Thompson Creek Metals Cuts Stripping Plans

Thompson Creek plans to save an estimated $100 million in operating costs, plus an additional $8-$9 million in
capex, by suspending next-phase stripping operations and laying off miners. (Photo courtesy Thompson Creek Metals)
Thompson Creek Metals has suspended stripping activity associated with the next phase of production, referred to as Phase 8, at its Thompson Creek molybdenum mine in central Idaho. Mining operations will continue as planned through 2014 in the current phase of production, referred to as Phase 7. As a result of this change, between now and 2014, the company expects to save approximately $100 mil-lion in operating costs and $8 million to $9 million in capital expenditures, as well as reducing the mine workforce by about 100 workers.

The company expects to restart strip-ping of Phase 8 of the mine plan when market conditions warrant.

Kevin Loughrey, chairman and CEO of Thompson Creek, said, “As a result of continuing weakness and uncertainty in the world economy, we have decided to reduce our costs, strengthen our balance sheet, and conserve cash. This will allow for greater certainty in accessing our existing financings in order to complete the development of our Mt. Milligan cop-per-gold project in British Columbia, while we preserve the assets at Thompson Creek until market conditions strengthen.”

The Thompson Creek mine is expect-ed to produce 20 million–22 million lb of molybdenum in concentrate in 2013 and 17 million–19 million lb in 2014. Assuming stripping is not restarted prior to 2015, cash costs are expected to be approximately $4.75 to $5.75/lb in 2013 and $5.00 to $6.00/lb in 2014. If stripping has not recommenced by 2015, the company plans to place the mine on care and maintenance at that time. If the company decides to recommence strip-ping prior to 2015, it will revise its guid-ance with respect to costs, but it expects that molybdenum production guidance should not be affected.

Thompson Creek Metals’ Langeloth roasting facility in Pennsylvania will continue to treat material from the Thompson Creek mine, third party-pur-chased concentrates, and tolled molyb-denum concentrates.

As featured in Womp 2012 Vol 11 -