One week after hitting a new low of $3.35 on the TSX, shares of Teck Cominco Ltd. (TSX: T.TCK.B, Stock Forum) were enjoying a surge in Thursday afternoon trading, up 15.56% to $6.09 on volume of more than four million.
On November 20, Teck announced that it was suspending dividends, slashing capital spending and selling assets in an effort to cope with a massive debt load. The Vancouver-based zinc, copper and coal miner said the measures were "the first steps in implementing its comprehensive plan to reduce debt" taken on for the US$14-billion takeover of the Fording Canadian Coal Trust, Canada's largest producer of coal for the steel industry.
On Monday, there was more bad news as Teck and NovaGold Resources Inc. (TSX: T.NG, Stock Forum) announced that they were suspending construction activities at the Galore Creek copper-gold-silver project in northwestern British Columbia. A recent review and completion of the first season of construction indicated substantially higher capital costs and a longer construction schedule for the project than first expected.
On the Teck Bullboard Thursday, Babu2 said, “Imagine BHP Billiton eying @ TECK. He or she quoted a news release titled, “Shares rise driven by steel producers.”
“Shares of steel makers gained, buoyed by news that BHP Billiton, the world's largest mining company, would abandon its bid for rival Rio Tinto.
“The China Iron and Steel Association had opposed the merger of the two iron ore giants over concerns about price controls. BHP Billiton and Rio Tinto together control 40 percent of China's iron ore imports. Baosteel, the country's biggest steel maker, gained 3.93 percent to 5.02 yuan. The Angang Steel Co, a leading domestic steel maker, added 5.97 percent to 7.1 yuan. Shares of the Xinjiang Bayi Iron and Steel Co jumped by the daily 10-percent limit to 5.72 yuan.
“Transport construction-related stocks rose after the Ministry of Transport announced Tuesday that it planned to spend 1 trillion yuan on infrastructure construction in 2009. The investment this year was expected to reach 800 billion yuan.”
“Too Little, Too Late,” scoffed First Class, adding “Still in the dog house with fleas.”
In “RE: Imagine BHP Billiton eying @ TECK,” anothrdwnday said, “SaBHP + TECK ?? With shares almost 80% to the downside and all the cash they would need to pay off debts. The best coal arsenal in the world. BHP could be looking at TECK. I couldn't see too many shareholders out there that would be disappointed in this kind of rumour. Maybe that's what has started the 24% pop yesterday.”
TCK offering gains for investors...., said
DoubleMan“Some analysts have pegged TCK.B at $18.00.....despite the Fording Coal buy out and credit crisis.....
“The sub 4.00 SP was totally oversold...and for those who added or bought for their portfolio....good on you...
“TCK will be back in the $teens within days and some investors will be pondering..."why didn't I get in earlier"...
“Just like GM....was sub 3.00 a couple of weeks ago....today it is over 4.00....and GM is in far worse condition than TCK....
“I bought yesterday and today I am glad that I made the move...
“TCK is heading back up to the $teens and even higher once their FDG financing is concluded ...”
To which casher responded, “agreed. given all the factors affecting TCK its still a double digit stock. Like someone posted yesterday their NAV is in the high teens. Report out today that BHP looking for cheap world class assets to add to their portfolio. TCK is as cheap as it gets.”
And magicman weighed in with, “teck cash cow.......is fording coal
“ before the crash, it was said fording profits will, be a large percentage of Teck’s profit for 2009, Fording has always made money and will continue to, funny thing is fording got attached to a well, I can’t say.............but past records show Teck not to wise when they invest. So fording MONEY maker, has the stigma of Teck now. BHP plse save this gem from the black eye Teck has giving fording, poor managment and old boys club has to GO!!!
“When Teck invested in Tahara, my first thought was wow a gr8 tax write off, was more then a tax write off it was a HUGE failure.............list goes on.
“In short Teck got a money maker, but paid 2 much. Bad timing, and egos.”