Thompson Creek shares rise after analyst upgrade
(Reuters) - Shares of Thompson Creek Metals Co Inc (TCM.TO) (TC.N) rose more than 10 percent on Friday after investment bank Dahlman Rose upgraded its rating on shares of the molybdenum miner to "buy".
The stock climbed 10.53 percent to C$2.73 on the Toronto Stock Exchange after Dahlman Rose mining analyst Anthony Young said in a note to clients that the benefits of the company's Mt Milligan copper development project in British Columbia outweigh its risks.
"We have not ruled out further challenges at the company as it looks to ramp up Mt. Milligan, but we believe the company has adequate capital to complete the project, which should generate substantial profits in 2014," Young wrote.
He boosted his rating on the stock to "buy" from "hold".
The $1.5 billion Mt Milligan mine is the main cog in Thompson Creek's diversification strategy, which will see the pure-play molybdenum producer add copper and gold to its production profile. First output at the new mine is expected in the second half of 2013.
Young warned that while the company has made strides forward at Mt Milligan, the massive construction-stage project could face further delays and cost overruns.
On the positive side, he noted that the price of molybdenum, used in steelmaking, has risen in the last two weeks and could steady in the $14-$15 a pound range over the mid-term.
Thompson Creek expects to produce up to 24.5 million pounds of molybdenum in 2012 at an average cash cost of $9.25 to $10.25 a pound.
Thompson Creek's stock has plunged more than 65 percent over the last 12 months as the company has grappled with cost overruns, operational hiccups and falling metal prices.
(Reporting by Julie Gordon; Editing by Peter Galloway)