Thompson Creek benefits from copper and gold sales at Mt. Milligan mine in Q2

Thompson Creek benefits from copper and gold sales at Mt. Milligan mine in Q2

North American miner Thompson Creek Metals (NYSE:TC) (TSE:TCM) rallied on Wednesday after it swung to a second quarter net profit as revenue more than doubled during the period on the back of new copper and gold sales from the Mt. Milligan mine in British Columbia.

Shares added 2.3 percent to C$3.10 in Toronto, after rising to as high as C$3.24 earlier this morning.

For the three months to June 30, the company, which now produces copper, gold and molybdenum and reports in US currency, posted net income of $61.6 million, or 28 cents per share, versus a net loss of $19.2 million, or 11 cents per share, in the corresponding period of 2013.

Excluding non-cash foreign exchange gains and losses, adjusted net income was 10 cents per share, compared to 6 cents a year ago.

Total revenues surged to $248.4 million from $117.8 million in the second quarter of 2013, mainly a result of copper and gold revenue from the Mt. Milligan mine. During the period, Thompson Creek made three shipments of copper and gold concentrate and recorded four sales, it said.

"We ended the quarter with an increase in cash from the first quarter of this year, which is another significant milestone for our company following the completion of Mt. Milligan Mine," said chief executive Jacques Perron.

"During the second quarter of 2014, we continued to focus on execution at Mt. Milligan and achieved an average mill throughput of 48,065 tonnes per day for the month of June 2014 and experienced improvements in both copper and gold recoveries."

Looking ahead, the chief executive said that the company will remain focused on the ramp up at the mine, though it will continue to see fluctuations in mill throughput until it consistently reaches about 80 percent of design capacity, which it expects by year-end. It expects to reach 100 percent of design capacity by the end of 2015.

The company sold a total of 21.9 million pounds of copper in the second quarter, at an average realized price of $3.20 per pound, as well as 51,983 ounces of gold at an average price of $1,047 per ounce. This compares to nil copper and gold sold in the same period last year.

Molybdenum sales, however, totaled 9.7 million pounds, about flat with the year-ago period despite higher production, but the average realized sales price increased to $13.03 per pound from $11.60 per pound. Cash costs per pound, on an adjusted basis, improved to $6.25 from $7.46 in the second quarter of 2013.

Thompson, which ended the quarter with cash and equivalents of $216.1 million, expects molybdenum output of 24 to 27 million pounds for fiscal 2014, copper production of 65 to 75 million pounds and gold ounces of 185,000 to 195,000.

Aside from the Mt. Milligan mine, the company owns the TC mine, an open pit molybdenum mine and concentrator in Idaho, as well as a 75 percent stake in the Endako molybdenum mine in British Columbia, and the Langeloth metallurgical facility in Pennsylvania. It also has development properties in British Columbia and Nunavut, Canada.

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