OTTAWA (Reuters) - Thompson Creek Metals Co TCM.TO, the Canadian molybdenum producer, posted a fourth-quarter profit on Friday as a 21-percent jump in prices more than offset production problems.
Thompson Creek, which is one of the world’s largest publicly traded pure-play molybdenum producers, also said it had approved an C$280 million ($282.8 million) expansion plan for its 75-percent owned Endako mine in British Columbia.
The mill modernization project will boost capacity to 50,000 tonnes of ore daily from 28,000 tonnes beginning in 2010.
Molybdenum, used primarily as a hardening agent in stainless steel production, is valued for its anti-corrosive and strengthening properties.
For the quarter ended December 31, the miner reported net income of $28.9 million, or 22 cents a share. In the same period last year, it lost $12.5 million, or 14 cents a share.
Revenue rose 31 percent to $197.8 million from $150.8 million in the year-earlier quarter, when it had 67 days of molybdenum sales from mines it acquired.
The average realized price for molybdenum in the fourth quarter was $31.08 a pound, up from $25.74 in the 2006 quarter.
Production totaled 3.4 million pounds, down from 3.8 million in the year-before quarter. The average cash operating expense rose to $11.51 a pound from $6.30 a pound.
“The production difficulties stemming from a rock slide at the Endako Mine and the processing of a low-grade stockpile at the Thompson Creek Mine are now behind us,” said Chief Executive Kevin Loughrey in a statement.
“Molybdenum production from our existing mines is expected to more than double from the 16.3 million pounds recorded in 2007 to at least 34 million pounds in 2009 due to higher ore grades at the Thompson Creek mine.”
The company said the molybdenum price outlook “remains positive” and it continues to see 2008 production of 23 million to 24.5 million pounds.
Thompson Creek said it sees 2008 cash operating costs of $6 to $6.50 a pound at its Thompson Creek mine in Idaho and $9.50 to $10.25 a pound at Endako.
The company, previously named Blue Pearl Mining, said it is considering development of its Davidson deposit in British Columbia, which could add to production starting in 2010.
The company’s shares dipped 13 Canadian cents to C$19.72 on the Toronto Stock Exchange on Friday morning and 12 cents to $20 in New York. So far this year, the stock has gained about 13 percent.
Reporting by Susan Taylor; Editing by Peter Galloway