May 9 (Reuters) - Shares of Thompson Creek Metals Co rose more than 15 percent on Thursday after the company said its Mt. Milligan copper project in British Columbia is on track for startup in August 2013.
The project, crucial to the molybdenum miner’s push to diversify, has been hit by cost overruns, and BB&T Capital Markets analyst Garrett Nelson said investors have been worried about delays.
“We’re seeing a light at the end of the tunnel for the Mt. Milligan project,” he said. “It should provide a significant earnings and free-cash-flow boost ... It’s really a transformational event.”
Nelson, who upgraded the stock to “buy” from “hold”, said the news had likely prompted traders to cover short positions, boosting the stock.
In a release published Wednesday evening, Thompson Creek said Mt. Milligan is 89 percent built, and about 95 percent of its capital expenditure has been spent or contracted.
The mine is expected to produce an average of 89 million pounds of copper and 262,000 ounces of gold, both in concentrate, in its first six years of operation.
The company said its operating income rose in the first quarter to March 31 as costs fell. But net income slipped, hurt by a lower tax benefit.
Net income fell to $900,000, or about break even on a per-share basis, from $1.1 million, or 1 cent a share, a year earlier. Revenue slipped to $108.7 million from $113.6 million.
Analysts, on average, had been expecting a loss of 1 cent a share on revenue of $96.5 million, according to Thomson Reuters I/B/E/S.
The company’ shares rose 15.8 percent to $3.74 on the New York Stock Exchange. (Reporting by Allison Martell; Editing by Janet Guttsman; and Peter Galloway)