Ultra, you might also want to look at the downtime of the operation which is higher in July than June. Scheduled down to make improvements which will make MM reach target at the end of the day and this is why we call it a 'ramp up'. September might have another hit on downtime to make improvements on the SAG grate opening. Since this is simulated by the JKTECH i would assume this will bring the average production over 50k tpd after this improvements based on my experience.(i'm a professional user of JKSIMMET). I agree that 42k tpd seems like a bottom for MM now which is promising based on the fact that the guidance is only to reach 48k TPD(80%) by year end.
Sentiment: Strong Buy
So you are saying that invest 75 million to achieve 62,000 tpod by year end 2015? Come on, according to Perron, they will reach 60,000(100%) some time in 2016 anyway.... So what's the point to invest 75 million? to buy them couple months to reach the 62ish?
Also, i haven't been to MM so i can't say for sure, but add additional flotation tank isn't just as easy as buid another tank to the existing ones. Permits could be an issue? enough area in the building for this purpose? And these are in addition to the cash cost.
I've no problem they do that in 2020 . By that time, they should explore ways to expand production and bragging about the potential reserve in the berg property or #$%$ like these. But now, they should do something that can bring them back real cash...
Still don't get it. 10,000 on top of 60,000 is about 17% higher. Higher throughput always means lower recovery if the base case is at its optimum status.(if not, they should reach their potential without any cost first).
Even assuming the recovery won't drop, that's only 17% higher production. where does your 21% number come from?
So you think the flotation could handle higher throughput with no problem. This 21% higher production is based on what recovery? Because higher throughput will usually mean lower recovery?
Another BIG ASSUMPTION for the seconadry crusher case is that : only 15% higher operation cost resulted from 40% higher production( which i also highly doubt they can achieve), which will take the cost to 280*1.15=322 million
I've seen your very good discussions about the P8 full stripping vs secondary crusher. You talked about ROI but did you also think about the cash generating capacity of these two projects? I mean they have their first debt to pay at the end 2017.
I did a quick calculation to see how these two projects will impact their cash position. Again, it's important to state the assumptions: Realized price: Cu $2.9/lb, Gold $1250, Moly $13, 5 million lbs copper sold from TC mine in 2015 with or without full stripping, 18 million lbs sold from this mine from 2016 with stripping. Cost $7/lb from this mine after stripping. 100 million for full stripping spent in 2015.
For full stripping with no secondary crusher the cash position by the year end :
2016-2021: 320, 84, -106, -120, 83, 266
For secondary crusher with no stripping(no moly after 2015 from thompson), assuming 75 million, ASSUMING +40% higher production on both Cu and GOLD (not throuput) resulted(highly doubt, since the flotation is designed for 60,000 tpod):
Unless they can increase the production by at least 40% with 75 million investment, this option can't compete with P8 mining option, not even close if you are talking about 15%+ or even 30%+. Again, i'm talking about the final production here not SAG throughput. I doubt if 40% is even physically possible.
we need to do something instead of complaining. It would be nice if someone would send an email to ask them about the plan to pay off the first mature note of 350m in 2017.
As a long term TC investor, i've concerns about what the Management team said yesteday in the CC. While fully understand that the management is still evaluating every possible options, but the impression was that the company has a higher priority to invest the limited cash to an additional secondary crusher than to fully strip the phase 8 at thompson creek mine to get us ore by the end of 2015.
Is this the right impression as a shareholder should have at this point? Many people like me are confused and would like clarification.
This is the right question! I understand the frustration today:1) talking crazy about secondary crusher which is totally unnecssary at this point to the company 2)talking crazy about 'slow stripping option' that only stupid people like SCOTT would even think of it. GEE. I am hoping they are trying to sandbagging instead of truly stupid...
I think it's your misconception that misled you that way: They never said the slow stripping option(part stripping as you may refer to) can strip while you process the ore. Although i anticipated the same way at the begining, but they never said this way. This option won't get you ore until end of 2016. And this option will cost you 30 million in the first year.
But, the fully stripping option which will cost you 80 million will get you ore by the end of 2015. And i think they can afford this .
You will have to listen to the CC again.
