Thompson Creek could become buyer

Dec 05, 2008 | 11:56 AM | Mick Bowen

Thompson Creek Metals Co. Inc. could use the money saved from indefinitely shelving expansion plans at the Endako Mine in British Columbia to snatch up a small development company at a bargain price, analysts told AMM.

"The company has said it could make acquisitions," said Anthony Young from New York investment bank Dahlman Rose & Co. LLC. "I wouldn't be surprised if within the next three to six months they picked up some small company for about $2 million."

Young said that a host of small companies are working on large molybdenum mines but lack the money and the access to credit to fully develop them.

"Thompson Creek is making prudent moves and conserving cash," he said. "It's the smart companies that make acquisitions at the bottom of a cycle in anticipation of the turnaround."

However, Thompson Creek investor relations director Wayne Cheveldayoff did not say what the company would do with its growing cash reserves after it suspended the Endako expansion project Friday and postponed the Davidson project in British Columbia last month (AMM, Nov. 10). "We have the cash, but we're not providing any specifics on what we're going to do with it," he said.....