 2012, Thompson Creek recognized a $530.5 million non-cash pre-tax write down of its share of the property, plant, equipment and development assets at the Endako Mine. Additional information regarding this write down is available in Thompson Creek's Annual Report on Form 10-K for the period ended December 31, 2012, which was filed today.
During the fourth quarter and year ended December 31, 2012, the Company made cash capital expenditures, including capital leases, of C$186.3 ($188.4) million and C$678.5 ($679.0) million, respectively, for the Mt. Milligan project. Capitalized interest and debt issuance costs were C$18.6 ($18.7) million and C$50.9 ($51.0) million, for the fourth quarter and fiscal year ended December 31, 2012, respectively. Capital expenditures were primarily related to the ongoing construction of the tailings storage facility, buildings and facilities (concentrator, truck shop, administration building and primary and pebble crushers), plant site earthworks, cement works, steel erection, construction camp costs, mine development, mining equipment and engineering design costs. The Company incurred C$1,139.8 million in cash spend since the inception of the project through December 31, 2012.
As of December 31, 2012, overall project completion is estimated to be at 81%. Significant achievements include the following;
Safety:
Average weekly site personnel - 1,000
Total hours worked without a lost time incident (through 12/31/12) - 3,529,632
Major milestones achieved to date:
Operations senior management team in place
Mine development well advanced
Truck shop, warehouse and administration building in commissioning
Procurement, engineering, concrete and steel work essentially complete
Tailings Storage Facility fully permitted
First two years of water for mill use stored (10 million cubic meters)
Concentrator building fully enclosed
SAG mill and one ball mill fully assembled, second ball mill well advanced and on schedule
All flotation cells positioned, installation of mechanical equipment and piping advanced
Primary crusher operational
Site connected to electrical power grid
Eight 793 haul trucks, two 7594 shovels and one 994 loader in operation
Reclaim barge operational
Upcoming milestones include the completion of the concentrator building (installation of all mill equipment, piping and electrical), 400-meter conveyor line from the primary crusher to the mill, pebble crushing circuit, truck maintenance shop and the administrative building.
The Mt. Milligan copper-gold project remains on schedule, with commissioning and start-up expected to commence in the third quarter of 2013, and commercial production of copper and gold expected in the fourth quarter of 2013. The Company is currently estimating an aggregate of approximately C$1.5 billion to construct and develop the Mt. Milligan copper-gold mine of which approximately C$390.0 million of expenditures remain to be spent, plus an additional C$40.0 million to C$50.0 million of estimated future cash capital expenditures for a permanent operations residence at Mt. Milligan, which is expected to be completed in 2014. The Company continues to monitor its current costs, future cost estimates and scheduling for the project.
Mt. Milligan's average annual production is expected to be higher during the first full 6 years of production (approximately 89 million pounds of copper and 262,000 ounces of gold in concentrate), compared to annual life-of-mine production. The Company will provide production and cash cost guidance for 2014 once Mt. Milligan is operational.
In late December 2012 and thus far in 2013, the Endako Mine experienced and is experiencing tailings management issues associated with frozen water in the tailings pond. Endako has been unable to feed sufficient water from the tailings pond to the new mill on a consistent basis, which has negatively impacted its rate and level of throughput of mined material to the mill and thus its production of molybdenum. These issues led management to revise its operating plan for the Endako Mine for 2013. The Endako Mine operating team has made modifications to the piping of tailings to the pond and has instituted other tailings management procedures to address these issues to ensure the availability of a sufficient supply of water to the mill for the future winter seasons beyond 2013. The Company expects that the Endako Mine tailings management issues will have a negative effect on production and financial results from the Endako Mine in the first quarter of 2013. As a result, the Endako Mine guidance for 2013 has been updated below.
In addition to the consolidated financial statements presented in accordance with US GAAP, we use certain non-GAAP financial measures of our financial performance for the reasons described further below. The presentation of these measures is not intended to be considered in isolation from, as a substitute for, or as superior to, the financial information prepared and presented in accordance with US GAAP, and 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 (loss) income and adjusted net (loss) income per share - basic and diluted are considered key measures by our management in evaluating our operating performance on a quarterly and annual basis. Management uses these measures in evaluating our performance as they represent profitability measures that are not impacted by changes in the market price of our previously outstanding warrants or significant non-cash items, such as asset impairments, that are considered non-recurring in nature. These measures do not have standard meanings prescribed by US GAAP and may not be comparable to similar measures presented by other companies. We believe that these non-GAAP measures provide useful supplemental information to investors in order that they may evaluate our performance using the same measures as those used by management and, as a result, the investor is afforded greater transparency in assessing our financial performance.
Adjusted net (loss) income represents the net (loss) income prepared in accordance with US GAAP, adjusted for significant non-cash items. For the 2012 periods, the significant non-cash items were the non-cash losses related to the impairment of assets at Endako Mine, net of income tax effects, goodwill impairment and the non-cash gains and losses on the fair value adjustment related to the common stock purchase warrants that were outstanding until June 30, 2012. For the 2011, the significant non-cash items were the non-cash gains and losses on the fair value adjustment related to the then outstanding common stock purchase warrants.
