TORONTO (miningweekly.com) – The British Columbia-based Endako molybdenum mine will be placed on care and maintenance from July 1, with dual-listed miner Thompson Creek Metals citing the continued weakness in the molybdenum market.

The NYSE- and TSX-listed company said it had taken the decision together with joint venture partner Sojitz Moly Resources, which had agreed to shutter the mine terminating the positions of 270 employees.

Thompson Creek had suspended operations at Endako at the end of last year. It estimated that its share of total costs at the Endako mine for 2015 would be about $20-million. This included temporary suspension costs through to July 1, expected care and maintenance costs for the remainder of the year and one-time severance costs for the workforce reduction.

The company held a 75% interest in the Endako operation and Sojitz the remaining 25% interest.

Thompson Creek expected its share of care-and-maintenance costs in 2016 to be $4-million to $5-million, using the current Canadian dollar/US dollar exchange rate of C$1.22 to US$1.

After the mine had been placed on care and maintenance, Thompson Creek expected the total cash flow from its molybdenum business this year to be $10-million to $15-million.

The company had also placed its eponymous Thompson Creek molybdenum mine, in Idaho, on care and maintenance at the end of December.

"When we announced our decision to place Endako mine on temporary suspension as of year-end 2014 we had hoped for some recovery in the molybdenum market. Nonetheless, market conditions have remained weak through May and are likely to remain so for the foreseeable future. 

“The current and expected molybdenum price cannot support profitable operations at Endako and, as a result, we believe the best course of action is to place the mine on care and maintenance. We will continue to closely monitor market conditions and re-evaluate the status of the mine as market conditions warrant," Thompson Creek president and CEO Jacques Perron advised on Monday.

MOUNT MILLIGAN UPDATE
Thompson Creek on Tuesday also updated the market on mill operations and throughput at its Mount Milligan copper/gold mine, also located in British Columbia, saying that various adjustments and modifications made to the plant had already started to deliver results.

While further improvements were expected to be completed in the second half of this year, during May, daily mill throughput averaged 50 686 t and tonnage an operating hour averaged 2 198 t, compared with 39 569 t/d and 1 889 t/h, respectively, for the first quarter to March 31. Mill availability in May was about 96% compared with 87% in the first quarter.

Perron said that the operation experienced steady weekly increases in daily throughput throughout May. Further improvements would be made during future scheduled maintenance shutdowns in the third and fourth quarters this year, which would impact mill availability. However, continuous improvement was expected in average daily mill throughput for the remainder of the year.