Desjardins Analyst Doubles Thompson Creek Price Target

With a strong molybdenum market and rising production, Desjardins Securities analyst John Redstone thinks shares of Thompson Creek Metals Company Inc. (TC) could more than double in 12 months. He is upgrading the stock to "top pick" from "buy," and raising his one-year target price to C$32.67 a share (the shares currently trade in the C$16 range).

Mr. Redstone notes that combined production from the company's Thompson Creek and Endako mines is likely to increase 56% in 2008 (to 25 million pounds) and another 36% in 2009 (to 34 million pounds).

"We believe that problems encountered in Q4 [a rock slide at Endako and lower grades at Thompson Creek] are solvable and that Thompson Creek's production will rise going forward," he wrote in a note to clients.

Mr. Redstone is also bullish on the market for molybdenum, as he sees demand outstripping supply in both 2008 and 2009. He expects prices to average $35/lb and $40/lb in those years, respectively, and is anticipating significantly lower inventories at the end of 2009.

Comments

[Yael Pipano:]

2008 & 2009 estimates of production are right from TC's last conference call to John Redstone's mouth! I strongly agree molybdenum's price can only increase considering supply/demand fundamentals. I only wish I had my own molybdenum/rhenium/mag... mine... (rhenium is a byproduct of molybdenum, as molybdenum is a byproduct of copper). If you don't believe the demand side of the equation, please refer to the below article:
IRON, STEEL AND FERROUS ALLOYS

BIG MOLY OFFTAKE AGREEMENT
ArcelorMittal invests to tie up moly and manganese supplies

ArcelorMittal has been making moves to tie up future supplies of molybdenum and manganese by investing in developing miners of these metals as scarcity looms.

Author: Lawrence Williams
Posted: Tuesday , 20 Nov 2007

LONDON -

The world's largest steelmaker, ArcelorMittal came out with a veritable flood of announcements today regarding acquisitions and investment in projects in North America and Africa.

That in Kalagadi Manganese is reported elsewhere on this site, but perhaps the most significant investment from a mining point of view is the company's purchase of a 12.6 percent stake in US molybdenum mine developer, General Moly. This was accompanied by a separate agreement under which Arcelor Mittal agreed to purchase 6.5 million pounds of molybdenum a year from General Moly for a five year period. This amounts to 26 percent of Arcelor Mittal's anticipated consumption.

2008 Jan 16 01:07 PM

[upthecreek:]

If you are not jumping on TC(best pure Moly play) I bet you'll wish you had when it was still at $19-20. Do your homework...TC will ramp up production, Moly supply will tighten in the next 2 years. China used to export 20-30% a year. They have stopped exporting completely. Does that give you any hints. Putt in a sell stop if you are worried Molybdenum prices will go down; it is that and Mother Nuture. The two real factors that could stop this stock from rising.
Sincerely,

UPTHECREEK(with a paddle.)

2008 Feb 27 05:22 PM