Annual Reports

 
Quarterly Reports

 
8-K

 
Other

  • Form 4 (Feb 8, 2018)
  • Form 4 (Feb 1, 2018)
  • SC 13G (Jan 31, 2018)
  • SC 13G (Jan 29, 2018)
  • Form 4 (Jan 16, 2018)
  • 144 (Dec 18, 2017)
TUCOWS INC 6-K 2009

Documents found in this filing:

  1. 6-K
  2. 6-K

FORM 6-K

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For the month of  August 2009

 

Commission File Number   001-33783


THOMPSON CREEK METALS COMPANY INC.

401 Bay Street, Suite 2010
Toronto, Ontario
M5H 2Y4
(416) 860-1438

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F   o      Form 40-F   x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): __

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): __

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

 


 

 

SIGNATURES

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, thereunto duly authorized.

 

 

 

 

 

 

Date:   August 6, 2009

THOMPSON CREEK METALS COMPANY INC.

 

 

/s/ Lorna D. MacGillivray                                 

Lorna D. MacGillivray

Assistant Secretary

 





 

Exhibit Index

 

Exhibit No.               Description                                     

 

1                Consolidated Financial Statements for the Six-Month Period Ending June 30, 2009

2                Management's Discussion & Analysis for the Six-Month Period Ending June 30, 2009

3                Certification of Chief Executive Officer

4                Certification of Chief Financial Officer

 


EXHIBIT 1

THOMPSON CREEK METALS COMPANY INC.

Consolidated Balance Sheets

(US dollars in millions – Unaudited)

 

Note

June 30,

2009

 

December 31,

2008

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

18

$

77.5

 

$

258.0

Short-term investments

4

 

184.5

 

 

Accounts receivable

8,17

 

37.3

 

 

55.0

Product inventory

5

 

42.8

 

 

57.1

Material and supplies inventory

 

 

35.3

 

 

36.2

Prepaid expense and other current assets

8

 

5.0

 

 

6.3

Income and mining taxes recoverable

 

 

2.2

 

 

1.4

 

 

384.6

 

 

414.0

Other assets

8

 

3.1

 

 

3.0

Restricted cash

9

 

16.0

 

 

14.2

Reclamation deposits

 

 

29.7

 

 

26.9

Property, plant and equipment

6

 

634.7

 

 

594.1

Goodwill

 

 

47.0

 

 

47.0

 

 

$

1,115.1

 

$

1,099.2

Liabilities

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable and accrued liabilities

8,9

$

28.1

 

$

36.5

Income and mining taxes payable

 

 

2.2

 

 

7.5

Current portion of long-term debt

7

 

5.0

 

 

5.6

Future income and mining taxes

 

 

6.3

 

 

8.1

 

 

41.6

 

 

57.7

Long-term debt

7

 

10.6

 

 

11.7

Other liabilities

9

 

21.3

 

 

21.8

Asset retirement obligations

10

 

24.2

 

 

23.3

Future income and mining taxes

 

 

163.0

 

 

167.2

 

 

260.7

 

 

281.7

Shareholders' Equity

 

 

 

 

 

 

Common shares

11

 

489.5

 

 

484.1

Common share warrants

11

 

35.0

 

 

35.0

Contributed surplus

 

 

44.1

 

 

40.4

Retained earnings

 

 

315.1

 

 

304.3

Accumulated other comprehensive loss

 

 

(29.3)

 

 

(46.3)

 

 

854.4

 

 

817.5

 

 

$

1,115.1

 

$

1,099.2

Commitments and contingencies

13

 

 

 

 

 

Measurement uncertainty

2

 

 

 

 

 

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

- 1 -

 


THOMPSON CREEK METALS COMPANY INC.

Consolidated Statements of Operations

(US dollars in millions, except per share amounts – Unaudited)

 

 

 

Three months ended

 

Six months ended

 

Note

June 30,

2009

 

June 30, 2008

 

 

June 30, 2009

 

 

June 30, 2008

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Molybdenum sales

8, 9,17

$

71.2

 

$

239.6

 

$

146.7

 

$

489.8

Tolling and calcining

 

 

2.6

 

 

4.3

 

 

6.1

 

 

8.9

 

 

73.8

 

 

243.9

 

 

152.8

 

 

498.7

Cost of sales

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

8

 

44.7

 

 

125.7

 

 

97.9

 

 

292.3

Selling and marketing

 

 

1.2

 

 

2.5

 

 

2.7

 

 

5.0

Depreciation, depletion and amortization

 

 

12.2

 

 

9.9

 

 

24.2

 

 

17.6

Accretion

10

 

0.4

 

 

0.4

 

 

0.7

 

 

1.1

 

 

58.5

 

 

138.5

 

 

125.5

 

 

316.0

Income from mining and processing

 

 

15.3

 

 

105.4

 

 

27.3

 

 

182.7

Other (income) expenses

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

4.1

 

 

5.7

 

 

7.8

 

 

9.1

Stock-based compensation

12

 

4.0

 

 

6.5

 

 

5.4

 

 

8.2

Exploration and development

14

 

1.9

 

 

0.3

 

 

3.7

 

 

1.3

Loss (gain) on foreign exchange

 

 

7.1

 

 

(1.9)

 

 

3.9

 

 

(2.7)

Interest and finance fees

7

 

0.3

 

 

8.1

 

 

0.5

 

 

14.8

Interest income

 

 

(0.6)

 

 

(0.8)

 

 

(1.0)

 

 

(1.6)

Other

 

 

 

 

(0.2)

 

 

(0.4)

 

 

(0.1)

 

 

16.8

 

 

17.7

 

 

19.9

 

 

29.0

Income (loss) before income and mining taxes

 

 

(1.5)

 

 

87.7

 

 

7.4

 

 

153.7

Income and mining taxes (recoverable)

 

 

 

 

 

 

 

 

 

 

 

 

Current

15

 

3.6

 

 

25.5

 

 

6.9

 

 

51.0

Future

15

 

(4.7)

 

 

1.8

 

 

(10.3)

 

 

(4.5)

 

 

 

(1.1)

 

 

27.3

 

 

(3.4)

 

 

46.5

Net income (loss)

 

$

(0.4)

 

$

60.4

 

$

10.8

 

$

107.2

Net income (loss) per share

16

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.00)

 

$

0.52

 

$

0.09

 

$

0.93

Diluted

 

$

(0.00)

 

$

0.45

 

$

0.09

 

$

0.82

 

Consolidated Statements of Comprehensive Income

(US dollars in millions - Unaudited)

 

 

 

Three months ended

 

Six months ended

 

 

June 30,

2009

 

June 30,

2008

 

 

June 30, 2009

 

 

June 30, 2008

Net income (loss)

 

$

(0.4)

 

$

60.4

 

$

10.8

 

$

107.2

Foreign currency translation adjustments

 

 

26.1

 

 

1.9

 

 

17.0

 

 

(9.3)

Comprehensive income

 

$

25.7

 

$

62.3

 

$

27.8

 

$

97.9

 

The accompanying notes are an integral part of these consolidated financial statements.

