Streaming Through Difficulties

Thompson Creek Sees 3Q 2013 Copper-Gold Production

By Ted Niles

Thompson Creek Metals Company Inc TSX:TCM derived two advantages from its acquisition of Terrane Metals in October 2010. An outstanding asset in the Mt Milligan copper-gold project, due to begin production 3Q 2013, and an opportunity to broaden the company’s focus from pure molybdenum producer. Nevertheless, 2011's growing pains have been sharp, and shares of Thompson Creek have lost half their value. “We’re living in an inflationary world in terms of building these mines,” Chairman and CEO Kevin Loughrey remarks. “It’s just something we have to live with.”

A number of factors have conspired against the company, including the recent drop in value of the Canadian dollar, but the main culprit is the recent increase to capital expenditures at the Mt Milligan project. Located 90 kilometres north of Prince George, BC, it has NI 43-101 proven and probable mineral reserves of an impressive 6.02 million ounces gold and 2.12 billion pounds copper. A 2009 feasibility study estimated a 22-year mine life with annual production of 194,500 ounces gold and 81 million pounds copper. Capex for the project was originally set at $915 million, but Thompson Creek announced May 6 that this had risen to $1.27 billion, due to increases in the cost of labour and material as well as the exchange rate.

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