NYSE: TC
TSX: TCM
TSX-V:TRX.WT
DENVER, Dec.
15, 2011 /CNW/ - Thompson Creek Metals Company Inc.
("Company" or "Thompson Creek"), a growing, diversified, North American
mining company, today announced that effective December 14, 2011, it
has entered into an Amended and Restated Purchase and Sale Agreement
with Royal Gold, Inc.
("Royal Gold") to sell an additional 15% of the
payable gold from Thompson Creeks Mt.
Milligan copper-gold project to
Royal Gold in exchange for a total of $270 million, $112 million of
which will be paid shortly after signing. Thompson Creek intends to
use the proceeds from the Amended and Restated Agreement to finance a
portion of the construction of the Mt.
Milligan project and related
costs.
"We are very pleased with Royal Golds increased investment and
continued support in the advancement of our Mt.
Milligan project," said
Kevin Loughrey, Chairman and Chief Executive Officer of Thompson
Creek. "We believe that Royal Golds participation in Mt.
Milligan is
an endorsement of the quality of the project that will transform our
Company into a diversified, base metals producer beginning late 2013
and significantly strengthen our Companys financial performance,"
added Mr.
Loughrey.
The Amended and Restated Agreement amended and restated the Purchase and
Sale Agreement by and among the Company, Royal Gold, and their
respective subsidiaries dated as of October 20, 2010 (the "Original
Agreement").
Under the Original Agreement, Thompson Creek agreed to
sell 25% of the payable ounces of gold produced from the Mt.
Milligan
project to Royal Gold in exchange for a total of $311.5 million, $226.5
million of which was paid at closing.
The remaining $85 million was
required to be paid over the construction period of the Mt.
Milligan
project.
The cash purchase price for the payable gold under the
Original Agreement was the lesser of $400 or the prevailing market
price for each payable ounce of gold until 550,000 payable ounces have
been delivered to Royal Gold and the lesser of $450 or the prevailing
market price for each additional payable ounce thereafter.
Under the Amended and Restated Agreement, Royal Gold increased its
aggregate investment (including amounts previously funded under the
Original Agreement and commitments for future funding) from $311.5
million to $581.5 million, and agreed to purchase a total of 40% of the
payable ounces of gold produced from the Mt.
Milligan project at a cash
purchase price equal to the lesser of $435, with no inflation
adjustment, or the prevailing market price for each payable ounce of
gold (regardless of the number of payable ounces delivered to Royal
Gold).
Three business days following the execution of the Amended and Restated
Agreement, Royal Gold will make a cash payment of $112 million to
Thompson Creek.
Following this payment, and taking into account
payments totaling $252.6 million made by Royal Gold under the Original
Agreement, Royal Gold will make future scheduled payments to Thompson
Creek in the aggregate amount of $216.9 million, which will be paid on
a quarterly basis commencing on March 1, 2012 at the rate of $45
million per quarter in calendar year 2012 (representing an aggregate of
$180 million in calendar year 2012) and $12 million per quarter in the
first two quarters of calendar year 2013, and $12.9 million in the
third quarter of calendar year 2013 (representing an aggregate of $36.9
million in calendar year 2013).
Concurrently with the closing of the transaction with Royal Gold, the participating banks in the Companys revolving credit facility entered into a third amendment to the Companys revolving credit agreement whereby the banks consented to the Royal Gold transaction, and agreed to modify certain financial covenants and measurements included in the credit agreement.
About Mt.
Milligan Copper-Gold Project
Mt.
Milligan is a copper-gold project located approximately 90 miles
northwest of Prince George in central British Columbia, Canada.
Thompson Creek is in the process of constructing the mine, which is
expected to be in production in the fourth quarter of 2013. The Mt.
Milligan project is based on a conventional truck-shovel open pit mine
and 60,000 tonnes per day copper flotation concentrator. Average
annual production over the current 22-year mine life is expected to be
approximately 81 million pounds of copper and 194,000 ounces of gold.
Production in years one through six is expected to be higher with
approximately 89 million pounds of copper and 262,000 ounces of gold.
The current capital expenditure estimate to construct and develop the
Mt.
Milligan mine is C$1.265 billion. Since inception of the project
through September 30, 2011, approximately C$383.1 million has been
spent and an additional C$336.3 million has been committed as open
purchase orders, contracts, and capital purchase commitments.
About Thompson Creek Metals Company Inc.
Thompson Creek Metals Company Inc.
is a growing, diversified North
American mining company. The Company produces molybdenum at its
100%-owned Thompson Creek Mine in Idaho and Langeloth Metallurgical
Facility in Pennsylvania and its 75%-owned Endako Mine in northern
British Columbia. The Company is also in the process of constructing
the Mt.
Milligan copper-gold mine in central British Columbia, which is
expected to commence production in 2013. The Companys development
projects include the Berg copper-molybdenum-silver property and the
Davidson molybdenum property, both located in central British
Columbia. Thompson Creek has approximately 970 employees. Its
principal executive office is in Denver, Colorado and its Canadian
administrative office is in Vancouver, British Columbia. More
information is available at www.thompsoncreekmetals.com.
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this news release (including information
incorporated by reference) are 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," "strategy," "future," "opportunity," "plan," "may," "should,"
"will," "would," "will be," "will continue," "will likely result," and
similar expressions. Our forward looking statements include, without
limitation: estimates of future capital expenditures and other cash
needs for operations, including with respect to the Endako mill
expansion and the development of Mt.
Milligan, and expectations as to
the funding thereof; statements as to the projected development of the
Endako mill expansion, Mt.
Milligan and other projects, including
expected production commencement dates; statements regarding future
earnings, and the sensitivity of earnings to molybdenum prices;
estimates of future production costs and other expenses for specific
operations and on a consolidated basis; estimates of future mineral
production and sales for specific operations and on a consolidated
basis; estimates of mineral reserves and resources, including estimated
mine life and annual production; estimates as to commodity prices; and
statements with respect to the future financial or operating
performance of Thompson Creek or its subsidiaries and its projects.
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 Creeks 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 factors that could cause actual results or events to differ from those described in such forward-looking statements, there may be other factors that cause results or events to differ from those anticipated, estimated or intended. Many of these factors are beyond TCMs 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.