ThompsonCreek Metals is seeking development projects in the hopes of expandingmolybdenum output as demand rises for the metal, its chief executivesaid on Wednesday.
In a presentation at a mining conference in New York, CEO KevinLoughrey said the company, was eyeing molybdenum, or moly, projectsthat were close to producing. It would also look at deposits with othermetals in combination with molybdenum, used for making steel.
"We are clearly in an acquisition mode. We're out there lookingat properties," he said, "The logical space to expand outside of moly,if we were to do that, would be in copper-moly."Loughrey said thecompany was looking primarily in North America but would also considerassets in South America.
"We're not limiting ourselves," he said.
The Colorado-based company had a cash position of $478 millionand $14 million in debt at Sept. 30, but has suffered from a sharp dropin molybdenum prices in the past year.
Realized prices for the metal, used primarily as asteel-hardening agent, were $12.75 a pound in the recent quarter, downfrom $32.85 in the year-before period, just before the economicslowdown eroded demand for building products.
However, Loughrey sees demand increasing due to recoveringeconomic activity and new uses for the metal, while supply should beconstrained by delayed development of new mines due to the financialcrisis.
The company expects global demand for the metal to rise to 600 million lbs by 2015 from about 460 million lbs this year.
Loughrey also noted China has become a net importer ofmolybdenum, as the metal's price decline forced the country to shutmany of its relatively high-cost small mines.
In fact, Thompson Creek sold a portion of its produced molybdenum to China this year, he said.
The company curtailed production this year due to weak prices,but is ramping it up for next year due to recent improvements in themarket.
It mines from the Thompson Creek mine in Idaho and the Endakomine in British Columbia, while it is also developing the high-gradeDavidson deposit, also in B.C.
Further out, Thompson Creek aims to mine the Mt. Emmons depositin Colorado, which it calls one of the largest, highest-grade,undeveloped molybdenum deposits in the world.
The company has an option to acquire as much as 75 percent of the project, which is currently owned by U.S. Energy Corp..