Form 8-K Thompson Creek Metals For: Aug 06
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 6, 2015
THOMPSON CREEK METALS COMPANY INC.
(Exact name of registrant as specified in its charter)
British Columbia, Canada | 001-33783 | 98-0583591 | ||
(State or Other Jurisdiction | (Commission | (IRS Employer | ||
of Incorporation) | File Number) | Identification No.) | ||
26 West Dry Creek Circle
Suite 810
Littleton, Colorado 80120
(Address of Principal Executive Offices)
(303) 761-8801
Registrant’s Telephone Number, Including Area Code
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Items to be Included in this Report
Item 2.02 Results of Operations and Financial Condition.
On August 6, 2015, Thompson Creek Metals Company Inc. (the “Company”) issued a press release (the “Press Release”) announcing results for the three months ended June 30, 2015. Furnished as Exhibit 99.1 to this Current Report is a copy of the Press Release.
Item 7.01 Regulation FD Disclosure.
The Company is furnishing as Exhibit 99.2 a presentation to be used during the Company's conference call/webcast for analysts and investors on Friday, August 7, 2015, and for future meetings with investors, stockholders, and analysts. The Company does not intend to file any update to this investor presentation. The fact that this investor presentation is being furnished should not be deemed an admission as to the materiality of any information contained in the presentation.
The information in this Current Report and Exhibits 99.1 and 99.2 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. | Description | |
99.1 | Thompson Creek Metals Company Inc. Press Release dated August 6, 2015 | |
99.2 | Investor Presentation | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
THOMPSON CREEK METALS COMPANY INC. | ||
By: | /s/ Wendy Cassity | |
Date: August 6, 2015 | Name: | Wendy Cassity |
Title: | Vice President, General Counsel and Secretary | |
Exhibit Index
Exhibit No. | Description | |
99.1 | Thompson Creek Metals Company Inc. Press Release dated August 6, 2015 | |
99.2 | Investor Presentation | |
Exhibit 99.1
news release
August 6, 2015
Thompson Creek Reports Second Quarter 2015 Financial Results
Denver, CO – Thompson Creek Metals Company Inc. (NYSE: TC) (TSX: TCM) (the “Company” or “Thompson Creek”), a North American mining company, announced today financial results for the three and six months ended June 30, 2015, prepared in accordance with United States generally accepted accounting principles (“US GAAP”). All dollar amounts are in United States (“US”) dollars unless otherwise indicated.
“During the second quarter, we made significant progress at Mount Milligan Mine compared to the first quarter of this year, including improved throughput, recoveries and unit cash costs,” said Jacques Perron, President, Chief Executive Officer and Director of Thompson Creek Metals Company. “We are particularly proud of our improving safety performance, which demonstrates the commitment and quality of all of the members of our team. With ongoing volatility in the markets, we will continue to prudently manage our balance sheet and actively pursue company-wide cost reductions.”
Mr. Perron continued, “We achieved our highest quarterly average daily mill throughput to date of 44,940 tonnes in the second quarter. As a result of several maintenance shutdowns related to the pebble crushers, primary crusher and ball mills, daily throughput in July averaged 43,302 tonnes, but following completion of the necessary maintenance work, daily mill throughput improved in the latter part of the month and averaged 52,290 between July 26 and August 4. We expect to make additional operational improvements in the second half of this year, including the installation of a second SAG discharge screen deck, which will be instrumental in achieving higher throughput. We believe these improvements, together with continued use of secondary crushed material, will help us to complete the ramp-up of Mount Milligan by year-end.”
During the quarter, the Company repurchased and retired $34 million of its senior secured notes. Since December of 2014, the Company has repurchased and retired approximately $68 million of its outstanding notes with future interest savings from these repurchases to maturity of approximately $22 million. Mr. Perron said, “These bond repurchases are consistent with our strategy to reduce our debt and strengthen our balance sheet. Since the completion of Mount Milligan Mine through June 30, 2015, we have repaid and retired approximately $121 million of our debt or 12%, including the net repayments of our capital lease obligations,” added Mr. Perron.
Highlights for the Second Quarter 2015
• | Operating results for the second quarter of 2015 compared to the first quarter of 2015 reflect positive trends, as management targets completion of the Mount Milligan ramp-up by year end. With our recent improvements in the mine and mill together with the utilization of the temporary secondary crushing circuit, during the second quarter of 2015, we achieved our highest quarterly average daily mill throughput to date of 44,940 tonnes, a 13.6% improvement over the first quarter of 2015. Recoveries for the second quarter of 2015 steadily increased to 85.5% for copper and 72.7% for gold. With the higher throughput and improved recoveries, payable production for both copper and gold increased by approximately 30% from the first quarter of 2015. |
• | Financial results for the second quarter of 2015 compared to the first quarter of 2015 also improved with operating income more than doubled and cash generated by operating activities more than quadrupled. During the second quarter of 2015, we also decreased our total debt balance by $41.2 million. |
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• | Total cash and cash equivalents at June 30, 2015 were $211.1 million compared to $265.6 million at December 31, 2014. Total debt, including capital lease obligations, at June 30, 2015 was $897.6 million, compared to $944.7 million at December 31, 2014. During the second quarter of 2015, we repurchased and retired $34.2 million of the 9.75% senior secured notes due 2017. |
• | Cash generated by operating activities was $23.9 million in the second quarter of 2015 compared to cash generated by operating activities of $50.7 million in the second quarter of 2014. |
• | Consolidated revenues for the second quarter of 2015 were $134.1 million compared to $248.4 million in the second quarter of 2014. Copper and gold sales contributed $105.6 million in revenue in the second quarter of 2015 compared to $118.9 million in the second quarter of 2014. Molybdenum sales for the second quarter of 2015 were $20.9 million compared to $126.3 million in the second quarter of 2014. During each of the second quarters of 2015 and 2014, we completed three shipments of copper and gold concentrate and recorded four sales. |
• | Payable production at Mount Milligan Mine for the second quarter of 2015 was 20.2 million pounds of copper and 59,917 ounces of gold, compared to payable production of 16.0 million pounds of copper and 37,030 ounces of gold for the second quarter of 2014. |
• | Sales volumes and average realized sales prices for copper and gold for the second quarter of 2015 were 21.2 million pounds of copper at an average realized price of $2.63 per pound and 57,920 ounces of gold at an average realized price of $975 per ounce, as compared to 21.9 million pounds of copper at an average realized price of $3.20 per pound and 51,983 ounces of gold at an average realized price of $1,047 per ounce for the second quarter of 2014. Molybdenum sales volumes in the second quarter of 2015, which consisted of the sale of molybdenum inventory produced at our mines in 2014 and molybdenum sourced from third parties, were 2.3 million pounds at an average realized price of $9.23 per pound compared to 9.7 million pounds at an average realized price of $13.03 per pound for the second quarter of 2014. |
• | Consolidated operating income for the second quarter of 2015 was $12.1 million compared to $57.3 million for the second quarter of 2014. Consolidated operating income for the second quarters of 2015 and 2014 was impacted by non-cash lower-of-cost-or-market molybdenum product inventory write downs of $1.9 million and $1.2 million, respectively. Consolidated operating income for the second quarter of 2015 was also impacted by $12.1 million of costs related to idle molybdenum mining operations, including our share of severance costs at Endako Mine of $6.7 million. |
• | Net income for the second quarter of 2015 was $0.3 million, or nil per diluted share, compared to net income of $61.6 million, or $0.28 per diluted share, for the second quarter of 2014. The net income for the second quarter of 2015 and 2014 included non-cash foreign exchange gains of $16.9 million and $42.3 million, respectively, primarily on intercompany notes. |
• | Non-GAAP adjusted net loss for the second quarter of 2015 was $13.5 million, or $0.06 per diluted share, compared to non-GAAP adjusted net income for the same period of 2014 of $22.0 million, or $0.10 per share. Non-GAAP adjusted net income (loss) excludes foreign exchange gains and losses, net of related income tax effects. See “Non-GAAP Financial Measures” for the definition and reconciliation of non-GAAP adjusted net income (loss). |
• | Non-GAAP unit cash cost per pound of copper produced for the second quarter of 2015 was, on a by-product basis, $0.48 per pound and, on a co-product basis, $1.55 per pound of copper and $434 per ounce of gold. Non-GAAP unit cash costs in the second quarter of 2014 was, on a by-product basis, $0.33 per pound and on a co-product basis, $1.97 per pound of copper and $538 per ounce of gold. See “Non-GAAP Financial Measures” for the definition and reconciliation of non-GAAP cash costs. |
• | Capital expenditures for the second quarter of 2015 were $9.7 million, composed of $9.1 million for Mount Milligan Mine and $0.6 million for the Langeloth Facility, Endako Mine and corporate combined, compared to $26.7 million for the second quarter of 2014. |
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Summary of Quarterly Results
(US$ in millions, except per share, per pound and per ounce amounts—unaudited)
Jun 30 2015 | Mar 31 2015 | Dec 31 2014 | Sep 30 2014 | Jun 30 2014 | ||||||||||||||||
Financial Information | ||||||||||||||||||||
Revenues | $ | 134.1 | $ | 123.0 | $ | 168.0 | $ | 229.3 | $ | 248.4 | ||||||||||
Operating income (loss) | $ | 12.1 | $ | 5.2 | $ | (98.1 | ) | $ | 63.8 | $ | 57.3 | |||||||||
Net income (loss) | $ | 0.3 | $ | (87.2 | ) | $ | (135.6 | ) | $ | (11.1 | ) | $ | 61.6 | |||||||
Income (loss) per share: | ||||||||||||||||||||
—basic | $ | 0.00 | $ | (0.41 | ) | $ | (0.63 | ) | $ | (0.05 | ) | $ | 0.35 | |||||||
—diluted | $ | 0.00 | $ | (0.41 | ) | $ | (0.63 | ) | $ | (0.05 | ) | $ | 0.28 | |||||||
Cash generated by (used in) operating activities | $ | 23.9 | $ | (5.3 | ) | $ | 34.9 | $ | 83.0 | $ | 50.7 | |||||||||
Adjusted Non-GAAP Measures (1) | ||||||||||||||||||||
Adjusted net income (loss) | $ | (13.5 | ) | $ | (14.2 | ) | $ | (10.0 | ) | $ | 38.3 | $ | 22.0 | |||||||
Adjusted net income (loss) per share | ||||||||||||||||||||
—basic | $ | (0.06 | ) | $ | (0.07 | ) | $ | (0.05 | ) | $ | 0.18 | $ | 0.13 | |||||||
—diluted | $ | (0.06 | ) | $ | (0.07 | ) | $ | (0.05 | ) | $ | 0.17 | $ | 0.10 | |||||||
Operational Statistics | ||||||||||||||||||||
Copper | ||||||||||||||||||||
Payable production (000's lb) (2) | 20,159 | 15,405 | 18,024 | 16,267 | 16,035 | |||||||||||||||
Cash cost ($/payable lb produced) - By-Product (1) | $ | 0.48 | $ | 1.12 | $ | 1.16 | $ | 0.77 | $ | 0.33 | ||||||||||
Cash cost ($/payable lb produced) - Co-Product (1) | $ | 1.55 | $ | 1.64 | $ | 1.88 | $ | 1.80 | $ | 1.97 | ||||||||||
Copper sold (000's lb) | 21,195 | 14,791 | 15,478 | 16,482 | 21,939 | |||||||||||||||
