Independent study confirms technology: Timminco

Independent study confirms technology: Timminco

ANDY HOFFMAN
Thursday, May 08, 2008

Timminco Ltd., which has faced questions about the viability of its process to produce solar-grade silicon, says an independent report it commissioned found its method has the potential to transform the silicon industry.

Germany's Photon Consulting was given access to Timminco's solar grade silicon production facility in Becancour, Que., during a one-day visit in early May.

In a news release, Timminco said Photon officials were given full access to the plant and information relating to accounting procedures, research and development efforts, intellectual property and technical processes to prepare the report.

“Operations and processes have potential for massive growth and, possibly, for reshaping the silicon industry,” Michael Rogol, Photon's managing director said in a statement.
“The equipment is very impressive, very low-costs, beyond poly-scale,” he said.

Skeptics and critics have said that Timminco has provided little evidence that its so-called “breakthrough” technology can produce large amounts of solar-grade silicon at the company's ambitious cost estimates which are lower than rival solar-silicon makers.

Timminco's shares, which were the top performer on the Toronto Stock Exchange last year, have been on a roller coaster in recent weeks as concerns have been raised about the company.
Toronto-based Timminco is scheduled to release its first-quarter financial report Thursday. The company has a conference call scheduled for later in the afternoon.

A summary of the Photon report will be released next week, Timminco said. It has another conference call scheduled for May 15.

The company's shares were halted before the announcement. Once they resumed trading, they were up 97 cents to $24.67 on the TSX.
© Copyright The Globe and Mail

Timminco Reports First Quarter 2008 Results

Timminco Reports First Quarter 2008 Results

16:30 EDT Thursday, May 08, 2008
TORONTO, ONTARIO--(Marketwire - May 8, 2008) - Timminco Limited ("Timminco") (TSX:TIM) today announced its financial results for the first quarter ended March 31, 2008.
Highlights of the First Quarter
- Sales of $47.6 million, representing a growth of 11.2% from $42.8 million in the first quarter of 2007.
- Net loss of $0.6 million compared to a net loss of $3.1 million in the first quarter of 2007.
- Completed the commissioning of a solar grade silicon production facility with nominal annual production output of 3,600 metric tons.
- Announced the expansion of solar grade silicon nominal capacity to 14,400 metric tons of annual output based on market demand and customer acceptance of product.
- Shipped 100 metric tons of solar grade silicon at an average selling price in excess of $60 per kilogram.
- Signed an agreement to supply solar grade silicon to Q-Cells AG, the world's largest manufacturer of solar cells.
Highlights Subsequent to Quarter End
- Appointed John Fenger to assume leadership of the Magnesium Group.
- Received a EUR 5 million deposit under a long term contract from a major customer for delivery of solar grade silicon.
- Received positive report by PHOTON Consulting on operational review of solar grade silicon business in Becancour.
- Signed second agreement to supply solar grade silicon to Solar Power Industries, Inc.
Overview
"Following the completion of the commissioning of our 3,600 metric ton solar grade silicon facility in the first quarter, the ramp up of production is progressing in line with our expectations, with output and shipments to our customers steadily increasing each month," said Dr. Heinz Schimmelbusch, Chairman of the Board and Chief Executive Officer of Timminco. "During the first quarter, we met our internal shipment target of 100 metric tons of solar grade silicon, all of which was tested by an independent laboratory and met the specifications set by our customers. Moreover, feedback from our customers has been positive. With production output for our existing facility sold out through 2008, we expect the continued ramp up in production to have an increasing positive impact in our financial results with each successive quarter. We will report on the progress of our ramp up when we report our second quarter results. While we anticipate that the cost of our solar grade silicon production will fluctuate as we make refinements to our facilities, we are comfortable with current levels and continue to expect to achieve an average variable cost in the range of $10 to $15 per kilogram at long-term nominal production levels."
Timminco has two reporting segments: the Silicon Group, which includes silicon metal and solar grade silicon products, and the Magnesium Group, which includes magnesium extruded and fabricated products. Timminco also has a minority investment in Fundo Wheels AS, an aluminum wheels business based in Norway.
Results for the First Quarter
Sales for the first quarter of 2008 were $47.6 million, an increase of 11.2% from $42.8 million the first quarter of 2007. The increase is attributable to growth in the sales volume of Timminco's solar grade silicon and regular grade silicon metal.
The net loss was $0.6 million or $0.01 per share, compared with a net loss of $3.1 million, or $0.04 per share, in the first quarter of 2007.
Cash and short-term investments as at March 31, 2008 were $11.3 million compared to $34.6 million at the end of 2007. During the quarter, $6.2 million was invested in working capital to support the 31% increase in sales volumes over the fourth quarter of 2007, $16.5 million was spent on capital expenditures relating primarily to the solar grade silicon facilities and $1.9 million was invested in Fundo Wheels to support the turnaround of that business.
Silicon Group
Sales of the Silicon Group were $34.7 million in the first quarter of 2008, an increase of 45.2% from $23.9 million of first quarter of 2007. The increase in sales was due to the growth in sales of solar grade silicon and an increase in sales volume of regular grade silicon metal.
Gross profit for the first quarter of 2008 was $4.2 million or 12.2% of sales compared with the gross margin of $1.7 million or 6.9% of sales in the first quarter of 2007. The growth was primarily due to the increase in sales of solar grade silicon. During the quarter $2.1 million of start up costs were incurred and expensed as cost of sales.
Amortization of capital assets in the first quarter of 2008 was $1.3 million compared with $0.6 million in the first quarter of 2007. The increase was attributable to the new solar grade silicon facility now in use.
Magnesium Group
Sales of the Magnesium Group were $12.8 million in the first quarter of 2008, representing a decrease of 31.9% from the $18.8 million generated in the first quarter of 2007. The decrease is a result of unusually high sales volumes in the first quarter of 2007, unfavourable foreign exchange rate moves and increased competition.
Gross profit for the first quarter was $1.2 million or 9.6% of sales. This compares to $1.1 million or 5.6% of sales in the first quarter of 2007. Although overhead expenses were decreased by $0.8 million, these were offset by higher costs for magnesium feedstock and increased competition in principal markets.Financial Highlights
in thousands of Canadian dollars,
except for loss per common share
-------------------
Three Months Ended
(unaudited)
-------------------
March 31, March 31,
2008 2007
-------------------
Sales $47, 557 $42,786
Gross profit 5,701 3,047
Gross profit percentage 12.0% 7.1%
Net loss (556) (3,119)
Loss per common share, basic and
diluted (0.01) (0.04)
Working capital (excluding
available cash items) 33,029 12,594
Total assets 185,674 102,647
Cash and marketable securities 11,338 201
Bank debt 11 23,115
Total long term liabilities 25,057 22,838
Weighted average number of
common shares outstanding, basic
and diluted 103,999 75,133
Timminco will file its consolidated financial statements for the quarter ended March 31, 2008, and related management's discussion and analysis (MD&A) with securities regulatory authorities within the applicable timelines. Such financial statements, MD&A and related documents will be available through SEDAR at www.sedar.com as well as through Timminco's website at www.timminco.com.
About Timminco
Timminco is a leader in the production and marketing of lightweight materials, specializing in solar grade silicon for high growth solar photovoltaic energy industry. Using its proprietary technology, Timminco processes metallurgical grade silicon into low cost solar grade silicon for use in the manufacture of solar cells. Timminco also produces silicon metal and specialty ferrosilicon and alloy magnesium for use in a broad range of industrial applications serving the aluminum, chemical, pharmaceutical, electronics and automotive industries.

