Thompson Creek Metals Co., the operator of two molybdenum mines in North America, said it may spend more than US$1-billion for acquisitions to benefit from a rebound in demand for the metal used to strengthen steel.
Thompson Creek is considering acquisition targets in South America and Australia and is willing to spend more than the US$500-million in cash the company has on hand if the asset is generating revenue, Chief Executive Officer Kevin Loughrey said in an interview.
"We are looking at things that are in production to things that are very greenfield and anywhere in between," Mr. Loughrey said in Hollywood, Florida, where he's attending a mining conference organized by BMO Capital Markets. "Not only do we have the cash in hand, but we have US$13-million in debt, so we have a significant amount of debt capacity if we wanted to debt-finance the acquisition."
Molybdenum prices have risen 45% this year to US$17.42 a pound, according to Metal Bulletin data. Thompson Creek wants to boost output to benefit from a resumption in demand from steel producers in the U.S., Europe and Asia, Loughrey said. Energy producers need steel treated with molybdenum to explore for, pump and transport oil and gas.
In September, Thompson Creek raised $217-million (US$207-million) in a sale of new equity "for development and expansion of existing mining assets, exploration activities, acquisitions, working capital and general corporate purposes."
The company sees opportunities in countries including Peru, Chile and Australia and is willing to invest in assets containing copper and other metals in addition to molybdenum, Mr. Loughrey said.
Thompson Creek increased 17 cents, or 1.2%, to $14.64 at 9:41 a.m. in Toronto Stock Exchange trading. The shares rose 17% this year before today.