Thompson Creek Metals Company Inc has announced financial results for the three months ended March 31st 2011, prepared in accordance with United States generally accepted accounting principles.
Revenue for the quarter ended March 31st 2011 was USD 206.7 million, up by 62% from USD 127.8 million for the first quarter of 2010.
Net income for the quarter ended March 31st 2011 was USD 128.9 million, which included a non cash unrealized gain on common stock purchase warrants of USD 66 million. Net income for the quarter ended March 31st 2010 was USD 1.1 million, which included a non cash unrealized loss on common stock purchase warrants of USD 24.5 million.
Non GAAP adjusted net income for the quarter ended March 31st 2011 (excluding the non cash unrealized gain on the warrants) was USD 62.9 million. Non GAAP adjusted net income for the quarter ended March 31st 2010 (excluding the non cash unrealized loss on the warrants) was USD 25.6 million.
The company's net income continues to be affected by the previously disclosed requirement under US GAAP to account for the company's outstanding common stock warrants as a derivative liability, with changes in the fair market value recorded in net income.
Molybdenum production for the quarter ended March 31st 2011 was a new quarterly record of 10.3 million pounds, up 25% from 8.3 million pounds in the first quarter of 2010.
Non GAAP average cash cost per pound produced for the quarter ended March 31st 2011 was USD 5.37 per pound as compared to USD 5.36 per pound for the first quarter of 2010.
Cash flow from operations for the quarter ended March 31st 2011 was USD 76.6 million, up 200% from USD 25.6 million for the first quarter of 2010.
Capital costs incurred for the quarter ended March 31st 2011 were USD 121.4 million, comprised of USD 10.1 million of capital costs for the mines, the Langeloth Facility and corporate, and USD 51.9 million and USD 59.4 million of capital costs for the mill expansion project at the Endako Mine (75% share) and the development of Mt Milligan, respectively. The capital costs for the first quarter of 2011 include amounts accrued of USD 28.5 million at March 31st 2011, therefore, capital expenditures for the first quarter of 2011 were USD 92.9 million.
Total cash and cash equivalents at March 31st 2011 were USD 303.0 million as compared to USD 316.0 million as of December 31st 2010. Total debt as of March 31st 2011 was USD 20.5 million as compared to USD 22.0 million as of December 31st 2010.
Mr Kevin Loughrey chairman & CEO of Thompson Creek said that "Thompson Creek achieved excellent financial performance in the first quarter of 2011, mainly as a result of increased production, sales volumes and molybdenum prices. The company produced a record 10.3 million pounds of molybdenum, and sold a record 10.1 million pounds of molybdenum from its mines for an average realized molybdenum sales price for the quarter of USD 17.39, up 20% from USD 14.50 in the first quarter of 2010. We anticipate that over the remainder of 2011, the price for molybdenum oxide will continue to be volatile, but will gradually increase with the expected improvement in worldwide molybdenum bearing steel production."
The company also announced that it has approved the increased capital expenditure budget for the Mt Milligan project in British Columbia from CAD 915 million to CAD 1.265 billion. The CAD 350 million increase is attributable to design improvements, increases in labor costs, the cost of steel, concrete and other materials, and changes in the foreign exchange rate.
Mr Kevin Loughrey said that "Mt Milligan is an important building block for our Company, both in terms of growth and diversification. We believe that, notwithstanding the capital increase, the economics for the project are still extremely attractive, and our liquidity and capital resources are sufficient to complete the construction of the Mt Milligan mine. We expect to commence production in late 2013 and produce approximately 81 million pounds of copper and 194,000 ounces of gold annually."
At March 31st 2011, Thompson Creek had working capital of USD 392.7 million, including USD 303 million of cash, cash equivalents and short term investments, USD 106.8 million of receivables and USD 20.5 million of debt related to equipment financings.
The company intends to fund the remaining mill expansion costs at the Endako Mine and the Mt Milligan development costs from a combination of cash on hand, cash flow from operations, funds from various financing facilities, the remaining proceeds from the gold stream transaction with Royal Gold and expected funds from the exercise of warrants that expire in October 2011. Thompson Creek may consider additional debt financings. The timing of any financing transaction will depend on market conditions. The company does not currently intend to fund Mt Milligan development costs through the issuance of equity or equity linked securities.
