August 9, 2012 / 3:33 PM / in 5 years

Thompson Creek falls to second-quarter loss, shares drop

(Reuters) - Thompson Creek Metals Co Inc TC.N TCM.TO posted a second quarter loss on Thursday as revenues slid 41 percent on lower sales volumes and metal prices, sending shares down more than 3 percent.

The molybdenum miner also said it had sold another 12.25 percent of gold output from its Mt Milligan development project in British Columbia to Royal Gold Inc (RGLD.O) RGL.TO for $200 million upfront and $435 an ounce at the time of production.

Royal Gold now owns 52.25 percent of the gold output at the copper project. Mt Milligan is expected to start production in late 2013.

The C$1.5 billion copper mine is key to Thompson Creek's long-term strategy as the pure-play molybdenum miner looks to diversify its metal output. Demand for molybdenum, used in steelmaking, can be volatile in times of economic uncertainty.

Thompson Creek said molybdenum production in the second quarter fell 59 percent due to operational problems at its Endako mine in British Columbia and at its Thompson Creek mine in Idaho.

The Denver-based miner cut its production outlook for the year to 22.5 million to 24.5 million pounds from an earlier estimate of 26 million to 28 million pounds, with cash costs expected to be in the range of $9.25 to $10.25 a pound.

The company posted a net loss of $14.8 million, or 9 cents per share, in the quarter ended June 30. That compared with a profit of $116.8 million, or 68 cents a share, in the year-before period.

Adjusted to remove one-time items, the loss was $16.7 million, or 10 cents a share, compared with a profit of $56.4 million, or 33 cents a share, in the year-earlier period.

Analysts, on average, had expected a loss of 11 cents a share, according to Thomson Reuters I/B/E/S.

Revenue fell 41 percent to $113.5 million as sales volumes dropped to 7.5 million pounds, compared with 10.8 million pounds in the year-before period, and the average realized molybdenum price slid 16 percent to $14.55.

Cash costs more than doubled to $14.57 a pound from $5.74 a pound in the year-earlier quarter.

Shares of Thompson Creek were down 3.57 percent at C$2.70 on Thursday morning on the Toronto Stock Exchange.

Reporting by Julie Gordon; Editing by Peter Galloway

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