The Conversation (0)
Copper Mountain achieved record production in its third quarter, and Haywood Securities raised its target price for the company as a result.
The good news keeps rolling in for Copper Mountain Mining (TSX:CUM), which on Wednesday released record third-quarter production results and received a positive review from Haywood Securities.
The company said it boosted production at its Copper Mountain project by 21.7 million pounds of copper concentrate, equivalent to a 9-percent increase, from the second quarter of 2014. The average grade of the ore was about 0.421-percent copper after processing 2.8 million tonnes.
With its share price mirroring that success, climbing 31 percent year-to-date, life has been good for the company this year.
Second crusher helps production keep rolling
Copper Mountain’s project is a combination of three existing open pits combined into one large super pit, with production having started back in 2011. Part of the project’s success this past quarter can be traced to a secondary crusher, which was installed to the tune of $40 million back in August. The crusher averaged 35,900 tonnes per day during the last week of September with a high day achievement of 43,500.
“We are extremely pleased with our construction and operating team’s efforts on bringing the new $40 million secondary crusher into production on schedule and on budget,” said Jim O’Rourke, president and CEO, in a statement.
Copper production was in line with company forecasts, with a ship loading error making a $3.6-million dent in sales. The workers at the port mistakenly loaded the concentrate produced by Copper Mountain onto another company’s ship.
Copper Mountain’s mill availability also remained high, allowing near continuous work on processing ore. The company has a targeted goal of hitting 92-percent availability by the end of the year. With an eye on producing 80 to 90 million pounds of copper concentrate by 2014’s end, analysts are eyeing up the company’s stock for investors.
Analyst takes note
Stefan Ioannou of Haywood Securities wrote in a note to clients that while the Copper Mountain project is relatively low grade, he believes stronger forecasted copper prices could help boost the company’s share price. He pinpointed its seamless transition to producer while many of its competitors lag behind as a reason to look at investment.
“We continue to view Copper Mountain’s anticipated improvement with cautious optimism,” he wrote. Ioannou also increased his share price target for the company from $3 to $3.50.
Keep an eye out
While copper prices are on a downtrend this year, Copper Mountain has plans in place to help with the purchase of its material. Mitsubishi Materials (TSE:5711) holds a 25-percent interest in the project, which it purchased for $28.75 million in 2009, and also holds the right to purchase 100 percent of its copper concentrate production.
In an interview with Copper Investing News, Ioannou said he sees copper staying in a range of $3.25 per pound for this year (as well as 2015 and the first half of 2016), with a possible deficit forecasted for 2017 and 2018, meaning a rise in prices.
Copper Mountain’s Q3 financial results are set to be released November 12, and investors are sure to take note of this company and its growing production in the British Columbia copper industry.
Securities Disclosure: I, Nick Wells, hold no direct investment interest in any company mentioned in this article.