- Incremental capital cost of C$373 million required to expand
Endako mill capacity by 78%.
- Estimated payback from cash flow within three years of becoming fully
operational in 2010.
- Annual molybdenum production would rise to approximately 16 million
pounds from current 11.2 million pounds.
- Long-term average costs would decline by over C$2 per pound.
- IRR would be 21.3% at assumed molybdenum prices including a long-term
price of US$14 per pound starting in 2012 but sensitivity analysis
shows IRR would increase to 31% if molybdenum prices are 20% higher.
Shares outstanding: 113,297,000
TSX: TCM, TCM.WT
TORONTO, Nov. 8 /CNW/ - Thompson Creek Metals Company Inc., one of the
world's largest publicly traded, pure molybdenum producers, today announced
the results of the feasibility study conducted by Hatch Ltd. on the proposed
mill expansion at the Endako Mine in Northern British Columbia. The Endako
Mine is operated as a joint venture with Thompson Creek holding a 75% interest
and Sojitz Corporation, a Japanese company, holding the remaining 25%
"The Endako expansion feasibility study indicates a potential significant
return on investment for Thompson Creek and its shareholders," said Kevin
Loughrey, President and Chief Executive Officer. "However, we have not yet
decided to proceed with the expansion. We first must review the details of the
Hatch study and evaluate it with Sojitz Corporation, our joint venture partner
at Endako. We anticipate making a decision on the expansion in the next few
The Hatch report evaluates the potential for increasing the processing
rate at the Endako mill to 50,000 tonnes of ore per day from the current
28,000 tonnes per day -- an increase of 78%.
Hatch has estimated that incremental capital expenditures of C$373
million would be required for the expansion. This estimate is considered to be
accurate within plus-or-minus 20%. The capital cost estimates include the
acquisition of new equipment for the mine and mill and to increase roasting
capacity to 21 million pounds a year, and a C$44 million contingency, but it
does not include costs related to new mine equipment for sustained operation
at current production rates. All calculations including capital costs assumed
a July 2007 Canadian dollar exchange rate of C$1.00 equals US$0.94.
The expanded facility could be fully operational by the second quarter of
2010 and would involve an increase in annual molybdenum production at Endako
to approximately 16 million pounds beginning in 2010 from the current
11.2 million pounds a year. Of this production, 75% would be to Thompson
Based on molybdenum price assumptions made by management and used in the
study, the internal rate of return (IRR) for the expanded operation would be
21.3% over a 16-year mine life (reduced from 27 years based on the current
Sensitivity analysis performed by Hatch showed an increase in the IRR to
31% if molybdenum prices are 20% higher than the assumed level, and a decline
in the IRR to 16.9% if molybdenum prices are 20% lower.
Projected cash flow through payback of the investment is calculated as
occurring in 2013, or approximately three years after commissioning of the
expanded mill facilities in 2010.
Management has assumed molybdenum prices will be US$31.50 per pound in
2008, US$27 per pound in 2009, US$23 per pound in 2010, US$17.50 per pound in
2011 and US$14 per pound thereafter. These were converted in the report in
Canadian dollars at the assumed exchange rate for the Canadian dollar of
C$1.00 equals US$0.94 cents.
Fixed and variable operating costs for the expanded operation over the
entire 16-year period are estimated at C$6.85 per tonne of ore milled,
compared with the current cost of C$8.52 per tonne. The estimated cost
reduction of C$1.67 per tonne is largely attributable to the dilution of fixed
costs at higher capacity.
This is equivalent to a reduction in long-term average costs to C$7.93
per pound of molybdenum from C$10.39 per pound under the current production
The proposed expansion would include a new crushing, grinding and
flotation process, including one SAG mill and two ball mills, seven stages of
rougher/scavengers and three stages of cleaners for the flotation process.
The new process would result in a projected recovery improvement of four
percentage points. Of this, 1.5 percentage points would be due to the
increased retention time in the new rougher scavenger flotation cells and a
further 2.5 percentage points due to the finer grind size afforded by the new
Kenneth Collison, P.Eng., Chief Operating Officer, Thompson Creek Metals
Company Inc., who is a "qualified person" as such term is defined under
National Instrument 43-101, has reviewed and approved the contents of this
About Thompson Creek Metals Company Inc.
Thompson Creek Metals Company Inc. (formerly Blue Pearl Mining Ltd.) 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 75% share of the Endako open-pit mine, mill and roasting facility in
northern British Columbia, and a metallurgical roasting facility in Langeloth,
Pennsylvania. Thompson Creek is also developing the Davidson high-grade
underground molybdenum project near Smithers, B.C. The Company has more than
700 employees. Its head office is in Toronto, Ontario. It also has executive
offices in Denver, Colorado (including sales and marketing) and Vancouver,
British Columbia. More information is available at
Cautionary Note Regarding Forward-Looking Statements
This news release contains "forward-looking information" which may
include, but is not limited to, statements with respect to the timing and
amount of estimated future production. 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/or its subsidiaries to be materially different from any
future results, performance or achievements expressed or implied by the
forward-looking statements. Such factors include those factors discussed in
the section entitled "Risk Factors" in Thompson Creek's annual information
form for the year ended December 31, 2006 which is available 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. 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. Thompson Creek undertakes no obligation to
update forward-looking statements if circumstances or management's estimates
or opinions should change. Accordingly, the reader is cautioned not to place
undue reliance on forward-looking statements.
For further information:
For further information: Ian McDonald, Executive Chairman, Thompson
Creek Metals Company Inc., Tel: (416) 860-1438, email@example.com; Wayne
Cheveldayoff, Director of Investor Relations, Thompson Creek Metals Company
Inc., Tel: (416) 860-1438, Toll free: 1-800-827-0992, firstname.lastname@example.org;
Tina Cameron, Renmark Financial Communications Inc., Tel.: (514) 939-3989,