TORONTO (CP) -- Thompson Creek Metals Co. [TSX:TCM] says it's experiencing a ''difficult'' third quarter that will result in a reduced full-year production target, although the molybdenum miner expects output to rebound in the fourth quarter.
The company, one of the world's largest publicly traded molybdenum producers, saw its shares rise by about 8.3% on the TSX in midday trading Monday, by C$1.50 to C$19.50, after the stock closed down 80 cents Friday.
CEO Kevin Loughrey told analysts in a conference call Monday that production will soon improve.
''Thompson Creek (mine) has been, as predicted, in something of a transition stage,'' Loughrey told analysts.
The production decrease is partly due to a slowdown at the company's Thompson Creek open-pit molybdenum mine and mill in Idaho.
Production is expected to pick up in the fourth quarter when the company proceeds to the next phase of its mine plan this year. The company is currently processing ore from stockpiles with variable ore grades until it can implement the next stage.
Loughrey said the company's previous production target of 21 million pounds of molybdenum in 2007 ''looks unlikely'' and said the company will likely be miss that by about 4% to 5%.
''It's very difficult to predict,'' he said.
Company officials said the firm's strategy in the second quarter included buying molybdenum and reselling it at a higher price.
Loughrey also said the company is planning to reduce its debt to a more manageable level of about C$200 million this year.
Profits reached almost US$57 million in that quarter on revenues of $248 million, partly as a result of rising molybdenum prices, the company reported Friday.
Thompson Creek which reports in U.S. dollars, said the net income translated into 45 cents a share in the second quarter. That beat analyst consensus estimates of 34 cents per share.
In the 2006 period, the company lost C$2.8 million or six cents per share, but was still in a developmental phase.
Analyst John Redstone, with Desjardins Securities, rated Thompson Creek a ''top pick'' in an Aug. 13 note to investors and attributed the company's good second quarter results to lower than expected costs and higher than forecast molybdenum prices.
Redstone said the price of molybdenum rose sharply in the second quarter from the mid US$20 level to more than US$30 per pound.
The company realized a price of $29.50 per pound in the second quarter, and Redstone said a US$1 per pound change in the molybdenum price alters the company's annual earnings by about 10 cents per share.
Redstone said the slowdown at the Thompson Creek mine in the second half of this year may be partially offset by the higher molybdenum prices realized recently.
Thompson Creek, formerly Blue Pearl Mining Ltd., has 700 employees. The firm owns the Thompson Creek open-pit molybdenum mine and mill in Idaho, a 75% stake of the Endako open-pit mine in Fraser Lake, B.C., which recently has its mine life extended to 27 years.
A Wardrop Engineering study concluded that reserves are expected to be 276 million tonnes of ore, with an average grade of 0.085% molybdenum disulphide, containing 310 million pounds of molybdenum at US$10 a pound.
The previous reserve estimates and mine plan extending to 2013 for Endako assumed a long-term molybdenum price of just US$3.50 per pound and included 2.5 years of milling low-grade stockpile material.
The company has a mill and roasting facility in northern British Columbia and a metallurgical roasting facility in Langeloth, Penn.
Thompson Creek is also developing the Davidson high-grade underground molybdenum project near Smithers, B.C.
Loughrey said he expects production to start up there in late 2008, with more significant operations ramping up in 2009.
''We think things are proceeding well at Davidson,'' he said, adding delays are the results of a shortage of third-party consultants, who are in huge demand as the mining sector booms. ''We're seeing the light at the end of the tunnel there.''
Loughrey also said the company is planning a listing on the New York Stock Exchange later this year and already has a ticker symbol reserved.
(c) The Canadian Press 2007
