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Thompson Creek Metals Company Inc. Message Board

  • eddy23@sbcglobal.net eddy23 May 6, 2013 7:04 PM Flag

    Earning report, what are we expecting?

    Any thoughts on earnings? are we going to give back the latest strides?

    Sentiment: Hold

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    • Give back the latest strides?

      Probably some.

      All depends on the tone of the call, which I expect to be poor.

      The mgmt team is trying to finagle a big stock option package, and probably won't want to remind the market that (barring any additional mgmt sandbagging [Endako Q1 is a sandbag] of the companies forward performance), moly will start chugging out profits in future quarters due to low-cost production from their TC Idaho mine.

      So I expect a dour tone, until mgmt gets the board to grant them a big option package, which won't happen for several weeks.

      Why would they want the stock to rise until they get their new low-low-low-cost grants?

      I wouldn't.

      Kevin's probably in that boat too.

      The happy-happy propaganda will resume after they get their new options.

      Then, we'll hear all kinds of frequent, positive updates and information once that happens. Rest assured.

      But probably not until then.

      Sorry, I'm a cynic, but I understand the mood (and subsequent behavior) of a mgmt team who are all sitting on underwater options, having been there myself.

      These guys won't start earning decent money and communicating with their shareholders in a more accomodating fashion until they get theirs, first.

      Sentiment: Strong Buy

    • Earnings = enigma for Q1.

      On 2/25 CC, TC said their Endako mill had suspended operations due to inadequate water supply as their tailing water pond (which they draw water from, for mill operations) was frozen up, and insufficient water was available to be drawn for mill operations. They mentioned nothing regarding remedial procedures being conducted that would alleviate this issue in the short term, and they were fast to take down their production guidance for full year 2013 at this site. No further update was provided by Company, since. Other than mentioning that the problem began to manifest in mid December, no other information was provided.

      So how bad will earnings be if Endako produced nothing for Q1? They will have to charge off approx. $20mm in costs for the quarter.

      What about earnings from the TC mine?

      Depends what the average cost of that material is, given where they are at regarding inventory liquidation of previously higher-cost material produced in Q3-2012 and prior [remember - - they use FIFO]. If they sold thru Q3-12 production in Q4-12, then what they are selling in Q1-13 is material produced in Q4-12 [they have lots of FG inventory from TC mine lying about] - - but I doubt they sold out Q3-12 production (higher cost) in Q4. Thus, what is sold in Q1-13 will be a blend of higher cost material produced in Q3-12, and some Q4-12 (lower cost) production. GAAP production costs for Q4-12 production were probably about $5.50/lb. So let's call avg. GAAP cost of material sold in Q1-13 from TC mine an even $7.00/lb. What would be the sales volume? Probably 4 mm lbs. for TC (Idaho)-produced material.

      Thus, the contribution margin for TC material would probably be around $4-$4.50 per lb. or approx. $16-20mm.

      Langeloth will chip in, but that's immaterial.

      SG&A per quarter is about $10-11mm per quarter.

      Thus, we're probably looking at a loss of $10-15mm for the quarter (LPS: loss of $0.06 / sh.)

      But, it all depends on costs at Endako.

      Big mystery.

      Sentiment: Strong Buy

 
TC
2.02+0.03(+1.51%)Nov 21 4:02 PMEST

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