Mol stox on the skids

When it comes to the pure-play molybdenum names, the past several weeks haven’t exactly presented an excuse for bottle poppin’. Here’s a chart of the stock prices for GMO (pure mol), TC (nearly pure mol), TCK and FCX (copper/gold/mol), and the SP500. In general, the more exposure you have to molybdenum, the worse you’ve been doing. The yearly WGMP, or world gross molybdenum product is ~8 billion dollars, meaning that mol constitutes ~0.0133% of the global economy — put another way, TC is exposed to the S&P, but the S&P isn’t really exposed to TC.

Extending the time horizon back a full year tells quite a different story. With the exception of TC, the molybdenum and metal names are all handily beating the stodgy ol’ S&P500. Calling all retail investors!

From what I can tell, TC’s trailing-year under-performance is due in part to the acquisition of Terrane metals, and the huge ongoing build-outs on the Endako expansion and the Mt. Milligan project. As a result of booming molybdenum sales, TC was sitting on 300 million in cash at the beginning of the year, but will spend nearly 600 million this year alone in funding ongoing operations and getting the new projects on-line for 2013. Meanwhile, production is starting to fall off at the flagship Thompson Creek mine in Idaho. TC’s guidance is that they will produce 30 – 33e+6 pounds of mol this year, falling to 26 – 28e+6 pounds in 2012. I think it’s likely that they’ll be starting 2013 with zero cash.

Now of course, if Mo, Cu and Au prices are holding firm at that time, then they’ll be completely set…