According to Dundee Securities:
CUM Needs to Regain Belief Through Production
Bottom Line: Q1 saw Copper Mountain solve their issues with mill availability experienced during ramp-up in 2012, but new issues with ore hardness, resulting in reduced mill throughput, caused CUM to miss the Q1 run-rate required in order to meet the Company's copper guidance set for the year. Although Q1 was a disappointment in terms of production, we believe that current measures being employed (high intensity blasting and increased contractor pre-crushing) can increase throughput over the short-term, and that once a secondary crushing circuit is added, the mine may even be able to operate above its designed capacity. However, we still don't believe that the company will achieve their 80MM lb copper production guidance for 2013 (we estimate 70MM lbs) and investors will have to wait out the time it takes to approve and install a secondary crusher before significant changes are realized (we estimate approval by Q3 and installation before the end of H1/14). CUM is currently trading at 4.2x EV/EBITDA in 2013E, below peers at 7.0x and at 0.42x NAV, also below the sector at 0.54x. We maintain our BUY rating on CUM and our target of $2.50/share based on a 4.0x EV/EBITDA multiple in 2014E.