- 2 -

 


THOMPSON CREEK METALS COMPANY INC.

Consolidated Statements of Cash Flows

(US dollars in millions – Unaudited)

 

 

Three months ended

 

Six months ended

 

Note

June 30,

2009

 

June 30,

2008

 

 

June 30, 2009

 

 

June 30, 2008

Operating Activities

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(0.4)

 

$

60.4

 

$

10.8

 

$

107.2

Items not affecting cash:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

12.2

 

 

9.9

 

 

24.2

 

 

17.6

Accretion expense

 

 

0.4

 

 

0.4

 

 

0.7

 

 

1.1

Amortization of finance fees

 

 

 

 

4.8

 

 

 

 

5.4

Stock-based compensation

 

 

4.0

 

 

6.5

 

 

5.4

 

 

8.2

Future income taxes (recoverable)

 

 

(4.7)

 

 

1.8

 

 

(10.3)

 

 

(4.5)

Unrealized loss (gain) on derivative instruments

 

 

1.5

 

 

(2.4)

 

 

1.7

 

 

(1.4)

Change in non-cash working capital

18

 

0.4

 

 

(18.5)

 

 

25.5

 

 

(7.3)

Cash generated by operating activities

 

 

13.4

 

 

62.9

 

 

58.0

 

 

126.3

Investing Activities

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments

 

 

(81.5)

 

 

 

 

(181.9)

 

 

Property, plant and equipment

 

 

(13.7)

 

 

(20.5)

 

 

(41.3)

 

 

(28.6)

Deferred stripping costs

 

 

(7.1)

 

 

(10.1)

 

 

(14.4)

 

 

(12.9)

Restricted cash

 

 

(1.0)

 

 

(1.5)

 

 

(1.8)

 

 

(3.9)

Reclamation deposit

 

 

(0.2)

 

 

(0.3)

 

 

(2.5)

 

 

(0.5)

Acquisition cost

 

 

 

 

 

 

 

 

(100.0)

Cash used in investing activities

 

 

(103.5)

 

 

(32.4)

 

 

(241.9)

 

 

(145.9)

Financing Activities

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of common shares

 

 

3.7

 

 

223.4

 

 

3.7

 

 

223.8

Repayment of long-term debt

 

 

(1.4)

 

 

(220.0)

 

 

(2.7)

 

 

(237.4)

Cash generated (used) by financing activities

 

 

2.3

 

 

3.4

 

 

1.0

 

 

(13.6)

Effect of exchange rate changes on cash

 

 

5.0

 

 

(2.1)

 

 

2.4

 

 

(1.2)

Increase (decrease) in cash and cash equivalents

 

 

(82.8)

 

 

31.8

 

 

(180.5)

 

 

(34.4)

Cash and cash equivalents, beginning of period

 

 

160.3

 

 

47.5

 

 

258.0

 

 

113.7

Cash and cash equivalents, end of period

 

$

77.5

 

$

79.3

 

$

77.5

 

$

79.3

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplementary cash flow information

18

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these consolidated financial statements.

- 3 -

 


THOMPSON CREEK METALS COMPANY INC.

Consolidated Statements of Shareholders’ Equity

(US dollars in millions – Unaudited)

 

 

Three months ended

 

Six months ended

 

 

June 30,

2009

 

June 30,

2008

 

 

June 30, 2009

 

 

June 30, 2008

Common Shares

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

484.1

 

$

268.7

 

$

484.1

 

$

268.1

Proceeds from equity issue

 

 

 

 

230.3

 

 

 

 

230.3

Proceeds from exercise of stock options

 

 

3.7

 

 

5.3

 

 

3.7

 

 

5.7

Transferred from contributed surplus on exercise of options

 

 

1.7

 

 

2.5

 

 

1.7

 

 

2.7

Issue costs

 

 

 

 

(12.2)

 

 

 

 

(12.2)

Balance, end of period

 

$

489.5

 

$

494.6

 

$

489.5

 

$

494.6

Common Share Warrants

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning and end of period

 

$

35.0

 

$

35.0

 

$

35.0

 

$

35.0

Contributed Surplus

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

41.8

 

$

28.4

 

$

40.4

 

$

26.5

Amortization of fair value of employee stock options

 

 

4.0

 

 

7.1

 

 

5.4

 

 

9.1

Transferred to common shares on exercise of options

 

 

(1.7)

 

 

(2.5)

 

 

(1.7)

 

 

(2.7)

Stock-based compensation tax adjustment

 

 

 

 

0.8

 

 

 

 

0.9

Balance, end of period

 

$

44.1

 

$

33.8

 

$

44.1

 

$

33.8

Retained Earnings

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

315.5

 

$

176.6

 

$

304.3

 

$

129.8

Net income (loss)

 

 

(0.4)

 

 

60.4

 

 

10.8

 

 

107.2

Balance, end of period

 

$

315.1

 

$

237.0

 

$

315.1

 

$

237.0

Accumulated Other Comprehensive (Loss) Income

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

(55.4)

 

$

17.0

 

$

(46.3)

 

$

28.2

Foreign currency translation adjustments

 

 

26.1

 

 

1.9

 

 

17.0

 

 

(9.3)

Balance, end of period

 

$

(29.3)

 

$

18.9

 

$

(29.3)

 

$

18.9

Shareholders’ Equity, end of period

 

$

854.4

 

$

819.3

 

$

854.4

 

$

819.3

 

The accompanying notes are an integral part of these consolidated financial statements.

