Having read the report of 3rd quarter earnings I continue to believe that this stock is on a path to get over $20 by 2015-2016.
Garofalo who had fantastic training and experience at Inmet and Agnieco has clearly set out his strategy for HudBay.
The key points as I see it are as follows;
- continue to carryout significant exploration work
- a 2 region strategy- Manitoba where the company has a long history and good relations and most importantly where there are lots of additional orebodies just waiting to be found. Secondly Peru where the former Norsemont property has not only Constancia but a number of other ore bodies and likley lots of undiscovered ones close by
- overbuilding of some infastructure so that when additional ore bodies are found the costs of increasing throughput are minimized. Examples of this are the larger hositing shaft at Lalor and the "cadillac" processing infastructure at Constancia, all on the highly probable basis that signifcantly more ore will be found on site or close by
- ensuring that the company has the $ in place to do all the infastructure so as to avoid being held hostage by the bankers etc.
- Garofalo has built multiple mines at his predecessor employers and this knowledge is being applied to HudBay
- While the earnings in the next 2 years will be small just wait until 2015 and 2016- by then the company should be in full production in both Manitboa and Peru and big $ should be hitting the bottom line
-NOW THERE ARE RISKS- the biggest one being that the Chinese growth will stop! From my knowledge of the Chinese I dont see this happening and I believe that there will be signifcant growth happening in all parts of the world .
-Some investors are pessimists and some are optimists and I am an optimist.
- Thus my belief that HBM will be at $20 in 2016( or earlier)