I'm not saying this is true, but what if they ran lot's of oxidized ore to achieve high throughput, and got poor recovery and higher costs. I am probably being too cynical.
HONG KONG, Nov 28 (Reuters) - Nine large copper producers in China have agreed an initial plan to cut refined metal production by more than 200,000 tonnes in 2016 or around 5 percent from this year's level, an executive at one of the producers said on Saturday.
My main concern is another operational setback. I didn't see 2.67 million shares though.
TC stock and bond prices are priced for failure, but is it warranted?
I did a quick stress test to see how bad things are. I am not suggesting this is the approach TC should follow. It is just a stress test.
Stress test conditions.
1) Sell remaining gold to RGLD for 650 million dollars to eliminate all debt. Continue to receive $435/oz
2) Produce 90,000,000 pound Cu and 235,000 oz Au.
3) Cu price $2.10
4) MM cost $240 million a year
5) 20 million SGA and 20 million CAPEX
6) No consideration for a permanent secondary crusher.
7) Moly unit is cash neutral.
$11 million net per year at $2.10/# Cu.
If Cu drops to $1.75, a $20 million annual loss.
Above results may be considered as an extreme scenerio. The results would have been much better if a smaller gold stream was used. TC management stated they were aiming for a 3x EBITDA debt level.
Agree. Want TC at max production to minimize cash bleed, and also help get better refi terms.
Negative cash cost per lb. will be viewed favorably when the number is arrived at genuinely.
TC plans to increase temporary crushing to 15,000 tpd #$%$t. That will be $27 million dollars a year with temporary crushing. A permanent secondary crusher will cost $50 million in 2016 to complete. The payback is tremendous. Plus there are many other benefits. Thus there is strong economics to pursue a path with the permanent secondary crusher. Obviously, this is what they are working towards, and is probably the correct strategy to pursue.
Looks like it is on management position that are affected. Probably no effect on production.
Armchair… I recognize the current sector environment is horrible, but a competent management must have and execute a plan to navigate through it. I am hoping management will present some meaningful positive information during their conference call on Monday. There is tremendous value in TC, and management must find a way to extract it.
Copper at multi-year lows. Markets believe China not doing well. Outlook for near term copper price recovery is fading. TC must get Milligan up to 60,000 tpd asap.
What does amount of copper contracts relative to copper consumption have to do with market efficiency?
An efficient market is one in which prices closely reflect available information.
They say the markets are usually very efficient. With copper prices stuck at current levels, one has to wonder have we looked at all the variables, do we understand all the variables? It is easy to have tunnel vision. Time will tell.
Prophit….My thought is that you feel TC is better/best leveraged company to copper prices compared to other copper miners. Yes/No?