The shares fell 9.7 percent to $2.33 in New York on Dec. 4 after a report from Toronto-Dominion Bank that the miner may not have enough money to pay bondholders when its first payment is due. The shares closed unchanged at $2.25 in trading today. Even with a copper price of $3 a pound and a gold price of $1,300 an ounce, Thompson Creek still wouldn’t be able to avoid a funding shortfall, Daniel Earle, a TD analyst, said in the report. Earle recommends investors sell the stock. “I don’t see solvency issues in the coming years,” Perron said in the interview. If copper sinks to a below-consensus price of $2.75 and gold to $1,100, the company will still be able to pay off or refinance its debt, the CEO said. “I don’t think anyone in the business, even the TD guys if you read their report, disagree with my view that we will make cash flow at Mt. Milligan for sure,” said Perron. The company is considering hedging some of its sales to head off volatility, said Perron, who started as Thompson Creek CEO in October. Once it has cash flow, Thompson Creek may choose not to pay off all its debt, but to refinance and use the cash to grow the company, said Perron. “You’re going to have people who are very negative on our project and people that are very positive on our project and others in between,” Perron said. “Right now, it’s keep our head down, do the work, make sure we get the results.”
Should prices of molybdenum oxide, a commonly traded form of the metal, drop to $9 or $9.50 a pound, the Littleton, Colorado-based company would consider closing the mines, Chief Executive Officer Jacques Perron said in an interview at Bloomberg’s Toronto office. “We’ll continue to do our best to reduce costs and have very efficient operations,” he said. “But if the price goes to $9 a pound it’s going to be very difficult for us.” Molybdenum has fallen 18 percent this year to $9.57, according to data compiled by Metal Bulletin. The metal also increases steel’s resistance to heat. “It’s typical of these types of operations, you put them on care and maintenance and you wait for better days and when the price goes to $13 or $14 you restart them,” the CEO said. Thompson Creek needs cash to pay back debt it took on when it diversified into copper and gold by buying the Mt. Milligan project in British Columbia. The first payment of $350 million is due in December 2017, Perron said. The company had long-term debt of $911 million at the end of the third quarter, according to a filing. Although earnings for this quarter will be “horrible,” the new Mt. Milligan project will start to be profitable by the second half of 2014, Perron said in the interview on Dec. 6.
I think that you need to look up the word logic. You did not use it correctly in your sentence.
Looks like you are the one on the defensive. I wish I had I short position in TC, but do not. I just see it for the junk that it is and spout worthless opinions.
Do what you want. Thanks for pointing out the quality of info contained in the Yahoo boards.
What a dumb comment Brian. I am saying that there are serious issues at TC, nothing more, nothing less. To take that comment and come up with the view that because TC has had better performance than the S&P 500 over a few weeks,and I have called out TC as having issues, that I am also saying that there are issues with basically every company in the S&P 500 is just pathetic. You will lose your #$%$ if you stay in this stock.
If there were not serious issues at TC, the stock would be doing better. It is as simple as that.
Not what I am seeing. I have seen an increasing number of products from 90% to Kilo bars becoming "Out of Stock - Notify Me" on all of the major bullion dealer sites.
Yes, it is still a falling knife. It just hit a pocket of resistance on its way down.