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Thompson Creek Metals Company Inc. Message Board

  • bobbibedahlia bobbibedahlia Sep 29, 2013 11:46 AM Flag

    MM startup and November earnings

    Earnings should be better certainly with some leakage from the MM operations hitting the bottom line we have whole month of October ,of course predicitng the price of gold is a #$%$ shoot. I'm certaily not going there. but just more new volume of gold and copper should add $ to the bottom line.When they start turning over gold to ROyal gold is also a mystery but it should start dropping debt So I look for better earnings with a slight revival in moly prices with steel beginning to improve..
    .

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    • I am confused about what quarter and in what earnings report we will start seeing the results of Mt Milligan. The recent release said they were currently stockpiling and would start selling in the fourth quarter. So will any of this hit this Septembers earnings report or will it start next report in December. Looks likes analysts estimates expect it will be in December.

      Sentiment: Strong Buy

      • 2 Replies to bob_wojnarowski
      • Dragon understood my prior posts correctly. They cannot warehouse pre-commerical operations production, however pekid that production is, to dump on the market the minute they declare Mt. Milligan in "commercial operation". So any production before their scheduled Dec 2013 declaration of commerical operations, when sold, will be an offset to Milligan capex.

        As far as Q3, no effect from Milligan regarding operations. Since the mine is still in the construction phase, all of its operational costs is also capitalized, as well as virtually all of the interest exp.

        In Q4 (Dec 2013), the Company plans to declare commercial operation. Depending on when, exactly in December, such declaration is made, It is unlikely they will record any revenue from sales of Milligan concentrate in Q4. Oh, they will produce bunches in Dec 2013, but per their offtake agreements with Dreyfus and LS Nikko, the title doesn't changes hands until the concentrate bags get to the 'port of destination'. That means a port in Korea (in the case of LS Nikko) and a port in Japan (in the case of Dreyfus). Unless they send it air freight (which won't happen), TC will have concentrate on the water that they have to defer revenue recognition on until such concentrate is accepted at the port of destination. It will take 1-3 days to accumulate any shipable quantity (lets assume December 1, 2013 is the date "commerical production" is declared), 2-4 days to get it to port, and another 20-25 days to cross the Pacific.
        Bottomline: There just isn't enough time for Milligan to get any material quantity into the hands of Dreyfus or LS Nikko before 12/31/13 creeps up on them.

        Thus, no material revenue from Milligan concentrate sales will be recorded in Q4, and at least one full month of interest costs will hit. Also, a full month of non-production related overhead from Milligan will hit the P&L for Dec 2013, but that won't be much.

        Expect a loss in Q4.

        Sentiment: Strong Buy

      • Q4 this year or Q1 next year - as per Ultra anything produced and sold PRIOR to "full commercial operations" will go against the capex for a capex reduction rather than eanrings per standard accounting rues - if I read him correctly......
        Also - better tax benefit this way?

        Sentiment: Strong Buy

 
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