Average realized sales price ($/lb) (1) | $ | 2.63 | $ | 2.47 | $ | 2.75 | $ | 3.02 | $ | 3.20 | ||||||||||
Gold | ||||||||||||||||||||
Payable production (oz) (2) | 59,917 | 46,119 | 40,967 | 60,366 | 37,030 | |||||||||||||||
Cash cost ($/payable oz produced) - Co-Product (1) | $ | 434 | $ | 498 | $ | 506 | $ | 477 | $ | 538 | ||||||||||
Gold sold (oz) | 57,920 | 36,750 | 38,910 | 57,974 | 51,983 | |||||||||||||||
Average realized sales price ($/oz) (1) | $ | 975 | $ | 986 | $ | 1,003 | $ | 952 | $ | 1,047 | ||||||||||
Molybdenum | ||||||||||||||||||||
Mined molybdenum production (000's lb) | — | — | 4,328 | 6,560 | 7,481 | |||||||||||||||
Cash cost ($/lb produced) (1) | $ | — | $ | — | $ | 10.34 | $ | 6.77 | $ | 6.25 | ||||||||||
Molybdenum sold (000's lb): | ||||||||||||||||||||
TC Mine and Endako Mine product | 576 | 2,552 | 5,756 | 6,732 | 7,439 | |||||||||||||||
Purchased and processed product | 1,679 | 1,733 | 2,376 | 2,181 | 2,250 | |||||||||||||||
2,255 | 4,285 | 8,132 | 8,913 | 9,689 | ||||||||||||||||
Average realized sales price ($/lb) (1) | $ | 9.23 | $ | 10.00 | $ | 10.79 | $ | 13.94 | $ | 13.03 | ||||||||||
(1) | See "Non-GAAP Financial Measures" for the definition and reconciliation of these non-GAAP measures. |
(2) | Payable production for copper and gold reflects estimated metallurgical losses resulting from handling of the concentrate and payable metal deductions, subject to metal content, levied by smelters. The current payable percentage applied is approximately 95.0% for copper and 96.5% for gold, which may be revised on a prospective basis after sufficient history of payable amounts is determined. |
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Selected Condensed Consolidated Financial and Operational Information
(US$ in millions, except per share, per pound and per ounce amounts)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, 2015 | June 30, 2014 | June 30, 2015 | June 30, 2014 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
Financial Information | ||||||||||||||||
Revenues | ||||||||||||||||
Copper sales | $ | 49.3 | $ | 64.8 | $ | 81.5 | $ | 94.6 | ||||||||
Gold sales | 56.3 | 54.1 | 92.3 | 78.5 | ||||||||||||
Molybdenum sales | 20.9 | 126.3 | 63.7 | 229.2 | ||||||||||||
Tolling, calcining and other | 7.6 | 3.2 | 19.6 | 7.1 | ||||||||||||
Total revenues | 134.1 | 248.4 | 257.1 | 409.4 | ||||||||||||
Costs and expenses | ||||||||||||||||
Cost of sales | ||||||||||||||||
Operating expenses | 75.3 | 148.2 | 158.3 | 261.8 | ||||||||||||
Depreciation, depletion and amortization | 26.8 | 33.0 | 46.8 | 55.6 | ||||||||||||
Total cost of sales | 102.1 | 181.2 | 205.1 | 317.4 | ||||||||||||
Total costs and expenses | 122.0 | 191.1 | 239.8 | 339.0 | ||||||||||||
Operating income (loss) | 12.1 | 57.3 | 17.3 | 70.4 | ||||||||||||
Other (income) expense | 6.7 | (18.8 | ) | 115.8 | 48.4 | |||||||||||
Income (loss) before income and mining taxes | 5.4 | 76.1 | (98.5 | ) | 22.0 | |||||||||||
Income and mining tax (benefit) expense | 5.1 | 14.5 | (11.6 | ) | (0.5 | ) | ||||||||||
Net income (loss) | $ | 0.3 | $ | 61.6 | $ | (86.9 | ) | $ | 22.5 | |||||||
Net income (loss) per share | ||||||||||||||||
Basic | $ | 0.00 | $ | 0.35 | $ | (0.40 | ) | $ | 0.13 | |||||||
Diluted | $ | 0.00 | $ | 0.28 | $ | (0.40 | ) | $ | 0.10 | |||||||
Cash generated by (used in) operating activities | $ | 23.9 | $ | 50.7 | $ | 18.6 | $ | 66.9 | ||||||||
Adjusted Non-GAAP Measures: (1) | ||||||||||||||||
Adjusted net income (loss) (1) | $ | (13.5 | ) | $ | 22.0 | $ | (27.7 | ) | $ | 26.3 | ||||||
Adjusted net income (loss) per share—basic (1) | $ | (0.06 | ) | $ | 0.13 | $ | (0.13 | ) | $ | 0.15 | ||||||
Adjusted net income (loss) per share—diluted (1) | $ | (0.06 | ) | $ | 0.10 | $ | (0.13 | ) | $ | 0.12 | ||||||
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Three Months Ended | Six Months Ended | |||||||||||||||
June 30, 2015 | June 30, 2014 | June 30, 2015 | June 30, 2014 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
Operational Statistics | ||||||||||||||||
Copper | ||||||||||||||||
Payable production (000's lb) (2) | 20,159 | 16,035 | 35,564 | 30,278 | ||||||||||||
Cash cost ($/payable lb produced) - By-Product (1) | $ | 0.48 | $ | 0.33 | $ | 0.75 | $ | 1.34 | ||||||||
Cash cost ($/payable lb produced) - Co-Product (1) | 1.55 | $ | 1.97 | $ | 1.59 | $ | 2.11 | |||||||||
Copper sold (000's lb) | 21,195 | 21,939 | 35,986 | 32,732 | ||||||||||||
Average realized sales price ($/lb) (1) | $ | 2.63 | $ | 3.20 | $ | 2.56 | $ | 3.14 | ||||||||
Gold | ||||||||||||||||
Payable production (oz) | 59,917 | 37,030 | 106,036 | 76,273 | ||||||||||||
Cash cost ($/payable oz produced) - Co-Product (1) | $ | 434 | $ | 538 | $ | 462 | $ | 573 | ||||||||
Gold sold (oz) | 57,920 | 51,983 | 94,670 | 75,857 | ||||||||||||
Average realized sales price ($/oz) (1) | $ | 975 | $ | 1,047 | $ | 979 | $ | 1,040 | ||||||||
Molybdenum | ||||||||||||||||
Mined production (000's lb) (3) | — | 7,481 | — | 15,368 | ||||||||||||
Cash cost ($/lb produced) (1) | $ | — | $ | 6.25 | $ | — | $ | 5.99 | ||||||||
Molybdenum sold (000's lb): | ||||||||||||||||
TC Mine and Endako Mine product | 576 | 7,439 | 3,128 | 16,030 | ||||||||||||
Purchased and processed product | 1,679 | 2,250 | 3,412 | 3,504 | ||||||||||||
2,255 | 9,689 | 6,540 | 19,534 | |||||||||||||
Average realized sales price ($/lb) (1) | $ | 9.23 | $ | 13.03 | $ | 9.73 | $ | 11.73 | ||||||||
_______________________________________________________________________________
(1) | See “Non-GAAP Financial Measures” for the definition and reconciliation of these non-GAAP measures. |
(2) | Payable production for copper and gold reflects estimated metallurgical losses resulting from handling of the concentrate and payable metal deductions, subject to metal content, levied by smelters. The current payable percentage applied is approximately 95.0% for copper and 96.5% for gold, which may be revised on a prospective basis after sufficient history of payable amounts is determined. |
(3) | Mined production pounds reflected are molybdenum oxide and HPM from our share of production from the mines (excludes molybdenum processed from purchased product). |
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Current Guidance
The Company has updated its 2015 guidance as of the date of this report to reflect (i) certain changes to its molybdenum business guidance as a result of expected decreases in cash flow from Langeloth, expected increases in the proportion of sales of upgraded products from its molybdenum mines, the placement of Endako Mine on care and maintenance, effective July 1, 2015 (in connection with which the Company incurred its share of one-time severance costs), and the decision to cease stripping at Thompson Creek Mine, effective August 6, 2015; and (ii) the addition of capital expenditures for 2015 relating to settlement of vendor claims in connection with the construction of Mount Milligan. There are no revisions to the production and cash cost guidance for Mount Milligan Mine as of the date of this report.
The table below presents (i) updated guidance for fiscal year 2015 as of the date of this report and (ii) for comparison purposes, the guidance previously provided in the Company's Form 10-Q for the three months ended March 31, 2015.
Year Ended December 31, 2015 (Estimated) (Updated) | Year Ended December 31, 2015 (Estimated) (Previous) | |||
Mount Milligan Mine Copper and Gold | ||||
Concentrate production (000's dry tonnes) | 140 - 160 | 140 - 160 | ||
Copper payable production (000's lb) | 70,000 - 90,000 | 70,000 - 90,000 | ||
Gold payable production (000's oz) | 200 - 220 | 200 - 220 | ||
Unit cash cost - By-product ($/payable lb copper produced): (1) (2) | $0.70 - $0.90 | $0.70 - $0.90 | ||
Molybdenum Business - Cash Inflow (Outflow) ($ in millions): (2)(3) | ||||
Ongoing molybdenum operations - Langeloth | $6 - $10 | $10 - $15 | ||
Suspended molybdenum operations: | ||||
TC Mine | ||||
Care and Maintenance | ($7 - $10) | ($6 - $8) | ||
Phase 8 Stripping | ($4 - $5) | ($8 - $10) | ||
Sale of Inventory | $32 - $34 | $25 - $28 | ||
Endako Mine (75% share) | ||||
Temporary suspension, care and maintenance and severance costs | ($17 - $19) | ($5 - $8) | ||
Sale of inventory | $10 - $11 | $9 - $10 | ||
Total Cash Flow from Molybdenum Operations | $20 - $21 | $25 - $27 | ||
Capital expenditures ($ in millions): (2)(4) | ||||
Mount Milligan operations | $22 ± 10% | $22 ± 10% | ||
Mount Milligan tailings dam | $24 ± 10% | $24 ± 10% | ||
Mount Milligan secondary crusher engineering and site preparation | $15 ± 10% | $15 ± 10% | ||
Mount Milligan vendor claims settlement (5) | $13 | nil | ||
Langeloth and other | $7 ± 10% | $7 ± 10% | ||
Total capital expenditures | $81 ± 10% | $68 ± 10% | ||
(1) | Copper by-product unit cash cost is calculated using copper payable production and deducts a gold by-product credit, which is determined based on expected revenue from payable gold production assuming a gold price of $801 per ounce for the first half of 2015 and approximately $730 per ounce for the second half of 2015, which takes into account the contractual price of $435 per ounce under the Gold Stream Arrangement. |
(2) | Estimates for cash costs, molybdenum cash inflow (outflow) and cash capital expenditures assume an average foreign exchange rate of US$1.00 = C$1.24 for the first half of 2015 and US$1.00 = C$1.25 for the second half of 2015. |
(3) | Cash inflow (outflow) excludes capital expenditures. |
(4) | Includes 2015 cash capital expenditures, but excludes cash capital expenditures related to 2014 accruals paid in 2015. |
(5) | In July 2015, Terrane Metals Corp., a wholly-owned subsidiary of the Company (“Terrane”), settled outstanding claims from two contractors that provided construction and installation services for the construction of Mount Milligan. The settlement amount, which represents a one-time payment, will be made in the third quarter of 2015. |
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Non-GAAP Financial Measures
In addition to the condensed consolidated financial statements presented in accordance with US GAAP, management uses certain non-GAAP financial measures to assess its operating performance for the reasons described further below. These measures do not have standard meanings prescribed by US GAAP and may not be comparable to similar measures presented by other companies. The presentation of these measures is not intended to be considered in isolation from, as a substitute for, or as superior to, the financial information prepared and presented in accordance with US GAAP. In addition, these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the results of operations as determined in accordance with US GAAP.
Adjusted Net Income (Loss), Adjusted Net Income (Loss) Per Share—Basic and Diluted
Management of the Company uses adjusted net income (loss) and adjusted net income (loss) per share—basic and diluted to evaluate the Company’s operating performance and for planning and forecasting future business operations. The Company believes the use of these measures allows investors and analysts to compare results of the continuing operations of the Company to similar operating results of other mining companies, by excluding unusual or infrequent items that are considered non-core to our business.
Adjusted net income (loss) represents the income (loss) prepared in accordance with US GAAP, adjusted for significant non-cash items.
For the first half of 2015 and 2014, the significant items were the net gains and losses related to the impact of foreign exchange due primarily to intercompany notes and related tax effects. For the five quarters ended June 30, 2015, the significant items were the net gains and losses related to the impact of foreign exchange due primarily to intercompany notes and related tax effects and impairments on our property, plant and equipment and materials and supplies inventory.