- 4 -

 


THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements

Three and Six Months Ended June 30, 2009

(US dollars in millions unless indicated otherwise - Unaudited)

 

1.

Description of Business

Thompson Creek Metals Company Inc. is a Canadian molybdenum mining corporation with vertically integrated mining, milling, processing and marketing operations in Canada and the United States (“US”). The US operations include the Thompson Creek Mine (mine and mill) in Idaho, the Langeloth Metallurgical Roasting Facility in Pennsylvania, as well as all roasting and sales of third party purchased material. The Canadian operations consist of a 75% joint venture interest in the Endako Molybdenum Mine Joint Venture (“Endako Mine”) (mine, mill and roaster) in British Columbia. In addition, the Corporation has two underground molybdenum development projects comprised of an option to acquire up to 75% of the Mount Emmons molybdenum property, located in Colorado, and the 100% owned Davidson molybdenum property (“Davidson Project”), located in British Columbia.

2.

Basis of Presentation and Measurement Uncertainty

Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”) for interim financial information and are expressed in US dollars unless otherwise stated. Accordingly, the interim consolidated financial statements of the Corporation do not include all information and note disclosures as required under Canadian GAAP for annual financial statements, and should be read in conjunction with the Corporation’s 2008 audited consolidated financial statements and the corresponding notes thereto.

The accompanying unaudited interim consolidated financial statements include all adjustments that are, in the opinion of management, necessary for a fair presentation.

The preparation of financial statements in conformity with Canadian GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities as of the date of the financial statements, and the reported amounts of revenues and expenditures during the reporting period.

The consolidated financial statements include the accounts of the Corporation and its subsidiaries. The principal subsidiaries of the Corporation are:

 

Thompson Creek Metals Company USA

 

Thompson Creek Mining Co.

 

Langeloth Metallurgical Company LLC

 

Cyprus Thompson Creek Mining Company

 

Thompson Creek Mining Ltd.

 

Blue Pearl Mining Inc.

 

Mt. Emmons Moly Company

The consolidated financial statements also include the Corporation’s pro rata share of its 75% joint venture interest in the Endako Mine.All intercompany accounts and transactions have been eliminated on consolidation.

Certain comparative figures for 2008 have been reclassified to conform to the 2009 financial statement presentation.

- 5 -

 


THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements

Three and Six Months Ended June 30, 2009

(US dollars in millions unless indicated otherwise - Unaudited)

 

Measurement Uncertainty

The Corporation’s financial statements are based on a number of significant estimates, including the fair value of goodwill, impairments of long-lived assets, the timing and costs associated with its asset retirement obligations, estimates of molybdenum mineral reserves used for depreciation, depletion and amortization, and the fair value of financial and derivative instruments. As the estimation process is inherently uncertain, actual future outcomes could differ from current estimates and assumptions, potentially having material effects on future financial statements.

3.

Accounting Changes and Accounting Policy Developments

Accounting Changes

Goodwill and Intangible Assets

Effective January 1, 2009 the Corporation adopted CICA Section 3064, “Goodwill and Intangible Assets”, replacing Section 3062, “Goodwill and Other Intangible Assets” and Section 3450, “Research and Development Costs.” Section 3064 establishes standards for the recognition, measurement, presentation and disclosure of goodwill subsequent to its initial recognition and of intangible assets by profit-oriented enterprises. Standards concerning goodwill are unchanged from the standards included in Section 3062. The adoption of Section 3064 did not have any impact on the Corporation’s consolidated financial statements.

 

Credit Risk and Fair Value of Financial Assets and Liabilities

 

In January 2009, the CICA issued Emerging Issues Committee (“EIC”) Abstract 173, “Credit Risk and the Fair Value of Financial Assets and Financial Liabilities.” The EIC provides guidance on evaluating credit risk of an entity and counterparty when determining the fair value of financial assets and financial liabilities, including derivative instruments. This standard is effective for the fiscal year beginning January 1, 2009. The adoption of EIC-173 did not have a significant impact on the Corporation’s consolidated financial statements.

 

Mining Exploration Costs

 

In March 2009, the CICA issued EIC-174, “Mining Exploration Costs.” The EIC provides guidance on the accounting and the impairment review of exploration costs. This standard is effective for the fiscal year beginning January 1, 2009. The adoption of this EIC did not have any impact on the Corporation’s consolidated financial statements.

Accounting Policy Developments

Convergence with International Financial Reporting Standards (“IFRS”)

In February 2008, the Canadian Accounting Standards Board confirmed that publicly accountable enterprises will be required to adopt International Financial Reporting Standards (“IFRS”) for fiscal years beginning on or after January 1, 2011, with earlier adoption permitted. The conversion to IFRS will impact the Corporation’s accounting policies, information technology and data systems, internal control over financial reporting, and disclosure controls and procedures. The transition may also impact business activities, such as foreign currency, certain contractual arrangements, debt covenants and compensation arrangements. Accordingly, the Corporation has undertaken an in-depth review of companywide accounting policies and procedures, comparing current financial reporting with IFRS.

 

 

- 6 -

 


THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements

Three and Six Months Ended June 30, 2009

(US dollars in millions unless indicated otherwise - Unaudited)

 

 

4.

Short-term Investments

As of June 30, 2009, the Corporation had $184.5 million of short-term investments ($nil as of December 31, 2008).  These investments consist of US and Canadian government treasury securities and US government-backed commercial paper with original maturities greater than 90 days and less than 180 days.  These short-term investments are categorized as held-to-maturity financial instruments and are recorded at amortized cost.  When there is objective evidence that held-to-maturity financial assets are impaired and there is a decline in the fair value below amortized cost that is considered other than temporary, an impairment loss is recorded for the excess of amortized cost over fair value. To date, no impairment losses have been recorded on these short-term investments.

5.

Inventory

 

 

June 30,

2009

 

December 31,

2008

Finished product

 

$

32.0

 

$

42.9

Work-in-process

 

 

7.7

 

 

10.5

Stockpiled ore

 

 

3.1

 

 

3.7

 

 

$

42.8

 

$

57.1

 

 

As of June 30, 2009, of the $32.0 million classified as finished product, $nil was valued at net realizable value. At December 31, 2008, of the $42.9 million classified as finished product, $19.4 million was valued at net realizable value.

