Copper

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What are the best copper stocks on the TSX so far this year? These three companies have seen the biggest gains year-to-date.

Top 3 Copper Stocks on the TSX in 2022
Company Description
1. Turquoise Hill Resources (TSX:TRQ)

Year-to-date gain: 95.82 percent; market capitalization: C$8.13 billion; current share price: C$40.79

Turquoise Hill Resources operates the Oyu Tolgoi copper-gold mine in Mongolia, which it claims has the potential to operate for 100 years from five deposits. Oyu Tolgoi is jointly owned by Turquoise Hill (66 percent) and Mongolian government-owned entity Erdenes Oyu Tolgoi (34 percent). Turquoise Hill itself is 50.8 percent owned by Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO), which is the operator of Oyu Tolgoi. The mine has been in production since 2013.

The company performed positively through mid-March, when Rio Tinto proposed a plan to buy the remaining 49.2 percent of Turquoise Hill that it does not already own for C$34 per share. The news drove Turquoise Hill's share price even higher, rising from C$25.68 on the previous trading day to C$34.02 on the day of the announcement. Shares continued to climb from there, hitting a year-to-date high of C$38.58 on April 13.

Turquoise Hill created a special committee to review the proposal in April, and after it found that the offer “did not reflect the full and fair value of the company,” Rio Tinto raised the offer to C$43 per share. On September 5, Turquoise Hill signed a definitive agreement with Rio Tinto at that price point, and the next step is a shareholder vote. This news resulted in the company’s share price hitting a four year high of C$41.99 on September 8.

On August 22, Turquoise Hill provided an update on its operations, including progress on updating the integrated mine plan at Oyu Tolgoi. The mine plan will include “minor refinements” at the Hugo North underground and the Oyut open-pit mines. The mine plan should be available in Q4 of this year.

2. Filo Mining (TSX:FIL)

Year-to-date gain: 31.02 percent; market capitalization: C$2.13 billion; current share price: C$16.77

Filo Mining is focused on advancing its Filo del Sol copper-gold-silver project in Chile along the Chile-Argentina border. Drilling at the site slowed for the 2022 winter season due to weather conditions, but the company is looking to explore the project’s Aurora zone, Breccia 41 zone and the recently discovered Bonita zone as the South America spring season commences.

Filo’s share price began to see significant growth in mid-March after it closed a C$100 million strategic investment from BHP Western Mining Resources, which is a subsidiary of BHP (ASX:BHP,NYSE:BHP,LSE:BHP). The company’s share price rose to reach a peak of C$24.44 on April 18 before falling through mid-May to C$16.62. However, the day after that low, Filo's share price rocketed back up on positive drill results that extended the Breccia 41 zone at Filo del Sol.

Further positive exploration news continued to drive the company's share price, culminating in a year-to-date high of C$26.58 on June 2. On June 3, Filo shared that it has been included in the S&P/TSX Composite Index. The company released its Q2 results in August, discussing the progress made at Filo del Sol over the quarter, including very high-grade drill results and the discovery of a copper-gold porphyry center, dubbed the Bonita zone, at the project.

“Exploration results from Filo del Sol continue to stand out on a global scale and showcase the project as one of the most significant copper-gold-silver discoveries of its generation,” President and CEO Jamie Beck said in a release.

August drill results at the Aurora zone extended the strike length by 180 meters, and it can still be further expanded. One highlight showed 701.2 meters at 1.13 percent copper equivalent. The company’s most recent news is the appointment of Ian Gibbs as chief financial officer and Arndt Brettschneider as vice president of operations and projects on September 1. While the company’s share price has fallen from its highs seen in June, it is still up year-to-date.

3. Entrée Resources (TSX:ETG)

Year-to-date gain: 23.46 percent; market capitalization: C$204.68 million; current share price: C$1.00

Entrée Resources is another company that has its hands in the Oyu Tolgoi pot. The company has a 20 to 30 percent interest in mineralization extracted at the Entrée/Oyu Tolgoi joint venture property, with the amount determined by the depth of mineralization. In addition to its interest in the Oyu Tolgoi project, Entrée has a 56.53 percent interest in the Blue Rose joint venture with Giralia Resources, and a 0.5 percent net smelter return royalty with Candente Copper (TSX:DNT) on the Cañariaco project.

Entrée’s share price saw a steep spike in late January when it shared news that multiple outstanding issues between the Mongolian government and the companies involved in Oyu Tolgoi — Turquoise Hill in particular — had been resolved. Its share price saw another large jump in March, and it remained elevated through mid-April, during which time Entrée shared its 2021 results and corporate highlights, as well as the appointment of a new member to its board of directors.

On May 26, Entrée “commenced binding arbitration proceedings to seek declarations and orders for specific performance relating to certain provisions of the Equity Participation and Earn-in Agreement with Turquoise Hill Resources.” The company’s board has concluded that these agreements must be enforced as soon as possible. The company further discussed its goals with these proceedings in its Q2 results, as well as developments at Oyu Tolgoi.

Click here to read the previous best TSX copper stocks article.

