The copper mining stocks we’ve dug up have the lowest Price/Net Asset Value of all copper producers in Canada
SmallCapPower | July 31, 2018: Copper prices have fallen significantly following the intensification of U.S. trade conflicts, having eased from US$3.29/lb in mid-June to US$2.84/lb. However, analysts at Bloomberg believe that copper prices will rise to US$8000/t, or US$3.63/lb, by 2022, a 27% increase from its current price. Copper supply is expected to peak in 2019 or 2020, while demand continues to rise due to increased demand from electric vehicles and other electrical products. The Canadian copper mining stocks on our list today have the lowest Price/Net Asset Value of its peer group.
Imperial Metals Corp. (TSX:III) – $1.39
Copper & Gold
Imperial Metals Corporation is a junior copper-gold-silver producer operating in British Columbia. The Company operates two producing mines, which produced 93.7Mlbs Cu, 81,000 oz. Au, and 170,000 oz. Ag in 2017. Prior to a worker’s strike in May, Imperial Metals guided to produce 89-96M lbs Cu and 75,000-80,000 oz. Au in 2018.
- Market Cap: $167.9M
- Net Asset Value (NAV): $513.5M
- Price / NAV: 0.33
- YTD Total Return: -59.0%
- Price to Cash Flow: 9.4x
Capstone Mining Corp. (TSX:CS) – $0.96
Copper
Capstone Mining is a Canada-based copper producer with three mines. The Company’s assets include Pinto Valley in the U.S., Cozamin in Mexico and Minto in Canada. In addition, Capstone has two projects under development, Santo Domingo in Chile and Kitcho in Canada. The Company’s flagship Pinto Valley open-pit mine is located 125 kilometers east of Phoenix in Arizona, U.S. In total, the mines are guided to produce 71,000t Cu at an all-in sustaining cot of $2.50-$2.60 in 2018.
- Market Cap: $375.5M
- Net Asset Value (NAV): $1,108.9M
- Price / NAV: 0.34
- YTD Total Return: -33.3%
- Price to Cash Flow: 2.4x
Hudbay Minerals Inc. (TSX:HBM) – $6.78
Specialty Mining & Metals
Hudbay Minerals is a low-cost Canadian copper producer. The Company’s mining operations fall within the first quartile of Wood Mackenzie’s 2018 projected cost curve. It operates four active mining assets with exploration underway for additional projects. Hudbay’s existing mines, located in Manitoba and Peru, are expected to produce 123k-148k tonnes of copper in 2018. Additionally, Hudbay’s open-pit Rosemont project, located in Arizona, is anticipated to produce an additional 127k tonnes of copper annually when fully operational. This site may account for up to 10% of all U.S copper production. Hudbay is currently in the process of securing all necessary permits for Rosemont.
- Market Cap: $1,771.4M
- Net Asset Value (NAV): $2,723.4M
- Price / NAV: 0.65
- YTD Total Return: -39.0%
- Price to Cash Flow: 2.4x
Taseko Mines Ltd. (TSX:TKO) – $1.18
Specialty Mining & Metals
Taseko is a copper producer operating in Canada and the U.S. The Company’s flagship asset is the Gibraltar Mine, which is an open pit copper-molybdenum mine located in south-central British Columbia. The mine produced 140M lbs of copper and 2.5M lbs of molybdenum at an average total operating cost of $1.43/lb, with production levels expected to be maintained throughout 2018. The Company also owns the New Prosperity gold-copper, Aley niobium, Florence copper and Harmony gold projects.
- Market Cap: $276.6M
- Net Asset Value (NAV): $367.1M
- Price / NAV: 0.75
- YTD Total Return: -59.9%
- Price to Cash Flow: 1.9x
Copper Mountain Mining Corp. (TSX:CMMC) – $1.19
Specialty Mining & Metals
Copper Mountain Mining operates the Copper Mountain Mine, a conventional open pit, truck and shovel operation with an estimated mine life of 16 years. The Company holds a 75% interest in the Copper Mountain mine, as part of a JV with Mitsubishi Materials Corporation (25%). CMMC is guided to produces 80M lbs of copper, 25,000-30,000 oz of gold, and 275,000-325,000 oz of silver in 2018.
- Market Cap: $223.8M
- Net Asset Value (NAV): $265.3M
- Price / NAV: 0.84
- YTD Total Return: -22.2%
- Price to Cash Flow: 4.0x
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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