Wellington WestWellington West selected Copper Mountain Mining in their top pick list for 2010 and they had a $4 target at that time. They haven't revised up their target yet, but I think it's only a matter of time as we are getting closer to production. What's interesting however is that they think that the coming drilling results could be a game changer of the company. The analyst is even suggesting the CUM could become a bigger producer if results are positive. I'm not sure what is the logic behind that as CUM already have 5 billion pounds of copper. Perhaps the new zones that are being drilled are expected to contain higher grades that would make it even more profitable to expand production at this time?
One thing for sure, things could really get interesting here should they have plans to double production. At current copper prices, the Similico mine should generate $200 million in free cash flow per year. They could easily finance the expansion of the mine with these cash flows without further dilution.
GLTA
*****************************************************************************************
TGR: Any other copper companies you're following that we have not talked about?
SP: There is Copper Mountain Mining Corp. (TSX:CUM). It has made the transition to a development company by securing an offtake deal. Now, Copper Mountain is one of the few projects we know of that is going into production next year. While it's not going to benefit from the offtake thesis, the valuation is still compelling and the company could very well be in the sights of one of the many cashed-up miners looking for production growth. This is the nearest-term production growth that is available.
TGR: Do you have a target price on Copper Mountain?
SP: Our target on Copper Mountain is $4. A potential game changer for the company is that it is drilling a geophysical anomaly below the pit. The company plans to drill four holes into it this year. Success would catapult Copper Mountain from a small- to mid-sized copper producer to, potentially, a larger copper producer that would fit into the wheelhouse of many more companies. Stay tuned. We should hear about that one in about a month or so.
https://www.ibtimes.com/articles/65547/20100924/copper-gold-copper-gold-porphyry-deposits-molybdenum-zinc-china-offtake-financing.htm