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Thompson Creek Metals warns of quarterly loss

Thompson Creek Metals is warning of a first quarter loss due to start up and commissioning costs for the new mill at the Endako molybdenum mine.

Thompson Creek Metals is warning of a first quarter loss due to start up and commissioning costs for the new mill at the Endako molybdenum mine.

The Denver-based company also warned in a statement issued Friday that the mine's average production costs were running at the higher end of a previously forecast range.

"The higher costs and lower production that we experienced during the commissioning and start-up phase are typical with projects like this," Thompson Creek CEO Kevin Loughery said.

"Although production was lower and costs were higher from the Endako mine in the first quarter of 2012, through continued optimization we expect to make up for the lower production throughout the remainder of 2012."

The new mill, which cost $633 million to build, began operating on Feb. 1. Its capacity is 50,000 tonnes per day compared to 28,000 tonnes for the old mill.

Thompson Creek holds a 75-per-cent interest in the mine, 175 kilometres west of Prince George, and Sojitz Corporation, a Japanese company, holds a 25 per cent interest.

The mine is expected to produce 6.4 to 6.8 million kilograms of molybdenum this year, up from 4.5 million using the old mill. Thompson Creek's share from that is forecast to be 4.5 to 5.0 million kilograms.

During the first quarter, the Thompson Creek's share of production from Endako was 500,000 kilograms, at a cash cost of $44 per kilogram produced.

In February Thompson Creek said the cost of building its Mt Milligan copper-gold mine, between Fort St. James and Mackenzie, would rise by 10 to 20 per cent to $1.4 to $1.5 billion.

The gold and copper mine 155 kilometres north of Prince George is expected to be operating in the second half of 2013.