Thompson Creek Metals (TC) just announced that Scott Shellhaas - the company's president and COO - is leaving the company. Jacque Perron has been appointed the company's president and the company is eliminating the role of COO in this lousy market environment.
This fits a larger pattern of decisions made by the company to cut costs as it puts its namesake molybdenum mine on care and maintenance with molybdenum prices falling below production costs. It also makes sense given that Shellhaas was so instrumental in getting the Mt. Milligan Project up and running and now this project is operating at near full capacity.
Investors will recall that I questioned the value of the company's Mt. Milligan Project in spite of its size and the amount of energy the company put into developing it. The project has resulted in a large debt load and gold streaming obligations to Royal Gold (NASDAQ:RGLD). Nevertheless this is a cash-flow positive project in spite of the fact that it loses a great deal of its gold revenue to Royal Gold, and I suspect the company will be able to generate strong earnings relative to its current valuation.
Ultimately, I think this is a good bet if you're looking for copper exposure and some optionality to molybdenum, but at this time, I think there are better metals to bet on and I would look for opportunities elsewhere.
Disclosure: The author is long RGLD.
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