Saturday , 10 June 2023

4 Copper Stocks Trading at a Discount to Future Cash Flows

We have identified four Canadian copper stocks that have declined 9.3%Copper-USFS on average, underperforming their benchmark Global X Copper Miners ETF (COPX) which has only declined 6.4%. In addition, the stocks covered trade at Forward Price to Cash Flow Ratios (NTM) well below their peer average of 5.31x.

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1. 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 of its own (the Red Chris, Mount Polley and Huckleberry mines) in northwest British Columbia plus a Joint Venture project between the Company (50%), Mitsui Mining & Smelting Co. Ltd. (30%) and Itochu Corporation (20%) located 155 kilometers north east of Kamloops, B.C.

  • Market Cap: $253 Million
  • Forward Price to Cash Flow Per Share (NTM): 2.5x
  • Peer Average: 5.31x
  • Month over Month Return: -27.0%

2. 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 with assets that include the Copper Mountain Mine and the Fenton Project. The Copper Mountain mine –  a Joint Venture with Mitsubishi Materials Corporation (25%) – comprises of an 18,000-acre property, 300 kilometers east of the port of Vancouver, B.C., as a conventional open pit, truck and shovel operation with an estimated mine life of 16 years (as of January 1, 2017).

  • Market Cap: $217 Million
  • Forward Price to Cash Flow Per Share (NTM): 2.81x
  • Peer Average: 5.31x
  • Month over Month Return: 8.6%

3. Capstone Mining Corp. (TSX:CS) – $1.40
Specialty Mining & Metals

Capstone Mining is a Canada-based producer with assets in Pinto Valley (an open-pit project located 125 kilometers east of Phoenix in Arizona, U.S.), Cozamin (Mexico) and Minto (Canada). In addition, Capstone has two projects under development (Santo Domingo in Chile and Kitcho in Canada).

  • Market Cap: $558 Million
  • Forward Price to Cash Flow Per Share (NTM): 3.01x
  • Peer Average: 5.31x
  • Month over Month Return: -9.7%

4. Hudbay Minerals Inc. (TSX:HBM) – $9.48
Specialty Mining & Metals

Hudbay Minerals is a Canadian copper-zinc producer with 3 producing mines in Manitoba, Canada, with 2 processing facilities in Snow Lake and Flin Flon, Manitoba, and a copper porphyry project (Constancia) consisting of 22,520 hectares 100 kilometers south of Cusco.

  • 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%

Related Articles from the munKNEE Vault:

1. Forget Gold! Got Copper? Super Boom In Copper Demand Coming – Here’s Why

Some basic math shows that the coming electric car boom will create a super boom in copper demand. In 2016, EVs made up 1.6% of the total U.S. car market and it is expected that EVs will make up 4% by 2021 and – get this – by 2030, the adoption of EVs in the U.S. will be 34%. What does that mean for copper demand?

2. Marin Katusa: “I expect to make +300% in coming copper rally!” Here’s Why & How

I plan to accumulate stakes in some of the world’s best copper deposits. Why? Because copper has become a great way to invest in the green energy super-trend and I expect to make at least 300% in the coming copper rally over the next five years.

3. These Copper Stocks Are Trading Below Their Peers

A 20-month high in the copper price, amid supply concerns and growing demand from increased infrastructure spending by governments. Today, we have identified five junior mining stocks that would benefit most from a further rise in the copper price.

5. 4 Canadian Copper Stocks Shining on Trump Infrastructure Speculation

With $500 billion to $1 trillion in potential infrastructure spending planned by the incoming Trump administration, the price of copper has risen along with the 4 Canadian copper stocks on our list.

6. The Problems With Copper Seem Insurmountable – Here’s Why

Copper is among the three most used metals in the world, and high quantities of the red metal must be mined every year but the problem is that copper is not being discovered fast enough to meet upcoming demand. There are several reasons as this infographic illustrates.

7. Copper’s Largest & Most Important Producing Countries

Copper is one of the most important and popular industrial metals in the world. With 3% per year production growth since 1900, approximately 16 million tons of the metal was produced in 2011, according to the International Copper Study Group. Below, we outline some of the largest and most important copper-producing nations across the world:

8. Why Copper Prices Have Increased So Dramatically Over the Last 10 Years

In this infographic we explore why copper prices have increased by 4x over the course of 10 years.

Copper is one of the most widely used metals on the planet, and has been for more than 10,000 years. Today, it’s the nervous system of our society – of our cities, homes, tools and toys. The simple truth is that the western lifestyle is completely dependent on copper. Here’s why as depicted in the infographic below.
Gold and silver continue to receive the lion’s share of press headlines and investment writers’ attention. [While] our team believes this theme will continue, there are other assets which benefit from a weak dollar, especially if a weak dollar is combined with some decent economic activity. [One such asset] is copper, a base metal that, like gold and silver, [that will] appreciate with inflation and has tremendous potential for increased demand given the theme of 2012 – economic growth. [Let me explain in some detail why we think that is the case.
About two years ago, I looked through a BHP Billiton presentation which listed the number of years remaining for particular commodities. It was not an analysis of “peak” commodities as such, just a report on when various commodities would be completely, 100% depleted based on current usage rates and reserve assumptions. Copper in that report was determined to be scarcer than oil! [What does that mean for the future well-being of the U.S. – and the world?]

I am convinced that we are still relatively early in a secular commodity bull market. In fact, with the modernization of Chindia and numerous other less-developed nations, I expect this bull market will be one for the record books. Fundamental demand coupled with inflation will push resource prices to unimaginable heights. Words: 805

13. This Interactive Table of Commodity Returns Is Easy to Use – Try It

Natural resources are the building blocks of the world, essential to progress and prosperity. These commodities, like all investments, can have wide price fluctuations over time. The interactive table provided shows the ebb and flow of commodity prices over the past decade and illustrates the principle of mean reversion—the concept that returns eventually move back towards their mean or average. [Take a look.]

14. A Direct Comparison Between Gold, Silver, Platinum and Copper

Here’s an updated analysis of physical gold, silver, platinum and copper regarding their respective versatility of use, durability, fungibility, store of value, liquidity and aesthetics.

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