Given the supply disruptions from strikes and the increasing demand, Copper under $4 represents real value. HCM maintain their year end target of $5.15 on the metal.
Shayne Heffernan has kept his estimate on the Copper shortfall in 2011 at 700,000 tons, and expects December copper prices above $5.15 a pound as workers at some of the world's biggest copper mines in the world have also staged strikes of their own to demand a bigger share of windfall copper profits.
Copper and Gold prices, as well as Copper and Gold will increase in value as supply dwindles.
One of the big impacts on Copper in the last month, apart from the Euro fears is the rising USD.
The U.S. dollar has rallied against major currencies as excessive pessimism dominates financial markets in trading today. Fears spread in global financial markets that Greece's ability to meet its obligations and repay its debt would collapse a global recovery.
HCM question the long term value of the US dollar should such a collapse occur, Gold, Silver, Copper and other commodities look far more attractive as a safe haven than the USD.
If you are looking for undervalued Copper Equities, here are some of the HCM picks.
HCM have Upgraded Xstrata PLC, LON:XTA based the improved on Copper Outlook of the group. Shayne Heffernan has set a price target of 1,800 for 2012.
Last year, the copper business made a $US3.82 billion operating profit representing 50 per cent of the mining giant's total operating profit.
"Charlie Sartain can take much of the credit for Xstrata's Copper success" Shayne Heffernan said.
Sartain has headed what is now Xstrata's most profitable business unit since just after the MIM takeover, when Xstrata chief executive Mick Davis promoted him from head of MIM's Latin American business.
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When Xstrata bought MIM, Australia made up about half its copper production. It now makes up about 20 per cent of Xstrata's 1 million tonnes of annual copper production, but this is expected to drop to between 10 and 15 per cent as the mining giant ramps up production to 1.5 million tonnes a year from 2014 and, after that, potentially beyond 2 million tonnes.
The decline in proportion is not because of any uncertainty in Australia. It is just that the bigger projects are in countries such as Chile, Argentina, The Philippines and Papua New Guinea.
Sartain originally worked with MIM Holdings for more than 20 years, initially in a number of mining engineering and management roles at Mount Isa Mines, then as General Manager of the Ravenswood Gold operations and General Manager of the Ernest Henry Mine, all in Queensland, Australia. In mid-2000 he was appointed General Manager of Minera Alumbrera in Argentina, and then Executive General Manager - Latin America in mid-2002. In July 2003 Mr Sartain was appointed Chief Executive Copper Americas for Xstrata, before being appointed into his current role in January 2004.
External appointments: Mr Sartain is a Director and current Chairman of the International Copper Association, the leading organisation for promoting the use of copper worldwide, a Director of the Council on Australian Latin America Relations, a Director of the Sustainable Minerals Institute at the University of Queensland, and a Director of Wesley Research Institute.
Xstrata plc is a diversified mining company. The Company's business is organized into five global commodity businesses. Xstrata Alloys is the producer of ferrochrome, vanadium and has a platinum group metals business.
Xstrata Alloys also owns carbon operations, which supply raw materials to its ferrochrome smelters. Xstrata Copper is the copper producer, with mining and processing facilities and projects located in Australia, Chile, Peru, Argentina and Canada.
It also manages a recycling business (Xstrata Recycling). Xstrata Copper's portfolio of projects includes Las Bambas, Tampakan, El Pachon and Frieda River. Xstrata Coal is the exporter of thermal coal and a producer of hard coking coal and semi-soft coal.
Xstrata Nickel is a nickel and cobalt producer. Xstrata Zinc is the miner and producer of zinc. Xstrata Technology Services provides technologies and specialist services in the areas of mining, mineral processing and metals extraction to mining companies.