Timminco Announces Second Solar Grade Silicon Supply Agreement With Solar Power Industries, Inc.

Timminco Announces Second Solar Grade Silicon Supply Agreement With Solar Power Industries, Inc.

15:08 EDT Thursday, May 08, 2008
TORONTO, ONTARIO--(Marketwire - May 8, 2008) - Timminco Limited ("Timminco") (TSX:TIM) today announced that its wholly-owned subsidiary, Becancour Silicon Inc. ("BSI"), has signed a second agreement to supply solar grade silicon to Solar Power Industries, Inc. based in Belle Vernon near Pittsburgh, Pennsylvania. ("SPI"). SPI was BSI's first long-term solar grade silicon customer, having entered into its initial supply agreement with BSI in March 2007. SPI was BSI's largest customer in 2007.
The initial supply agreement anticipated shipments of solar grade silicon in excess of 4,000 metric tons over its initial period of 5 years. Under this second supply agreement, SPI has committed to purchase an additional 3,000 metric tons per year from 2010 to 2015.
"We are very happy to have SPI as a strategic partner in the development of our solar silicon business and this second contract with SPI further corroborates the value proposition we bring to our customers." said Mr. Rene Boisvert, President and CEO of BSI. "SPI has had extensive experience with our solar grade silicon, having shipped their products using our material for over one year."
ABOUT TIMMINCO
Timminco is a leader in the production and marketing of lightweight metals, specializing in solar grade silicon for the rapidly growing solar photovoltaic energy industry. Using its proprietary technology, Timminco processes metallurgical grade silicon into low cost solar grade silicon for use in the manufacture of solar cells. Timminco also produces silicon metal, magnesium extrusions and other specialty metals for use in a broad range of industrial applications serving the aluminum, chemical, pharmaceutical, electronics and automotive industries.
CAUTIONARY NOTE ON FORWARD-LOOKING INFORMATION
This news release contains "forward-looking information", as such term is defined in applicable Canadian securities legislation, concerning Timminco's future financial or operating performance and other statements that express management's expectations or estimates of future developments, circumstances or results. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "expects", "believes", "anticipates", "budget", "scheduled", "estimates", "forecasts", "intends", "plans" and variations of such words and phrases, or by statements that certain actions, events or results "may", "will", "could", "would" or "might" "be taken", "occur" or "be achieved". In this news release, such information includes statements regarding agreements and commitments to supply solar grade silicon. Forward-looking information is based on a number of assumptions and estimates that, while considered reasonable by management based on the business and markets in which Timminco operates, are inherently subject to significant operational, economic and competitive uncertainties and contingencies. Timminco cautions that forward-looking information involves known and unknown risks, uncertainties and other factors that may cause Timminco's actual results, performance or achievements to be materially different from those expressed or implied by such information, including, but not limited to, limited history with the solar grade silicon business; expansion of the solar grade silicon business generally; production capacity expansion at the Becancour facilities; protection of intellectual property rights; increasing and maintaining the purity of solar grade silicon; long-term contracts for supplying solar grade silicon; selling prices for solar grade silicon; price volatility for silicon metal; pricing and availability of raw materials for the silicon businesses; dependence upon power supply for silicon metal production; the cost of solar grade silicon production; price volatility for magnesium metal; magnesium supply chain interruptions; dependence upon key customers of magnesium extruded products; manufacturing cost reduction initiatives; financing requirements for capital expenditures; limitations under existing credit facilities; foreign currency exchange; dependence upon key executives and employees; customer concentration; completion and integration of potential acquisitions, partnerships or joint ventures; risks with foreign operations and suppliers; environmental, health and safety laws and liabilities; equipment failures; transportation disruptions; conflicts of interest; intellectual property infringement claims; new regulatory requirements; labour disputes; and changes in tax laws. These factors are discussed in greater detail in Timminco's Annual Information Form for the year ended December 31, 2007, which is available via the SEDAR website at www.sedar.com. Although Timminco has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in forward-looking information, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate or that management's expectations or estimates of future developments, circumstances or results will materialize. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information in this news release is made as of the date of this news release and Timminco disclaims any intention or obligation to update or revise such information, except as required by applicable law.
Sedar Filer Profile #00000838
FOR FURTHER INFORMATION PLEASE CONTACT:Timminco Limited
Robert J. Dietrich
Executive Vice President - Finance and CFO
(416) 364-5171
(416) 364-3451 (FAX)
Email: rdietrich@timminco.com
or Becancour Silicon Inc.
Rene Boisvert
President and CEO
(819) 294-6000
(819) 294-9001 (FAX)
Email: rboisvert@silbec.com

