Will you two stop bickering and just say you love each other (and yourselves) and get along. I could not resist…hehehe!
Also, how much of the $10 million cost to put Endako on C&M was spent in Q2 (ie included in the net of $211 million cash balance)?
Also the hedge on the C$ is not working well.
Carl - the gold is in there…see reply to Ultra. SG&A is reported as being ~35 million, but only about $20 is real cash in this calculation (Ultra corrected me on this matter. See earlier post). I assumed moly business is break-even (Tolling pays for care and maint, hopefully eliminate/reduce stripping). Interest for leasing is included in 80 million, but maybe some additional cash is required. Does depreciation directly affect FCF?
Thanks for the feedback.
Gold is included…..
Expenses = 80+20+35 = 135 million
Milligan revenue required = 135 million to have 0 FCF
--- 135 million/90 million # Cu = $1.50/# Cu
--- add by-product cost (Au is here) $0.70/#Cu = $1.50+$0.70 = $2.20
I appreciate all feedback as this is a very important factor during this period of depressed copper price.
Phoghan, no one has a crystal ball, but a good starting point would be to use the best current info, plus some assumptions on expenditures for 2016.
For example, my back of envelope estimate is….
At 90 million pounds of copper, 80 million interest, 20 million SG&A, and say 35 million capital expenditures, and assuming moly business is break-even, I estimate the neutral FCF at $2.20/# Cu.
I hope I did not omit anything major.
How much cost reductions can Perron attain? At what copper price will TC become FCF neutral in 2016? Will moly business be self-sustaining in 2016?
xtim40 - collars covering 21,500 oz of gold with expirations between April and December 2015. TC is still vulnerable to dropping gold price.
Carl, what about the revenue from gold in your $3 copper calculation?
Another perspective…..TC would not be BK if they were only in moly. They would not have spent 2 billion on MM, and would be cash rich with no debt, and there would be a much smaller number of outstanding shares….and I would have less grey hair.
Moly price $4.20/pound.
This is insane. This price crash cannot last forever, but I thought that was the case at $6/pound.
Time to stop stripping at TC mine?
The Company's target is to reduce its debt over time to approximately three times earnings before income taxes, depreciation and amortization ("EBITDA") for a twelve month period.
What is a normal debt to EDITDA for a mining company? I feel it 3x is a little high. Perhaps it is a first target.
With MM operating at full capacity with "reasonable" copper prices, EBITDA should be at least $200 million. This translate to $600 million debt.
Cash build? Perron says $10 million cash build. I am not sure it is as good as Perron states. They got $27 million dollar for the fourth Q1 shipment in Q2. One can say the cash buildup actually dropped $17 million dollars during Q2. Comments?