The Canadian copper stocks we’ve dug up are Canaccord Genuity’s top three picks for 2020
SmallCapPower | January 10, 2020: In a recent base metals comment from Canaccord Genuity, the bank views the environment for industrial commodities, such as copper and iron ore, to be promising in 2020. This is due to two reasons: 1) continued fiscal and monetary stimulus from central banks around the world; and 2) a trade deal being realized between the U.S. and China. Canaccord is expecting central banks throughout the world to remain dovish into 2020 and the U.S. and China to agree to a Phase 2 trade deal, with U.S. President Trump up for re-election in 2020, and President Xi Jinping being motivated by a slowing economy as well as mounting political pressures from Hong Kong. As such, Canaccord sees copper as the preferred commodity to hold in 2020 and has identified three Canadian copper stocks as its top picks for 2020.
*Share price data as at January 7, 2019, data obtained from S&P Capital IQ
Turquoise Hill Resources Ltd. (TSX:TRQ) – $0.89
Copper
Turquoise Hill is an international mining company focused on the operation and further development of the Oyu Tolgoi copper-gold mine in southern Mongolia, which is the Company’s principal and only material mineral resource property. On November 12, 2019, Turquoise Hill Resources announced third-quarter 2019 production for Oyu Tolgoi. Copper production was 28,446 tonnes, and gold production was 25,607 ounces. Oyu Tolgoi is expected to produce 125,000 to 155,000 tonnes of copper and 230,000 to 240,000 ounces of gold in concentrates for F2019. Mill throughput for 2019 is expected to be approximately 45 million tonnes. Canaccord views a new mining deal with the Government of Mongolia in 2020, and a resolution on mine design and financing issues as major catalyst that could result in a re-weighting of the Turquoise Hill’s share price.
- Market Cap: $1,791.0M
- 1-Month Return: +10.1%
- 3-Month Return: +38.1%
- 3-Month Average Trading Volume: 1,489,630
First Quantum Minerals Ltd. (TSX:FM) – $12.43
Copper
First Quantum Minerals is a Canada-based mining company that engages in the exploration, development, and production of mineral properties, primarily focused on exploration for copper, nickel, gold, and zinc ores. The Company operates seven mines, including the Ravensthorpe nickel mine in Australia; the Kansanshi copper-gold mine and copper smelter in Zambia; the Sentinel copper operation in North Western Province of Zambia; the Guelb Moghrein copper-gold mine in Mauritania; the Çayeli copper-zinc mine in Turkey; the Las Cruces copper mine in Spain; and the Pyhäsalmi copper-zinc mine in Finland. On January 9, 2019, the Company announced Q4F2019 production of 204,000 tonnes of copper and 78,000 oz/Au. First Quantum also announced F2020 production guidance of 830,000 to 880,000 tonnes of copper and 280,000 to 300,000 oz/Au. Canaccord believe that the sale of a 20% stake (first speculated in September 2019) of its Zambia assets to a Chinese partner could pave the way for a takeover of the rest of the Company in 2020.
- Market Cap: $8,517.6M
- 1-Month Return: -8.0%
- 3-Month Return: +18.9%
- 3-Month Average Trading Volume: 3,084,630
Ero Copper Corp. (TSX:ERO) – $21.72
Copper
Ero Copper is a base metals producer focused on its Vale do Curaçá Property, located in Bahia, Brazil, which has been in production for 39 years. The Company mines copper from four mines on the property: the Pilar underground mine, the Surubim open pit mine, the R22W open pit mine, and the Vermelhos underground mine. Ero Copper also owns the Boa Esperanҫa development project, an IOCG-type copper project located in Pará, Brazil, and the NX Gold Mine, an operating gold and silver mine located in Mato Grosso, Brazil. Canaccord views the Company’s recent announcement of the discovery of one or more Nickel-Copper “Super-pods” samples at Vermelhos, which are returning copper grades between 4.96% and 3.49% at 51.8m and grades between 2.37% and 1.95% at 26.1m, as a catalyst for a takeover. These copper “Super-Pods” are returning much higher grades, compared with the world average of 0.6% copper per tonne of ore.
- Market Cap: $1,858.7M
- 1-Month Return: +3.9%
- 3-Month Return: +28.3%
- 3-Month Average Trading Volume: 197,110
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