4 Copper Stocks Trading at a Discount to Future Cash Flows

Lorimer Wilson November 4, 2017 1 Comment 2,555 Views

We have identified four Canadian copper stocks that have declined 9.3% 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%

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