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- 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.
- 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.
- 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.