Many analysts are stuck to the number of 50-75 millon 'cost' to the additional secondary crusher. Think it this way, if they said: oops, we are stuck in the 70-80% range of the designed capacity and there's no way to achieve the capacity unless we spend another 50-75 million on an secondary crusher to crush the feed finer. Then, this is a bomb, i will have to dump the stock because this is truly an additional cost. The truth is it will be really nice that 'if we had that addinal crusher we will be at 60,000+tpd already at this point with no improvement work, operator training work etc that are ongoing needed at all.'Sure, some really hard material from the mine might hit us and get us to average 45,000tpod but most of the time we will be running around 60,000tpod once everything is well tuned. Just like one day in June, we already hit 60,000+ tpod.'
And it will make more money in the H2 2014. The cash position of this company will be at 260 million based on $1280 of gold and $3 of copper average this year which is even a bit conservative based on the current price. I'm not sure why they can't afford 80 millon to do the fully stripping with this much cash in hands by the end of this year. The 50-75 million number is BS. I don't know why they throw out this number, but even if they have to, they won't do it until at least in later 2015 due to the fact that they haven't even done the test yet, not to mention to decide the size, the type of the crusher. They engineering design to sit it on site etc.
Nothing changes since last quarter except for better MM performance and more cash in hand by year end than orginally expected. That's what i take.
I heard a fair CC regarding the results and guidance :
1. Both Au and Cu recovery are a bit better than expected due to a bit higher grade in Gold the throughput ramping up. This leads to the lower by-product cost revision from 1.5-1.75 down to 1-1.5 range.
2. It's totally possible to achieve 60,000tpd capacity without investing 50-75 million on additional secondary crusher unit. And this is the original plan. However, they want to be proactive to investigate the potential benefits of an additional secondary crusher thus this figure is wide guess, maybe from an experienced mineral process consultant. The takeaway is: this is not necessary but depending the Economic return and could be one of the future optimization plan.
75% of the time of the CC was stuck to this topic from the so called analysts. The company shouldn't even mention this in my opinion.
3.Endako concentrator is doing fine. The higher cost is due to higher haulage cost due to the pit they are mining is the furthest to the in pit crusher.
4. Throughput at MM has a varability of +- 10% due to the different ore types. Perron said he as doing some calculation in his head when he tried to answer the question and use 50,000tpod+- 5000 tpod. Which i think is what they can consistently achieve. This back to the quetion about the additonal secondary crusher again: my understanding: if they can have an additional crusher, then they will be able to process 60,000+ tpod consistently with various types of the ore. But this is still evaluated by conducting tests.5. They want to continue the P8 mining if current Moly price stays. but 'we can't find the fund' at this time point. If they decide to do the full stripping, 80 millon is needed and can be back to production by the end of 2015. If they decide to do slow stripping, then 30 million for the first year needed and won't get to production even in 2016.
While a lot of things can change, the things i know is that the MM is progressing better than expected. CONT
With such a good quarter, tc deserves to be re-valued, gap up to 3.5 is reasonble. I will put my money where my mouth is and buy as much as i can under $3! what else can we expect? Perron's bragging about how he's planning to resume P8 next year? We know that will have to happen as long as Moly is at current levels or above.
It's an amazing quarter but the pps doesn't move?
I don't pay too much attention to the past quarter numbers but hey look at the guidance for the operation cost for MM, it's significantly reduced from half a year ago's expecation. The throughput is already at 80% capacity although PERRON wants to be 'conservative' to achieve it 'by the end of 2014'. The recoveries for both Cu and Au are higher than expected. This is what will pay you in the coming quarters!
Only negative i saw is the damn join-ventured moly mine but as expected and they made a right decision to reduce production there.
PERRON could do some bragging but it's up to us to find the value of the stock. To this point, i would say, screw Perron, no matter what you have to say, P8 will be resumed operation as long as the moly price stays. Otherwise, it will be joke in the mining industry and Perron can't find a job after he's fired by us!
Ultra, if memory serves, i think the guidance was MM will REACH 75-80% of designed capacity in the H2 2014 not average 75-80%. That's why i think the 48,000 tpod is a beat.
The most important piece of information that i saw in the operation results is that they averaged above 48,000 tpod which is 80% of the designed capacity in June. Already! To me, this is a milestone, and the uncertainty about MM is literally gone. Only unclear thing is the P8 mining plan. BUT, hey, don't you think the stock price now is reflecting the 'Market Maker' is assuming the TC mine will be closed from next year. Accumulating is the spirit