Best Base Metals Stocks for Coronavirus Volatility?

The base metals stocks we’ve dug up are positioned to recover sharply once COVID-19 worries start to subside

SmallCapPower | March 13, 2020: The copper price, which is often used as a gauge of world economic activity, is down ~14% since January. Zinc, an industrial material used in galvanizing vehicles and steel rebar, is down ~18% over the same time period. Both these metals are used in construction and industrial manufacturing. Experts agree that prices of both metals should stabilize once coronavirus passes, as consumers will always need products that contain copper and zinc. Today we’ve found four base metals stocks that could benefit most from the eventually rebound in commodities prices.

*Share prices as at March 11, 2020, data obtained from S&P Capital IQ

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First Quantum Minerals Ltd. (TSX:FM) – $7.06
Copper Mining

First Quantum is a Canada-based mining company focused primarily on exploration for copper, nickel, gold, and zinc ores. The Company operates seven mines, including the Ravensthorpe nickel mine in Australia; and mines in Zambia, Mauritania, Turkey, Finland, and Spain. First Quantum announced F2020 production guidance of 830,000 to 880,000 tonnes of copper and 280,000 to 300,000 oz/Au. In its Q4F19 results, First Quantum disclosed that it maintains a weighted copper hedge position to manage downside commodity-price risk.

  • Market Cap: $4,850.5M
  • 7-Day Return: -35.0%
  • YTD-Return: -52.5%
  • 90-Day Average Trading Volume: 2,842,840

Lundin Mining Corporation (TSX:LUN) – $5.92
Copper Mining

Lundin Mining is a diversified Canadian base metals mining company with operations in Brazil, Chile, Portugal, Sweden and the United States of America, producing primarily copper, zinc, gold and nickel. The Company’s flagship locations include the Eagle mine located in the United States, the Neves-Corvo mine in Portugal, and the Zinkgruvan mine in Sweden. In February, Lundin Mining provided 2020 production guidance, expecting to produce between 272,000 to 296,000 tonnes of copper at costs between $1.15 to $1.80/lb, below the current price of ~$2.50/lb.

  • Market Cap: $4,350.8M
  • 7-Day Return: -20.8%
  • YTD-Return: -31.4%
  • 90-Day Average Trading Volume: 2,087,590

Taseko Mines Limited (TSX:TKO) – $0.42
Copper Mining

Taseko Mines is a precious and base metals producer focused on British Columbia and Arizona. The Company’s projects include gold, copper, and niobium. The Company’s flagship asset is the open-pit Gibraltar Mine, which is a copper-molybdenum mine located in south-central British Columbia. Taseko also owns the Aley niobium and Harmony gold projects located in BC, and the Florence copper project located in Arizona.

  • Market Cap: $103.4M
  • 7-Day Return:  -19.6%
  • YTD-Return: -34.9%
  • 90-Day Average Trading Volume: 279,240

Trevali Mining Corporation (TSX:TV) – $0.09
Zinc Mining

Trevali Mining is a Canada-based, zinc-focused mining and exploration company with operations throughout the world. It explores primarily for zinc, lead, silver, and copper deposits. The Company has interests in four producing mines, which include the Santander, Perkoa, Rosh Pinah, and Caribou, which are located in Peru, Burkina Faso, Namibia and Canada, respectively.

  • Market Cap: $72.2M
  • 7-Day Return: -33.3%
  • YTD-Return: -65.2%
  • 90-Day Average Trading Volume: 1,365,110

Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.

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