copper, cibc report Am i correc that all we're waiting on is the Clean Water Act permit from the US Army Engineers / Record of Decsion from the US Forest Service? Are there any other hurdles?
Pardon me if this is old news (dated April 2) but i didn't see it posted and it pertains to this stock:
| Be Greedy When Others Are Fearful Discounted Junior Copper Equities Offer Attractive Risk/Reward |
| ? Global copper production will likely struggle to keep pace with demand growth. We estimate that the market will require at least ~360,000 new tonnes of copper per year for the remainder of the decade. We believe that the market's focus is likely to shift to the supply side in the near term. ? Challenges that have plagued copper producers, including technical issues, political interference, and labor/local unrest, will likely continue to keep the copper market tight. The potential for grade decline at major copper mines could further exacerbate supply constraints moving forward. ? We have updated our junior copper ranking system and methodology, incorporating political risk and increased weighting for grades, to better reflect, we believe, how the market values companies globally, with a premium for high grade, low political risk and low capex projects. ? We now rank 32 junior copper equities, holding 56 development projects located inside and outside the Americas. We have ranked these projects against 100 peers, including several held by senior miners. Our top-ranked developers: NDM, IVP, POM, NCQ, AZC; and explorers: DM, SAU, LCC. |
A Reminder: Why We Like Copper
Near term, the copper market appears to be well supplied and the equities tend to reflect this in their valuations. We believe that there is a tremendous amount of execution risk with maintaining current production levels at many mines and ramping up new projects. Given the mining industry’s recent operating track record, it is easy to look at supply projections with a fair degree of skepticism. Going forward it is likely that any kind of supply disruption, whether of a political, technical, or environmental nature, could provide a catalyst for copper prices and equity valuations.
Looking over a longer time horizon, however, we believe that copper development projects will be essential to satisfy growing demand and offset declining production from existing mines. Replacing production as mines age will become more important. At the same time, exploration is not delivering large, high-grade deposits and those few that are found are increasingly hampered by a lack of available infrastructure or are situated in less-than-mining-friendly jurisdictions.
Potential restocking in China in H2/2013 is likely to improve sentiment, as is a continued recovery in the U.S. Europe is unlikely to add significantly to demand and, more than likely, will detract from sentiment given the headlines from the region.