NEW YORK (TheStreet) -- Shares of Cliffs Natural Resources (CLF) were falling 13.4% to $8.84 Wednesday after the mining company announced it will pursue exit options for its Eastern Canada iron ore operations.
Cliffs Natural resources said that pursuing exit options may result in the closure of the Bloom Lake iron ore mine. "Despite the continued interest of the prospective equity partners in Bloom Lake and in its high quality ore, the potential investment is not achievable within a time frame acceptable to Cliffs," CEO Lourenco Gonclaves said in a statement.
The company said it would need an estimated $1.2 billion investment to develop the Bloom Lake mine's Phase 2 in order to make it viable. Closing the mine would result in closure costs of $650 million to $700 million in the next five years.
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TheStreet Ratings team rates CLIFFS NATURAL RESOURCES INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate CLIFFS NATURAL RESOURCES INC (CLF) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."