The Investment Doctor • Thu, Nov. 13
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- Copper Mountain Mining reports excellent financial results, even though investors have to look further than the headlines to discover the real production cost.
- This is in line with my expectations, and actually confirms my thesis.
- Q4 will be the quarter of the truth, and I might even be able to increase my price target.
Update: Copper Mountain Reports Good Production Numbers, But Some Of Its Concentrate Is MIA
- Copper Mountain reports another quarterly record production, and this confirms my bullish expectations.
- I expected a higher production rate, but a 9% increase is better than I anticipated.
- The financial results should look good, depending on how the company will book its $3.6M insurance claim for ‘missing concentrate'.
- Copper Mountain Mining had a record quarter which means the company is on track to meet its guidance.
- The secondary crusher is up and running, and should provide further production improvements.
- The best update is in the fine print. During the first week of August, the throughput was 13% (!) higher than in Q2 2014.
- This confirms my bullish thesis for the company.
Copper Mountain Mining - A Lot Of Copper, But Can The Company Repay Its Debt?
- The addition of a secondary crusher will allow the company to increase the ore processing rate.
- This should allow Copper Mountain to meet the expected throughput of 35,000 tonnes per day, three years after the production started.
- Copper Mountain has a sizeable debt position, but at the current copper price the incoming after-tax cash flows should be sufficient to repay the debt.
- However, the margin of error is thin, as at a copper price below $3/lbs, Copper Mountain would have to tap into its current positive working capital position.
High Costs Leave Copper Mountain Mining Leveraged To Higher Prices
- Copper Mountain Mining's core asset is relatively long-lived and in a stable, mining-friendly location.
- Copper Mountain's cash costs are on the high end of the curve, creating above-average leverage to copper prices.
- Copper Mountain Mining shares look undervalued today, with the potential for both production improvements and higher copper prices to support the shares.
Staying Well Away From Copper Mountain For The Moment
Wed, Apr. 9, 3:09 PM
- Copper Mountain Mining (CPPMF +5.9%) says Q1 production at its Copper Mountain mine in British Columbia rose 34% Y/Y to 19.1M lbs. of copper, a new record and in line with guidance despite some unscheduled down time in March resulting from a ball mill transformer failure; the concentrate also included 5,400 oz. of gold and 105.3K oz. of silver.
- During the quarter, the mill processed a total 2.6M metric tons of ore at an average grade of 0.394% copper.
- It's the sixth consecutive quarter of production growth for the miner.
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