 

 

- 7 -

 


THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements

Three and Six Months Ended June 30, 2009

(US dollars in millions unless indicated otherwise - Unaudited)

 

 

6.

Property, Plant and Equipment

 

 

June 30,

2009

 

December 31,

2008

Mining properties

 

$

296.6

 

$

274.0

Mining equipment

 

 

180.8

 

 

163.9

Processing facilities

 

 

111.0

 

 

110.2

Deferred stripping costs

 

 

77.2

 

 

62.8

Endako mill expansion

 

 

52.9

 

 

43.4

Construction in progress

 

 

27.2

 

 

30.8

Other

 

 

2.3

 

 

1.1

 

 

 

748.0

 

 

686.2

Less: Accumulated depreciation, depletion and amortization

 

(113.3)

 

 

(92.1)

 

 

$

634.7

 

$

594.1

The following table summarizes activity related to stripping costs that have been deferred:

 

 

 

Deferred

costs

 

Accumulated

amortization

 

Net deferred

Costs

As of December 31, 2008

 

 

$

62.8

 

$

(7.2)

 

$

55.6

Costs deferred in period

 

 

 

14.4

 

 

 

 

14.4

Amortization of previously deferred costs

 

 

 

(3.8)

 

 

(3.8)

As of June 30, 2009

 

 

$

77.2

 

$

(11.0)

 

$

66.2

 

- 8 -

 


THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements

Three and Six Months Ended June 30, 2009

(US dollars in millions unless indicated otherwise - Unaudited)

 

 

7.

Long-term Debt

Long-term debt consists of:

 

 

June 30,

2009

 

December 31,

2008

Promissory note

 

$

1.0

 

$

Equipment loan – fixed rate

 

 

12.4

 

 

13.6

Equipment loans – variable rate

 

 

2.2

 

 

3.7

 

 

 

15.6

 

 

17.3

Less: Current portion

 

 

(5.0)

 

 

(5.6)

 

 

$

10.6

 

$

11.7

 

The Corporation has a $35 million first lien revolving collateralized line of credit secured by a significant amount of the Corporation’s US based assets. This credit facility, which has a final maturity date of October 26, 2011, bears interest at LIBOR plus 2.5% and includes both standard financial and non-financial covenants, including ratio tests for leverage, interest coverage and working capital. The Corporation was in compliance with these covenants as of June 30, 2009. As of June 30, 2009, drawings on this facility were $nil (December 31, 2008 – $nil).

As of June 30, 2009, the Corporation also held equipment loans with each loan secured by the underlying assets. The variable rate loans bear interest at LIBOR plus 2% with the fixed rate loan bearing interest at 5.9%. These loans are scheduled to mature no later than October 31, 2013.

In January 2009, the Corporation purchased a property interest in Colorado ($2.0 million), of which $1.0 million was paid in cash, and the remaining $1.0 million was paid with a promissory note. The promissory note bears interest at a fixed rate of 6%, and is due in equal payments over a five year period, with the first payment due in January 2010.

The following table summarizes activity related to interest and finance fees:

 

 

Three months ended

 

Six months ended

 

 

June 30,

2009

 

June 30,

2008

 

 

June 30, 2009

 

 

June 30, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

$

0.3

 

$

3.3

 

$

0.5

 

$

9.4

Finance fees

 

 

 

 

4.8

 

 

 

 

5.4

 

$

0.3

 

$

8.1

 

$

0.5

 

$

14.8

 

- 9 -

 


THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements

Three and Six Months Ended June 30, 2009

(US dollars in millions unless indicated otherwise - Unaudited)

 

 

8.

Derivative Financial Instruments

 

a)

Forward Currency Contracts

The Corporation uses foreign currency forward contracts to fix the rate of exchange of US dollars for Canadian dollars (CAD) at future dates in order to reduce the Corporation’s exposure to foreign currency fluctuations on cash flows related to its share of the Endako Mine’s operations. The terms of these contracts are less than one year. At June 30, 2009, the Corporation had open forward currency contracts with a total commitment to purchase CAD$7.8 million at an average US dollar to Canadian dollar exchange rate of 1.21 (December 31, 2008 – CAD$6.0 million at an average rate of 1.23).

The Corporation does not consider these contracts to be hedges for accounting purposes and has determined these contracts to be derivative instruments, the fair value of which was an asset of $0.3 million at June 30, 2009 (December 31, 2008 –$0.1 million). The asset has been included in other assets on the Corporation’s consolidated balance sheets.

 

b)

Provisionally-priced contracts

The Corporation enters into agreements to sell and purchase molybdenum at prices to be determined in the future. The future pricing mechanism of these agreements constitutes an embedded derivative which must be bifurcated and separately recorded.

Changes to the fair value of embedded derivatives related to molybdenum sales agreements are included in molybdenum sales revenue in the determination of net income. As of June 30, 2009, the fair value of these embedded derivatives was an asset of $0.4 million (December 31, 2008 – asset of $0.1 million) and has been included in accounts receivable on the Corporation’s balance sheet. For the three and six months ended June 30, 2009, the Corporation recorded an unrealized gain on these embedded derivatives of $1.4 million and $0.3 million, respectively, which has been included in molybdenum sales on the consolidated statements of operations (three and six months ended June 30, 2008 - no sales agreements in prior year).

Changes to the fair value of embedded derivatives related to molybdenum purchases are included in operating expenses in the determination of net income. As of June 30, 2009, the fair value of these embedded derivatives was a liability of $0.6 million (December 31, 2008 – liability of $0.7 million). For the three and six months ended June 30, 2009, an unrealized loss of $0.7 million and $1.4 million, respectively, has been included in operating expenses on the Corporation’s consolidated statements of operations (three and six months ended June 30, 2008 - $0.7 million and $0.2 million gain, respectively).

 

c)

Fixed Price Contracts

The Corporation has forward sales contracts with fixed-price agreements under which it is required to sell certain future molybdenum production at prices that may be different than the prevailing market price. Forward sales contracts in place at June 30, 2009 cover the period 2009 to 2011. As of June 30, 2009, the Corporation had committed to sell approximately 3.3 million pounds at an average market price of approximately $13.23 per pound. These contracts had a mark-to-market value totaling $3.6 million (as of December 31, 2008 - $4.5 million). The current portion of $1.5 million has been included in other assets on the Corporation’s consolidated balance sheet. An unrealized loss of $1.6 million and $1.1 million related to these forward sales contracts has been included in molybdenum sales on the Corporation’s consolidated statements of operations for the three and six months ended June 30, 2009, respectively (three and six months ended June 30, 2008 - $1.5 million and $1.3 million gain, respectively).

