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Executive summary:

  • This is a report on analyst data for base metal miners.
  • Share prices have moved up, but price targets have dropped during the past month.
  • Augusta Resources has received an unsolicited takeover offer from Hudbay Minerals.
  • Nevsun Resources continues to be viewed most favorably by analysts.

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We are pleased to present the February edition of our analyst watch series for base metal miners. As always we will be summarizing analyst targets and recommendations for selected base metal mining companies. Additionally we will report on the share price performance of the stocks in our watch list and provide some comparisons to last month's edition.

Most companies mentioned in this article have more analysts following their progress than considered in our database. This difference is due to the fact that not all analysts release their predictions to Yahoo.com, which is the source of the presented data.

Unchanged from last edition we are considering the following companies in alphabetical order: Augusta Resource (NYSEMKT:AZC), Capstone Mining (OTCPK:CSFFF), Copper Mountain Mining (OTCPK:CPPMF), First Quantum Minerals (OTCPK:FQVLF), Freeport McMoRan (NYSE:FCX), Hudbay Mining (NYSE:HBM), Nevsun Resources (NYSEMKT:NSU), Southern Copper (NYSE:SCCO), Taseko Mines (NYSEMKT:TGB), Teck Resources (NYSE:TCK), Thompson Creek Metals , Turquoise Hill Resources (NYSE:TRQ).

Our data for these stocks is summarized in the table below. Grey columns represent data sourced directly from Yahoo.com, and light green colored columns represent processed data derived from this source data.

The first three columns list the company names, ticker symbols and share prices at the time of writing, followed by the change in share price since the last edition.

Price targets (low, median and high) are listed in the following three columns. These targets are followed by a column giving the number of analysts providing data to Yahoo.com and the mean recommendations given by these analysts ranging from 1.0 (strong buy) to 5.0 (sell). This concludes the data sourced directly from Yahoo.com.

The remaining columns list data points computed as percentages of the share prices at the time of writing as given in the third column. The column titled "median-price" gives the differences between the share prices and the median target prices. The column titled "high-low" gives the differences between the high and the low targets. The last four columns titled "target change" document the changes in price targets since the January report, with the last column giving the average changes over the low, median and high price targets.

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N.B. Price targets for Imperial Metals, Copper Mountain Mining, First Quantum Mineral and Capstone Mining are provided to us in Canadian Dollars and we have used a conversion rate of 1 Can$ = 0.90 US$.

The chart below is new to our article format and illustrates the share price development over the past month.

On average share prices have gone up by 12%; however, this average is skewed by Augusta Resources. This company has received an unsolicited takeover offer from Hudbay Minerals and the share price reflects this offer. Discounting this outlier, we still note a share price increase on average, but by more moderate 3.7%.

Copper Mountain Mining (+17.3%) is the top performer among the companies in our watch list not affected by takeover offers; and Teck Resources (-5.5%) has been the worst performer in the past month.

The difference between the current share price and the median price target is listed in column "median-price" and visualized in the diagram below. Under normal circumstances we would view a large value in this column as an indicator for the potential of disproportionate gains over the coming year.

Last month's leader in this category was Augusta Resources and thanks to the takeover offer this potential has been realized. Taseko Mines heads this ranking this month trading 75% below the median price target.

First Quantum on the other end of the spectrum continues to trade very close to the median price target.

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Column "high-low" measures the divergence in analyst opinions. The results from this column in the table at the top of this article are visualized in the next diagram.

Taseko Mines and Copper Mountain Mining remain at the top of this ranking, and have been joined by Turquoise Hill Resources this month. These three stocks are causing the greatest degree of disagreement among analysts.

A great deal of agreement among analysts is achieved for price targets for Nevsun Resources, Imperial Metals, Southern Copper and Augusta Resources.

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Monthly changes in price targets are visualized in the diagram below.

On average price targets decreased by -1.1% in the past month for the companies contained in our watch list. We note the drop in price targets despite the positive share price performance since the start of the year.

Price targets for Taseko Mines have been raised by 19.2% during the past month; and price targets for Teck Resources dropped by 13.1% in during the same time.

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The final diagram visualizes analysts recommendation ratings. The small red bars indicate changes in the recommendation score since last month.

Nevsun Resources and Augusta Resource continue to receive the most favorable ratings, followed by Imperial Metals and Capstone Mining. The rating for Freeport McMoRan received a small improvement, and the rating for Teck Resources was lowered by a fraction. Thompson Creek Metals continues to be viewed most unfavorable by analysts.

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N.B. Investors finding the data presentation in this article helpful might wish to visit our analyst watch articles on gold miners, silver miners, uranium miners and metal streaming companies.

Source: Base Metal Miners Analyst Watch: February Edition