Timminco Inc. (OTCPK:TIMNF) shares have been upgraded to "buy" by Dundee Capital Markets as the company continues to shake things up in order to focus more on its primary process to produce upgraded metallurgical silicon for use in the solar industry.
Last Wednesday, Timminco announced that it has signed a deal to merge parts of its magnesium and specialty metals business with Winca Tech Ltd., a Chinese-based producer of magnesium products. On completion of the deal, Timminco is expected to retain most of the working capital associated with the magnesium business and generate net cash proceeds from the transaction in 2009.
The deal is part of a strategy put in place so Timminco can better concentrate on its silicon business going forward. The company also recently wrote off its interest in beleaguered Norwegian-based tire maker, Fundo Wheels.
Dundee's Ian Tharp said:
Management can now strengthen its focus on successfully ramping its high margin UMG - Si production facility, which is currently a few months behind the original schedule, and also focus on the achievement of critical production cost reductions within 2009.
Mr. Tharp reiterated his C$4.75 price target, which represents upside of almost 80% on the current stock price of C$2.74, up 3% on the day.