 

- 10 -

 


THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements

Three and Six Months Ended June 30, 2009

(US dollars in millions unless indicated otherwise - Unaudited)

 

 

9.

Other Liabilities

Other liabilities consist of:

 

 

June 30,

2009

 

December 31,

2008

Severance and retention liability

 

$

15.4

 

$

14.5

Contractual sales obligations

 

 

5.9

 

 

7.3

 

 

$

21.3

 

$

21.8

 

The Corporation maintains an employee severance and retention program for certain individuals employed by Thompson Creek Metals Company USA. As of June 30, 2009, the Corporation had recorded a total liability related to the severance and retention program of $16.2 million, of which $0.8 million was included in current liabilities (December 31, 2008 – $14.5 million and $nil classified in current liabilities). The Corporation has set aside funding for this liability by making periodic contributions to a trust fund based upon program participants’ salaries. The trust fund assets totaled $16.0 million at June 30, 2009 (December 31, 2008 – $14.2 million) and have been presented as restricted cash, a long-term asset, on the Corporation’s consolidated balance sheets. The Corporation recognized an expense of $1.0 million and $1.8 million for the three and six months ended June 30, 2009, respectively (three and six months ended June 30, 2008 - $1.1 million and $2.7 million, respectively) for the retention and severance program.

On acquisition of Thompson Creek USA, the Corporation acquired a contractual agreement to sell 10% of certain production at the Thompson Creek Mine at an amount that was less than the prevailing market price at the date of the acquisition. Deliveries under this contract commenced in 2007 and, based on the current mine plan, will continue through 2011. As of June 30, 2009, the Corporation has a liability of $5.9 million related to future deliveries under this agreement (December 31, 2008 – $7.3 million). As this contractual agreement is satisfied by delivery of product, the liability is being drawn down with a corresponding adjustment to molybdenum sales in the determination of net income. For the three and six months ended June 30, 2009, $0.8 million and $1.4 million, respectively, related to this obligation has been realized and included in molybdenum sales (three and six months ended June 30, 2008 – $0.6 million and $1.1 million, respectively).

 

- 11 -

 


THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements

Three and Six Months Ended June 30, 2009

(US dollars in millions unless indicated otherwise - Unaudited)

 

 

10.

Asset Retirement Obligations

 

The following table details items affecting asset retirement obligations for future mine closure and reclamation costs in connection with the Corporation’s Thompson Creek Mine, Endako Mine and Davidson Project:

 

 

Thompson

Creek Mine

 

Endako

Mine

 

Davidson

Project

 

Total

As of December 31, 2008

$

18.7

 

$

4.4

 

$

0.2

 

$

23.3

Accretion

 

0.6

 

 

0.1

 

 

 

 

0.7

Foreign exchange

 

 

 

0.2

 

 

 

 

0.2

As of June 30, 2009

$

19.3

 

$

4.7

 

$

0.2

 

$

24.2

 

 

 

 

 

- 12 -

 


THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements

Three and Six Months Ended June 30, 2009

(US dollars in millions unless indicated otherwise - Unaudited)

 

 

11.

Common Share Capital and Common Share Warrants



 

a)

Common Shares

The following table summarizes common share transactions:

(US$ in millions except share amounts)

 

Number of Shares

(000’s)

 

Amount

Balance, December 31, 2008

 

 

122,253

 

$

484.1

Options exercised

 

 

639

 

 

5.4

Warrants exercised

 

 

1

 

 

Balance, June 30, 2009

 

 

122,893

 

$

489.5

 

b)

Common Share Warrants

 

The following table summarizes common share warrant transactions:

 

(US$ in millions except share amounts)

 

Number of Shares

(000’s)

 

Amount

Balance, December 31, 2008

 

 

24,505

 

$

35.0

Warrants exercised

 

 

(1)

 

 

Balance, June 30, 2009

 

 

24,504

 

$

35.0

 

 

 

 

- 13 -

 


THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements

Three and Six Months Ended June 30, 2009

(US dollars in millions unless indicated otherwise - Unaudited)

 

 

12.

Stock-based Compensation

 

The Corporation uses the fair value method of accounting for stock-based compensation and recognized a stock-based compensation expense of $4.0 million and $5.4 million for the three and six months ended June 30, 2009, respectively (three and six months ended June 30, 2008 – $6.5 million and $8.2 million, respectively). The stock-based compensation expense recorded in each period includes costs related to option awards made during the period, as applicable, as well as the amortization of costs of prior period awards that did not vest at the grant date.

In June 2009 the Corporation completed a voluntary stock option surrender program offered to all holders of stock options with an exercise price of CAD$16.19 per share and above. Under the terms of the surrender program, options to acquire an aggregate of 2,414,500 common shares were voluntarily surrendered by 55 holders, effective June 22, 2009. A non-cash compensation charge of approximately $2.8 million was recorded in the quarter ending June 30, 2009, representing the remaining unamortized, stock-based compensation cost for the surrendered options.

The following table summarizes the status and changes of the stock-option plan:

 

 

Options Outstanding (000’s)

 

Weighted-

average

Exercise

Price per

Option

(CAD$)

Balance, December 31, 2008

 

 

8,788

 

$

12.51

Options granted

 

 

 

 

Options exercised

 

 

(639)

 

 

6.71

Options expired

 

 

(39)

 

 

20.43

Options surrendered

 

 

(2,415)

 

 

20.72

Balance, June 30, 2009

 

 

5,695

 

$

9.69

 

 

13.

Commitments and Contingencies

 

The Corporation has entered into commitments to buy Canadian dollars at future dates at established exchange rates (see Note 8(a)).

The Corporation has committed to sell a certain amount of production at a defined price that may be greater or less than market (see Note 8(c) and Note 9).

In the normal course of operations, the Corporation enters into agreements for the purchase of molybdenum. As of June 30, 2009, the Corporation had commitments to purchase approximately 2.0 million pounds of molybdenum sulfide concentrates for the remainder of 2009 to be priced at a discount to the market price for molybdenum oxide at the time of purchase.

