According to TD Securities:
Thompson Creek Metals Company Inc.
(TCM-T, TC-N) C$3.43
2013 Guidance Lowered at Endako - Rating Goes to REDUCE
Thompson Creek reported Q4/12 and full-year financial and operating results.
NEGATIVE. For Q4/12, the company had an adjusted EPS loss of $0.11 versus our estimate of a loss of $0.07 and consensus of a loss of $0.06. The company reported a fourth-quarter net loss of $484.4mm ($2.87/share), which included a $530.5mm ($3.25/share) non-cash pre-tax write-down of its interest in the Endako operation to reflect management's view of weak long-term molybdenum prices and persistent challenges at the mine, where 2013 production guidance has been lowered, and cash costs forecasts increased. We have made a number of changes to our estimates to reflect the company’s revised guidance, which significantly lowered our NAV estimates for the company. Notably, we now assume the Thompson Creek mine discontinues production in 2015, following the completion of the Phase 7 mine plan. We have also increased our life-of-mine capex and operating assumptions for the Mt. Milligan development project scheduled for start-up in Q3/13. The net impact of the changes resulted in decreases to our target price to C$3.00 from C$4.50, and our rating to REDUCE from Hold.
• During Q4/12, the company reported sales revenues of $99.4mm and operating costs of $83.9 mm, resulting in an operating margin of 13.6%.
• It produced 7.75mmlb molybdenum in Q4/12 versus our expectation of 6.8mmlb Mo.
• Endako is currently experiencing operating issues associated with ice in the tailings pond, which has reduced the supply of water to the mill which in turn has restricted throughput rates and lowered molybdenum production.