Gold Rush JAG, FXC, FGLD

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Freeport-McMoRan Copper & Gold Inc. NYSE:FCX, Jaguar Mining Inc. NYSE:JAG, Focus Gold Corp OTC:FGLD

Freeport-McMoRan Copper & Gold Inc. NYSE:FCX


Freeport-McMoRan Copper & Gold Inc. ( FCX ) is a copper, gold and molybdenum mining company. Its portfolio of assets includes the Grasberg minerals district in Indonesia, mining operations in North and South America, and the Tenke Fungurume (Tenke) minerals district in the Democratic Republic of Congo ( DRC ). The Grasberg minerals district contains a single recoverable copper reserve and a single gold reserve of any mine in the world. It also operates Atlantic Copper, its wholly owned copper smelting and refining unit in Spain. FCX operates seven copper mines in North America: Morenci, Bagdad, Safford, Sierrita and Miami in Arizona, and Tyrone and Chino in New Mexico. It operates four copper mines in South America: Cerro Verde in Peru, and El Abra, Candelaria and Ojos del Salado in Chile. In Indonesia, PT Freeport Indonesia operates the mines in the Grasberg minerals district. In Africa, Tenke Fungurume S.A.R.L. ( TFM ) operates the Tenke Fungurume (Tenke) mine.

The Company had 42.9 billion pounds of proven and probable copper reserves, including 20.2 billion pounds during the fiscal year ended December 31, 2010. It also had 1.72 billion pounds of proven and probable molybdenum reserves, including 0.87 billion pounds during 2010. Molybdenum concentrate is also produced by Bagdad and Sierrita. In addition to copper, the Cerro Verde mine also produces molybdenum concentrate and the Candelaria and Ojos del Salado mines produce gold and silver. PT Freeport Indonesia also owns 25% of PT Smelting, a smelting and refining company in Gresik, Indonesia. In Africa, Tenke Fungurume S.A.R.L. ( TFM ) operates the Tenke Fungurume (Tenke) mine. In addition to copper, the Tenke mine produces cobalt hydroxide. FCX produces molybdenum at its Henderson molybdenum mine in Colorado. During 2010, 56% of its consolidated molybdenum production was from the Henderson molybdenum mine, 34% was produced at its Bagdad and Sierrita copper mines and 10% was produced at its Cerro Verde copper mine.

North America Copper Mines

As of December 31, 2010, the Company operated seven copper mines in North America: Morenci, Sierrita, Bagdad, Safford and Miami in Arizona, and Tyrone and Chino in New Mexico. All of these mining operations are wholly owned, except for Morenci, an unincorporated joint venture, in which FCX owned an 85% undivided interest. The North America copper mines include open-pit mining, sulfide ore concentrating, leaching and solution extraction/electrowinning (SX/EW) operations. Molybdenum is also produced by Sierrita and Bagdad. A majority of the copper produced at the North America copper mines is cast into copper rod by its Rod & Refining operations. Rod and wire sales to outside wire and cable manufacturers represented approximately 81% of its North America copper sales during 2010. The remainder of its North America copper sales is primarily in the form of copper cathode or copper concentrate. In March 2010, it restarted the Morenci mill to process available sulfide material being mined. Mill throughput averaged 42,200 metric tons of ore per day during 2010 and 26,000 metric tons of ore per day during 2010. The mining rate averaged 566,000 metric tons per day and over 480,000 metric tons per day during 2010.

South America Mining

FCX operates four copper mines in South America: Cerro Verde in Peru, and Candelaria, Ojos del Salado and El Abra in Chile. It owns a 53.56% interest in Cerro Verde, an 80% interest in both Candelaria and Ojos del Salado and a 51 % interest in El Abra. South America mining includes open-pit and underground mining, sulfide ore concentrating, leaching and SX/EW operations. In addition to copper, the Cerro Verde mine also produces molybdenum concentrates, and the Candelaria and Ojos del Salado mines also produce gold and silver. Production from South America mines is sold as copper concentrate or copper cathode under long-term contracts.

Indonesia Mining

Indonesia mining includes PT Freeport Indonesia's Grasberg minerals district. The Company owns 90.64% of PT Freeport Indonesia, including 9.36% owned through its wholly owned subsidiary, PT Indocopper Investama. PT Freeport Indonesia produces copper concentrates, which contain gold and silver. All of the PT Freeport Indonesia's copper concentrates are sold under long-term contracts, of which approximately one-half is sold to affiliated smelters, Atlantic Copper and PT Smelting (PT Freeport Indonesia's 25% owned copper smelter and refinery in Indonesia, and the remainder to other customers. The Company has several projects in progress in the Grasberg minerals district, including development of underground ore bodies located beneath and adjacent to the Grasberg open pit.

Africa Mining

Africa mining includes the Tenke copper and cobalt mining concessions in the Katanga province of the DRC. The Tenke mine includes open-pit mining, leaching and SX/EW operations. Copper production from the Tenke mine is sold as copper cathode. In addition to copper, the Tenke mine produces cobalt hydroxide.

