May 7, 2009 / 8:59 PM / 8 years ago

UPDATE 1-Thompson Creek profit plunges along with prices

* Q1 EPS $0.09 Vs $0.37 a year-ago

* Q1 revenue down almost 70 percent

* Sees 2009 production costs below prior forecast

(All figures in U.S. dollars, unless noted)

TORONTO, May 7 (Reuters) - Canadian molybdenum miner Thompson Creek Metals Co TCM.TO posted a lower first-quarter profit on Thursday, as the global economic slowdown caused a sharp decline in the price of molybdenum -- a strengthening and anti-corrosion agent used in steel.

Net profit in the quarter ended March 31 was $11.2 million, or 9 cents a share, down from $46.8 million, or 37 cents a share, a year earlier.

The decline in net income was primarily due to a 69 percent reduction in the average realized price on molybdenum, Thompson Creek said in a statement.

Revenue in the quarter fell almost 70 percent to $78.9 million. While molybdenum production in the quarter was 6.1 million pounds, up from 5.6 million pounds in the same period a year earlier.

“While overall the molybdenum market continues to experience weaker conditions than it did for most of last year, we are encouraged by the upturn in price in the past two weeks,” said Chief Executive Kevin Loughrey, in a statement.

“We continue to expect a sustained recovery in molybdenum demand and prices in the medium-term future as the world economy recovers from recession,” he added.

Still, the company expects its average realized molybdenum price to be lower in the second quarter than in the first quarter of 2009. It also expects weaker second-quarter sales volumes on a sequential basis.

Thompson Creek lowered its 2009 estimated molybdenum production costs to a range of $6.25 to $7.25 a pound, from a prior forecast of $7.25 to $8.25 a pound.

The decline in the expected cash cost per pound produced is primarily due to favorable foreign exchange rates and lower mining and milling costs.

“Thompson Creek is well positioned not only to weather additional market weakness should it occur, but also to raise production again relatively quickly when demand recovers and to consider possible acquisitions that will benefit shareholders,” said Loughrey.

Thompson Creek’s shares, which have risen more than 70 percent year-to-date, closed Thursday at C$8.47 on the Toronto Stock Exchange. ($1= $1.17 Canadian) (Reporting by Euan Rocha)

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