Are we playing games here with this company, Endako has been a disaster, they can't even get water to it. Are we giving too much credit to think they can finish and get Milligan up and running and making the money most are expecting? Or is this just more smoke and mirrors sinking ship stuff? Thanks.
As a veteran on this board you have been duped into buying tc at a high point. I suggest you wait for my signal to buy. I always state my buy in price and my sell price. As a follower of mine you may not get the highest of the high or the lowest of the low but what you do get is a calculated risk that I myself take as well. If you are a day trader tomorrow will be down as well. I expect in the coming days for other analyst to downgrade tc as they have a tendency to follow my lead.
Sentiment: Strong Sell
dtime, let's look at things 20/20 shall we? You sold at $3.40 and yes, now the pps is below that by just a bit, so, you're up, congrats. I bought primarily in the mid $2's, low and mid $3's, and finally a few more shares just over $4, but only sold half of my position at $4.22. So, I'm up a bit as well, but nothing to brag about. That said, feel free to call your shots. Where are you buying next? And we all know that you're here for that very reason, to BUY at some point. So, is it $3, $2.50, or that previous sub $2 call that you made in the past, which has yet to come to pass (and I'm not holding my breath for that you happen). I'll load up again, if we fall back to the mid $2's, but would be very surprised if we do. Again, I like hearing from all here, so, I'll give you some credit, you made the call on your sell order, bashed it while it went up, and are gloating a bit now. Again, that's fine, but continue to call your shots and let's see who proves to be the most accurate. I see a floor around $2.95, but perhaps as low as $2.60. And yes, I'm HOPING to buy more at those levels, but certainly NOT counting on it. TC looks to have the bad news out of the way. Now, let's see what they can do as they ramp up to being a diversified producer of moly, copper and gold, towards the latter part of this year, and start generating some serious cash flow imo, in 2014.
Howdy. I would not worry too much about Q4, or reading too much into Endako's problems and extrapolating those onto Mt. Milligan. They rushed that mill's into operation on Feb 1, and it's commissioning period was only one month. They hadn't even completed the regrind circuit, or pebble crusher lines until one month after they fired up the new mill. I suspect a lot of this anxious behavior on TC's part was the result of the TC / Sojitz dispute on capex, that resulted from cost overruns on the new mill. So yes, they've had some issues with Endako's mill.
However, the problems centers on this: Endako's performance has been disappointing because the recoveries have been poor at their new mill.
This was caused by running lower-grade oxidized stockpile ore. Their were doing this to conserve cash (as they furloughed the pit equipment and mining staff), as things got tight from a financing perspective regarding Milligan construction. As moly fell in price, it becomes tough for Endako to operate profitably with it's inherent higher cash costs and much higher depreciation (which are absorbed into product from a GAAP costing perspective). The water issue is new, and this is the new mill's first winter (it gobbles up more water than it's predecessor mill - which is understandable as it's rated at 55,000 tpd vs. the old mill's 30,000 tpd). So that will get fixed, along with mill recoveries.
But, as it stands, they got KPMG to agree to a one-time write-off of the much of the mill's depreciable capex costs. This will reduce GAAP production costs going forward since much less depreciation will be added to final product manufactured.
Second, their recoveries are low because their running thru oxidized lower-grade ore stockpile. They plan to transition to the Denak pit and then to the Endako pit, beginning in Q3. This will nearly double the head grades, and represents unoxidized, fresh ore. I suspect the % recover issue improves outright, as this higher-grade material is milled. Thus, yields go up. Probably close to double current Q4 2012 production rates by Q3-Q4 2013. That will collapse cost to manufacture there. So much so, I suspect that analysts will be amazed in later 2013 at how well they've turned Endako around.
This past quarter saw the following KEY improvements:
1) They received all the money they need to complete Milligan, and still have a LARGE rainy day fund.
2) Increased production at TC's Idaho mine - - this results in much lower fully absorbed GAAP production costs of material going forward, which will start filtering into sales in earnest beginning Q1. My calculations say their all-in fully absorbed GAAP production costs for TC material they'll be selling lots of in Q1 is around $5.50 lb (GAAP basis). Current market prices are between $11-12/lb, so they'll make money on that.
3) Unit sales volumes improved from 5.6mm lbs. in Q3-2012, to over 8.1mm lbs. in Q4-2012. This is encouraging.
4) Milligan is progressing well, as they near the end of the construction-phase. By April/May, the mechanicals are complete, and they enter multiple phases of pre-commissioning / commissioning until August. Then they run the mill on a fully operation trial basis until Dec 2013, for testing & debugging, before going commercial production then. So Milligan will be calibrated for a period of almost seven months. That's a healthy start-up schedule.
2012 wasn't a good year. Of course they were going to dump all the krap into it. Relax, they got the cash to complete Milligan, and have a nice war chest to boot, and moly operations will improve going forward. 2013 should be a better year for longs of TC common.
Sentiment: Strong Buy
It's already all priced in - the uncertainty. If everything Kevin Loughrey stated today comes true, and if everything in their investor presentation comes true and goes according to plan, then TC is a $10 a share company even if prices stay as they are now.
Since TC is trading at $3.50, and not $10+, it means the risk is priced in that TC may not come through fully, or there may be hiccups along the way.
If you are ever having doubts about TC sinking and being full of bumbling idiots, just remember that your investment is nothing compared to the investment sunk into this company by Royal Gold. They are invested deep in TC, and there's no reason to assume that it is by error on their part.
We are so used to seeing this company bleed money, that it starts to seem like it will never stop. But come 2014, there will no more capital expenses and low operating costs to boot. TC won't be building up Berg or anything like that for a long time. Expect many years of solid earnings and a strong push upward. It's always been a long hold...
I'm not a veteran, but I have to put my 2 cents in anyway . . .
Oh My God. Yeah, Mt. Milligan is all smoke and mirrors. Royal Gold gave them hundreds of millions of dollars because they were pretty sure Mt. Milligan would not be completed. With all due respect, how can anyone make REAL money being so paranoid about a 1.5 billion dollar project that is 81% complete and has enough funding to see it through. Winter is almost over. What's the big risk now ? I can't forecast 5 years from now, but the next 12 months sure looks good to me.
Sentiment: Strong Buy
I'm not saying I disagree with you guys, but I guess I would like an answer to this question: What has hundreds of millions of dollars in upgrades at Endako gotten them for the investment. That is a nagging elephant in the room that I don't think anyone has an answer for and is in the back of a lot of investors minds? In layman's terms, can anyone with some mining insight share input on whether the Mt. Milligan start-up and production is an "easier" one than what they tried to do at Endako? Thanks.