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Teck no longer the 'go-to' name in base metals, says Dundee Capital

Broker Dundee Capital reckons mining major Teck Resources is no longer the go-to name in base metals. ..

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Teck no longer the 'go-to' name in base metals, said the broker..

Broker Dundee Capital reckons mining major Teck Resources (TSE:TCK.B, NYSE: TCK) is no longer the go-to name in base metals. It comes after the group reported third quarter numbers yesterday.

The broker on Friday repeated a 'neutral' stance on the shares with a target price of C$8.50.

The shares in Toronto are up over 3% today at C$9.06.

Teck's next few years are mainly dedicated to building  its Fort Hills oil sands project in Alberta, Canada, noted the broker.

".... late 2017 would be the earliest possible time to see revenue from the project. However, we would highlight that if zinc were to go on a run, Teck would be incredibly receptive on their bottom line. As we wait for a zinc price rally, we comfortably remain on the sidelines," it added.

The diversified miner, which produces coal, copper and zinc, yesterday posted a loss of C$2.15 billion after recording C$2.16 billion of impairment charges, mostly related to its steelmaking coal operations.

Dundee analyst Joseph Gallucci notes that Teck is a zinc company with leverage to coal and future leverage to oil. Around 50% of its gross profit comes from the zinc business.

The group's current cash position is more than the remaining Fort Hills spend but the outstanding $1.5bn does not include working capital requirements, he highlighted.

Quick facts: Teck Resources Ltd (USA)

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