TSX: TCM, TCM.WT
TORONTO, March 13 /CNW/ - Thompson Creek Metals Company Inc. (the
"Company"), one of the world's largest publicly traded, pure molybdenum
producers, today announced that its Board of Directors has approved plans to
expand capacity at the Endako Mine from 28,000 to 50,000 tonnes of ore per day
beginning in 2010.
"Our estimates show that the Endako expansion will add to
Thompson Creek's profitability and provide an attractive rate of return in the
coming years even using price assumptions that are well below the current
price of molybdenum," said Kevin Loughrey, Chairman and Chief Executive
"The expansion project also involves a needed modernization of the mill,
which has been in operation since 1965, and ensures we will have an efficient
processing operation at Endako that will be beneficial for the long term."
The Company expects its capital expenditures related to the expansion
project during the period 2008 to 2010 will be C$280 million (75% of the
feasibility study estimate of C$373.6 million) plus ongoing sustaining capital
spending. 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% interest.
Thompson Creek expects it will have sufficient cash flow from existing
operations to fund its share of the expansion as well as to meet the capital
requirements anticipated at other properties.
Annual molybdenum production as a result of the expansion at the Endako
Mine (of which Thompson Creek will receive 75%) is expected initially to be
about 17 million pounds and will decline within two years of the start up to
approximately 16 million pounds. In the absence of an expansion, annual
molybendum production would be expected to fall to about 8 million pounds by
2012 and remain at approximately that level.
In estimating the return on investment from the expansion, the Company
assumed future molybdenum prices of 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. Based on
these prices, the Company estimates that the expansion will generate an
internal rate of return (IRR) of more than 20% over a 16-year mine life.
Sensitivity analysis showed an increase in the IRR to over 30% if
molybdenum prices are 20% higher than the assumed level, and a decline in the
IRR to approximately 17% if molybdenum prices are 20% lower.
Average production costs as a result of the expansion are projected to be
C$7.93 per pound of molybdenum, down from C$10.39 per pound in the absence of
All calculations assume an average exchange value of the Canadian dollar
of US$0.94 throughout the production period.
The mill expansion includes the installation of a new grinding circuit
consisting of semi-autogenous grinding (SAG) and ball mills, a modern
flotation circuit and the upgrading of the roaster circuit. The result will be
a more cost-efficient mill with fewer mechanical items and with the ability to
handle a variety of ore more easily and achieve greater recoveries than the
The capital expenditures will also include the acquisition of new trucks
and other equipment to supply the mill with a higher volume of ore.
The approval of the Endako expansion by the Thompson Creek Board of
Directors is subject to approval by Sojitz, the other Endako joint-venture
participant, and subject to certain adjustments in Thompson Creek's existing
First Lien Credit Facility or obtaining new financing to replace the
First Lien Credit Facility.
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 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 Deposit, a high-grade underground molybdenum
project near Smithers, B.C. The Company has approximately 800 employees. Its
principal executive office is in Denver, Colorado, and it has other executive
offices in Toronto, Ontario and Vancouver, British Columbia. More information
is available at www.thompsoncreekmetals.com.
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 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 and dated March 26, 2007 which is
available on SEDAR at www.sedar.com and is incorporated in its Registration
Statement on Form 40-F filed with the United States Securities and Exchange
Commission on October 30, 2007 which is available at www.sec.gov. 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 does not undertake to update any such
forward-looking statements, except in accordance with applicable securities
laws. 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, readers are cautioned not
to place undue reliance on forward-looking statements.
Readers should refer to Thompson Creek's annual information form for the
year ended December 31, 2006 and dated March 26, 2007 which is available on
SEDAR at www.sedar.com and is incorporated in its Registration Statement on
Form 40-F filed with the SEC on October 30, 2007 which is available at
www.sec.gov and subsequent continuous disclosure documents available at
www.sedar.com and www.sec.gov for further information on mineral reserves and
mineral resources, which is subject to the qualifications and notes set forth
For further information:
For further information: 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; Dan Symons, Renmark Financial
Communications Inc., Tel.: (514) 939-3989, email@example.com