After a strong 2021, copper has seen even greater success in 2022, reaching an all-time high of US$10,910 per metric ton (MT) on March 4. However, prices have fallen in Q3, dropping to US$8,225 as of September 13.

This decline began in Q2, and experts have weighed in on what happened and where copper will go from here. In the short term, some market watchers believe prices will fall further, but long-term factors look positive.

"Most, if not all, the reports I've seen have been talking about a large (copper) deficit looming in the not-too-distant future. If you combine a deficit with the lengthening of the timelines to bring on production, there's some very optimistic price forecasts for copper," Rob McEwen, chairman and chief owner of McEwen Mining (TSX:MUX,NYSE:MUX), told the Investing News Network.


The list below shows the top-performing TSX-listed copper stocks by share price performance so far this year. It was generated on September 13, 2022, using TradingView’s stock screener, and only TSX copper companies with market capitalizations greater than C$50 million at that time are included.

1. Turquoise Hill Resources (TSX:TRQ)

Year-to-date gain: 95.82 percent; market capitalization: C$8.13 billion; current share price: C$40.79

Turquoise Hill Resources operates the Oyu Tolgoi copper-gold mine in Mongolia, which it claims has the potential to operate for 100 years from five deposits. Oyu Tolgoi is jointly owned by Turquoise Hill (66 percent) and Mongolian government-owned entity Erdenes Oyu Tolgoi (34 percent). Turquoise Hill itself is 50.8 percent owned by Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO), which is the operator of Oyu Tolgoi. The mine has been in production since 2013.

The company performed positively through mid-March, when Rio Tinto proposed a plan to buy the remaining 49.2 percent of Turquoise Hill that it does not already own for C$34 per share. The news drove Turquoise Hill's share price even higher, rising from C$25.68 on the previous trading day to C$34.02 on the day of the announcement. Shares continued to climb from there, hitting a year-to-date high of C$38.58 on April 13.

Turquoise Hill created a special committee to review the proposal in April, and after it found that the offer “did not reflect the full and fair value of the company,” Rio Tinto raised the offer to C$43 per share. On September 5, Turquoise Hill signed a definitive agreement with Rio Tinto at that price point, and the next step is a shareholder vote. This news resulted in the company’s share price hitting a four year high of C$41.99 on September 8.

On August 22, Turquoise Hill provided an update on its operations, including progress on updating the integrated mine plan at Oyu Tolgoi. The mine plan will include “minor refinements” at the Hugo North underground and the Oyut open-pit mines. The mine plan should be available in Q4 of this year.

2. Filo Mining (TSX:FIL)

Year-to-date gain: 31.02 percent; market capitalization: C$2.13 billion; current share price: C$16.77

Filo Mining is focused on advancing its Filo del Sol copper-gold-silver project in Chile along the Chile-Argentina border. Drilling at the site slowed for the 2022 winter season due to weather conditions, but the company is looking to explore the project’s Aurora zone, Breccia 41 zone and the recently discovered Bonita zone as the South America spring season commences.

Filo’s share price began to see significant growth in mid-March after it closed a C$100 million strategic investment from BHP Western Mining Resources, which is a subsidiary of BHP (ASX:BHP,NYSE:BHP,LSE:BHP). The company’s share price rose to reach a peak of C$24.44 on April 18 before falling through mid-May to C$16.62. However, the day after that low, Filo's share price rocketed back up on positive drill results that extended the Breccia 41 zone at Filo del Sol.

Further positive exploration news continued to drive the company's share price, culminating in a year-to-date high of C$26.58 on June 2. On June 3, Filo shared that it has been included in the S&P/TSX Composite Index. The company released its Q2 results in August, discussing the progress made at Filo del Sol over the quarter, including very high-grade drill results and the discovery of a copper-gold porphyry center, dubbed the Bonita zone, at the project.

“Exploration results from Filo del Sol continue to stand out on a global scale and showcase the project as one of the most significant copper-gold-silver discoveries of its generation,” President and CEO Jamie Beck said in a release.

August drill results at the Aurora zone extended the strike length by 180 meters, and it can still be further expanded. One highlight showed 701.2 meters at 1.13 percent copper equivalent. The company’s most recent news is the appointment of Ian Gibbs as chief financial officer and Arndt Brettschneider as vice president of operations and projects on September 1. While the company’s share price has fallen from its highs seen in June, it is still up year-to-date.

3. Entrée Resources (TSX:ETG)

Year-to-date gain: 23.46 percent; market capitalization: C$204.68 million; current share price: C$1.00

Entrée Resources is another company that has its hands in the Oyu Tolgoi pot. The company has a 20 to 30 percent interest in mineralization extracted at the Entrée/Oyu Tolgoi joint venture property, with the amount determined by the depth of mineralization. In addition to its interest in the Oyu Tolgoi project, Entrée has a 56.53 percent interest in the Blue Rose joint venture with Giralia Resources, and a 0.5 percent net smelter return royalty with Candente Copper (TSX:DNT) on the Cañariaco project.