|% Shares Owned:||78.86%|
|# of Holders:||870|
|Total Shares Held:||2,337,954,086|
|3 Mo. Net Change:||235,099,504|
|# New Positions:||45|
|# Closed Positions:||31|
|# Increased Positions:||278|
|# Reduced Positions:||231|
|# Net Buyers:||47|
|P/E Ratio ( TTM )||8.79||14.45||17.96||15.16|
|P/E High - Last 5 Yrs.||72.43||57.66||149.09||102.54|
|P/E Low - Last 5 Yrs.||2.54||15.12||28.45||12.78|
|Price to Sales ( TTM )||1.39||3.78||2.07||2.09|
|Price to Book (MRQ)||1.07||0.54||1.67||2.98|
|Price to Tangible Book (MRQ)||1.33||0.62||1.83||4.69|
|Price to Cash Flow ( TTM )||5.41||11.99||15.38||10.00|
|Price to Free Cash Flow ( TTM )||135.36||3.22||48.54||38.40|
|% Owned Institutions||-||-||-||-|
|Dividend Yield - 5 Year Avg.||0.83||0.86||1.48||2.37|
|Dividend 5 Year Growth Rate||14.57||16.66||15.45||-1.41|
|Payout Ratio( TTM )||18.19||31.93||16.93||32.52|
|Sales (MRQ) vs Qtr. 1 Yr. Ago||23.29||32.79||16.49||12.90|
|Sales ( TTM ) vs TTM 1 Yr. Ago||25.63||19.28||18.44||10.74|
|Sales - 5 Yr. Growth Rate||30.53||14.99||13.60||7.90|
|EPS (MRQ) vs Qtr. 1 Yr. Ago||26.38||51.26||18.64||11.67|
|EPS ( TTM ) vs TTM 1 Yr. Ago||133.60||-||-||-|
|EPS - 5 Yr. Growth Rate||4.66||13.00||22.69||6.83|
|Capital Spending - 5 Yr. Growth Rate||46.40||18.66||18.40||4.03|
|Quick Ratio (MRQ)||0.73||0.38||0.73||0.76|
|Current Ratio (MRQ)||1.39||0.58||1.12||1.12|
|LT Debt to Equity (MRQ)||17.28||12.05||11.31||110.67|
|Total Debt to Equity (MRQ)||22.52||19.57||29.59||148.82|
|Interest Coverage ( TTM )||-||-0.07||0.13||23.29|
|Gross Margin ( TTM )||-||36.15||27.48||35.19|
|Gross Margin - 5 Yr. Avg.||35.48||47.13||26.25||33.84|
|EBITD Margin ( TTM )||33.23||-||-||-|
|EBITD - 5 Yr. Avg||30.29||34.18||19.60||21.01|
|Operating Margin ( TTM )||24.25||25.70||14.99||-|
|Operating Margin - 5 Yr. Avg.||21.77||26.98||14.35||15.78|
|Pre-Tax Margin ( TTM )||22.26||25.80||15.26||15.65|
|Pre-Tax Margin - 5 Yr. Avg.||19.56||27.99||14.19||15.31|
|Net Profit Margin ( TTM )||16.60||19.49||11.24||11.81|
|Net Profit Margin - 5 Yr. Avg.||13.67||20.30||10.29||11.38|
|Effective Tax Rate ( TTM )||25.42||19.15||23.46||22.32|
|Effecitve Tax Rate - 5 Yr. Avg.||30.11||28.00||27.92||24.99|
|Return on Assets ( TTM )||8.39||3.56||10.14||7.30|
|Return on Assets - 5 Yr. Avg.||6.64||13.09||11.06||6.45|
|Return on Investment ( TTM )||9.74||4.46||15.80||9.54|
|Return on Investment - 5 Yr. Avg.||7.68||15.83||16.30||8.54|
|Return on Equity ( TTM )||13.79||6.09||15.64||24.97|
|Return on Equity - 5 Yr. Avg.||12.98||17.81||19.93||21.04|
China Yunnan Copper Australia Limited, ASX:CYU has been upgraded to a Strong Buy with a 2012 price target of $1.23 issued today by Shayne Heffernan.
Chinalco Yunnan Copper Resources Limited (CYU) explores and develops minerals in Australia, Chile and Laos. Cornerstone investor Yunnan Copper Industry (Group) Co Ltd (YCI) is China's third largest copper producer. Chinalco has confirmed its strategic alliance with YCI and supports Chinalco Yunnan Copper Resources' role to become YCI's international investment arm and mining house.
1. COPPER REE - MOUNT ISA
Drilling is occurring to extend the high grade copper, heavy rare earths, cobalt silver zones at Mount Dorothy and to confirm the recently discovered copper REE zone at Elaine Dorothy. These projects form part of the Mary Kathleen JV with Goldsearch Ltd (ASX:GSE).
