Thompson Creek Completes Transaction with Royal Gold to Sell an Additional 12.25% of Future Gold Production from Mt. Milligan and Amends its Credit Agreement
DENVER, Aug. 13, 2012 /PRNewswire/ – Thompson Creek Metals Company Inc.
(“Company” or “Thompson Creek”), a growing, diversified, North American
mining company, today announced that effective August 10, 2012, it has
completed the previously announced transaction with Royal Gold to amend
its gold stream agreement with Royal Gold, Inc. (“Royal Gold”) to sell
Royal Gold an additional 12.25% of the refined gold production from the
Company’s Mt. Milligan copper-gold mine for $200 million, plus $435 per
ounce, or the prevailing market rate, if lower than $435 per ounce,
when the gold is delivered. Thompson Creek intends to use the proceeds
to finance the construction of the Mt. Milligan project and related
“Royal Gold is a valued partner in our Mt. Milligan project and we are
extremely pleased with their increased investment and continued support
in the advancement of the project,” said Kevin Loughrey, Chairman and
Chief Executive Officer of Thompson Creek. “We look forward to the
completion of the Mt. Milligan copper-gold mine in the third quarter of
2013 and commencement of commercial production in the fourth quarter of
2013,” added Mr. Loughrey.
Pursuant to this amendment, Thompson Creek has agreed to sell to Royal
Gold a total of 52.25% of the refined gold production from its Mt.
Milligan project, and Royal Gold’s aggregate investment (including
amounts previously funded and commitments for future funding) in the
refined gold from Mt. Milligan has increased from $581.5 million to
$781.5 million. Three business days following the consummation of the
transactions contemplated by the amendment, Royal Gold will make a cash
payment to Thompson Creek of $75 million. Following this payment, Royal
Gold will make combined future scheduled payments to Thompson Creek in
the aggregate amount of $251.9 million, which will be paid on a
quarterly basis as follows: $45 million on September 1, 2012; $95
million on December 1, 2012; $62 million on March 1, 2012; $37 million
on June 1, 2012; and $12.9 million on September 1, 2013. Following the
September 1, 2013, payment, Royal Gold will have satisfied its
obligations to make quarterly payments to Thompson Creek.
Concurrently with the closing of the transaction with Royal Gold, the
participating banks in the Company’s revolving credit facility entered
into a fifth amendment to the Company’s revolving credit agreement
whereby the banks consented to the Royal Gold transaction and revised
and put in place new financial covenants and measurements.
Specifically, under this amendment, the banks agreed to remove the
senior secured leverage covenant, increase the liquidity covenant to
$100 million from $75 million, add a new minimum quarterly EBITDA
covenant commencing in the fourth quarter of 2012, add new liquidity
thresholds for borrowings and prepayments, add a new condition
precedent for borrowings, and add new reporting requirements. With
these changes, the Company no longer anticipates that it will be in
breach of its credit agreement as of September 30, 2012, and
anticipates that it will be able to access revolving credit facility
funds as needed to fund the construction of Mt. Milligan, assuming that
the new covenants and conditions are met and satisfied.
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. 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.
Thompson Creek expects commissioning and start-up to begin in the third
quarter of 2013 and commercial production of copper and gold to
commence in the fourth quarter of 2013.
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 Company’s development
projects include the Berg copper-molybdenum-silver property and the
Davidson molybdenum property, both located in central British
Columbia. 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
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 include statements with respect to:
anticipated or future financings; future financial or operating
performance of the Company or its subsidiaries and its projects; future
inventory, production, sales, cash costs, capital expenditures and
exploration expenditures; future earnings and operating results;
expected concentrate and recovery grades; statements as to the
projected development of Mt. Milligan and other projects, including
expected production commencement dates; Mt. Milligan development costs;
future operating plans and goals; and future molybdenum 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 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 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.
Director, Investor Relations
Thompson Creek Metals Company Inc.
Tel: (303) 762-3526
Renmark Financial Communications Inc.
Tel: (416) 644-2020
SOURCE Thompson Creek Metals Company Inc.