CUBC research todayMetals & Minerals (416) 594-7284
Weighting Companies Covered
M BIM-TSX,CLM-TSX,CS-TSX,EQN-TSX,FM-TSX,FNX-TSX,GMO-AMEX,HBM-TSX,IMN-TSX,IVN-TSX,LIF.UN-TSX,ML-TSX,NML-V,QUA-TSX,TCK.B-TSX,TCMTSX,
TKO-TSX
Executive Summary: 2010 Base Metals Outlook
We have revised our commodity price expectations upward based on better-than-expected interest in commodity
investment, stronger-than-expected Chinese metals imports and industrial production, and initial indications of a
stronger-than-expected economic recovery ex-China.
Our relative preference for commodities remains copper first followed by metallurgical coal and iron ore. We could become more attracted to zinc should a stronger demand environment materialize. We continue to believe the upside potential for aluminum and nickel prices remains limited.
We have substantially increased most price targets for our coverage universe, with the most significant increases in
copper and iron ore-exposed names FM (+24%) and CLM (+27%). Also, as of January 6, we are upgrading EQN to SO
(from SP) and downgrading IVN to SP (from SO).
Our top picks in the large-cap sector are FM and TCK.B, with CS, TKO, ML and FNX our preferred names in the mid- to small-cap universe.