2. COPPER - CHILE JV WITH RIO TINTO
Drilling program at the Caramasa and Palmani porphyry targets. Exploration Target size for Chilean Cordillera style copper porphyry deposits is 0.5-1 billion tonnes grading 0.5-0.8% copper. In addition, CYU is developing the Humito project which is 100% owned and scheduled for drilling in the current year.
3. COPPER SILVER - LAOS JV WITH YUNNAN COPPER INDUSTRY (GROUP) Co Ltd (YCI)
Drilling program on the copper silver Zambian style deposits of the Laos Copper Silver JV, operated by YCI. The Laos Copper Silver JV is subject to CYU shareholder approval. Exploration Target size for Zambian style Copper Silver deposits is 50-100 Mt grading 1-1.5 % copper and 2-3 ounces/tonne silver.
4. COPPER - CLONCURRY FARMOUT WITH YUNNAN COPPER MINERAL RESOURCE EXPLORATION CO. LTD (YEX)
YEX field operations to define Ernest Henry style drill targets. Ernest Henry is owned by Xstrata and is a 160 Mt deposit grading 1% copper and 0.20 g/t gold. The Cloncurry Farmout agreement remains subject to CYU shareholder approval in the current quarter.
China Yunnan Copper Australia Limited ASX:CYU has announced that China Yunnan Copper Australia Chile Limitada, a Chilean subsidiary of the Company has signed a new agreement with Rio Tinto Mining and Exploration Chile (Rio Tinto Exploration) covering the copper porphyry exploration property Candelabro, in northern Chile. The Candelabro porphyry copper and molybdenum prospect is located in the Palaeocene Porphyry Copper Belt of Northern Chile (Region 1), 60km north of BHP Billiton's Cerro Colorado mine.
Chinalco Yunnan Copper Resources (CYU) is exploring tenements in Queensland for copper, gold and uranium. It is also actively drilling highly prospective tenements in Chile as well as Laos.
This strategy is supported and assisted by CYU's cornerstone shareholder, Yunnan Copper Industry (Group) Co Ltd. (YCI) which is China's third largest copper producer. YCI supports CYU's role as YCI's international investment arm and mining house.
More than 1,000 km2 of highly prospective tenements focused on copper, gold and uranium in Queensland, Australia.
The projects are located in areas with established mining history with some close to previous or current operating mines.
Extensive exploration land position with potential for discovery of new deposits from known targets.
Chile - copper JV with Rio Tinto
CYU has adopted the Chinalco and Yunnan Copper Industry Co Ltd (YCI) strategy of exploring and developing major copper sulphide projects. This includes:
Environmental studies have commenced to allow three drill holes of approximately 500 metres each at the Caramasa porphyry target once permitting and access construction is complete this year. Exploration Target size for Chilean Cordillera style copper porphyry deposits is between 0.5-1 billion tonnes grading 0.5-0.8% copper.
Footnote: These Exploration Targets are conceptual in nature and there has been insufficient exploration to define a mineral resource under the JORC Code and it is uncertain if further exploration will results in the definition of a mineral resource.
In Chile CYU has very prospective porphyry targets. This is proven from surface mapping, sampling and geophysical surveys. The targets have the correct parameters to allow drilling when regulatory approvals are received.
The Palmani Target has dimension of 1x3km and represents a porphyry target to be drilled at the end of winter.
The Caramasa Target is drill ready with excellent alteration observed in the valley. Permitting of drill access is underway with possible drilling operations in the current quarter.
Chinese Mining Industry Company Partnership
To date over $5 million cornerstone investment by China Yunnan Copper (Australia) Investment & Development Co Ltd, a subsidiary of Yunnan Copper Industry (Group) Co Ltd which is China's third largest copper producer and its largest silver and bismuth producer.
Yunnan Copper Industry (Group) Co Ltd's Chairman and two other Chinese representatives appointed to the Chinalco Yunnan Copper Resources Limited board.
Access to technical expertise, new projects, project funding and competitive off-take agreements from Yunnan Copper Industry (Group) Co Ltd.
Australian and Chinese Board and management with a range of resources and corporate experience capable of advancing this portfolio of highly prospective projects to discovery and development.
Major shareholder Yunnan Copper Industry (Group) Co Ltd via its subsidiary brings exploration, mining, production, smelting and refining expertise to the company.
