The copper mining stocks on our list could head higher with an impending supply crunch
SmallCapPower | April 24, 2017: The sudden surge in commodity prices, particularly copper, zinc and nickel, has caught many analysts and industry experts by surprise. Besides an increase in infrastructure spending, China has been importing more and more copper, which is a good sign for the industry’s health. A slowing supply growth outlook due to production cuts in China—the world’s top consumer—and declining ore grades in Chile—the world’s largest producer of the red metal—are likely to result in higher copper prices, at least for the near term. Today we have identified those copper mining stocks that are trading below an Enterprise Value to Sales multiple of 3.1x, which is the current peer average for junior copper miners.
Capstone Mining Corp. (TSX: CS) – $1.06
Specialty Mining & Metals
Capstone Mining Corp. is a Canada-based mining company that is engaged in the production of, and exploration for, base metals in the United States, Mexico, Canada and Chile, with a focus on copper. The Company’s segments include individual mining operations of Pinto Valley (the United States), Cozamin (Mexico), Minto (Canada), Santo Domingo development project (Chile) and other. Its subsidiary, Pinto Valley Mining Corp., owns and operates copper Pinto Valley Mine located in Arizona, the United States. Capstone Gold, S.A. de C.V., its Mexican subsidiary, owns and operates copper-silver Cozamin Mine located in Zacatecas, Mexico. Minto Explorations Ltd., its Canadian subsidiary, owns and operates copper Minto Mine located in Yukon, Canada.
- Market Cap: $413.9 million
- Total Revenue (LTM, CAD): 696.3 million
- EV/Sales: 1.2x
- YTD Price Change: -15.9%
Amerigo Resources Ltd. (TSX: ARG) – $0.63
Specialty Mining & Metals
Amerigo Resources Ltd. is engaged principally in the production of copper and molybdenum concentrates through its operating subsidiary Minera Valle Central S.A. (MVC), pursuant to a long-term contractual relationship with the El Teniente Division (DET) of Corporacion Nacional del Cobre de Chile (Codelco). The MVC operation is eight kilometers east of the city of Rancagua and 90 kilometers south of Santiago.
- Market Cap: $110.3 million
- Total Revenue (LTM, CAD): 120.2 million
- EV/Sales: 1.5x
- YTD Price Change: 82.6%
Copper Mountain Mining Corp. (TSX: CMMC) – $0.92
Specialty Mining & Metals
Copper Mountain Mining Corporation is a copper-gold producing company engaged in the business of mineral exploration, development and operation of mineral deposits. The Company, through its subsidiary, has interests in the Copper Mountain Mine. The Copper Mountain mine project is situated 20 kilometers south of Princeton, British Columbia, and 300 kilometers east of the port of Vancouver. The Copper Mountain mine project consists of approximately 140 Crown granted mineral claims, over 150 located mineral claims, over 10 mining leases and over 10 properties, covering an area of approximately 70 square kilometers. Its Copper Mountain mine project is a conventional open pit, truck and shovel operation.
- Market Cap: $121.8 million
- Total Revenue (LTM, CAD): $278.0 million
- EV/Sales: 1.9x
- YTD Price Change: -2.1%
Taseko Mines Ltd. (TSX: TKO) – $1.47
Specialty Mining & Metals
Taseko Mines Limited is a mining company engaged principally in the production and sale of metals, as well as related activities, including exploration and mine development, within the province of British Columbia, Canada and the State of Arizona, the United States. Its projects represent a range of metals, including gold, copper and niobium. The Company’s operating asset is the Gibraltar Mine, which is a copper-molybdenum mine located in south-central British Columbia. Gibraltar is an open pit copper mine. The Company also owns the New Prosperity gold-copper, Aley niobium, Florence copper and Harmony gold projects.
- Market Cap: $325.7 million
- Total Revenue (LTM, CAD): 263.9 million
- EV/Sales: 2.4x
- YTD Price Change: 26.7%
Trevali Mining Corp. (TSX: TV) – $1.21
Diversified Mining
Trevali Mining Corporation is a Canada-based natural resource company engaged in the acquisition, exploration, development and production from mineral properties. The Company holds approximately four properties in Canada and has an interest in a property in Peru with an option on a second Peruvian property. The Company, through its subsidiary Trevali Peru S.A.C., operates the Santander underground metallurgical plant and mine located in Peru. It is producing zinc and lead-silver concentrates. In Canada, the Company owns through its subsidiaries, the Caribou mine and mill, the Halfmile mine and the Stratmat polymetallic deposit all located in northern New Brunswick.
- Market Cap: $492.0 million
- Total Revenue (LTM, CAD): 198.2 million
- EV/Sales: 2.9x
- YTD Price Change: 8.0%
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