The Canadian copper stocks on our list are trading at a future cash flow discount in relation to their peers
SmallCapPower | November 20, 2017: As the Global X Copper Miners ETF (COPX) has declined 6.4%, we have identified four Canadian copper stocks that have declined 9.3% on average, underperforming their benchmarks. The stocks covered trade at Forward Price to Cash Flow Ratios (NTM) well below their peer average of 5.31x.
Imperial Metals Corp. (TSX:III) – $2.65
Diversified Mining
Imperial Metals Corporation is a junior producer based in Vancouver, British Columbia. With three producing assets, the Company owns the Red Chris, the Mount Polley and Huckleberry mines. The Company’s flagship asset, the Red Chris Mine is a copper gold producer in northwest British Columbia, 80 kilometers south of Dease Lake. In addition to its producing assets, the Company develops the Ruddock Creek project, located 155 kilometers north east of Kamloops, British Columbia encompassing 21,160 acres. The Ruddock project is a Joint Venture between the Company (50%), Mitsui Mining & Smelting Co. Ltd (30%) and Itochu Corporation (20%).
- Market Cap: $253 Million
- Forward Price to Cash Flow Per Share (NTM): 2.5x
- Peer Average: 5.31x
- Month over Month Return: -27.0%
Copper Mountain Mining Corp. (TSX:CMMC) – $1.64
Specialty Mining & Metals
Copper Mountain Mining Corporation is a Canada based copper-gold-silver producer focused in British Columbia. The Company’s assets include the Copper Mountain Mine and the Fenton Project. The Copper Mountain mine comprises an 18,000-acre property, 300 kilometers east of the port of Vancouver, BC. CMMC operates a conventional open pit, truck and shovel operation with an estimated mine life of 16 years (as of January 1, 2017). The Company holds a 75% interest in the Copper Mountain mine, as part of a Joint Venture with Mitsubishi Materials Corporation (25%).
- Market Cap: $217 Million
- Forward Price to Cash Flow Per Share (NTM): 2.81x
- Peer Average: 5.31x
- Month over Month Return: 8.6%
Capstone Mining Corp. (TSX:CS) – $1.40
Specialty Mining & Metals
Capstone Mining is a Canada-based producer with three copper 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 mine comprises an open-pit project, located 125 kilometers east of Phoenix in Arizona, U.S.
- Market Cap: $558 Million
- Forward Price to Cash Flow Per Share (NTM): 3.01x
- Peer Average: 5.31x
- Month over Month Return: -9.7%
Hudbay Minerals Inc. (TSX:HBM) – $9.48
Specialty Mining & Metals
Hudbay Minerals is a Canadian copper-zinc producer with assets in North and South America. The Company’s assets include its Manitoba and Peru operations. The Company’s Constancia copper porphyry project was acquired in 2011 and brought into production in 2014. The Constancia property comprises 22,520 hectares in south eastern Peru, 100 kilometers south of Cusco. In addition, Hudbay has three producing mines in Manitoba; the 777 Mine, the Lalor Mine and the Reed Mine. In conjunction, Hudbay operates two processing facilities in Snow Lake and Flin Flon, Manitoba.
- Market Cap: $2,477 Million
- Forward Price to Cash Flow Per Share (NTM): 3.83x
- Peer Average: 5.31x
- Month over Month Return: -9.1%
Disclosure: Neither the author nor any of the principals at SmallCapPower, or their family members, own units in any of the companies mentioned above.
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