In connection with the Company's strategy to manage cash balances, fund its operations and provide future tax benefits, the Company may enter into intercompany loan arrangements. At times, the loans are denominated in currencies other than the measurement currency of one of the parties. US GAAP requires that notes that are intended to be repaid should not be considered a capital contribution, and, therefore, the foreign exchange fluctuations related to these loans impact net income (loss) each period. At each period end, management compares the exchange rate between the Canadian and US dollars to the exchange rate at the end of the prior reporting period. The difference between those rates is recorded as an unrealized gain or loss on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Settlement of these intercompany loans results in realized foreign exchange gains or losses recorded on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). As the loans between the parent company and its subsidiaries are the primary driver of the Company's foreign exchange gains and losses, as discussed above, management does not consider gains or losses on foreign exchange in its evaluation of our financial performance. Management believes that presentation of our non-GAAP measures excluding these gains or losses provides useful information to our investors regarding the Company's financial condition and results of operations.
Adjusted net income (loss) per share (basic and diluted) is calculated using adjusted net income (loss), as defined above, divided by the weighted-average basic and weighted-average diluted shares outstanding during the period as determined in accordance with US GAAP. If the adjustments to net (loss) on a US GAAP basis result in non-GAAP adjusted net income, management calculates weighted-average diluted shares outstanding in accordance with US GAAP and use that to calculate adjusted net income per share—diluted. If the adjustments to net income on a US GAAP basis result in non-GAAP adjusted net (loss), the Company utilizes weighted-average basic shares outstanding to calculate adjusted net income per share—diluted, in accordance with US GAAP.
The following tables reconcile net income (loss) presented in accordance with US GAAP to the non-GAAP financial measures of adjusted net income (loss) and adjusted net income (loss) per share—basic and diluted, for the three and six months ended June 30, 2015 and 2014 and for the five quarters ended June 30, 2015. All figures within the tables are unaudited and are presented in US$ in millions, except shares and per share amounts.
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Non-GAAP Reconciliation
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, 2015 | June 30, 2014 | June 30, 2015 | June 30, 2014 | ||||||||||||
Net income (loss) | $ | 0.3 | $ | 61.6 | $ | (86.9 | ) | $ | 22.5 | ||||||
Add (Deduct): | |||||||||||||||
(Gain) loss on foreign exchange (1) | (17.2 | ) | (41.9 | ) | 72.6 | 4.2 | |||||||||
Tax expense (benefit) on foreign exchange (gain) loss | 3.4 | 2.3 | (13.4 | ) | (0.4 | ) | |||||||||
Non-GAAP adjusted net income (loss) | $ | (13.5 | ) | $ | 22.0 | $ | (27.7 | ) | $ | 26.3 | |||||
Net income (loss) per share | |||||||||||||||
Basic | $ | 0.00 | $ | 0.35 | $ | (0.40 | ) | $ | 0.13 | ||||||
Diluted | $ | 0.00 | $ | 0.28 | $ | (0.40 | ) | $ | 0.10 | ||||||
Adjusted net income (loss) per share | |||||||||||||||
Basic | $ | (0.06 | ) | $ | 0.13 | $ | (0.13 | ) | $ | 0.15 | |||||
Diluted | $ | (0.06 | ) | $ | 0.10 | $ | (0.13 | ) | $ | 0.12 | |||||
Weighted-average shares | |||||||||||||||
Basic | 218.0 | 174.5 | 216.2 | 173.1 | |||||||||||
Diluted | 218.0 | 220.3 | 216.2 | 217.3 | |||||||||||
(1) | Included a foreign exchange gain of $0.3 million and a foreign exchange loss of $1.3 million presented in income and mining tax expense (benefit) on the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2015, respectively. Included $0.4 million and nil of foreign exchange loss presented in income and mining tax expense (benefit) on the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2014, respectively. |
8
Three Months Ended | |||||||||||||||||||
Jun 30 2015 | Mar 31 2015 | Dec 31 2014 | Sep 30 2014 | Jun 30 2014 | |||||||||||||||
Net income (loss) | $ | 0.3 | $ | (87.2 | ) | $ | (135.6 | ) | $ | (11.1 | ) | $ | 61.6 | ||||||
Add (Deduct): | |||||||||||||||||||
Asset impairments | — | — | 104.8 | — | — | ||||||||||||||
Tax benefit of asset impairments (1) | — | — | (7.0 | ) | — | — | |||||||||||||
(Gain) loss on foreign exchange (2) | (17.2 | ) | 89.8 | 34.8 | 59.7 | (41.9 | ) | ||||||||||||
Tax expense (benefit) on foreign exchange (gain) loss | 3.4 | (16.8 | ) | (7.0 | ) | (10.3 | ) | 2.3 | |||||||||||
Non-GAAP adjusted net income (loss) | $ | (13.5 | ) | $ | (14.2 | ) | $ | (10.0 | ) | $ | 38.3 | $ | 22.0 | ||||||
Net income (loss) per share | |||||||||||||||||||
Basic | $ | 0.00 | $ | (0.41 | ) | $ | (0.63 | ) | $ | (0.05 | ) | $ | 0.35 | ||||||
Diluted | $ | 0.00 | $ | (0.41 | ) | $ | (0.63 | ) | $ | (0.05 | ) | $ | 0.28 | ||||||
Adjusted net income (loss) per share | |||||||||||||||||||
Basic | $ | (0.06 | ) | $ | (0.07 | ) | $ | (0.05 | ) | $ | 0.18 | $ | 0.13 | ||||||
Diluted | $ | (0.06 | ) | $ | (0.07 | ) | $ | (0.05 | ) | $ | 0.17 | $ | 0.10 | ||||||
Weighted-average shares | |||||||||||||||||||
Basic | 218.0 | 214.4 | 214.1 | 213.9 | 174.5 | ||||||||||||||
Diluted | 218.0 | 214.4 | 214.1 | 220.4 | 220.3 | ||||||||||||||
(1) The asset impairment for Endako Mine and TC Mine in 2014 did not have a net tax impact due to offsetting valuation allowance movement; therefore, the non-GAAP adjusted net income (loss) presentation excluded this tax effect.
(2) Included a foreign exchange gain of $0.3 million; a foreign exchange loss of $1.6 million, foreign exchange gains of $0.5 million and $0.6 million and a foreign exchange loss of $0.4 million, presented in income and mining tax expense (benefit) in the Condensed Consolidated Statements of Operations for the three months ended June 30, 2015, March 31, 2015, December 31, 2014, September 30, 2014 and June 30, 2014, respectively.
Copper-Gold Operations - Unit Cash Cost and Average Realized Price per Payable Pound or Payable Ounce Sold
Unit cash cost on a by-product and co-product basis are considered key measures in evaluating operating performance in the Company's Copper-Gold operations, as well as measures of profitability and efficiency on a consolidated basis. Although, unit cash cost on a by-product and co-product basis are not measures of financial performance, do not have standardized meaning prescribed by US GAAP and may not be comparable to similar measures presented by other companies, management believes these non-GAAP measures provide useful supplemental information to investors.
Unit cash cost on a by-product and co-product basis represent the mining, milling, on-site general and administration, truck and rail transportation, warehousing, refining and treatment, and ocean freight and insurance costs; and exclude the effects of changes in inventory; non-cash corporate allocations; other non-cash employee benefits, such as stock-based compensation; depreciation, depletion, amortization and accretion.
On a by-product basis, sales of by-product metals are deducted when computing cash costs in accordance with the cash cost standard endorsed by the World Gold Council and, previously, the Gold Institute. On a co-product basis, cash costs are allocated between copper and gold based on production. Copper production is stated in thousands of pounds. Gold production has been converted to thousands of copper equivalent (Cu eq.) pounds using the gold production for the periods presented, as well as the most recent quarterly average prices for copper and gold. The price used for copper is the most recent quarterly average of the Metals Bulletin Daily published price for LME settlement per tonne. The price used for gold is a weighted average of the most recent quarterly average of the Metals Bulletin Daily published prices for daily average London price per ounce adjusted for the fixed price established under the Gold Stream Arrangement ($435 per oz).
9
The following tables provide a reconciliation of cash costs, unit cash costs, and operating expenses for Copper-Gold operations included in our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) in the determination of net income (loss) for the three and six months ended June 30, 2015 and 2014 and for the five quarters ended June 30, 2015.
Non-GAAP cash cost
Three Months Ended | Six Months Ended | ||||||||||||||
(US$ in millions) | Jun 30 2015 | Jun 30 2014 | Jun 30 2015 | Jun 30 2014 | |||||||||||
Direct mining costs (1) | $ | 45.0 | $ | 39.8 | $ | 82.4 | $ | 89.4 | |||||||
Truck and rail transportation and warehousing costs | 3.8 | 4.6 | 8.2 | 6.2 | |||||||||||
Costs reflected in inventory and operations costs | $ | 48.8 | $ | 44.4 | $ | 90.6 | $ | 95.6 | |||||||
Refining and treatment costs | 6.6 | 5.7 | 11.1 | 8.5 | |||||||||||
Ocean freight and insurance costs | 1.8 | 1.5 | 3.8 | 3.5 | |||||||||||
Direct costs reflected in revenue and selling and marketing costs | $ | 8.4 | $ | 7.2 | $ | 14.9 | $ | 12.0 | |||||||
Non-GAAP cash costs | $ | 57.2 | $ | 51.6 | $ | 105.5 | $ | 107.6 | |||||||
Reconciliation to amounts reported (US$ in millions) | |||||||||||||||
Direct costs | $ | (8.4 | ) | $ | (7.2 | ) | $ | (14.9 | ) | $ | (12.0 | ) | |||
Changes in inventory | 1.8 | 26.6 | (5.2 | ) | 18.6 | ||||||||||
Silver by-product credits (2) | (1.2 | ) | (1.6 | ) | (2.4 | ) | (2.3 | ) | |||||||
Non cash costs and other | 0.2 | 0.3 | 0.4 | 0.6 | |||||||||||
Copper-Gold segment US GAAP operating expenses | $ | 49.6 | $ | 69.7 | $ | 83.4 | $ | 112.5 | |||||||
Three Months Ended | |||||||||||||||||||
(US$ in millions) | Jun 30 2015 | Mar 31 2015 | Dec 31 2014 | Sep 30 2014 | Jun 30 2014 | ||||||||||||||
Direct mining costs (1) | $ | 45.0 | $ | 37.4 | $ | 45.2 | $ | 48.8 | $ | 39.8 | |||||||||
Truck and rail transportation and warehousing costs | 3.8 | 4.4 | 3.3 | 3.8 | 4.6 | ||||||||||||||
Costs reflected in inventory and operations costs | $ | 48.8 | $ | 41.8 | $ | 48.5 | $ | 52.6 | $ | 44.4 | |||||||||
Refining and treatment costs | 6.6 | 4.5 | 4.6 | 4.4 | 5.7 | ||||||||||||||
Ocean freight and insurance costs | 1.8 | 2.0 | 1.5 | 1.1 | 1.5 | ||||||||||||||
Direct costs reflected in revenue and selling and marketing costs | $ | 8.4 | $ | 6.5 | $ | 6.1 | $ | 5.5 | $ | 7.2 | |||||||||
Non-GAAP cash costs | $ | 57.2 | $ | 48.3 | $ | 54.6 | $ | 58.1 | $ | 51.6 | |||||||||
Reconciliation to amounts reported (US$ in millions) | |||||||||||||||||||
Direct costs | $ | (8.4 | ) | $ | (6.5 | ) | $ | (6.1 | ) | $ | (5.5 | ) | $ | (7.2 | ) | ||||
Changes in inventory | 1.8 | (7.0 | ) | (6.2 | ) | (4.5 | ) | 25.0 | |||||||||||
Silver by-product credits (2) | (1.2 | ) | (1.2 | ) | (0.9 | ) | (1.1 | ) | — | ||||||||||
Non cash costs and other | 0.2 | 0.2 | — | 0.4 | 0.3 | ||||||||||||||
Copper-Gold segment US GAAP operating expenses | $ | 49.6 | $ | 33.8 | $ | 41.4 | $ | 47.4 | $ | 69.7 | |||||||||
(1) Mining, milling and on-site general and administration costs. Mining includes all stripping costs but excludes costs capitalized related to the construction of the tailings dam. Stripping costs that provide access to mineral reserves that will be produced in future periods are expensed as incurred under US GAAP.
(2) Silver sales are reflected as a credit to operating costs.