Molybdenum

The Company's Molybdenum operations are a producer of molybdenum, with mining, sulfide ore concentrating, roasting and processing facilities that produce molybdenum-based chemicals, molybdenum metal powder and metallurgical products, which are sold to customers around the world, and includes the wholly owned Henderson molybdenum mine in Colorado and related conversion facilities. The Henderson underground mine produces chemical-grade molybdenum concentrates, which are typically further processed into molybdenum chemical products. The Molybdenum operations also include the wholly owned Climax molybdenum mine in Colorado, for which construction activities in preparation to restart mining activities are ongoing.

Atlantic Copper Smelting & Refining

Atlantic Copper, the Company's wholly owned subsidiary located in Spain, smelts and refines copper concentrates and markets refined copper and precious metals in slimes. Its Indonesia mining operation sells copper concentrate and its South America mining operations sell copper concentrate and copper cathode to Atlantic Copper. During 2010, Atlantic Copper purchased approximately 28% of its concentrate requirements from its Indonesia mining operation and approximately 25% from the South America mining operations.

Valuation Ratios


Company Industry Sector S&P 500
P/E Ratio ( TTM ) 10.30 19.14 23.08 17.29
P/E High - Last 5 Yrs. 13.82 70.31 131.57 99.67
P/E Low - Last 5 Yrs. 8.41 16.37 26.94 12.61

Beta 1.77 1.07 1.21 1.26

Price to Sales ( TTM ) 2.47 4.94 2.36 2.34
Price to Book (MRQ) 3.63 3.51 3.14 3.16
Price to Tangible Book (MRQ) 3.72 3.58 3.29 5.45
Price to Cash Flow ( TTM ) 6.99 16.52 19.84 10.65
Price to Free Cash Flow ( TTM ) 12.45 10.08 27.39 24.72

% Owned Institutions - - - -

Dividends


Company Industry Sector S&P 500
Dividend Yield 1.89 0.95 1.08 1.87
Dividend Yield - 5 Year Avg. 2.58 0.80 1.46 2.44
Dividend 5 Year Growth Rate -2.09 18.59 16.33 -3.38

Payout Ratio( TTM ) 25.23 41.86 16.35 32.31

Growth Rates


Company Industry Sector S&P 500
Sales (MRQ) vs Qtr. 1 Yr. Ago 30.85 19.91 23.35 8.27
Sales ( TTM ) vs TTM 1 Yr. Ago 20.99 16.23 21.34 9.98
Sales - 5 Yr. Growth Rate 35.35 14.78 13.47 7.67

EPS (MRQ) vs Qtr. 1 Yr. Ago 57.29 59.14 39.78 43.18
EPS ( TTM ) vs TTM 1 Yr. Ago 32.90 - - -
EPS - 5 Yr. Growth Rate 14.35 13.08 24.23 5.14

Capital Spending - 5 Yr. Growth Rate 58.09 20.83 14.67 3.62

Jaguar Mining Inc. NYSE:JAG

Jaguar Mining Inc. (Jaguar) engaged in the acquisition, exploration, development and operation of gold producing properties at its 93,000-acre land base in the Iron Quadrangle region of Brazil, a greenstone belt located near the city of Belo Horizonte in the state of Minas Gerais. During the year ended December 31, 2009, Jaguar acquired the 293,000-acre Gurupi Project in the state of Maranhao from Kinross Gold Corporation (Kinross). Through a joint venture with Xstrata plc (Xstrata), the Company is also engaged in gold exploration at a greenfield site in the northeast of Brazil covering 182,000 acres. The Company is producing gold at its Turmalina and Paciencia operations. During 2009, the Company completed the Phase I expansion of the Turmalina operation on schedule and on-budget. The Company's Caete Project is under its final stage of construction.

Focus Gold Corp OTC:FGLD

Focus Gold Corp, Inc. ("GBGI") is a Company focused on acquiring and developing gold mining properties worldwide. GBGI has developed a private equity strategy to acquiring gold mining properties following several key investment criteria:

Primarily Gold;

Assets must be in safe governmental jurisdictions worldwide. FGC will seek geographic diversification across its portfolio;

Looking to invest $500,000 to $5 million in projects with significant exploration upside where returns are at their highest;

Will look for assets ranging from grass roots exploration to near production. GBGI will look to have a balanced portfolio of properties across this spectrum so as to maximize returns while also mitigating risk;

Investments may be structured as 100% control, minority/majority equity positions or debt depending on the transaction type and potential return;

Where possible, GBGI will acquire properties with existing capable management teams and then provide senior level experienced management oversight;

Once a property has matured to a sizable level, GBGI will seek to divest of the property either through a strategic sale or through a spin-off into a stand-alone public company.

Shayne Heffernan Shayne Heffernan oversees the management of funds for institutions and high net worth individuals. Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Commodities

Referenced Stocks: DRC , FCX , TFM , TTM

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