As of June 30, 2009, the Corporation had commitments related to the purchase of major mill equipment for its share of the Endako mill expansion of approximately $11.8 million in 2009 and approximately $21.3 million in 2010. In January 2008, a payment of $100.0 million was made to the former shareholders of Thompson Creek Metals Company USA to settle an acquisition price adjustment recorded in 2007 related to the market price of molybdenum in 2007. The Corporation may be responsible for a further contingent payment in early 2010 of $25.0 million if the average price of molybdenum exceeds $15.00 per pound in 2009.

 

 

- 14 -

 


THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements

Three and Six Months Ended June 30, 2009

(US dollars in millions unless indicated otherwise - Unaudited)

 

14.

Exploration and Development

 

 

 

Three months ended

 

Six months ended

 

 

June 30,

2009

 

June 30, 2008

 

 

June 30, 2009

 

 

June 30, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

Davidson project

 

$

0.7

 

$

0.3

 

$

0.9

 

$

1.3

Mt. Emmons project

 

 

1.2

 

 

 

 

2.8

 

 

 

$

1.9

 

$

0.3

 

$

3.7

 

$

1.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- 15 -

 


THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements

Three and Six Months Ended June 30, 2009

(US dollars in millions unless indicated otherwise - Unaudited)

 

15.

Income and Mining Taxes

 

 

 

Three months ended

 

Six months ended

 

 

June 30,

2009

 

June 30, 2008

 

 

June 30, 2009

 

 

June 30, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

Current income and mining taxes

 

$

3.6

 

$

25.5

 

$

6.9

 

$

51.0

Future income and mining taxes (recoverable)

 

 

(4.7)

 

 

1.8

 

 

(10.3)

 

 

(4.5)

 

$

(1.1)

 

$

27.3

 

$

(3.4)

 

$

46.5

Income and mining taxes differ from the amount that would result from applying the Canadian federal and provincial income tax rates to earnings before income taxes. The differences result from the following items:

 

 

Three months ended

 

Six months ended

 

 

June 30,

2009

 

June 30, 2008

 

 

June 30, 2009

 

 

June 30, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income and mining taxes

 

$

(1.5)

 

$

87.7

 

$

7.4

 

$

153.7

 

 

 

 

 

 

 

 

 

 

 

 

 

Combined Canadian federal and provincial

 

 

 

 

 

 

 

 

 

 

 

 

income tax rates

 

 

30%

 

 

31%

 

 

30%

 

 

31%

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes (recoverable) based on above rates

 

 

(0.4)

 

 

27.2

 

 

2.2

 

 

47.6

Increase (decrease) to income taxes due to:

 

 

 

 

 

 

 

 

 

 

 

 

Difference in foreign statutory tax rates

 

 

1.0

 

 

3.6

 

 

1.5

 

 

6.1

Provincial and state mining taxes

 

 

(0.2)

 

 

4.2

 

 

 

 

7.8

Withholding taxes

 

 

0.3

 

 

0.2

 

 

0.6

 

 

0.3

Non-deductible expenses

 

 

1.6

 

 

1.7

 

 

2.1

 

 

3.4

Non-taxable income

 

 

0.5

 

 

(0.6)

 

 

(0.1)

 

 

(1.0)

Foreign tax differences

 

 

(2.8)

 

 

 

 

(5.6)

 

 

Depletion allowance

 

 

(2.4)

 

 

(8.3)

 

 

(4.5)

 

 

(15.2)

Change in valuation allowance

 

 

3.8

 

 

0.6

 

 

3.1

 

 

0.6

Unrealized foreign exchange gain on translation of investments, fully valued

 

 

(2.9)

 

 

 

 

(2.0)

 

 

Impact of reduction in tax rates on future

 

 

 

 

 

 

 

 

 

 

 

 

income and mining taxes

 

 

(0.1)

 

 

 

 

(1.5)

 

 

(2.6)

Other

 

 

0.5

 

 

(1.3)

 

 

0.8

 

 

(0.5)

Income and mining taxes (recoverable)

 

$

(1.1)

 

$

27.3

 

$

(3.4)

 

$

46.5

 

 

 

 

 

 

- 16 -

 


THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements

Three and Six Months Ended June 30, 2009

(US dollars in millions unless indicated otherwise - Unaudited)

 

16.

Net Income (Loss) per Share

 

 

(US$ in millions except share and per share amounts)

 

Three months ended

 

Six months ended

 

 

June 30,

2009

 

June 30,

2008

 

 

June 30, 2009

 

 

June 30, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(0.4)

 

$

60.4

 

$

10.8

 

$

107.2

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted-average number of shares outstanding (000’s)

 

 

122,451

 

 

116,902

 

 

122,353

 

 

115,180

Effect of dilutive securities

Common share warrants

 

 

 

 

14,214

 

 

 

 

13,119

Stock options

 

 

 

 

2,751

 

 

518

 

 

2,780

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted-average number of shares outstanding (000’s)

 

 

122,451

 

 

133,867

 

 

122,872

 

 

131,079

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.00)

 

$

0.52

 

$

0.09

 

$

0.93

Diluted

 

$

(0.00)

 

$

0.45

 

$

0.09

 

$

0.82

 

 

For the three months ended June 30, 2009, approximately 5,734,000 stock options and 24,504,000 warrants (2008 – 1,265,000 stock options and nil warrants) have been excluded from the computation of diluted securities as these would be considered to be anti-dilutive. Of the stock options and warrants excluded from the computation of diluted securities for the three months ended June 30, 2009, approximately 1,300,000 shares (924,000 stock options and 376,000 warrants) had exercise prices that were lower than the average market price for the quarter; however, were excluded from the computation of diluted securities as a result of the Corporation having a loss in the current quarter.

For the six months ended June 30, 2009, approximately 5,755,000 stock options and 24,505,000 warrants (2008 – 2,172,000 stock options and nil warrants) have been excluded from the computation of diluted securities as these would be considered to be anti-dilutive.

 

 

 

 

- 17 -

 


THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements

Three and Six Months Ended June 30, 2009

(US dollars in millions unless indicated otherwise - Unaudited)

 

17.

