Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (9384)	11/1/2007 10:50:30 AM
From: LoneClone	Read Replies (1) \| Respond to of 192834

Teck Cominco May Consider Hedging its Share of Production from Galore Creek By Craig Wong 31 Oct 2007 at 12:41 PM GMT-04:00 resourceinvestor.com VANCOUVER (CP) -- Teck Cominco Ltd. [TSX:TCK.B] may consider hedging some of its share of production from the troubled Galore Creek joint venture in northern B.C., where the US$2-billion cost to build the mine is expected to rise significantly. CEO Don Lindsay said Tuesday the company doesn't generally hedge its production, but prices right now could make it attractive. ''If we're making a large capital investment such as the oilsands or such as Galore Creek then we would consider hedging an amount to ensure the return of the capex,'' Lindsay told a conference call with analysts. ''At current gold prices, we could hedge the gold component north of US$900, which makes an extraordinary difference to the economics of the project, so we'll look at all those things.'' Teck Cominco bought into the Galore Creek gold and copper project earlier this year in a deal with NovaGold Resources Inc. [TSX:NG], agreeing to invest an initial US$478-million toward the C$2-billion construction cost and split all subsequent costs. NovaGold warned earlier this month the project would cost more due to inflationary pressures in the mining industry as well as inclusion of additional power line costs; further optimization of the project; and strengthening of the Canadian dollar. An updated feasibility study is expected in the first half of next year. ''It's a challenge worldwide there's no question about that,'' Lindsay said. ''We're facing that capex challenge not just at Galore Creek, any project that we look at.'' Galore Creek is expected to produce in excess of 430 million pounds of copper, 340,000 ounces of gold and four million ounces of silver annually during the first five years of operation. On Monday, Teck Cominco reported a third-quarter profit of C$490 million or C$1.14 per diluted share on revenue of C$1.93 billion for the three months ended Sept. 30. That compared with a profit of C$504 million or C$1.16 per diluted share on revenue of C$1.63 billion a year ago. The company said its adjusted earnings, which excluded the one-time loss and other non-recurring items, were C$545 million or C$1.27 per share. The average analyst estimate, according to Thomson Financial, was for earnings of C$1.33 per share, based on 12 analysts. The average revenue estimate was C$1.74 billion. Teck Cominco's class B shares were down C$2.21 or about 4.5 per cent at C$46.57 in trading Tuesday afternoon on the Toronto Stock Exchange. However RBC Capital Markets analyst Fraser Phillips maintained his ''sector perform'' rating on the stock and C$50 price target. ''Over the next two to three quarters the company's results will likely be negatively impacted by the sharp increase in the Canadian dollar, particularly at Elk Valley prior to the increase in prices we are expecting for the 2008 coal year,'' Phillips wrote in a note to clients. ''Over the longer term, we believe that Teck Cominco offers investors the potential for continued positive returns within the mining industry through growth via internally generated projects and acquisitions.''