As a result of lower production and higher costs at the Endako mine due to lower than expected recovery rates at the new mill and ore grade at the mine, Thompson Creek will cease mining new material and process stockpiled Endako ore beginning in the third quarter of 2012 through the spring of 2013. The company had previously planned to mill this material over the course of the current 17-year mine plan.
Thompson Creek has also convened a team consisting of outside experts and internal technical specialists with the goal of achieving designed recovery as soon as possible. This team is currently addressing various areas, including a recalibration of the major instruments in the mill, working on the reagent mix in the flotation tanks, metallurgical balance work, and additional mill and maintenance staff training. The company has also ceased mining at the bottom of the Denak West pit where it encountered lower-than-expected ore grades. Thompson Creek expects mining operations to resume in the spring of 2013, with planned mining in the Endako pit and the walls of the Denak West pit.
Given the prolonged worldwide economic volatility, the continued decline in molybdenum prices, and short-term operational issues that we experienced in the second quarter of this year, we had negative operating cash flow of $20.4 million in the second quarter that caused us to re-evaluate our current operating plan at the Endako mine,” said Kevin Loughrey, chairman and CEO, Thompson Creek. “We have undertaken a series of initiatives intended to increase production and recovery rates, and decrease costs in order to increase revenue and cash flow in the third and fourth quarters of 2012.”