Related Party Transactions

Consolidated sales to members of a group of companies affiliated with the other participant in the Endako Mine joint venture were $12.1 million and $24.2 million for the three and six month periods ended June 30, 2009, respectively. These sales represent 16.4% and 15.9% of the Corporation’s total revenues for the respective three and six months periods (2008 – $65.9 million and $120.1 million, and 27.0 % and 24.1%, respectively).

For the three and six months ended June 30, 2009, the Corporation recorded management fee income of $0.1 million and $0.2 million, respectively (2008 – $0.2 million and $0.4 million) and selling and marketing costs of $0.1 million and $0.2 million, respectively (2008 – $0.4 million and $0.8 million) from this group of companies. At June 30, 2009, the Corporation’s accounts receivable included $4.9 million owing from this group of companies (December 31, 2008 – $8.9 million).

 

18.

Supplementary Cash Flow Information

 

 

 

Three months ended

 

Six months ended

 

 

June 30,

2009

 

June 30, 2008

 

 

June 30, 2009

 

 

June 30, 2008

Change in non-cash working capital:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts Receivable

 

$

(5.7)

 

$

13.7

 

$

17.8

 

$

(26.1)

Product inventory

 

 

3.0

 

 

0.8

 

 

13.7

 

 

21.8

Material and supplies inventory

 

 

0.4

 

 

(1.0)

 

 

1.3

 

 

(5.9)

Prepaid expense and other current assets

 

 

1.7

 

 

0.6

 

 

1.7

 

 

0.7

Income and mining taxes recoverable

 

 

(0.8)

 

 

 

 

(0.8)

 

 

13.4

Accounts payable and accrued liabilities

 

 

(0.2)

 

 

(33.7)

 

 

(2.7)

 

 

(14.0)

Income and mining taxes payable

 

 

2.0

 

 

1.1

 

 

(5.5)

 

 

2.8

 

 

$

0.4

 

$

(18.5)

 

$

25.5

 

$

(7.3)

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash interest paid

 

$

0.2

 

$

8.1

 

$

0.4

 

$

13.1

Cash income taxes paid

 

$

3.1

 

$

23.5

 

$

13.9

 

$

33.7

 

 

 

June 30,

2009

 

December 31

2008

Cash and cash equivalents is comprised of:

 

 

 

 

 

 

Cash

 

$

48.6

 

$

51.7

Cash equivalents

 

 

28.9

 

 

206.3

 

 

$

77.5

 

$

258.0

 

Cash equivalents consist of treasury securities and money market instruments issued or guaranteed by US and Canadian financial institutions and the US and Canadian governments that have an original maturity date of less than 90 days.

 

 

- 18 -

 


THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements

Three and Six Months Ended June 30, 2009

(US dollars in millions unless indicated otherwise - Unaudited)

 

19.

Financial Risk Management

 

The Corporation’s activities expose it to a variety of financial risks which include foreign exchange risk, interest rate risk, commodity price risk, counterparty and credit risk, and liquidity risk. Below is further discussion of these risks and the Corporation’s activities to manage these exposures.

 

Foreign Exchange Risk

The US dollar is the measurement currency of the majority of the Corporation’s activities. However, the Canadian dollar is the measurement (functional) currency of the Corporation’s self-sustaining Canadian operations. The Corporation has potential currency exposures related to items denominated in currencies other than the operations’ measurement currency. The Corporation’s foreign exchange exposures include:

 

Transactional exposure in its Canadian dollar self-sustaining operation as molybdenum sales are denominated in US dollars and the majority of operating expenses, and a portion of capital expenditures, are in Canadian dollars;

 

Transactional exposure to its self-sustaining Canadian operations; whereby, those operations hold financial instruments (which includes cash and cash equivalents, short-term investments, and accounts receivable) in a currency other than the Canadian dollar.

 

Transactional exposure to Canadian dollar transactions and balances in US dollar functional currency operations.

 

The Corporation enters into foreign exchange forward contracts to manage these exposures. As of June 30, 2009, the Corporation had open forward exchange contracts for CAD$7.8 million to sell US dollars and buy Canadian dollars at a weighted average US dollar to Canadian dollar exchange rate of 1.21. All foreign exchange forward contracts are due within the year. As of June 30, 2009, the fair value of these contracts was an asset of $0.3 million.

With other variables unchanged, each $0.10 strengthening (weakening) of the US dollar against the Canadian dollar would result in an increase (decrease) of approximately $7 million in net income (loss) for the three and six month periods ended June 30, 2009.

Interest Rate Risk

The Corporation has invested and borrowed at variable rates. Cash and cash equivalents receive interest based on market interest rates. Some of the Corporation’s debt facilities are variable rate facilities based on LIBOR and prime rates.

Commodity Price Risk

The Corporation’s results of operations and operating cash flows are affected by changes in market prices for molybdenum. To mitigate a portion of this risk, the Corporation enters into certain molybdenum sales contracts where it sells future molybdenum production at fixed prices. These fixed prices may be different than the quoted market prices at the date of sale. The Corporation physically delivers molybdenum under these contracts; however, has chosen not to use the normal usage exemption and therefore treats these contracts as non-financial derivatives. The fair value is recorded on the balance sheet with changes in fair value recorded in revenue. The fair value is calculated using a discounted cash flow based on estimated forward prices. To estimate forward prices the Corporation uses the monthly Platts Metals Week published average price and an average of long-term prices as forecast by independent analysts.

 

- 19 -

 


THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements

Three and Six Months Ended June 30, 2009

(US dollars in millions unless indicated otherwise - Unaudited)

 

 

As of June 30, 2009, the fair value of the Corporation’s fixed forward sales contracts is as follows:

 

(US$ in millions except per pound amounts)

 

2009

 

2010

 

2011

Molybdenum committed (000’s lb)

 

 

2,238

 

 

628

 

 

417

Fair value – asset

 

$

0.5

 

$

1.5

 

$

1.6

Average price ($/lb)

 

$

11.06

 

$

15.83

 

$

21.00

 

The Corporation also enters into molybdenum sale and purchase agreements with provisional pricing mechanisms where the final prices are determined by quoted market prices subsequent to the date of the sale or purchase. As a result, the value of the respective trade receivable and trade payable changes as the underlying market price changes. This component of these contracts is an embedded derivative, which is initially recorded at fair value with subsequent changes in fair value recorded in revenue and operating expenses, respectively. The Corporation uses the latest Platts Metals Week published average molybdenum oxide price as the estimated forward price.