Contract upgrade, report boost Timminco shares

Contract upgrade, report boost Timminco shares

ANDY HOFFMAN
00:00 EDT Friday, May 09, 2008
Timminco Ltd., which has faced skepticism about the viability of its process to produce solar-grade silicon, hit back at critics yesterday, announcing a contract upgrade and a report it had commissioned suggesting its method has the potential to transform the solar industry.
The Toronto-based company's shares rose nearly 5 per cent yesterday and have jumped 21 per cent in the past week. The stock had previously been battered by mounting concerns it may not be able to deliver solar-grade silicon to customers at cost projections and also on reports of timely option grants and stock buying by company insiders.
Timminco yesterday said Pittsburgh's Solar Power Industries Inc. (SPI) has committed to purchase an additional 3,000 tonnes of solar grade silicon from Timminco a year from 2010 to 2015. The initial deal, announced March 15, 2007, to supply 4,000 tonnes of silicon over five years, was Timminco's first contract announcement. At the time, SPI was not identified as the buyer.
That first contract was the early catalyst sending Timminco shares rocketing higher in 2007, from 40 cents to nearly $22 at the end of the year.
Timminco claims it has developed a "breakthrough" process to upgrade metallurgical silicon for use in solar cells at much lower costs than competitors.
Critics and short sellers have questioned whether Timminco can economically produce large amounts of solar-grade silicon, when rivals such as Elkem AS are spending more than twice as much to produce less material.
Yesterday, Timminco said it had commissioned a report by Photon Consulting to review its process. "Operations and process have potential for massive growth and, possibly, for reshaping the silicon industry," Photon's managing director Michael Rogol said in a statement.
Mr. Rogol and other Photon officials were given a one-day tour of Timminco facilities in Bécancour, Que., in early May. "The equipment is very impressive, very low-cost," Mr. Rogol added. Officials from Photon and Mr. Rogol's firm Rogol Energy Consulting declined further comment.
David Dunnison, the head of business development at Mississauga's 6N Silicon Inc., which is also developing a process to upgrade metallurgical silicon for use in solar cells, said Mr. Rogol is the solar industry's top analyst and is both highly respected and exceedingly bullish on the sector's growth potential.
However, "when it comes to technology and process specifics, no offence, he probably wouldn't be my first choice. He tells you what is going on the market. He doesn't talk technology," Mr. Dunnison said.
On a conference call, Timminco CEO Heinz Schimmelbusch said the company chose Photon to audit its process instead of an established engineering firm in order to safeguard the company's proprietary process.
"We felt that the integrity and the reputation of Photon would shield us against the outflow of competitive information while giving us a comfortable statement here," Mr. Schimmelbusch said.
Timminco also yesterday reported a first-quarter loss of $556,000 or 1 cent per share compared to a $3.1-million loss or 4 cents last year. Revenue was $47.6-million, up 11 per cent from last year.
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