Thompson Creek announces 2010 capital expenditure plans and revision of the Endako Mine expansion project
December 07 2009 - 5:00AM
PR Newswire (US)
NYSE: TC TSX: TCM, TCM.WT Frankfurt: A6R TORONTO, Dec. 7
/PRNewswire-FirstCall/ -- Thompson Creek Metals Company Inc.
("Company"), one of the world's largest publicly traded, pure
molybdenum producers, today announced that capital expenditures in
2010 are expected to be $298 million, comprised of $89 million in
sustaining capital expenditures and $209 million for its 75% share
of capital expenditures required for the Endako Mine expansion
project. (All dollar amounts are expressed in U.S. dollars unless
otherwise indicated.) "We have increased our sustaining capital
expenditures for our producing operations in 2010 as we proceed
with maintenance and upgrades that had been postponed to conserve
cash in 2009 and as we begin purchasing new equipment required for
the extended 16-year mine life recently announced for the Thompson
Creek Mine," said Kevin Loughrey, Chairman and Chief Executive
Officer. "The purchase of new trucks, shovels and drills will
amount to almost one-half of the estimated $89 million in
sustaining capital expenditures in 2010," he added. "We are also
increasing our spending on important reclamation and environmental
measures in 2010." The Company expects its sustaining capital
expenditures in 2009 will total approximately $32 million. The
Endako Mine expansion project includes the construction of a new,
modern Endako mill, which will replace the existing 45-year-old
mill and raise ore-processing capacity from the existing 31,000
tons per day to 55,000 tons per day. The new mill facility will
eliminate the need for significant capital expenditures to upgrade
and refurbish the existing Endako mill. The Endako Mine expansion
project was originally announced March 13, 2008, after the
completion of a feasibility study dated December 14, 2007, which
estimated that project capital expenditures would be C$373.6
million (including a contingency of C$45 million), with Thompson
Creek's 75% share of the total at C$280 million. The project was
halted in December 2008 due to economic uncertainty, although the
Company proceeded with the purchase and storage of equipment when
orders could not be cancelled without the payment of onerous
penalties. Thompson Creek announced on August 6, 2009 that the
Company's Board of Directors approved the resumption of the project
(subject to approval by the joint venture partner). "The delay gave
us time to reassess the project's design and we have made a number
of improvements which we believe will ensure the efficiency and
reliability of the milling process and the planned significant
reduction in operating costs," said Mr. Loughrey. "Among the
significant changes are an enhanced and more flexible pebble
crusher circuit to ensure a finer grind and an enhanced automation
system - both of which will contribute to improved recovery of
molybdenum from the ore." "In addition, all processing equipment
except for the roaster will now be located in a larger new mill
building. The original plan was to utilize the existing mill
building and some existing equipment for the final stages of the
flotation process in the production of molybdenum concentrate. The
new mill building and equipment will be more reliable and more
efficient, with this new design facilitating the exclusive
dedication of the existing mill building to producing concentrate
without disruption until the new mill is operational. The old mill
will be mothballed once the new mill is fully operational and
available in the event of possible further expansion." "While the
new design has raised the total capital cost of the Endako
modernization and expansion project to C$498 million (including a
contingency of C$60 million), with Thompson Creek's 75% share of
the total at C$374 million, the project remains economically
attractive and will, with a greater certainty, generate the
expected significant reduction in per-pound cash processing costs.
As a result, the Company's Board of Directors has approved the
revised capital cost estimate and we are seeking the approval of
our joint venture partner, Sojitz Corporation, in order to proceed
with the project," Mr. Loughrey stated. Assuming an exchange rate
of US$1 = C$1.05, approximately $81 million (of which $61 million
is Thompson Creek's share) has been spent on the project from
inception through October 31, 2009, with an estimated $15 million
to be spent on the project for the remainder of the year (of which
Thompson Creek's share is $11 million). About $279 million (of
which $209 million is Thompson Creek's share) is expected to be
spent in 2010 and the remaining $99 million (of which $74 million
is Thompson Creek's share) is scheduled to be spent in 2011.
Commercial production of molybdenum concentrate from the new mill
is expected late in the second half of 2011. As previously
announced on March 13, 2008, the Endako expansion project includes
the installation of a new grinding circuit consisting of
semi-autogenous grinding (SAG) and ball mills and a modern
flotation 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
existing mill. The capital expenditures will also include the
acquisition of more trucks and other equipment to supply the mill
with a higher volume of ore. The current mining plan provides for a
widening of the area being mined as well as for the creation of a
large single pit through the mining of ore contained in the walls
separating the three existing pits. Annual molybdenum production as
a result of the expansion is expected to be approximately 15 to 16
million pounds, of which Thompson Creek's share would be about 11
to 12 million pounds. The Company's 75% share of 2009 production is
expected to be in a range of 7 to 8 million pounds but in the
absence of the modernization and expansion project, annual
production in future years can be expected to gradually diminish
due to declining grades. 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
metallurgical roasting facility in Langeloth, Pennsylvania and a
75% share of the Endako open-pit mine, mill and roasting facility
in northern British Columbia. Thompson Creek is evaluating the
Mount Emmons Deposit, a high-grade underground molybdenum deposit
near Crested Butte, Colorado. Thompson Creek has an option to
acquire up to 75% of the Mount Emmons Deposit. The Company is
continuing to pursue permitting of the Davidson Deposit, a
high-grade underground molybdenum deposit near Smithers, B.C. The
Company has approximately 750 employees. Its principal executive
office is in Denver, Colorado, and it also has an office in
Toronto, Ontario. More information is available at
http://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 the future price
of molybdenum, the estimation of mineral reserves and resources,
the realization of mineral reserve estimates and those factors
discussed in the section entitled "Risk Factors" in Thompson
Creek's current annual information form which is available on SEDAR
at http://www.sedar.com/ and is incorporated in its Annual Report
on Form 40-F filed with the United States Securities and Exchange
Commission which is available at http://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 current annual information form which is available
on SEDAR at http://www.sedar.com/ and is incorporated in its Annual
Report on Form 40-F filed with the SEC which is available at
http://www.sec.gov/ and subsequent continuous disclosure documents
available at http://www.sedar.com/ and http://www.sec.gov/ for
further information on mineral reserves and mineral resources,
which is subject to the qualifications and notes set forth therein.
CONTACT: Wayne Cheveldayoff, Director of Investor Relations,
Thompson Creek Metals Company Inc., Tel: (416) 860-1438, Toll free:
1-800-827-0992, ; Dan Symons, Renmark Financial Communications
Inc., Tel.: (514) 939-3989, DATASOURCE: Thompson Creek Metals
Company Inc. CONTACT: Wayne Cheveldayoff, Director of Investor
Relations, Thompson Creek Metals Company Inc., Tel: (416) 860-1438,
Toll free: 1-800-827-0992, ; Dan Symons, Renmark Financial
Communications Inc., Tel.: (514) 939-3989,
Copyright