Friday, March 08, 2013
This was in Canaccord’s Morning Coffee research.
Imperial Metals* (III : TSX : $14.12), Net Change: 0.05, % Change: 0.36%, Volume: 18,680
Taseko Mines* (TKO : TSX : $2.99), Net Change: 0.15, % Change: 5.28%, Volume: 84,374
Capstone Mining* (CS : TSX : $2.48), Net Change: 0.08, % Change: 3.33%, Volume: 837,342
Copper Mtn.Mining* (CUM : TSX : $3.08), Net Change: 0.03, % Change: 0.98%, Volume: 484,766
I like copper, I really like copper. If you are an owner of a Canadian copper producer you should be feeling pretty good about yourself, as copper has been one of the few commodities that hasn?t seen dramatic swings in its price. While other commodities such as oil, natural gas, gold, and nickel, to name a few, all suffer from environmental pressure, substitution risk, demand destruction or dramatic amounts of new supply, copper remains on an island as it is a critical part of global economic success and technological innovation.
If you are believer in the electrification of the globe for economic or environmental reasons, then copper offer the best exposure to that trend. Whether it is the growing acceptance of hybrids and EV?s or the fact that Apple's (AAPL) iPhones and iPads are everywhere, copper is in virtually every new technology. Supply of the red metal is also supportive of the long-term price as old mines suffer from grade decay and new mines are in politically unstable jurisdictions and require decades of pre-work to get them into production. Recently, Chilean copper giant Codelco noted that about twothirds of new copper projects are located in areas of “higher geopolitical risk”.
With that in mind, Canadian based copper companies such as Imperial Metals, Taseko Mines, Capstone Mining, and Copper Mountain Mining should remain on investors' radar. Imperial currently operates the Mt Polley mine, and is also building its flagship Red Chris mine in B.C., which is the only large new copper mine under construction in Canada. Taseko Mines runs the recently expanded Gibraltor Mine in central B.C., while its Prosperity gold/copper project also in B.C. is currently in an environmental review process. Capstone Mining operatesthe Minto Mine in the Yukon and the Cozamin mine in Mexico. The company is also developing, in co-operation with Korea Resources, the Santo Domingo copper project in Chile. Finally Copper Mountain Mining, which operates the Copper Mountain Mine in southern B.C. and has been in recent merger chatter.
Recently, a Bay Street analyst published a note that B.C. based copper miners should merge and create a global intermediate copper company with all its operation in B.C. The copper intermediate space has been thinned out recently as mergers remove names.
My patiernce will be rewarded.. RDK spoken of in glowing terms at PDAC. Proof will be in the pudding.