Thompson Creek confirms move to U.S. generally accepted accounting principles and discloses significant impact
25 Januar 2010 - 12:00PM
PR Newswire (US)
NYSE: TC TSX: TCM, TCM.WT Frankfurt: A6R TORONTO, Jan. 25
/PRNewswire-FirstCall/ -- Thompson Creek Metals Company Inc.
("Company"), one of the world's largest publicly traded, pure
molybdenum producers, today confirmed it will use U.S. generally
accepted accounting principles ("US GAAP") when it discloses its
2009 fiscal year end financial results in February 2010. The
Company had previously disclosed its financial results using
Canadian generally accepted accounting principles ("Canadian
GAAP"). All dollar amounts below are in U.S. dollars unless
otherwise indicated. The Company previously announced on November
5, 2009 that more than 50% of its outstanding shares were held by
U.S. residents, and consequently it is required to comply with U.S.
Securities and Exchange Commission public reporting filing
requirements as of January 1, 2010. As a result, the Company will
prepare its 2009 consolidated financial statements (including the
recast of previously reported annual and quarterly financial
statements) in accordance with US GAAP instead of Canadian GAAP.
There will be several impacts to the Company's fiscal 2009
consolidated results from the adoption of US GAAP, but the most
significant is the US GAAP accounting treatment of the Company's
24,504,000 outstanding warrants (exercisable at CDN$9.00 per common
share until October 23, 2011). The warrants are traded on the
Toronto Stock Exchange under the symbol TCM.WT. Under Canadian
GAAP, these outstanding warrants have been classified in equity.
However, under US GAAP, since the exercise price of these warrants
is denominated in Canadian dollars instead of the Company's
functional currency (U.S. dollars), each reporting period the
Company is required to reclassify these warrants as a derivative
liability and adjust them to fair value each period through a
non-cash increase or decrease to consolidated net income. Despite
the US GAAP accounting treatment described above, only one of two
scenarios can occur with regard to these warrants. If the warrants
are exercised, the Company will receive cash proceeds of CDN$9.00
per warrant exercised and issue shares of the Company's common
stock. Or, alternatively, if the warrants expire unexercised, no
cash proceeds will be received and no common shares will be issued.
The warrant holders' right to exercise these warrants expires in
October 2011. The Company believes it is important to note that
under either of these two scenarios, there is no possibility for a
cash outlay by the Company other than minor administrative expenses
related to the exercise of warrants. Additional information
regarding this accounting treatment is available in Management's
Discussion and Analysis for the three and nine months ended
September 30, 2009 that was issued on November 5, 2009. The market
value of the outstanding warrants was approximately $22 million on
January 1, 2009 (equivalent to CDN$27 million or CDN$1.10 for each
warrant outstanding) and was approximately $115 million on December
31, 2009 (equivalent to CDN$121 million or CDN$4.93 for each
warrant outstanding). As discussed above, the change in the fair
value of these warrants in fiscal 2009 will result in a pre-tax
non-cash charge in the Company's 2009 consolidated statement of
operations of approximately $93 million. This pre-tax charge will
be applied as an "other expense" deduction in the Company's fiscal
2009 consolidated statement of operations. As a result of this
non-cash charge related to the warrants, the Company expects to
report a net loss for fiscal 2009. Excluding this non-cash charge
related to the warrants, the Company expects to report adjusted net
income for fiscal 2009. The Company is currently in the process of
finalizing its fiscal 2009 year-end results and the related audit.
More details of the Company's 2009 financial performance will be
provided when the Company announces its 2009 financial results,
which is planned to occur after the market closes on February 25,
2010. The Company's quarterly and annual earnings for 2010 and 2011
will also be impacted by non-cash gains or charges related to the
change in the market value of the warrants until the warrants are
either exercised or expire in October 2011. About Thompson Creek
Metals Company Inc. Thompson Creek Metals Company Inc. is one of
the largest publicly traded, pure molybdenum producers in the
world. The Company owns the Thompson Creek open-pit molybdenum mine
and mill in Idaho, a metallurgical roasting facility in Langeloth,
Pennsylvania and a 75% share of the Endako open-pit mine, mill and
roasting facility in northern British Columbia. Thompson Creek is
evaluating the Mount Emmons Deposit, a high-grade underground
molybdenum deposit near Crested Butte, Colorado. Thompson Creek has
an option to acquire up to 75% of the Mount Emmons Deposit. The
Company is continuing to pursue permitting of the Davidson Deposit,
a high-grade underground molybdenum deposit near Smithers, B.C. The
Company has approximately 750 employees. Its principal executive
office is in Denver, Colorado, and it also has an office in
Toronto, Ontario. More information is available at
http://www.thompsoncreekmetals.com/. Cautionary Note Regarding
Forward-Looking Statements
---------------------------------------------------- This news
release contains "forward-looking information" within the meaning
of the United States Private Securities Litigation Reform Act of
1995 and applicable Canadian securities legislation which may
include, but is not limited to, statements with respect to the
timing and amount of estimated future production. Often, but not
always, forward-looking statements can be identified by the use of
words such as "plans", "expects", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates", or
"believes" or variations (including negative variations) of such
words and phrases, or state that certain actions, events or results
"may", "could", "would", "might" or "will" be taken, occur or be
achieved. Forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Thompson Creek and/or its
subsidiaries to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements. Such factors include the future price
of molybdenum, the estimation of mineral reserves and resources,
the realization of mineral reserve estimates and those factors
discussed in the section entitled "Risk Factors" in Thompson
Creek's current annual information form which is available on SEDAR
at http://www.sedar.com/ and is incorporated in its Annual Report
on Form 40-F filed with the United States Securities and Exchange
Commission which is available at http://www.sec.gov/. Although
Thompson Creek has attempted to identify important factors that
could cause actual actions, events or results to differ materially
from those described in forward-looking statements, there may be
other factors that cause actions, events or results to differ from
those anticipated, estimated or intended. Forward-looking
statements contained herein are made as of the date of this news
release and Thompson Creek does not undertake to update any such
forward-looking statements, except in accordance with applicable
securities laws. There can be no assurance that forward-looking
statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
statements. Accordingly, readers are cautioned not to place undue
reliance on forward-looking statements. Readers should refer to
Thompson Creek's current annual information form which is available
on SEDAR at http://www.sedar.com/ and is incorporated in its Annual
Report on Form 40-F filed with the SEC which is available at
http://www.sec.gov/ and subsequent continuous disclosure documents
available at http://www.sedar.com/ and http://www.sec.gov/ for
further information on mineral reserves and mineral resources,
which is subject to the qualifications and notes set forth therein.
CONTACT: Wayne Cheveldayoff, Director of Investor Relations,
Thompson Creek Metals Company Inc., Tel: (416) 860-1438, Toll free:
1-800-827-0992, ; Dan Symons, Renmark Financial Communications
Inc., Tel.: (514) 939-3989, DATASOURCE: Thompson Creek Metals
Company Inc. CONTACT: Wayne Cheveldayoff, Director of Investor
Relations, Thompson Creek Metals Company Inc., Tel: (416) 860-1438,
Toll free: 1-800-827-0992, ; Dan Symons, Renmark Financial
Communications Inc., Tel.: (514) 939-3989,
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