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Thompson Creek Metals Company Inc. Message Board

  • superlithe superlithe Aug 1, 2013 3:09 PM Flag

    TMED is paying 9.72% annually

    Is anyone else in the world paying 9.72% to borrow money? Lenders are demanding this rate as compensation for the RISK connected with holding TC debt. You can ignore me if you like, but why would you? What say you foggiecat?

    Sentiment: Sell

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    • A perfect example of how the truth can be distorted. The TMEDS when issued were at 6.5%. Look it up. That means TC is paying 6.5% on the TMEDS, NOT 9% or 10%. You just love to distort the facts don't you?
      We get it. You think that this is a risky stock, and you are right. There is risk involved, although as MM gets closer to completion, that risk is both reducing, and transforming from company specific issues to more of a general "state of the economy " risk. A year ago, the risks were much higher than they are now.

      You think management is incompetent. Yeah, they are to certain degree. An upgrade at Endako costs millions, and nobody knows how to get it to work right. An ice dam in the tailings pond wipes out a quarter's worth of revenues. Yeah, the management here is the gang that couldn't mine straight. And I would agree with you that based on their previous record, there is some uncertainty as to their ability to get MM running efficiently. But right now the mine is 99% complete, and seems ready to open on time. Will everything go perfect? Probably not. Will they mine copper and gold? Seems like a yes there. Is it still risky? Definitely. So you feel the risks are too great. OK, that's fine. then invest in T-Bills, or a big blue chip company. No risk there, right ? Oh yeah, GM, AIG, Bear Stearns, Lehman. All blue chip companies with no risk.
      So if you want to write about risk, go right ahead. I agree it's there. I may disagree with you as to the amount of risk, but that's what makes horse races and stock markets. But please stop distorting the facts. That just makes you a lying weasel.

      • 1 Reply to phakosurgeon
      • Hello Phakosurgeon
        I certainly did not mean to distort the facts. In the secondary market, the TMED is paying 9.72% because the value of the bond is falling as investors need to be compensated for higher perceived risks going forward. You are correct, the issue rate is 6.5% which is no bargain for TC in the first place. But the market is not even willing to loan them money at that rate now. IF they went out for financing they would pay near 9.72%. Don't forget that the 6.5% rate is being subsidized to TMED holders by a sweetheart conversion deal if TC ever does pull off the MM project. The market believes that even a year closer to the anticipated opening of MM, TC is in even work shape than it was. Please correct any errors in this post and keep an open mind to the opinions of others. Sometimes you can make some money that way.

        Sentiment: Sell

    • Yes TC does not produce copper or gold in any steady state operation yet so not possible to know the value of the company or future free cash flows with certainty. All we have are paper projections. Of course BV of TC is $8 and BV of FCX is $19 so TC is trading at 38% of book value and FCX is trading at 140% of book value. Expect that spread to close if TC delivers on MM operations as expected. Long term copper price and gold prices are real risks though (they do concern me a bit) and could keep this companies stock price depressed for a while or even push it out of business if prices were to continue to deteriorate for a number of years say back to prices of 10 years ago. Its called risk, that is why you are getting a discount right now on TC while the risks exist. Could get better, could get worse. Place your bet!

      Sentiment: Strong Buy

    • Yup. No foolin' that TC is risky. What else is new?

      Sentiment: Strong Buy

 
TC
1.69+0.05(+3.05%)Dec 18 4:02 PMEST

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