Entrée’s share price saw a steep spike in late January when it shared news that multiple outstanding issues between the Mongolian government and the companies involved in Oyu Tolgoi — Turquoise Hill in particular — had been resolved. Its share price saw another large jump in March, and it remained elevated through mid-April, during which time Entrée shared its 2021 results and corporate highlights, as well as the appointment of a new member to its board of directors.

On May 26, Entrée “commenced binding arbitration proceedings to seek declarations and orders for specific performance relating to certain provisions of the Equity Participation and Earn-in Agreement with Turquoise Hill Resources.” The company’s board has concluded that these agreements must be enforced as soon as possible. The company further discussed its goals with these proceedings in its Q2 results, as well as developments at Oyu Tolgoi.

FAQs for investing in copper

Is copper a good investment in 2022?

While the metal is currently trending down in terms of its price, experts see that as a symptom of COVID-19 lockdowns in China, as well as other short-term headwinds. So when will the copper price go back up? Economists are divided, but many believe it will be back up within the next couple of years.

With the volatility and unpredictability of markets and economies at the moment, nothing is guaranteed, but it can be worth getting into a market when prices are depressed if it matches an investors’ portfolio goals.

What is copper used for?

Copper is used in many industries, from construction to electronics to medical equipment. In fact, in 2020, 32 percent of copper globally was used in equipment manufacturing and 28 percent in building construction.

Two other growing sectors for copper are the burgeoning electric vehicle and green energy industries. Electric vehicles require a significant amount of the red metal per vehicle.

How to invest in copper?

Investors can get exposure to copper in a variety of ways. Holding physical copper is possible, but plenty of storage would be required to hold any significant value of the metal.

For investors looking to invest in the metal without physically holding it, there are a few options. Copper stocks such as those on the TSX, TSXV and ASX are worth looking at. Additionally, there are copper exchange-traded funds and the copper options and futures markets on the London Metal Exchange

How to invest in a copper ETF?

Copper exchange-traded funds (ETFs) can be a good way to diversify an investment portfolio, and they can be a more stable option compared to individual copper miners or explorers. There are multiple options available on the market, and they can usually be purchased in the same way one could purchase stocks through a broker or trading platform.

In May 2022, Horizons launched Canada’s first copper equities ETF, the Horizons Copper Producers Index ETF (TSX:COPP), which is focused solely on pure-play and diversified copper-mining companies.

There are two ETFs available on the US ARCA exchange as well. The Global X Copper Miners ETF (ARCA:COPX) tracks the Solactive Global Copper Miners Index, which includes copper miners, as well as copper explorers and developers. The other option is the United States Copper Index Fund (ARCA:CPER), which gives investors exposure to copper futures contracts by tracking the SummerHaven Copper Index Total Return (INDEXNYSEGIS:SCITR).

How much is copper worth?

The copper price is tracked in two ways: COMEX copper and London Metal Exchange (LME) copper. The COMEX and LME are both options and futures metal exchanges, with the former being headquartered in New York and the latter in London. COMEX copper is priced by the pound, while LME copper is priced per MT.

Since the start of 2022, copper has seen historically high prices. In Q1 and most of Q2, copper prices on the COMEX ranged between US$4.10 and US$4.89 ⁠— an all-time high. For the same time period on the LME, copper moved between US$9,000 and US$10,730. Q3 has brought lower prices for the metal, which has seen year-to-date lows of US$3.21 and US$6,998, respectively.

Where is copper mined and how is it processed?

Copper is mined throughout the world, with significant production found on every continent besides Antarctica. Chile was the top producer in 2021, putting out 5.6 million MT of the metal. Rounding out the top five are Peru with 2,200 MT, China and the Democratic Republic of Congo with 1,800 MT each and the US with 1,200 MT.

Once copper is mined, the ore goes through multiple steps to reach a market-ready state. First, the ore is ground to roughly separate the rock from the copper, as copper typically only makes up 1 percent of the mined rock.

The resultant copper is then slurried with water and chemical reagents, after which air is used to float the copper to the top of the mixture. After the copper is removed from this, it is typically at 24 to 40 percent purity.

Lastly, the copper is refined at a refining plant or smelter using one of two methods, pyrometallurgy and hydrometallurgy. Pyrometallurgy is employed for copper ore that is sulfide rich, while hydrometallurgy is used when the ore is oxide rich. The Investing News Network's guide on copper refining goes into further detail about how those processes work. Once these processes are complete, the copper is concentrated to up to 99.99 percent purity.

Don’t forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Lauren Kelly, hold no direct investment interest in any company mentioned in this article.

Copper Outlook:

MARKETS

Markets
TSX19370.99+489.80
TSXV623.23+15.25
DOW30316.32+825.43
S&P 5003790.930.00
NASD11176.41+360.97
ASX6699.30+242.40

COMMODITIES

Commodities
Gold1708.03-17.33
Silver20.31-0.71
Copper3.48-0.01
Palladium2276.00-27.00
Platinum920.50-10.50
Oil86.70+0.18
Heating Oil3.520.00
Natural Gas6.74-0.10

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