Cliffs Natural shares jump after it says has enough liquidity
By Sneha Banerjee and Anannya Pramanick
Oct 28 (Reuters) - Shares of Cliffs Natural Resources Inc shot up as much as 25 percent after the miner said it had "more than enough" liquidity and that it was in talks with three "big steelmakers" to invest in its Bloom Lake iron ore mine in Quebec.
Cliffs also said it had settled with its bankers and was no longer in breach of any debt covenants - a position that rose earlier this month after the miner's plan to write down $6 billion in coal and iron ore assets.
Chief Executive Lourenco Goncalves told Reuters that Cliffs was in "active talks" with three equity partners to invest in the development of the second phase of the Bloom Lake mine.
"These are three high class international big steelmakers and they would take their ore for their own use."
The aim was to finalize the documentation on the second phase before the end of the year and Cliffs would scrap the project if it did not come up with a viable option by then, Goncalves said.
The company on Monday reported a third-quarter loss, hurt by the writedown, the majority of which was related to Bloom Lake.
Cliffs bought Bloom Lake as part of its takeover of Consolidated Thompson Iron Mines Ltd in 2010, but higher-than-expected costs at the mine have weighed on Cliffs' earnings.
The issues at Bloom Lake were among the reasons that hedge fund Casablanca Capital, which owns 5.2 percent of Cliffs, waged and won a proxy battle against the company in August. Continued...