"Deutsche Bank Initiates Thompson Creek (TC) with a Buy
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June 23, 2008 8:21 AM EDT
Deutsche Bank initiates coverage on Thompson Creek (NYSE: TC) with a Buy rating and a $32 price target.
The firm said, "Thompson Creek Metals Company, a primary molybdenum miner, is one of the largest listed pure play companies in the industry. We are positive on the medium-term outlook for molybdenum based on robust steel industry demand and uncertain supply-side dynamics. The positive outlook for moly demand is underpinned by expectations of strong global steel production and shifting industry cost structure. Despite large project announcements, permitting, financing, grades issues, and surging costs imply execution uncertainty and the moly industry could have difficulty keeping pace with demand — we foresee an extension of high moly prices into 2010."
Deutsche believes that a production ramp up and a shift in sales mix toward greater in-house produced moly to drive Thompson Creek’s 2008-10 earnings growth. Also, Thompson Creek exhibits a high ~2:1 EPADR sensitivity to changes in moly assumptions, which could drive long-term earnings power.
Thompson Creek Metals Company acquires, explores, develops, and of molybdenum properties in Canada and the United States."
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