10
By-Product
Three Months Ended | Six Months Ended | ||||||||||||||
(US$ in millions, except pounds and per pound amounts) | Jun 30 2015 | Jun 30 2014 | Jun 30 2015 | Jun 30 2014 | |||||||||||
Copper payable production (000's lbs) | 20,159 | 16,035 | 35,564 | 30,278 | |||||||||||
Non-GAAP cash cost | $ | 57.2 | $ | 51.6 | $ | 105.5 | $ | 107.6 | |||||||
Less by-product credits | |||||||||||||||
Gold sales (1) | $ | 56.5 | $ | 54.4 | $ | 92.7 | $ | 78.9 | |||||||
Gold sales related to deferred portion of Gold Stream Arrangement | (10.0 | ) | (9.7 | ) | (16.4 | ) | (14.1 | ) | |||||||
Net gold by-product credits | $ | 46.5 | $ | 44.7 | $ | 76.3 | $ | 64.8 | |||||||
Silver by-product credits (2) | 1.3 | 1.6 | 2.5 | 2.3 | |||||||||||
Total by-product credits | $ | 47.8 | $ | 46.3 | $ | 78.8 | $ | 67.1 | |||||||
Non-GAAP cash cost net of by-product credits | $ | 9.4 | $ | 5.3 | $ | 26.7 | $ | 40.5 | |||||||
Non-GAAP cash cost per pound, on a by-product basis | $ | 0.48 | $ | 0.33 | $ | 0.75 | $ | 1.34 | |||||||
Three Months Ended | |||||||||||||||||||
(US$ in millions, except pounds and per pound amounts) | June 30 2015 | Mar 31 2015 | Dec 31 2014 | Sep 30 2014 | Jun 30 2014 | ||||||||||||||
Copper payable production (000's lbs) | 20,159 | 15,405 | 18,024 | 16,267 | 16,035 | ||||||||||||||
Non-GAAP cash cost | $ | 57.2 | $ | 48.3 | $ | 54.6 | $ | 58.1 | $ | 51.6 | |||||||||
Less by-product credits | |||||||||||||||||||
Gold sales (1) | $ | 56.5 | $ | 36.2 | $ | 39.0 | $ | 55.2 | $ | 54.4 | |||||||||
Gold sales related to deferred portion of Gold Stream Arrangement | (10.0 | ) | (6.4 | ) | (6.3 | ) | (10.8 | ) | (9.7 | ) | |||||||||
Net gold by-product credits | $ | 46.5 | $ | 29.8 | $ | 32.7 | $ | 44.4 | $ | 44.7 | |||||||||
Silver by-product credits (2) | 1.3 | 1.2 | 0.9 | 1.1 | 1.6 | ||||||||||||||
Total by-product credits | $ | 47.8 | $ | 31.0 | $ | 33.6 | $ | 45.5 | $ | 46.3 | |||||||||
Non-GAAP cash cost net of by-product credits | $ | 9.4 | $ | 17.3 | $ | 21.0 | $ | 12.6 | $ | 5.3 | |||||||||
Non-GAAP cash cost per pound, on a by-product basis | $ | 0.48 | $ | 1.12 | $ | 1.16 | $ | 0.77 | $ | 0.33 | |||||||||
_______________________________________________________________________________
(1) Excluded refining and treatment charges.
(2) Silver sales are reflected as a credit to operating costs.
11
Co- Product
Three Months Ended | Six Months Ended | ||||||||||||||
(US$ in millions, except pounds, ounces and per unit amounts) | Jun 30 2015 | Jun 30 2014 | Jun 30 2015 | Jun 30 2014 | |||||||||||
Copper payable production (000’s lbs) | 20,159 | 16,035 | 35,564 | 30,278 | |||||||||||
Gold payable production in Cu eq. (000’s lbs) (1) | 17,317 | 10,125 | 31,399 | 20,565 | |||||||||||
Payable production (000’s lbs) | 37,476 | 26,160 | 66,963 | 50,843 | |||||||||||
Non-GAAP cash cost allocated to Copper | $ | 30.8 | $ | 31.6 | $ | 56.0 | $ | 64.1 | |||||||
Non-GAAP cash cost per pound, on a co-product basis | $ | 1.55 | $ | 1.97 | $ | 1.59 | $ | 2.11 | |||||||
Non-GAAP cash cost allocated to Gold | $ | 26.4 | $ | 20.0 | $ | 49.5 | $ | 43.5 | |||||||
Gold payable production (ounces) | 59,917 | 37,030 | 106,036 | 76,273 | |||||||||||
Non-GAAP cash cost per ounce, on a co-product basis | $ | 434 | $ | 538 | $ | 462 | $ | 573 | |||||||
Three Months Ended | |||||||||||||||||||
(US$ in millions, except pounds, ounces and per unit amounts) | Jun 30 2015 | Mar 31 2015 | Dec 31 2014 | Sep 30 2014 | Jun 30 2014 | ||||||||||||||
Copper payable production (000’s lbs) | 20,159 | 15,405 | 18,024 | 16,267 | 16,035 | ||||||||||||||
Gold payable production in Cu eq. (000’s lbs) (1) | 17,317 | 14,082 | 10,954 | 15,976 | 10,125 | ||||||||||||||
Payable production (000’s lbs) | 37,476 | 29,487 | 28,978 | 32,243 | 26,160 | ||||||||||||||
Non-GAAP cash cost allocated to Copper | $ | 30.8 | $ | 25.2 | $ | 34.0 | $ | 29.3 | $ | 31.6 | |||||||||
Non-GAAP cash cost per pound, on a co-product basis | $ | 1.55 | $ | 1.64 | $ | 1.88 | $ | 1.80 | $ | 1.97 | |||||||||
Non-GAAP cash cost allocated to Gold | $ | 26.4 | $ | 23.1 | $ | 20.6 | $ | 28.8 | $ | 20.0 | |||||||||
Gold payable production (ounces) | 59,917 | 46,119 | 40,967 | 60,366 | 37,030 | ||||||||||||||
Non-GAAP cash cost per ounce, on a co-product basis | $ | 434 | $ | 498 | $ | 506 | $ | 477 | $ | 538 | |||||||||
______________________________________________________________________________
(1) For the six months ended June 30, 2015 gold has been converted from payable ounces to thousands of copper equivalent pounds by using the gold production for the periods presented, using a gold price of $801 and a copper price of $2.70. For the six months ended June 30, 2014 gold has been converted from payable ounces to thousands of copper equivalent pounds by using the gold production for the periods presented, using a gold price of $843 and a copper price of $3.13. Gold has been converted from payable ounces to thousands of copper equivalent pounds by using the gold production for the periods presented, using a gold price of $795, $806, $829, $840, and $842 per ounce for the three months ended June 30, 2015, March 31, 2015, December 31, 2014, September 30, 2014, and June 30, 2014, respectively, (adjusted for the Royal Gold price of $435 per ounce) and a copper price of $2.75, $2.64, $3.10, $3.17, and $3.08 per pound for the three months ended June 30, 2015, March 31, 2015, December 31, 2014, September 30, 2014 and June 30, 2014, respectively.
Average realized sales price
The average realized sales price per payable pound or payable ounce sold is calculated by dividing copper or gold sales revenue, gross together with the final pricing adjustments and mark-to-market adjustments by the pounds or ounces sold, respectively, as shown in the tables below.
12
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(US$ in millions, except pounds, ounces and per unit amounts) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Average realized sales price for Copper | |||||||||||||||
Copper sales reconciliation ($) | |||||||||||||||
Copper sales, excluding adjustments | $ | 58.4 | $ | 68.6 | $ | 96.7 | $ | 102.6 | |||||||
Final pricing adjustments | 1.6 | (1.9 | ) | (5.7 | ) | (2.0 | ) | ||||||||
Mark-to-market adjustments | (4.3 | ) | 3.5 | 1.2 | 2.1 | ||||||||||
Copper sales, net of adjustments | 55.7 | 70.2 | 92.2 | 102.7 | |||||||||||
Less Refining and treatment costs | 6.4 | 5.4 | 10.7 | 8.1 | |||||||||||
Copper sales | $ | 49.3 | $ | 64.8 | $ | 81.5 | $ | 94.6 | |||||||
Pounds of Copper sold (000's lb) | 21,195 | 21,939 | 35,986 | 32,732 | |||||||||||
Average realized sales price for Copper on a per pound basis | |||||||||||||||
Copper sales excluding adjustments | $ | 2.76 | $ | 3.13 | $ | 2.69 | $ | 3.13 | |||||||
Final pricing adjustments | 0.08 | (0.09 | ) | $ | (0.16 | ) | (0.06 | ) | |||||||
Mark-to-market adjustments | (0.21 | ) | 0.16 | $ | 0.03 | 0.07 | |||||||||
Average realized Copper sales price per pound sold | $ | 2.63 | $ | 3.20 | $ | 2.56 | $ | 3.14 | |||||||
Average realized sales price for Gold | |||||||||||||||
Gold sales reconciliation ($) | |||||||||||||||
Gold sales related to cash portion of Gold Stream Arrangement | $ | 13.1 | $ | 11.7 | $ | 21.4 | $ | 17.2 | |||||||
Gold sales related to deferred portion of Gold Stream Arrangement | 10.0 | 9.7 | 16.4 | 14.1 | |||||||||||
Gold sales under Gold Stream Arrangement | 23.1 | 21.4 | 37.8 | 31.3 | |||||||||||
TCM share of gold sales to MTM Customers | 34.0 | 32.2 | 55.2 | 47.2 | |||||||||||
Final pricing adjustments | (1.1 | ) | (0.2 | ) | (0.4 | ) | (0.3 | ) | |||||||
Mark-to-market adjustments | 0.4 | 1.0 | — | 0.7 | |||||||||||
Gold sales TCM Share | 33.3 | 33.0 | 54.8 | 47.6 | |||||||||||
Gold sales, net of adjustments | 56.4 | 54.4 | 92.6 | 78.9 | |||||||||||
Less Refining and treatment costs | 0.1 | 0.3 | 0.3 | 0.4 | |||||||||||
Gold sales | 56.3 | 54.1 | 92.3 | 78.5 | |||||||||||
Ounces of gold sold to Royal Gold | 30,070 | 26,990 | 49,224 | 39,364 | |||||||||||
TCM share of ounces of gold sold to MTM customers | 27,850 | 24,993 | 45,446 | 36,493 | |||||||||||
Total ounces of Gold sold | 57,920 | 51,983 | 94,670 | 75,857 | |||||||||||
Average realized sales price for Gold on a per ounce basis | |||||||||||||||
Gold sales related to cash portion of Gold Stream Arrangement | $ | 435 | $ | 435 | $ | 435 | $ | 435 | |||||||
Gold sales related to deferred portion of Gold Stream Arrangement | 334 | 359 | 334 | $ | 359 | ||||||||||
Average realized sales price per ounce sold to Royal Gold | $ | 769 | $ | 794 | $ | 769 | $ | 794 | |||||||
TCM share of gold sales to MTM Customers | $ | 1,221 | $ | 1,288 | 1,215 | $ | 1,293 | ||||||||
Final pricing adjustments | (39 | ) | (8 | ) | (10 | ) | (7 | ) | |||||||
Mark-to-market adjustments | 15 | 40 | — | 19 | |||||||||||
Average realized sales price per ounce sold for TCM share | $ | 1,197 | $ | 1,320 | $ | 1,205 | $ | 1,305 | |||||||
Average realized sales price per ounce sold | $ | 975 | $ | 1,047 | $ | 979 | $ | 1,040 | |||||||
13
Three Months Ended | |||||||||||||||||||
(US$ in millions, except pounds, ounces and per unit amounts) | Jun 30 2015 | Mar 31 2015 | Dec 31 2014 | Sep 30 2014 | Jun 30 2014 | ||||||||||||||
Average realized sales price for Copper | |||||||||||||||||||
Copper sales reconciliation ($) | |||||||||||||||||||
Copper sales, excluding adjustments | $ | 58.4 | $ | 38.3 | $ | 46.6 | $ | 52.6 | $ | 68.6 | |||||||||
Final pricing adjustments | 1.6 | (7.3 | ) | (2.5 | ) | 1.3 | (1.9 | ) | |||||||||||
Mark-to-market adjustments | (4.3 | ) | 5.5 | (1.5 | ) | (4.0 | ) | 3.5 | |||||||||||
Copper sales, net of adjustments | 55.7 | 36.5 | 42.6 | 49.9 | 70.2 | ||||||||||||||
Less Refining and treatment costs | 6.4 | 4.3 | 4.4 | 4.2 | 5.4 | ||||||||||||||
Copper sales | $ | 49.3 | $ | 32.2 | $ | 38.2 | $ | 45.7 | $ | 64.8 | |||||||||
Pounds of Copper sold (000's lb) | 21,195 | 14,791 | 15,478 | 16,482 | 21,939 | ||||||||||||||
Average realized sales price for Copper on a per unit basis | |||||||||||||||||||
Copper sales excluding adjustments | $ | 2.76 | $ | 2.59 | $ | 3.01 | $ | 3.19 | $ | 3.13 | |||||||||
Final pricing adjustments | 0.08 | (0.49 | ) | (0.16 | ) | 0.08 | (0.09 | ) | |||||||||||
Mark-to-market adjustments | (0.21 | ) | 0.37 | (0.10 | ) | (0.25 | ) | 0.16 | |||||||||||
Average realized Copper sales price per pound sold | $ | 2.63 | $ | 2.47 | $ | 2.75 | $ | 3.02 | $ | 3.20 | |||||||||
Average realized sales price for Gold | |||||||||||||||||||
Gold sales reconciliation ($) | |||||||||||||||||||
Gold sales related to cash portion of Gold Stream Arrangement | $ | 13.1 | $ | 8.3 | $ | 8.8 | $ | 13.0 | $ | 11.7 | |||||||||
Gold sales related to deferred portion of Gold Stream Arrangement | 10.0 | 6.4 | 6.3 | 10.8 | 9.7 | ||||||||||||||
Gold sales under Gold Stream Arrangement | 23.1 | 14.7 | 15.1 | 23.8 | 21.4 | ||||||||||||||
