UPDATE: Bank of America Downgrades Thompson Creek Metals Company to Underperform, Lowers PT on Lower Molybdenum and Gold Price Forecasts

In a report published Friday, Bank of America analyst Oscar Cabrera downgraded the rating on

from Neutral to Underperform, and lowered the price target from $4.00 to $3.00. In the report, Bank of America noted, “We are downgrading Thompson Creek Metals Co. Inc. (TCM) to an Underperform from Neutral rating, and lowering our price objective (PO) to $3.00/share from $4.00, following our commodities team downgrade of our 2013-15 molybdenum (moly - Mo) and gold (Au) price forecasts, due to weakening fundamentals (higher than expected near-term supply for moly and tapering on gold). TCM announced first concentrate production at its Mt. Milligan copper-gold development project on September 24th, after 3 years of construction that saw capex overruns north of $750mn in the $1.6B project. While we continue to expect Mt. Milligan to improve TCM's EBITDA ($56mn in 2013 to $486mn in 2015), we believe that risks in TCM shares have increased because the company will have to rely on its relatively high cost moly operations (Thompson Creek and Endako mines) during Mt. Milligan's ramp up (~12 months) under a weak moly price environment.” Thompson Creek Metals Company closed on Thursday at $3.73.