According to CIBC World Markets:
Thompson Creek Metals Company Inc.
Are You A Believer?
- In order to be buyers of TCM today, investors need to be firm believers in the ramp up of Mt Milligan and/or in rebounding moly prices. Given the teething issues mills typically face during ramp up and our fundamental view on molybdenum prices, we downgrade TCM to SU from SP as of 2/25.
- TCM reported adjusted EPS of a loss of ($0.08) versus our expectations of ($0.16) and consensus of ($0.06). The beat in the quarter was a result of higher sales volumes and lower operating costs. CFPS in the quarter was $0.11 compared to our estimate of ($0.07) and consensus of ($0.06).
- Production at the Thompson Creek Mine totaled 6.0MM lbs in Q4 at cash costs of $4.59/lb Mo. We were expecting 5.4MM lbs at cash costs of $6.43/lb. Endako produced 1.8MM lbs at cash costs of $13.26/lb Mo versus our estimate of 2.0MM lbs at cash costs of $12.86/lb Mo.
- 2013 production guidance was lowered to 27.5MM-30.5MM lbs from 29-32.5MM lbs. Capex guidance increased at Mt. Milligan by $40MM-$50MM. As a result, we have reduced our PT to $4.90 from $5.20. We believe that until Mt Milligan ramps up, investors should take a wait-and-see approach.