TCM share of gold sales to MTM Customers | 34.0 | 21.2 | 24.0 | 35.6 | 32.2 | ||||||||||||||
Final pricing adjustments | (1.1 | ) | 0.7 | (2.5 | ) | (0.2 | ) | (0.2 | ) | ||||||||||
Mark-to-market adjustments | 0.4 | (0.4 | ) | 2.4 | (4.0 | ) | 1.0 | ||||||||||||
Gold sales TCM Share | 33.3 | 21.5 | 23.9 | 31.4 | 33.0 | ||||||||||||||
Gold sales, net of adjustments | 56.4 | 36.2 | 39.0 | 55.2 | 54.4 | ||||||||||||||
Less Refining and treatment costs | 0.1 | 0.2 | 0.2 | 0.2 | 0.3 | ||||||||||||||
Gold sales | $ | 56.3 | $ | 36.0 | $ | 38.8 | $ | 55.0 | $ | 54.1 | |||||||||
Ounces of gold sold to Royal Gold | 30,070 | 19,154 | 20,217 | 29,965 | 26,990 | ||||||||||||||
TCM share of ounces of gold sold to MTM customers | 27,850 | 17,596 | 18,692 | 28,009 | 24,993 | ||||||||||||||
Total ounces of Gold sold | 57,920 | 36,750 | 38,909 | 57,974 | 51,983 | ||||||||||||||
Average realized sales price for Gold on a per ounce basis | |||||||||||||||||||
Gold sales related to cash portion of Gold Stream Arrangement | $ | 435 | $ | 435 | $ | 435 | $ | 435 | $ | 435 | |||||||||
Gold sales related to deferred portion of Gold Stream Arrangement | 334 | 334 | 312 | 359 | 359 | ||||||||||||||
Average realized sales price per ounce sold to Royal Gold | $ | 769 | $ | 769 | $ | 747 | $ | 794 | $ | 794 | |||||||||
TCM share of gold sales to MTM Customers | $ | 1,221 | $ | 1,205 | $ | 1,284 | $ | 1,271 | $ | 1,288 | |||||||||
Final pricing adjustments | (39 | ) | 40 | (134 | ) | (7 | ) | (8 | ) | ||||||||||
Mark-to-market adjustments on current period sales | 15 | (25 | ) | 129 | (143 | ) | 40 | ||||||||||||
Average realized sales price per ounce sold for TCM share | $ | 1,197 | $ | 1,220 | $ | 1,279 | $ | 1,121 | $ | 1,320 | |||||||||
Average realized sales price per ounce sold | $ | 975 | $ | 985 | $ | 1,002 | $ | 952 | $ | 1,047 | |||||||||
14
__________________________________________________________________________
(1) The average realized sales price per payable pound of copper sold and per payable ounce of gold sold is impacted by any final volume and pricing adjustments and mark-to-market adjustments for shipments made in prior periods.
Additional information on the Company’s financial position is available in Thompson Creek’s Quarterly Report on Form 10-Q for the period ended June 30, 2015, which was filed today on EDGAR (www.sec.gov) and SEDAR (www.sedar.com) and posted on the Company’s website (www.thompsoncreekmetals.com).
Conference Call and Webcast
Thompson Creek will hold a conference call for analysts and investors to discuss its second quarter 2015 financial results on Friday, August 7, 2015 at 8:00 am Eastern Time.
To participate in the call, please dial 1 (647) 427-7450 or 1 (888) 231-8191. A live audio webcast of the conference call will be available at http://cnw.ca/uGrB0 and www.thompsoncreekmetals.com.
An archived recording of the second quarter 2015 conference call/webcast will be available through August 21, 2015, by dialing 1 (416) 849-0833 or 1 (855) 859-2056 and entering replay code 81714952.
About Thompson Creek Metals Company Inc.
Thompson Creek Metals Company Inc. is a North American mining company. The Company’s principal operating property is its 100%-owned Mount Milligan mine, an open-pit copper and gold mine and concentrator in British Columbia. The Company’s molybdenum assets consist of its 100%-owned Thompson Creek Mine, an open-pit molybdenum mine and concentrator in Idaho, its 75% joint venture interest in the Endako Mine, an open-pit molybdenum mine, concentrator and roaster in British Columbia, and its Langeloth Metallurgical Facility in Pennsylvania. The Company’s development project is the Berg property, a copper, molybdenum, and silver exploration property located in British Columbia. The Company’s principal executive office is located in Denver, Colorado. More information is available at www.thompsoncreekmetals.com.
Cautionary Note Regarding Forward-Looking Statements
This news release contains ''forward-looking statements'' within the meaning of the United States Private Securities Litigation Reform Act of 1995 Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and applicable Canadian securities legislation. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "future," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressions. Our forward-looking statements may include, without limitation, statements with respect to: future financial or operating performance of the Company or its subsidiaries and its projects; access to existing or future financing arrangements and ability to refinance or reduce debt on favorable terms or at all; future inventory, production, sales, payments from customers, cash costs, capital expenditures and exploration expenditures; future earnings and operating results; expected concentrate and recovery grades; estimates of mineral reserves and resources, including estimated mine life and annual production; statements as to the projected ramp-up at Mount Milligan Mine, including expected achievement of design capacities, decisions regarding whether to proceed with the construction of a permanent secondary crusher, and the effects of secondary crushing; future operating plans and goals, including statements regarding Langeloth's business model; and future molybdenum, copper, gold and silver prices.
Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, our forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from future results expressed, projected or implied by those forward-looking statements. Important factors that could cause actual results and events to differ from those described in such forward-looking statements can be found in the section entitled "Risk Factors" in Thompson Creek's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents filed on EDGAR at www.sec.gov and on SEDAR at www.sedar.com. Although we have attempted to identify those material factors that could cause actual results or events to differ from those described in such forward-looking statements, there may be other factors, currently unknown to us or deemed immaterial at the present time that could cause results or events to differ from those anticipated, estimated or intended. Many of these factors are beyond our ability to control or predict. Given these uncertainties, the reader is cautioned
15
not to place undue reliance on our forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.
For more information, please contact:
Pamela Solly Director, Investor Relations Thompson Creek Metals Company Inc. Tel: (303) 762-3526 | Francois Perron Renmark Financial Communications Inc. Tel: (416) 644-2020 |
16
THOMPSON CREEK METALS COMPANY INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, | December 31, | ||||||
(US dollars in millions, except share amounts) | 2015 | 2014 | |||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 211.1 | $ | 265.6 | |||
Accounts receivable | 31.4 | 42.0 | |||||
Accounts receivable-related parties | 0.2 | 4.1 | |||||
Product inventory | 76.8 | 96.6 | |||||
Materials and supplies inventory | 26.3 | 30.4 | |||||
Prepaid expenses and other current assets | 7.1 | 7.7 | |||||
Income and mining taxes receivable | 0.5 | 0.5 | |||||
Restricted cash | — | 1.6 | |||||
Deferred income tax assets | 0.2 | 0.1 | |||||
353.6 | 448.6 | ||||||
Property, plant, equipment and development, net | 2,063.6 | 2,218.3 | |||||
Restricted cash | — | 5.7 | |||||
Reclamation deposits | 10.3 | 10.3 | |||||
Other assets | 40.5 | 35.4 | |||||
Deferred income tax assets | 133.3 | 128.0 | |||||
$ | 2,601.3 | $ | 2,846.3 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities | |||||||
Accounts payable and accrued liabilities | $ | 80.7 | $ | 93.1 | |||
Income, mining and other taxes payable | 1.5 | 1.8 | |||||
Current portion of Gold Stream deferred revenue | 40.3 | 40.4 | |||||
Current portion of long-term debt | 1.4 | 3.9 | |||||
Current portion of long-term lease obligations | 24.9 | 22.8 | |||||
Deferred income tax liabilities | 13.5 | 14.1 | |||||
Other current liabilities | 0.3 | 0.3 | |||||
162.6 | 176.4 | ||||||
Gold Stream deferred revenue | 705.3 | 721.1 | |||||
Long-term debt | 831.3 | 872.3 | |||||
Long-term lease obligations | 40.0 | 45.7 | |||||
Other liabilities | 4.8 | 5.2 | |||||
Asset retirement obligations | 35.5 | 35.3 | |||||
Deferred income tax liabilities | 97.4 | 102.8 | |||||
1,876.9 | 1,958.8 | ||||||
Commitments and contingencies | |||||||
Shareholders' equity | |||||||
Common stock, no-par, 221,001,135 and 214,148,315 shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively | 1,195.7 | 1,186.1 | |||||
Additional paid-in capital | 80.2 | 86.6 | |||||
Accumulated deficit | (333.8 | ) | (246.9 | ) | |||
Accumulated other comprehensive income (loss) | (217.7 | ) | (138.3 | ) | |||
724.4 | 887.5 | ||||||
$ | 2,601.3 | $ | 2,846.3 | ||||
17
THOMPSON CREEK METALS COMPANY INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS and COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(US dollars in millions, except per share amounts) | 2015 | 2014 | 2015 | 2014 | |||||||||||
REVENUES | |||||||||||||||
Copper sales | $ | 49.3 | $ | 64.8 | $ | 81.5 | $ | 94.6 | |||||||
Gold sales | 56.3 | 54.1 | 92.3 | 78.5 | |||||||||||
Molybdenum sales | 20.9 | 126.3 | 63.7 | 229.2 | |||||||||||
Tolling, calcining and other | 7.6 | 3.2 | 19.6 | 7.1 | |||||||||||
Total revenues | 134.1 | 248.4 | 257.1 | 409.4 | |||||||||||
COSTS AND EXPENSES | |||||||||||||||
Cost of sales | |||||||||||||||
Operating expenses | 75.3 | 148.2 | 158.3 | 261.8 | |||||||||||
Depreciation, depletion and amortization | 26.8 | 33.0 | 46.8 | 55.6 | |||||||||||
Total cost of sales | 102.1 | 181.2 | 205.1 | 317.4 | |||||||||||
Selling and marketing | 2.2 | 3.6 | 5.2 | 7.7 | |||||||||||
Accretion expense | 0.6 | 0.9 | 1.2 | 1.8 | |||||||||||
General and administrative | 4.9 | 5.2 | 10.5 | 11.8 | |||||||||||
Exploration | 0.1 | 0.2 | 0.1 | 0.3 | |||||||||||
Costs for idle mining operations | 12.1 | — | 17.7 | — | |||||||||||
Total costs and expenses | 122.0 | 191.1 | 239.8 | 339.0 | |||||||||||
OPERATING INCOME (LOSS) | 12.1 | 57.3 | 17.3 | 70.4 | |||||||||||
OTHER (INCOME) EXPENSE | |||||||||||||||
(Gain) loss on foreign exchange | (16.9 | ) | (42.3 | ) | 71.3 | 4.2 | |||||||||
Interest and finance fees | 22.3 | 23.3 | 44.9 | 46.9 | |||||||||||
Loss from debt extinguishment | 3.1 | 0.5 | 2.8 | 0.5 | |||||||||||
Interest (income) expense | — | (0.1 | ) | (0.1 | ) | (0.2 | ) | ||||||||
Other | (1.8 | ) | (0.2 | ) | (3.1 | ) | (3.0 | ) | |||||||
Total other (income) expense | 6.7 | (18.8 | ) | 115.8 | 48.4 | ||||||||||
Income (loss) before income and mining taxes | 5.4 | 76.1 | (98.5 | ) | 22.0 | ||||||||||
Total income and mining tax expense (benefit) | 5.1 | 14.5 | (11.6 | ) | (0.5 | ) | |||||||||
NET INCOME (LOSS) | $ | 0.3 | $ | 61.6 | $ | (86.9 | ) | $ | 22.5 | ||||||
COMPREHENSIVE INCOME (LOSS) | |||||||||||||||
