Best Copper Stocks of 2018 on the TSX

Base Metals Investing

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

After such a promising jump in value at the start of June, copper is still well on its way downwards as of the close of the second quarter and into the start of July in 2018.

The red metal broke through the floor and set a new low today (July 5), falling to US$6,458 per tonne—below the previous low of US$6,499 hit at the end of March.

Much of the blame is going towards general jitters in the markets and fears over the emerging trade war between the US and its partners, which is forcing all base metals down.

In its most recent report, Scotiabank analysts directed blame for the fall in value away from supply concerns for copper, saying that rumblings at Escondida in Chile were not the culprit.

“[We] don’t believe that we will see another significant work stoppage at Escondida this year and we anticipate that the union and management will come to an agreement through the summer,” they said.

Escondida’s claim to 5 percent of global copper production means it can move the market by itself. On the TSX, copper miners have been making gains through the year despite an overall fall in value.

Here’s a look at what the 5 best copper stocks of 2018 are up to so far. The list below was generated using the Globe and Mail’s market data filter, and it shows the TSX-listed copper companies with the biggest share price gains from January 1 to July 5. Only companies with market caps above $50 million are included.

1. Atalaya Mining (TSX:AYM)

Current price: C$4.21; year-to-date gain: 58.87 percent.

Copper miner Atalaya has the Proyecto Riotinto as its primary asset, a 9.5 million tonne per year open-pit mine in Andalucia in southern Spain. According to the company, the mine’s measured and indicated mineral resources total 193 million tonnes at 0.43 percent copper, at a cut-off grade of 0.20 percent copper.

It also has Proyecto Touro, also in Spain, which is another copper mine, where the company has been conducting exploration and snapping up concessions surrounding the project as of early June.

Atalaya’s first quarter results released in May detailed positive progress at Proyecto Riotinto, where copper production increased 7.2 percent compared to Q1 2017. The company also released details about Proyecto Touro and its recently concluded pre feasibility study, showing a future mine would need 2 years of development for 12 years of production, yielding 30,000 tonnes of copper per year.

2. Nevsun Resources (TSX:NSU)

Current price: C$4.35; year-to-date gain: 38.87 percent.

Nevsun Resources has spent plenty of time in the spotlight this year, gaining a decent 38.87 percent on the Toronto Stock Exchange thanks to attempted woo-ing by fellow Canadian miners Lundin Mining (TSX:LUN) and Euro Sun Mining (TSX:ESM)the two companies that have been attempting to buy Nevsun since May.

Nevsun is guarding its two major assets however, which are the producing Bisha mine in Eritrea and the Timok project in Serbia. In June, the company released the initial resource estimate for the Timok lower zone, showing 1.7 billion inferred tonnes grading 0.86 percent copper and 0.18 grams per tonne gold, containing 31.5 billion pounds of copper and 9.6 million ounces of gold.

The company is yet to show any interest in the offer from Lundin Mining and Euro Sun Mining, which would see Lundin take Timok, and Euro Sun acquire Bisha.

3. Sierra Metals (TSX:SMT)

Current price: C$3.51; year-to-date gain: 17.39 percent.

Sierra Metals has three operating mines throughout Latin America, including the copper-producing Yauricocha mine in Peru and the Bolivar mine in Mexico.

According to Sierra, Yauricocha saw a 33.9 percent increase in copper production in Q1 2018 over Q1 2017, with output reaching 3,727,000 pounds. The Bolivar mine in Mexico was down 3.2 percent however, but still produced 4,363,000 pounds of copper.

In late June, Sierra released positive results from a preliminary economic assessment looking into increasing output at Yauricocha to 5,500 tonnes per daya 66 percent increase.

4. Ero Copper (TSX:ERO)

Current price: C$9.16; year-to-date gain: 9.71 percent

Base metals miner Ero Copper has mining and development operations in Brazil, in the states of Bahia and Pará.

Its primary focus is its MCSA mining complex in Bahia, which includes the Vale Do Curaçá properties, where it has underground and open pit mining as well as processing facilities.

In May, the company released its Q1 results for 2018, detailing an increase in total ore mined as well as copper grade compared with the previous quarter.

The company also detailed progress on its Vermelhos mine development, where the company has continued to provide updates throughout the year.

5. PolyMet Mining (TSX:POM)

Current price: C$1.22; year-to-date gain: 6.09 percent

Polymet Mining controls the NorthMet project in Minnesota, which includes a major copper-nickelcobalt deposit and a steel processing facility, which the company says it will repurpose as part of its development of the asset.

According to PolyMet, Northmet will be developed in two stages, the first of which will see the deposit turned into an operating mine capable of producing 32,000 tonnes of ore per day, and the rehabilitation of the facilities on site.

PolyMet says that at peak production, the project will produce 69.4 million pounds of copper, 9.6 million pounds of nickel and 352,000 pounds of cobalt every year.

Permitting applications are still underway, but the company says it has broad support from the local community.

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

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