As a result of significant deterioration in the projected price of molybdenum, lower-than anticipated ore grades and recovery at the Endako Mine and water management issues at the Endako Mine, together with a change in the Endako operating plan for 2013, management reviewed the carrying value of assets at Endako Mine. This review resulted in a pre-tax asset impairment of $530.5 million to the assets at the Endako Mine, representing a write down to the assets' estimated fair values. This impairment was included in total costs and expenses in our Consolidated Statements of Operations and Comprehensive (Loss) Income.
In addition, during 2012, TCM suspended waste stripping activity associated with the next phase of production at TC Mine. This decision, coupled with declines in molybdenum prices, represented significant changes in our business requiring us to evaluate our goodwill for impairment on an enterprise-wide basis during 2012. As a result of this evaluation, a goodwill impairment charge of $47.0 million, representing the remaining balance of goodwill, was recorded as other expense and (income) in our Consolidated Statements of Operations and Comprehensive (Loss) Income in 2012.
Adjusted net (loss) income per share (basic and diluted) is calculated using adjusted earnings, as defined above, divided by the weighted-average basic and weighted-average diluted shares outstanding during the period, as determined in accordance with US GAAP.
The following tables reconcile net (loss) income presented in accordance with US GAAP to the non-GAAP financial measures of adjusted net (loss) income and adjusted net (loss) income per share - basic and diluted, for the years ended December 31, 2012 and 2011 and for the fourth quarters of 2012 and 2011. All figures within the tables are unaudited and are presented in US$ in millions, except shares and per share amounts.
Cash cost per pound produced, weighted-average cash cost per pound produced and average realized sales price per pound sold are considered key measures in evaluating the Company's operating performance. Cash cost per pound produced, weighted-average cash cost per pound produced and average realized sales price per pound sold are not measures of financial performance, nor do they have a standardized meaning prescribed by US GAAP and may not be comparable to similar measures presented by other companies. Management uses these measures to evaluate the operating performance at each of our mines, as well as on a consolidated basis, as measures of profitability and efficiency. Management believes that these non-GAAP measures provide useful supplemental information to investors in order that they may evaluate the Company's performance using the same measures as those used by management and, as a result, the investor is afforded greater transparency in assessing Thompson Creek'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.
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; corporate allocations; stock-based compensation; other non-cash employee benefits; depreciation, depletion, amortization and accretion; and commissioning and start-up costs for the Endako mill. 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 tables provide a reconciliation of cash costs and cash cost per pound produced, by mine, and operating expenses included in the Company's Consolidated Statements of Operations and Comprehensive (Loss) Income in the determination of net (loss) income. All figures within the tables are unaudited and are presented in US$ in millions, except shares and per share amounts.
Additional information on the Company's financial position is available in Thompson Creek's Annual Report on Form 10-K for the period ended December 31, 2012, which was filed today on EDGAR () and SEDAR () and posted on the Company's website ().
Thompson Creek will hold a conference call for analysts and investors to discuss its 2012 financial results on Monday, February 25, 2013 at 8:00 am 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 1 (877) 719-9801. A live audio webcast of the conference call will be available at and .
An archived recording of the conference call will be available at 1 (888) 203-1112 (access code 2463802) from 11:00 a.m. ET on February 25, 2013 to 11:59 p.m. ET on March 8, 2013. An archived recording of the webcast will also be available at Thompson Creek's website.
Thompson Creek Metals Company Inc. is a growing, diversified North American mining company. The Company's principal operating properties are its 100%-owned Thompson Creek Mine, an open-pit molybdenum mine and concentrator in Idaho, a 75% joint venture interest in the Endako Mine, an open-pit molybdenum mine, concentrator and roaster in British Columbia, and the Langeloth Metallurgical Facility in Pennsylvania. The Company is also in the process of constructing the Mt. Milligan Mine in British Columbia. Mt. Milligan is designed to be a conventional truck-shovel open-pit copper-gold mine. Mt. Milligan is expected to commence production in 2013. The Company's development projects include the Berg property, a copper, molybdenum and silver exploration property located in British Columbia, the Davidson property, an underground molybdenum exploration property located in British Columbia, and the Maze Lake property, a joint venture gold exploration project located in the Kivalliq District of Nunavut, Canada. The Company's principal executive office is located in Denver, Colorado. More information is available at .
This news release contains ''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," "future," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressions. Our forward-looking statements include statements with respect to: future financial or operating performance of the Company or its subsidiaries and its projects; future inventory, production, sales, cash costs, capital expenditures and exploration expenditures; future earnings and operating results; expected concentrate and recovery grades; statements as to the projected development of Mt. Milligan and other projects, including expected production commencement dates; Mt. Milligan development costs; future operating plans and goals; and future molybdenum prices.
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 and on SEDAR at . Although we have attempted to identify those material factors that could cause actual results or events to differ from those described in such forward-looking statements, there may be other factors, currently unknown to us or deemed immaterial at the present time, that could cause results or events to differ from those anticipated, estimated or intended. Many of these factors are beyond our 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.
For more information, please contact:
Pamela Solly
Director, Investor Relations
Thompson Creek Metals Company Inc.
Tel: (303) 762-3526
Christine Stewart
Renmark Financial Communications Inc.
Tel: (416) 644-2020
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