Management team has extensive collective experience and expertise in the exploration, evaluation, feasibility studies, financing, development and operation of mineral projects.
Potential for exploration success combined with the active support of Yunnan Copper Industry (Group) Co Ltd provides CYU with the opportunity of rapidly expanding its business in Australia and abroad.
New Mexico Copper Corporation Parent Company Gains 100% Ownership of Copper Flat
New Mexico Economic Development Gives Project Thumbs Up
Albuquerque, NM May 23, 2011 - THEMAC Resources Group Limited ("THEMAC" or "the Company") ( MAC )) is pleased to announce that on May 18 the company made the final payment on the Copper Flat project. Through its wholly owned subsidiary, New Mexico Copper Corporation, THEMAC is now 100% owner of the entire project. Copper Flat is located about 20 miles Southwest of Truth or Consequences in Sierra County.
"We're very happy to announce this significant milestone," said Barrett Sleeman, Chief Executive Officer of THEMAC. "We are committed to bringing this project to production."
The site was originally an open pit mine developed in 1982, which closed shortly thereafter when the market price for copper dropped. Building foundations and other infrastructure remain in place at Copper Flat. The project will create close to 500 construction and approximately 200 jobs at the mine site. The operation will also contribute royalties and tax revenues to the state of New Mexico.
"Bringing mine projects such as Copper Flat to production is the goal and objective of this administration," said Cabinet Secretary Designee Jon Barela of the New Mexico Economic Development Department. "This is about job creation and economic survival for Southern New Mexico. We're very pleased to play a role in paving the way for New Mexico Copper Corporation," added Barela.
"This Administration is committed to making the state a place where business and government can work together to create an environment that promotes a vibrant and healthy job market and economy," concluded Barela.
Final payment to the previous owners was in the amount of $7,000,000. Also, on May16, the company made a $1,000,000 payment for the water rights which will be necessary for full production. One final water rights payment in the amount of $750,000 is due when plant operations commence. The funds for these purposes amounting to $5 million were advanced by the major shareholder of THEMAC in line with terms of a previously negotiated loan arrangement.
"New Mexico Copper Corporation is dedicated to establishing a dialogue with the residents of Sierra County," said Barrett Sleeman. "We will continue communicating with the community on our plans as our management is environmentally responsible and sensitive to any concerns."
About the Copper Flat Project
Copper Flat is a former producing mine located approximately 20 miles southwest of Truth or Consequences in Sierra County. Permitting for a return of the project to production is at an advanced stage, and a prefeasibility study is in progress and targeted for completion during 2011.
The Copper Flat project is a porphyry copper-molybdenum-gold-silver deposit. The deposit has NI43-101 Indicated Mineral Resources of 107 million short tons grading 0.303% copper and 0.01% molybdenum for 645 million lbs copper and 21.4 million lbs molybdenum, plus Inferred Mineral Resources of 46 million short tons grading 0.24% copper and 0.006% molybdenum for 222 million lbs copper and 5.6 million lbs molybdenum.
The gold and silver content of the deposit is evidenced by historic production and metallurgical test work, and gold and silver are targeted for incorporation into the deposit's NI43-101 Mineral Resource statement following completion and interpretation of a re-assay program using historic drill pulps.
An NI43-101 Preliminary Economic Assessment ("PEA") dated June 30, 2010 and updated February 25, 2011 has been completed for Copper Flat and can be viewed on SEDAR.
Civil infrastructure in place at Copper Flat includes a tailings dam, largely pre-stripped open pit, power lines, water well field and pipeline, access roads, diversion channels and building foundations. The project land package comprises in excess of 1,200 hectares. For more information visit www.nmcopper.com
About THEMAC Resources Group Limited
THEMAC is a copper development company with a strong management team and as of May 18, a 100% ownership interest in the Copper Flat copper-molybdenum-gold-silver project in New Mexico, USA. We are committed to bringing the closed copper mine, Copper Flat, in Sierra County, New Mexico back into production with innovation and a sustainable approach to mining development and production, local economic opportunities and the best reclamation practices for our unique environment. The Company is listed on the TSX Venture Exchange (ticker: MAC) and has issued share capital of 74,117,622 common shares (fully diluted share capital 134,523,241).
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. www.livetradingnews.com
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.