Foreign currency translation | 17.1 | 42.0 | (79.4 | ) | (3.6 | ) | |||||||||
Total other comprehensive income (loss) | 17.1 | 42.0 | (79.4 | ) | (3.6 | ) | |||||||||
Total comprehensive income (loss) | $ | 17.4 | $ | 103.6 | $ | (166.3 | ) | $ | 18.9 | ||||||
NET INCOME (LOSS) PER SHARE | |||||||||||||||
Basic | $ | 0.00 | $ | 0.35 | $ | (0.40 | ) | $ | 0.13 | ||||||
Diluted | $ | 0.00 | $ | 0.28 | $ | (0.40 | ) | $ | 0.10 | ||||||
Weighted-average number of common shares | |||||||||||||||
Basic | 218.0 | 174.5 | 216.2 | 173.1 | |||||||||||
Diluted | 218.1 | 220.3 | 216.2 | 217.3 | |||||||||||
18
THOMPSON CREEK METALS COMPANY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(US dollars in millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||
OPERATING ACTIVITIES | |||||||||||||||
Net income (loss) | $ | 0.3 | $ | 61.6 | $ | (86.9 | ) | $ | 22.5 | ||||||
Items not affecting cash: | |||||||||||||||
Depreciation, depletion and amortization | 26.8 | 33.0 | 46.8 | 55.6 | |||||||||||
Deferred revenue related to Gold Stream Arrangement | (10.0 | ) | (9.7 | ) | (16.4 | ) | (14.1 | ) | |||||||
Accretion expense | 0.6 | 0.9 | 1.2 | 1.8 | |||||||||||
Amortization of finance fees | 1.2 | 1.3 | 2.4 | 2.6 | |||||||||||
Stock-based compensation | 1.8 | 1.5 | 3.1 | 2.6 | |||||||||||
Obsolete materials and supplies inventory write downs | — | 0.1 | — | 0.2 | |||||||||||
Product inventory write downs | 1.8 | 1.1 | 7.0 | 6.6 | |||||||||||
Deferred income tax benefit | 5.0 | 7.8 | (10.1 | ) | (9.3 | ) | |||||||||
Unrealized gain on financial instruments and mark-to-market adjustments | (6.0 | ) | (2.8 | ) | — | (3.2 | ) | ||||||||
Unrealized foreign exchange (gain) loss | (16.0 | ) | (44.0 | ) | 70.6 | 3.6 | |||||||||
Debt extinguishment | 0.7 | (0.1 | ) | 0.4 | (0.1 | ) | |||||||||
Change in current assets and liabilities | 11.9 | (4.1 | ) | 0.2 | (12.8 | ) | |||||||||
Gold Stream Arrangement net payable | 5.8 | 4.1 | 0.3 | 10.9 | |||||||||||
Cash generated by (used in) operating activities | 23.9 | 50.7 | 18.6 | 66.9 | |||||||||||
INVESTING ACTIVITIES | |||||||||||||||
Capital expenditures | (9.7 | ) | (26.7 | ) | (22.9 | ) | (48.5 | ) | |||||||
Capitalized interest payments | (0.3 | ) | (0.6 | ) | (1.0 | ) | (6.9 | ) | |||||||
Restricted cash | 0.1 | (0.6 | ) | 7.2 | — | ||||||||||
Reclamation deposit | — | — | — | (10.0 | ) | ||||||||||
Cash generated by (used in) investing activities | (9.9 | ) | (27.9 | ) | (16.7 | ) | (65.4 | ) | |||||||
FINANCING ACTIVITIES | |||||||||||||||
Equipment financings and repayments | (6.1 | ) | (5.5 | ) | (12.6 | ) | (10.8 | ) | |||||||
Repayment of long-term debt | (1.0 | ) | (5.1 | ) | (2.3 | ) | (8.8 | ) | |||||||
Senior unsecured note repurchase | (34.2 | ) | — | (41.0 | ) | — | |||||||||
Proceeds (costs) from issuance of common shares, net | 0.2 | — | 0.5 | — | |||||||||||
Cash generated by (used in) financing activities | (41.1 | ) | (10.6 | ) | (55.4 | ) | (19.6 | ) | |||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | — | 1.2 | (1.0 | ) | 0.3 | ||||||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (27.1 | ) | 13.4 | (54.5 | ) | (17.8 | ) | ||||||||
Cash and cash equivalents, beginning of period | 238.2 | 202.7 | 265.6 | 233.9 | |||||||||||
Cash and cash equivalents, end of period | $ | 211.1 | $ | 216.1 | $ | 211.1 | $ | 216.1 | |||||||
19
NYSE:TC TSX:TCM Second Quarter 2015 Investor Conference Call August 7, 2015 NYSE:TC TSX:TCM
2 Webcast Information Webcast: This Webcast can be accessed on the Thompson Creek Metals Company website under the Events Section: www.thompsoncreekmetals.com Q&A Instructions: If you would like to ask a question, please press star 1 on your telephone keypad. If you’re using a speakerphone, please make sure your mute function is turned off to allow your signal to reach the operator.
3 Cautionary Statement This document contains ''forward-looking statements'' within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and applicable Canadian securities legislation. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "future," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressions. Our forward-looking statements include, without limitation, statements with respect to: future financial or operating performance of the Company or its subsidiaries and its projects; access to existing or future financing arrangements and ability to refinance or reduce debt on favorable terms or at all; future inventory, production, sales, payments from customers, cash costs, capital expenditures and exploration expenditures; future earnings and operating results; expected concentrate and recovery grades; estimates of mineral reserves and resources, including estimated mine life and annual production; statements as to the projected ramp-up at Mount Milligan Mine, including expected achievement of design capacities, decisions regarding whether to proceed with the construction of a permanent secondary crusher, and the effects of secondary crushing; future operating plans and goals, including statements regarding Langeloth’s business model; and future molybdenum, copper, gold and silver prices. Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, our forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from future results expressed, projected or implied by those forward-looking statements. Important factors that could cause actual results and events to differ from those described in such forward-looking statements can be found in the section entitled "Risk Factors" in Thompson Creek's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents filed on EDGAR at www.sec.gov and on SEDAR at www.sedar.com. Although we have attempted to identify those material factors that could cause actual results or events to differ from those described in such forward-looking statements, there may be other factors, currently unknown to us or deemed immaterial at the present time that could cause results or events to differ from those anticipated, estimated or intended. Many of these factors are beyond our ability to control or predict. Given these uncertainties, the reader is cautioned not to place undue reliance on our forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.
4 Management in Attendance Jacques Perron President, Chief Executive Officer and Director Pam Saxton Executive Vice President and Chief Financial Officer Mark Wilson Executive Vice President and Chief Commercial Officer
5 Jacques Perron President, Chief Executive Officer and Director Overview
6 Improving Safety Performance Company All Incident Recordable Rate (AIRR)1 5.94 5.03 2.60 2.25 1.40 2.48 2.46 0.46 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 2008 2009 2010 2011 2012 2013 2014 2015 YTD 1 Includes Lost Time and Reportable Incidents. Mining Association British Columbia AIRR Average Surfaces Metals Mining U.S. AIRR Average Compared to Q214 AIRR of 3.43
7 Q215 Highlights Significantly improved operational performance at Mount Milligan Mine Consistent utilization of temporary secondary crusher Achieved highest quarterly average daily mill throughput to date of 44,940 tonnes, and for May and June averaged 49,913 tonnes From July 26 through August 4, daily mill throughput averaged 52,290 tonnes Exceeded design recoveries; copper – 85.5% and gold – 72.7% Copper sales – $49 million Gold sales – $56 million Completed three copper and gold concentrate shipments and recorded four sales, including one sale from Q1 shipment Achieved quarterly unit cash cost on a by-product basis of $0.48 per pound of copper produced
8 Q215 Highlights (continued) Generated positive cash flow of $10 million, prior to bond repurchases Repurchased and retired $34 million of 9.75% senior secured notes due December 1, 2017 Future interest savings of $0.8 million to call date of December 2015 and $8.2 million to maturity date of December 2017 Since December 2014, we have repurchased and retired $67 million of our outstanding notes Future interest savings of $22 million to maturity dates Ended Q2 with $211 million of cash Molybdenum business generated cash flow of approximately $4 million, excluding capital expenditures or $0.5 million Molybdenum sales – $21 million Tolling, calcining and other – $8 million
9 Focused on Continuous Improvements at Mount Milligan Mine Continue to optimize the mill to sustain design recoveries and achieve design mill throughput, while containing costs Installation of second SAG discharge screen deck expected to occur at the beginning of Q4 Temporary secondary crushing circuit Consistent utilization during Q2 has demonstrated positive impact of secondary crushing on throughput Contractor proved ability to provide steady supply of secondary crushed material Continuing to look for opportunities to increase pre-crushed material Temporary secondary crushing, together with the installation of the second SAG discharge screen deck, is expected to help us to achieve daily mill throughput of 60,000 tonnes by year-end
10 Mount Milligan Permanent Secondary Crushing Circuit Detailed engineering substantially complete Current capex estimate is $65 – $70 million, assuming an exchange rate of US$1.00 = C$1.25, including $15 million of estimated capital expenditures for 2015, of which $2.3 million has been incurred through June 30, 2015 Earthwork and concrete work commenced in Q3 Decision expected in Q4 whether to purchase long-lead items and proceed with construction With proven success in Q2, continued utilization of temporary secondary crushing circuit is a viable short-term option should the Company decide to delay moving forward with construction of a permanent secondary crusher If a decision to move forward with construction of permanent secondary crushing circuit is made in Q415, we expect construction to be completed and commissioning to occur in Q416 Once installed and commissioned, average daily mill throughput expected to increase to 62,500 tonnes
11 Committed to Strengthening the Balance Sheet and Reducing Debt Actively evaluating opportunities to reduce and refinance debt Goal to have solution in place well in advance of debt maturity dates 9.75% Senior Secured Notes due December 1, 2017 7.375% Senior Unsecured Notes due June 1, 2018 12.5% Senior Unsecured Notes due May 1, 2019 Target debt level three times EBITDA for a twelve month period
12 Reduced Debt by $121 Million over 8 Quarters Since completion of Mount Milligan Mine, reduced debt by $121 million, or ≈12%1 Since December 2014, repurchased $67 million of our senior secured and unsecured notes, with total future interest savings to maturity from these notes repurchased of approximately $22 million $1,019 $1,013 $1,004 $984 $977 $945 $939 $898 $820 $840 $860 $880 $900 $920 $940 $960 $980 $1,000 $1,020 $1,040 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 [US$ in millions] 1 Includes net repayments of the Company’s capital leases.
