The Financial Post reports in its Friday edition Thompson Creek Metals ($1.66) is a leading molybdenum producer, but that will soon change. The Post's Peter Koven, writing in Trading Desk, says the company is suspending its Endako moly mine, while production from its Thompson Creek moly mine is also supposed to go off-line by the end of the year.
Soon, the Mount Milligan copper-gold mine will be the only one that matters for Thompson Creek.
"With the Thompson Creek moly mine also going on care and maintenance, [the company's] leverage to moly prices would be eliminated in 2015, while its leverage to copper and gold prices would increase," BMO analyst Sasha Bukacheva said in a note.
The Endako shutdown should not surprise anyone, said RBC Capital Markets analyst Fraser Phillips. In addition to weak moly prices, he noted Endako's high costs and expected rising global moly supply. If the suspension at Endako becomes a permanent shutdown, the company could be on the hook for more reclamation costs. There is $15-million (U.S.) of bonding in place to cover closure costs, but Ms. Bukacheva warned the ultimate cost could be higher than that.
Both Ms. Bukacheva and Mr. Phillips have price targets of $2.50 a share.
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