Deutsche Bank Comments On Thompson Creek Following Production And Sales Update

In a research report published today, Deutsche Bank analyst Jorge Beristain maintained a Buy rating on Thompson Creek (NYSE:TC) with a $1.60 price target, as the company announced fourth-quarter and full year 2014 production and sales results.

Beristain commented: “Thompson Creek updated the market with 4Q14 production (and sales) figures that were l-t-e and provided 2015 guidance (production, cash costs, capex) which was largely in-line. TC will move forward with secondary crusher at Mt. Milligan (MM) copper-gold mine, but only when copper market conditions improve. In interim, MM will use temporary crushing which will increase operating costs, but improve throughput and push out capex for permanent secondary crusher. Molybdenum (moly) mines to remain idled until market conditions improve, TC anticipates to generate positive cash flow ($25-27m) from sale of inventories and expected tolling proceeds at Langeloth (more-than-offsets estimated care and maintenance/stripping costs at TC mine and temporary suspension costs at Endako).”

“On a positive note, TC has a portion of its copper and gold sales hedged, during the quarter repurchased and retired $33m of debt for $30m cash (that will reduce total future interest payments by $13m; ~$3m per year) and increased copper reserves by 15% to 2.4bn lbs and gold by 4% to 6.2m oz.”

hompson Creek Metals Company Inc. is a diversified North American mining company. The Company’s principal operating property is its 100%-owned Mount Milligan mine, an open-pit copper and gold mine and concentrator in British Columbia. 

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