13 Maintaining Optionality of Molybdenum Business Shifting Langeloth from integrated service facility for Thompson Creek and Endako mines to a cash generating business Strategic goal to transform Langeloth into one of the largest independent molybdenum conversion plants in the world Molybdenum business expected to contribute $20 to $21 million of cash flow in 2015, excluding capital expenditures, including our 75% share of Endako one-time severance costs of approximately $7 million For the first half of 2015, molybdenum business generated $24 million of cash flow, excluding the impact of capital expenditures at Langeloth of $0.9 million. Our share of Endako one-time severance costs of approximately $7 million was paid in July 2015
14 Pam Saxton Executive Vice President and Chief Financial Officer Financial Review
15 Financial Summary | Q215 vs Q214 134 248 12 57 41 91 0 62 (14) 22 24 51 [millions of US$] Revenue Operating Income Net Income (Loss) Adjusted Net Income Operating Cash Flow 1 Please refer to Appendix for non-GAAP reconciliation. Q215 Q214 1 Non-GAAP EBITDA 1
16 Financial Summary | First Half 2015 vs First Half 2014 257 409 17 70 68 131 (87) 23 (28) 26 19 67 [millions of US$] Revenue Operating Income Net Income (Loss) Adjusted Net Income Operating Cash Flow 1 Please refer to Appendix for non-GAAP reconciliation. H1 2015 H1 2014 1 Non-GAAP EBITDA 1
17 Three Months Ended 6/30/15 6/30/14 Six Months Ended 6/30/15 6/30/14 Cash Flow from Operations 23.9 50.7 18.6 66.9 Cash (Used) in Investing Activities (9.9) (27.9) (16.7) (65.4) Cash (Used) in Financing Activities (41.1) (10.6) (55.4) (19.6) Effect of Exchange Rate Changes on Cash - 1.2 (1.0) 0.3 Increase (Decrease) in Cash and Cash Equivalents (27.1) 13.4 (54.5) (17.8) Cash and Cash Equivalents, beginning of period 238.2 202.7 265.6 233.9 Cash and Cash Equivalents, end of period 211.1 216.1 211.1 216.1 Summary of Statement of Cash Flows [US$ in millions]
18 Updated 2015 Production and Unit Cost Guidance Year-Ended 12/31/15 (Estimate) (Updated) Year-Ended 12/31/15 (Estimate) (Previous) Mount Milligan Copper and Gold Concentrate production (000’s dry tonnes) 140 – 160 140 – 160 Copper payable production (millions lb) 70 – 90 70 – 90 Gold payable production (000’s oz) 200 – 220 200 – 220 Unit cash cost – By-product (US$/payable lb copper production) 1,2 $0.70 – $0.90 $0.70 – $0.90 Molybdenum Business – Cash Inflow (outflow) (US$ in millions) 2,3 Ongoing molybdenum operations – Langeloth $6 – $10 $10 – $15 Suspended molybdenum operations: Thompson Creek Mine Care and maintenance ($7 – $10) ($6 – $8) Phase 8 stripping ($4 – $5) ($8 – $10) Sale of inventory $32 – $34 $25 – $28 Endako Mine (75% share) Temporary suspension, care and maintenance and estimated severance costs ($17 – $19) ($5 – $8) Sale of inventory $10 – $11 $9 – $10 Total Cash Flow from Molybdenum Operations $20 – $21 $25 – $27 1 Copper by-product unit cash cost is calculated using copper payable production and deducts a gold by-product credit, which is determined based on expected revenue from payable gold production assuming a gold price of $801 per ounce for the first half of 2015 and approximately $730 per ounce for the second half of 2015, which takes into account the contractual price of $435 per ounce un the Bold Stream Arrangement. 2 Estimates for cash costs and molybdenum cash inflow (outflow) assume an average foreign exchange rate of US$1.00 = C$1.24 for the first half of 2015 and US$1.00 = $1.25 for the second half of 2015. 3 Cash flow (outflow) excludes capital expenditures.
19 Updated 2015 Capital Expenditure Guidance Year-Ended December 31, 2015 (Updated Estimate) Year-Ended December 31, 2015 (Previous Estimate) Capital Expenditures (US$ in millions) 1,2 Mount Milligan operations $22 +/- 10% $22 +/- 10% Mount Milligan tailings dam $24 +/- 10% $24 +/- 10% Mount Milligan secondary crusher engineering and site preparation $15 +/- 10% $15 +/- 10% Mount Milligan vendor claim settlements 3 $13 nil Langeloth and other $7 +/- 10% $7 +/- 10% Total Cash Capital Expenditures $81 +/- 10% $68 +/- 10% 1 Estimates for cash capital expenditures assume an average foreign exchange rate of US$1.00 = C$1.24 for the first half of 2015 and US$1.00 = $1.25 for the second half of 2015.. 2 Includes 2015 cash capital expenditures, but excludes cash capital expenditures related to 2014 accruals paid in 2015. 3 In July 2015, Terrane Metals Corp., a wholly-owned subsidiary of the Company, settled outstanding claims from two contractors that provided construction and installation services for the construction of Mount Milligan. The settlement amount, which represents a one-time payment, will be made in the third quarter of 2015.
20 2015 EBITDA Estimates at Various Copper Prices Average Estimated EBITDA1, 2 (US$ in millions) ($1,050/oz Gold and $6/lb Molybdenum Oxide for the second half of 2015) $0 $20 $40 $60 $80 $100 $120 $140 Cu $2.25/lb Cu $2.50/lb Cu $2.80/lb 1 EBITDA estimates were assumed to be at the mid-point of guidance, utilizing foreign exchange rate of US$1.00 = C$1.25 for the second half of 2015, and assumes all production for 2015 is sold, using the 2015 first half actual realizations and the second half at the various copper prices. EBITDA equals operating income excluding the deferred revenue from the Gold Stream Arrangement, depreciation, depletion and amortization, accretion expense and any asset impairments. Does not include any additional severance costs for Endako Mine. 2 EBITDA estimates were updated for the Endako Mine being placed on care and maintenance and related severance costs. $93 $104 $117 Exchange Rate US$1.00 = C$1.25 for the second half of 2015
21 Hedging1 Quantity Sell Price Buy Price Maturities Through Forward Gold Sales (oz) 4,900 $1,222 TBD Jul 2015 – Aug 2015 Forward Copper Sales (lb) 5,511,550 $2.86 TBD Jul 2015 – Aug 2015 Quantity Put Price Call Price Maturities Through Gold Collars (oz) 12,000 $1,175- $1,200 $1,267 - $1,360 Jul 2015 – Dec 2015 Copper Collars (lb) 13,227,720 $2.00 $2.99 Jul 2015 – Dec 2015 1 Information is as of June 30, 2015.
22 Significant Positive Impact from US$/C$ Foreign Exchange Rate Current US$/C$ exchange rate continues to have positive impact on Mount Milligan operating margins Approximately 90% of costs are in C$ The US$ to C$ average exchange rate for the first half of 2015 was US$1.00 = C$1.24. This exchange rate had a positive impact on Mount Milligan operating costs for the first half of 2015 of approximately $9 million, or a positive unit cost impact of $0.25 per pound of copper, compared to applying the average fourth quarter exchange rate of December 31, 2014 of US$1.00 = C$1.14 The weakening Canadian dollar supports margins and somewhat mitigates the effects of copper and gold pricing volatility
23 Copper Margins Supported by Weakening Canadian Dollar Source: FactSet $2.00 $2.50 $3.00 $3.50 $4.00 31-Dec-13 31-Mar-14 30-Jun-14 30-Sep-14 31-Dec-14 31-Mar-15 30-Jun-15 Co pp er P ric e ($/ lb ) Copper Price in US$ Copper Price in C$
24 Gold Price in Non-U.S. Dollar Terms Has Increased Source: FactSet $1,000 $1,100 $1,200 $1,300 $1,400 $1,500 $1,600 $1,700 31-Dec-13 31-Mar-14 30-Jun-14 30-Sep-14 31-Dec-14 31-Mar-15 30-Jun-15 G old P ric e ($/o z) Gold Price in US$ Gold Price in C$
25 Mark Wilson Executive Vice President and Chief Commercial Officer Sales Summary and Market Commentary
26 36.0 32.7 H115 H114 Copper (Cu) Sales 1 Please refer to Appendix for non-GAAP reconciliation. 21.2 21.9 Q215 Q214 Cu Sales (millions lbs) Average Realized Sales Price1 (US$/lb) Cu Sales (millions lbs) Average Realized Sales Price1 (US$/lb) 49.3 64.8 Q215 Q214 81.5 94.6 H115 H114 $2.56 $3.14 H115 H114 Cu Revenue (millions US$) Cu Revenue (millions US$) $2.63 $3.20 Q215 Q214 Three Months Ended June 30 Six Months Ended June 30
27 92.3 78.5 H115 H114 Gold (Au) Sales 1 Please refer to Appendix for non-GAAP reconciliation. 57.9 52.0 Q215 Q214 Au Sales (000’s oz) Average Realized Sales Price1 (US$/oz) Au Sales (000’s oz) Average Realized Sales Price1 (US$/oz) 56.3 54.1 Q215 Q214 $979 $1,040 H115 H114 Au Revenue (millions US$) Au Revenue (millions US$) 975 1,047 Q215 Q214 Three Months Ended June 30 Six Months Ended June 30 94.7 75.9 H115 H114
28 Molybdenum Sales Total Sales Tolling, Calcining and Other 21 126 64 229 8 3 20 7 Q215 Q214 H115 H114 2.3 9.7 6.5 19.5 Q215 Q214 H115 H114 Avg Realized Mo Price/Lb. $9.73 $11.73 Mo Sales Volumes [US$ in millions] [millions of pounds] $9.23 $13.03
29 Long-Term Fundamentals Support Positive Copper Market Outlook Improving economy is expected to support 2015 U.S. demand growth of ~3% Driven by manufacturing, automotive and housing recovery Supply growth expected to slow relative to demand and support medium-term price improvement Copper consumption expected to grow 14% from an estimated 22.3 Mt in 2015 to 25.4 Mt in 2020 By 2025, China expected to account for 14.1 Mt or 50% of global consumption Copper Consumption (Mt Cu) Global Market Copper Supply and Demand (Mt Cu) -- 10 20 30 40 2015E 2025E 2035E China Other Asia / Rest of World N. America / Europe Source: Wood Mackenzie -- 5 10 15 20 25 30 35 40 1992 1997 2002 2007 2012 2017 2022 2027 Possible Projects Probable Projects Highly Probable Projects Base Case Production Capability Primary Demand
30 Operations Review and Closing Remarks Jacques Perron President, Chief Executive Officer and Director
31 Operating Statistics Copper (Cu) 1 Please refer to Appendix for non-GAAP reconciliation. 20.2 16.0 35.6 30.3 21.2 21.9 35.9 32.7 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 Q215 Q214 H115 H114 Cu-Payable Production (millions lbs) Cu-Sales (millions lbs) $0.48 $0.33 $0.75 $1.34 $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 Q215 Q214 H115 H114 Cu-Cash cost ($/payable lb produced) By-Product 1 Q215 Q214 H115 H114 Cu Ore Grade 0.28% 0.27% 0.27% 0.28% Cu Recovery 85.5% 80.4% 82.7% 79.8%
32 Operating Statistics Gold (Au) 1 Please refer to Appendix for non-GAAP reconciliation. 59,917 37,030 106,036 76,273 57,920 51,983 94,670 75,857 0 20,000 40,000 60,000 80,000 100,000 Q215 Q214 H115 H114 Au-Payable Production (oz) Au-Sales (oz) $434 $538 $462 $573 $0 $100 $200 $300 $400 $500 $600 Q215 Q214 H115 H114 Au-Cash cost ($/payable oz produced) Co-Product 1 Q215 Q214 H115 H114 Au Ore Grade (g/tonne) 0.65 0.52 0.64 0.61 Au Recovery 72.7% 65.1% 70.0% 61.8%
