Cliffs Natural Resources To Close Deal With Consolidated Thompson, Deutsche Bank Maintains Buy

Deutsche Bank has published a research report on Cliffs Natural Resources CLF after having spent time with company management while visiting with investors. In the report, Deutsche Bank writes "The C$5bn Consolidated Thompson (CLM) deal remains at forefront, with most investors agreeing on benefits of adding scale and exposure to iron ore seaborne market and EPS accretion potential. In our view CLM consensus forecasts appear conservative, when considering iron ore prices near IODEX (QTD average of $181/ton vs implied price of $133/ton). Further, agreement with 3rd largest steel producer, Wuhan Iron and Steel (600005.SS, NR, CNY4.38) (WISCO) increases likelihood deal reaches finish line. CLF appeared more open regarding non-performing coal assets within its portfolio implying 2011 as a bit of "litmus" test year." Deutsche Bank maintains its Buy rating and $115 price target. Cliffs Natural Resources closed yesterday at $90.78.