UPDATE: Paradigm Capital Downgrades Thompson Creek Metals Company to Hold
Paradigm Capital has published a research report on Thompson Creek Metals Company (NYSE: TC) and has downgraded the company from Buy to Hold.
In the report, Paradigm Capital wrote, "Thompson Creek continues to struggle in this low molybdenum price environment. Higher-than-planned operating costs at both of its operations have required management to cease mining operations at the Endako mine and focus on processing stockpile ore while undisclosed recovery problems in the mill are addressed, and now the cessation of stripping activities at the Thompson Creek mine effectively reduces the projected mine life to 2015 with only optionality for extensions. The visibility into the nature of current operational problems and the timing for a potential turnaround in the company's financial fortunes have deteriorated. We have revised our financial forecast to incorporate management's revised guidance, while simultaneously increasing our discount rate assumption to 10% at the Thompson Creek and Endako mines. We continue to apply a 0.75x NAV multiple to our estimated value of the development projects. Our NAV declines to $3.64/sh (from $6.24/sh)."
Paradigm Capital also lowered the price target from $5.50 to $3 on Thompson Creek Metals, which is currently trading down 2.71 percent from Tuesday's $2.58 closing price.
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