By: Liezel Hill
6th August 2010
TORONTO (miningweekly.com) – The general direction of the molybdenum market remains positive, although not without its ups and downs, Thompson Creek Metals CEO Kevin Loughrey said on Friday.
“The molybdenum market continues to be improving on the longer term, but it has done so on an uneven path over the course of this year,” he said on a conference call.
Thompson Creek mines molybdenum from its 75%-owned Endako mine in British Columbia and the Thompson Creek mine, in Idaho, and also operates a metallurgical facility in Pennsylvania.
Although prices for the metal, which is used to strengthen steel, declined over the last three months compared with earlier in 2010, the price still remains higher than it was this time last year, Loughrey commented.
The average price of molybdenum in the first half of the year was $17,58/lb, but the metal dropped to as low as $14,10/lb last month, and Thompson Creek warned on Thursday that the lower prices in the first two months of the third quarter will likely have an effect on profit for the quarter.
The molybdenum price has since recovered to just over $15/lb, Loughrey said, and the company expects to see prices rising over the remainder of the year.
“But there is undeniably a sense of caution in the market right now, as the improvement from the recession has not happened quite as quickly as I think most of us thought it would.”
The “fundamental” supply and demand picture is still positive though, he said.
Thompson Creek earned $126,5-million in the second quarter, compared with a net loss of $89,3-million a year earlier.
However, the earnings were clouded by noncash unrealised gains on common stock purchase warrants of $74,8-million, while the second quarter of 2009 included an unrealised loss on the warrants of $83-million.
Excluding these and some other once-off items, adjusted net income for the second quarter of 2010 was $51,7-million, compared with $6,3-million a year earlier.
Revenue for the quarter more than doubled to $148,4-million, from $74-million in the same period last year, mainly thanks to higher realised molybdenum prices.
Thompson Creek produced 7-million pounds of molybdenum in the second quarter of 2010, compared with 6,7-million pounds a year earlier.
The expansion of the mill at the Endako mine remains more or less on schedule, with start-up still expected towards the end of 2011, Loughrey said.
Thompson Creek announced last month it will buy Canadian junior Terrane Metals, which owns the Mount Milligan copper/gold project in British Columbia.
Shares in the company rose 4,8% on Friday, to $9,82 apiece by 12:28 in New York.
Edited by: Liezel Hill
http://www.miningweekly.com/article/...umpy-thompson-creek-2010-08-06 |
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