33 Mount Milligan Ramp-up 38,970 40,445 43,781 39,569 44,940 0 10,000 20,000 30,000 40,000 50,000 60,000 Q214 Q314 Q414 Q115 Q215 Mill Throughput Design 60,000 tpd 1,959 1,958 2,002 1,890 2,054 0 500 1,000 1,500 2,000 2,500 Q214 Q314 Q414 Q115 Q215 89.4% 88.7% 91.1% 87.3% 91.2% 85% 86% 87% 88% 89% 90% 91% 92% Q214 Q314 Q414 Q115 Q215 Hourly Throughput Design 2,715 tpoh Mill Availability Design 92% 80.4% 83.1% 79.0% 79.3% 85.5% 55% 60% 65% 70% 75% 80% 85% 90% Q214 Q314 Q414 Q115 Q215 65.1% 66.6% 60.8% 66.7% 72.7% 55% 57% 59% 61% 63% 65% 67% 69% 71% 73% 75% Q214 Q314 Q414 Q115 Q215 Copper Recovery Design 84% Gold Recovery Design 71%
34 Key Messages We believe we are favorably positioned to withstand current volatility in commodity markets Cash of $211 million as of June 30, 2015 Significant positive impact of US$/C$ exchange rate on Mount Milligan operating costs, which somewhat mitigates effects of copper and gold pricing volatility With installation of second SAG discharge screen deck, together with continued utilization of temporary secondary crusher, daily mill throughput is expected to reach 60,000 tonnes by year end Remain focused on Company’s current business strategy to: Complete the ramp-up of Mount Milligan by year-end 2015 Reduce and refinance debt Maintain optionality of molybdenum business, while generating positive cash flow Contain costs throughout the Company
35 NYSE:TC TSX:TCM Thompson Creek Metals Company www.thompsoncreekmetals.com Pamela Solly Director, Investor Relations and Corporate Responsibility Phone (303) 762-3526 Email [email protected]
36 Appendix
37 Non-GAAP EBITDA Reconciliation (1) Certain prior year reclassifications were made to DD&A to conform with current year presentation. (US$ in millions) Q215 Q214 First Half 2015 First Half 2014 Net income (loss) 0.3 61.6 22.5 (86.9) (Interest income)/expense, net 25.4 23.7 47.2 47.6 Tax expense (benefit) 5.1 14.5 (0.5) (11.6) DD&A 1 26.8 33.0 55.6 46.8 Accretion 0.6 0.9 1.8 1.2 Asset impairments - - - - (Gain) loss on foreign exchange (16.9) (42.3) 4.2 71.3 Non-GAAP EBITDA 41.4 91.4 130.8 68.4
38 Non-GAAP Reconciliation Adjusted Net Income (Loss) (US$ in millions, except per share amounts) (1) Included a foreign exchange gain of $0.3 million and a foreign exchange loss of $1.3 million presented in income and mining tax expense (benefit) on the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2015, respectively. Included $0.4 million and nil of foreign exchange loss presented in income and mining tax expense (benefit) on the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2014, respectively. Three Months Ended Six Months Ended Jun 30 2015 Jun 30 2014 Jun 30 2015 Jun 30 2014 $ 0.3 $ 61.6 $ (86.9 ) $ 22.5 Add (Deduct): (Gain) loss on foreign exchange (1) (17.2 ) (41.9 ) 72.6 4.2 Tax expense (benefit) on foreign exchange (gain) loss 3.4 2.3 (13.4 ) (0.4 ) Non-GAAP adjusted net income (loss) $ (13.5 ) $ 22.0 $ (27.7 ) $ 26.3 Net income (loss) per share Basic $ 0.00 $ 0.35 $ (0.40 ) $ 0.13 Diluted $ 0.00 $ 0.28 $ (0.40 ) $ 0.10 Adjusted net income (loss) per share Basic $ (0.06 ) $ 0.13 $ (0.13 ) $ 0.15 Diluted $ (0.06 ) $ 0.10 $ (0.13 ) $ 0.12 Weighted-average shares Basic 218.0 174.5 216.2 173.1 Diluted 218.0 220.3 216.2 217.3
39 Non-GAAP Reconciliation Copper-Gold Operations Non-GAAP Cash Cost (US$ in millions) Non-GAAP Cash Cost (1) Mining, milling and on-site general and administration costs. Mining includes all stripping costs but excludes costs capitalized related to the construction of the tailings dam. Stripping costs that provide access to mineral reserves that will be produced in future periods are expensed as incurred under US GAAP. (2) Silver sales are reflected as a credit to operating costs. Three Months Ended Six Months Ended Jun 30 2015 Jun 30 2014 Jun 30 2015 Jun 30 2014 Direct mining costs (1) $ 45.0 $ 39.8 $ 82.4 $ 89.4 Truck and rail transportation and warehousing costs 3.8 4.6 8.2 6.2 Costs reflected in inventory and operations costs $ 48.8 $ 44.4 $ 90.6 $ 95.6 Refining and treatment costs 6.6 5.7 11.1 8.5 Ocean freight and insurance costs 1.8 1.5 3.8 3.5 Direct costs reflected in revenue and selling and marketing costs $ 8.4 $ 7.2 $ 14.9 $ 12.0 Non-GAAP cash costs $ 57.2 $ 51.6 $ 105.5 $ 107.6 Reconciliation to amounts reported (US$ in millions) Direct costs $ (8.4 ) $ (7.2 ) $ (14.9 ) $ (12.0 ) Changes in inventory 1.8 26.6 (5.2 ) 18.6 Silver by-product credits (2) (1.2 ) (1.6 ) (2.4 ) (2.3 ) Non cash costs and other 0.2 0.3 0.4 0.6 Copper-Gold segment US GAAP operating expenses $ 49.6 $ 69.7 $ 83.4 $ 112.5
40 By-Product (US$ in millions, except pounds and per pound amounts) Non-GAAP Reconciliation Copper-Gold Operations By-Product Unit Cost Per Pound Produced (1) Excluded refining and treatment charges. (2) Silver sales are reflected as a credit to operating costs. Three Months Ended Six Months Ended Jun 30 2015 Jun 30 2014 Jun 30 2015 Jun 30 2014 Copper payable production (000's lbs) 20,159 16,035 35,564 30,278 Non-GAAP cash cost $ 57.2 $ 51.6 $ 105.5 $ 107.6 Less by-product credits Gold sales (1) $ 56.5 $ 54.4 $ 92.7 $ 78.9 Gold sales related to deferred portion of Gold Stream Arrangement (10.0 ) (9.7 ) (16.4 ) (14.1 ) Net gold by-product credits $ 46.5 $ 44.7 $ 76.3 $ 64.8 Silver by-product credits (2) 1.3 1.6 2.5 2.3 Total by-product credits $ 47.8 $ 46.3 $ 78.8 $ 67.1 Non-GAAP cash cost net of by-product credits $ 9.4 $ 5.3 $ 26.7 $ 40.5 Non-GAAP unit cash cost on a by-product basis, per pound $ 0.48 $ 0.33 $ 0.75 $ 1.34
41 Co- Product (US$ in millions, except pounds, ounces and per unit amounts) Non-GAAP Reconciliation Copper-Gold Operations Co-Product Costs Three Months Ended Six Months Ended Jun 30 2015 Jun 30 2014 Jun 30 2015 Jun 30 2014 Copper payable production (000’s lbs) 20,159 16,035 35,564 30,278 Gold payable production in Cu eq. (000’s lbs) (1) 17,317 10,125 31,399 20,565 Payable production (000’s lbs) 37,476 26,160 66,963 50,843 Non-GAAP cash cost allocated to Copper $ 30.8 $ 31.6 $ 56.0 $ 64.1 Non-GAAP cash cost per pound, on a co-product basis $ 1.55 $ 1.97 $ 1.59 $ 2.11 Non-GAAP cash cost allocated to Gold $ 26.4 $ 20.0 $ 49.5 $ 43.5 Gold payable production (ounces) 59,917 37,030 106,036 76,273 Non-GAAP cash cost per ounce, on a co-product basis $ 434 $ 538 $ 462 $ 573 (1) For the three months ended June 30, 2015 gold has been converted from payable ounces to thousands of copper equivalent pounds by using the gold production for the periods presented, using a gold price of $795 (adjusted for the Royal Gold price of $435 per ounce) and a copper price of $2.75. For the three months ended June 30, 2014 gold has been converted from payable ounces to thousands of copper equivalent pounds by using the gold production for the periods presented, using a gold price of $842 (adjusted for the Royal Gold price of $435 per ounce) and a copper price of $3.08. For the six months ended June 30, 2015 gold has been converted from payable ounces to thousands of copper equivalent pounds by using the gold production for the periods presented, using a gold price of $801 (adjusted for the Royal gold price of $435 per ounce) and a copper price of $2.70. For the six months ended June 30, 2014 gold has been converted from payable ounces to thousands of copper equivalent pounds by using the gold production for the periods presented, using a gold price of $843 (adjusted for the Royal Gold price of $435 per ounce) and a copper price of $3.13.
42 Non-GAAP Reconciliation Copper-Gold Operations Average Realized Sales Prices (1) The average realized sales price per payable pound of copper sold and payable ounces of gold sold is impacted by any final volume and pricing adjustments and mark-to-market adjustments for shipments made in prior periods. (US$ in millions, except pounds, ounces and per unit amounts) Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Copper sales reconciliation ($) Copper sales, excluding adjustments $ 58.4 $ 68.6 $ 96.7 $ 102.6 Final pricing adjustments 1.6 (1.9 ) (5.7 ) (2.0 ) Mark-to-market adjustments (4.3 ) 3.5 1.2 2.1 Copper sales, net of adjustments 55.7 70.2 92.2 102.7 Less Refining and treatment costs 6.4 5.4 10.7 8.1 Copper sales $ 49.3 $ 64.8 $ 81.5 $ 94.6 Pounds of Copper sold (000's lb) 21,195 21,939 35,986 32,732 Average realized sales price for Copper on a per pound basis Copper sales excluding adjustments $ 2.76 $ 3.13 $ 2.69 $ 3.13 Final pricing adjustments 0.08 (0.09 ) $ (0.16 ) (0.06 ) Mark-to-market adjustments (0.21 ) 0.16 $ 0.03 0.07 Average realized Copper sales price per pound sold $ 2.63 $ 3.20 $ 2.56 $ 3.14 Continued Average Realized Sales Prices for Copper
43 Non-GAAP Reconciliation (continued) Copper-Gold Operations Average Realized Sales Prices (1) The average realized sales price per payable pound of copper sold and payable ounces of gold sold is impacted by any final volume and pricing adjustments and mark-to-market adjustments for shipments made in prior periods. (US$ in millions, except pounds, ounces and per unit amounts) Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Gold sales related to cash portion of Gold Stream Arrangement $ 13.1 $ 11.7 $ 21.4 $ 17.2 Gold sales related to deferred portion of Gold Stream Arrangement 10.0 9.7 16.4 14.1 Gold sales under Gold Stream Arrangement 23.1 21.4 37.8 31.3 TCM share of gold sales to MTM Customers 34.0 32.2 55.2 47.2 Final pricing adjustments (1.1 ) (0.2 ) (0.4 ) (0.3 ) Mark-to-market adjustments 0.4 1.0 — 0.7 Gold sales TCM Share 33.3 33.0 54.8 47.6 Gold sales, net of adjustments 56.4 54.4 92.6 78.9 Less Refining and treatment costs 0.1 0.3 0.3 0.4 Gold sales 56.3 54.1 92.3 78.5 Ounces of gold sold to Royal Gold 30,070 26,990 49,224 39,364 TCM share of ounces of gold sold to MTM customers 27,850 24,993 45,446 36,493 Total ounces of Gold sold 57,920 51,983 94,670 75,857 Average realized sales price for Gold on a per ounce basis Gold sales related to cash portion of Gold Stream Arrangement $ 435 $ 435 $ 435 $ 435 Gold sales related to deferred portion of Gold Stream Arrangement 334 359 334 $ 359 Average realized sales price per ounce sold to Royal Gold $ 769 $ 794 $ 769 $ 794 TCM share of gold sales to MTM Customers $ 1,221 $ 1,288 1,215 $ 1,293 Final pricing adjustments (39 ) (8 ) (10 ) (7) Mark-to-market adjustments 15 40 - 19 Average realized sales price per payable ounce sold for TCM share $ 1,197 $ 1,320 $ 1,205 $ 1,305 Average realized sales price per ounce sold $ 975 $ 1,047 $ 979 $ 1,040 Average Realized Sales Prices for Gold