As of June 30, 2009, the fair value of embedded derivatives in the provisionally priced sale and purchase agreements is as follows:

(US$ in millions except per pound amounts)

Pounds Sold/Purchased

(000’s lb)

 

Fair Value

Asset (Liability)

Provisionally priced sales

324

 

$

0.4

Provisionally priced purchases

555

 

$

(0.6)

These agreements will mature within the year.

Counterparty and Credit Risk

The Corporation is exposed to counterparty risk from its cash and cash equivalent balances, its short-term cash investments, and its insurance policy to provide financial assurance of future mine reclamation costs at its mines. The Corporation monitors its positions with, and the credit quality of, the financial institutions in which it invests its cash, cash equivalents and short-term investments, and that hold its insurance policy. Counterparties to cash balances, money market instruments, government treasury securities and its insurance policy are US and Canadian institutions and the US and Canadian governments. The Corporation’s investment policy limits investments to government-backed financial instruments, other than balances maintained in various bank operating accounts.

The Corporation manages its credit risk from its accounts receivable through established credit monitoring activities. As of June 30, 2009 the Corporation had one customer which owed the Corporation more than $3.5 million and accounted for approximately 10.3 % of all receivables outstanding. There were another ten customers having balances greater than $1.0 million but less than $3.5 million that accounted for 47.0% of total receivables. All of these balances were compliant with credit terms and scheduled payment dates. The Corporation’s maximum credit risk exposure is the carrying value of its accounts receivable.

 

The carrying amounts of accounts receivable, accounts payable and accrued liabilities and fixed and variable rate debt approximate fair value as of June 30, 2009 and December 31, 2008.

 

 

- 20 -

 


THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements

Three and Six Months Ended June 30, 2009

(US dollars in millions unless indicated otherwise - Unaudited)

 

 

Liquidity Risk

 

The Corporation manages its liquidity risk by maintaining cash and cash equivalent balances and by utilizing its line of credit, if necessary. Surplus cash is invested in a range of 30 to 180-day US and Canadian government-backed financial instruments under the Corporation’s investment policy. As of June 30, 2009, the Corporation had an unutilized line of credit of $35.0 million.

As of June 30, 2009, contractual undiscounted cash flow requirements for financial assets and liabilities, including interest payments are as follows:

 

 

2009 to 2011

 

2012 Onward

 

Total

Accounts payable

 

$

28.1

 

$

 

$

28.1

Long-term debt

 

$

9.8

 

$

5.8

 

$

15.6

Capital commitments

 

$

33.1

 

$

 

$

33.1

 

 

Pledged Financial Assets

 

The Corporation has financial assets that are pledged for employee compensation and reclamation obligations. The Corporation maintains a separate trust fund to satisfy its obligation to employees under a severance and retention compensation arrangement. Reclamation deposits are maintained to satisfy the Corporation’s obligation for future reclamation expenditures at its mine sites.

 

 

 

 

 

 

 

 

 

- 21 -

 


THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements

Three and Six Months Ended June 30, 2009

(US dollars in millions unless indicated otherwise - Unaudited)

 

20.

Capital Risk Management

 

The Corporation defines its capital as follows:

 

Shareholders’ equity;

 

Long-term debt; and

 

Short-term debt.

Capital as defined above as of June 30, 2009 and December 31, 2008 are as follows:

 

 

 

June 30,

2009

 

December 31,

2008

Shareholders’ equity

 

$

854.4

 

$

817.5

Debt

 

 

15.6

 

 

17.3

 

 

$

870.0

 

$

834.8

 

The Corporation’s objectives with regard to its capital are:

 

Maintain adequate working capital to operate its business;

 

Comply with financial covenants on the line of credit;

 

Utilize equipment financings to supplement working capital needs; and

 

Other investment opportunities

 

The Corporation’s capital structure is managed and adjusted as necessary by monitoring economic conditions, debt and equity markets, and changes to the Corporation’s operating plans. Covenants relating to existing debt are monitored regularly to ensure compliance. Outstanding debt is evaluated to determine if it contains the most favorable terms available to the Corporation or if the Corporation should reduce the amount outstanding from cash available or pursue new equity issuances.

 

- 22 -

 


THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements

Three and Six Months Ended June 30, 2009

(US dollars in millions unless indicated otherwise - Unaudited)

 

 

21.

Segment Information

The Corporation has two reportable segments: US Operations and Canadian Operations. The US Operations segment includes all mining, milling, roasting and sale of molybdenum products from the Thompson Creek Mine and the Langeloth Metallurgical Facility, as well as all roasting and sales of third party purchased material. The Canadian Operations segment includes all mining, milling, roasting and sale of molybdenum products from the 75% owned Endako Mine. The Corporation evaluates segment performance based on income from mining and processing. The Corporation attributes other income and expenses to the reporting segments if the income or expense is directly related to segment operations, as described above. The Corporation does not allocate corporate expenditures such as general and administrative, exploration and development, and interest income and expense items. The Corporation does not report income and mining taxes by reporting segment as the Corporation’s tax attributes are determined by legal entity.

Segment information for the three and six month periods ended and as of June 30, 2009 and 2008 is as follows:

 

 

 

 

 

 

- 23 -

 


THOMPSON CREEK METALS COMPANY INC.

Notes to the Consolidated Financial Statements

Three and Six Months Ended June 30, 2009

(US dollars in millions unless indicated otherwise - Unaudited)

 

Three Months Ended June 30, 2009

 

 

 

 

US

Operations

Canadian

Operations

Inter-segment sales

Total

Revenues

 

 

 

 

 

 

 

 

Molybdenum sales

$

56.3

$

14.9

$

$

71.2

Tolling and calcining

 

2.6

 

 

 

2.6

 

 

58.9

 

14.9

 

 

73.8

Cost of sales

 

 

 

 

 

 

 

 

Operating expenses

 

36.6

 

8.1

 

 

44.7

Selling and marketing

 

0.9

 

0.3

 

 

1.2

Depreciation, depletion and amortization

 

8.9

 

3.3

 

 

12.2

Accretion

 

0.3

 

0.1

 

 

0.4

 

 

46.7