November 5, 2010 / 12:41 PM / in 8 years

UPDATE 2-Consolidated Thompson posts first ever qrtrly profit

* Q3 EPS C$0.19 vs loss/shr C$0.12 last year

* Q3 rev C$153.8 mln vs C$0.0 last year

* Says achieves full quarter of production at Bloom lake

* Continues to see production capacity of 8 mtpa by Q1, 2011

* Shares touch lifetime high (Recasts; adds analyst comments, details, share movement)

By Arnika Thakur

BANGALORE, Nov 5 (Reuters) - Canadian miner Consolidated Thompson Iron Mines Ltd CLM.TO posted its first quarterly profit, helped by production at its flagship Bloom Lake property in Quebec and high iron ore prices, sending its shares up 8 percent to their highest levels.

Iron ore prices have risen 20 percent from seven-month troughs in July and this year’s lowest price is still up 44 percent from the year-ago level. [ID:nSGE68100Y]

Iron ore prices based on the Steel Index .IO62-CNI=SI last traded up $3 at $153.20.

“They (the company) have received a very good price for their iron ore and that’s what has made all the difference,” Jennings Capital analyst Peter Campbell told Reuters. Consolidated Thompson made on an average C$130 per wet metric ton for iron ore concentrate.

The company, with market capitalisation of more than C$2 billion, said it continued to expect to reach production capacity of 8 million tonnes per annum (mtpa) at Bloom Lake during the first quarter of 2011. For the third quarter, sales volumes were at 1.18 million wet metric tons of iron ore concentrate.

Campbell said the iron ore prices can offset high operating costs expected in the near term, though the costs may be a headwind in the future as the company’s long-term cash cost projection is about C$40 per ton, and it reported C$57 per ton this quarter.

For the July-September quarter, the Montreal-based company posted net income of C$46.4 million, or 19 Canadian cents a share, compared with a loss of C$22.6 million, or 12 Canadian cents a share, a year ago.

The company said it achieved its first positive cash flow from operating activities of C$51 million.

The company said engineering and civil works to expand the Bloom Lake mine and mill to 16 mtpa are underway and it expects to start the foundation of the new mill before year-end.

In September, Consolidated Thompson received the go ahead from the government of Newfoundland and Labrador to increase the transport of iron ore concentrate over the Bloom Lake railway, which could further boost its profitability. [ID:nN09177444]

Consolidated Thompson shares, which have gained about 26 percent in value since the September approval, were up 8 percent at C$11.69 in afternoon trade on Friday on the Toronto Stock Exchange. They touched a lifetime high of C$11.72 earlier in the day.

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