Coppernico Metals Inc. CPPMF

Primary Symbol: T.COPR

Metals & Mining Industrial Metals & Minerals

Coppernico is a mineral exploration company focused on creating value for shareholders and stakeholders through diligent project evaluation and exploration excellence in pursuit of the discovery of world-class copper-gold deposits in the Americas. The Company’s management and technical teams have a successful track record of raising capital, discovery and the monetization of exploration successes. The Company, through its wholly-owned private Peruvian subsidiary Sombrero Minerales S.A.C., is currently focused on the Ccascabamba (previously referred to as Sombrero Main) and Nioc target areas within the Sombrero Project in Peru, its flagship project, and is regularly reviewing additional premium projects to consider for acquisition. The Sombrero Project is a land package of approximately 102,000 hectares (1,020 square kilometres) located in the north-western margins of the world-class Andahuaylas-Yauri trend in Peru. It consists of a number of prospective exploration targets characte...

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Coppernico Metals Inc.

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Post by retiredcfon Nov 02, 2021 8:57am

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Post# 34076412

TD 2

Copper Mountain Mining Corp.

(CMMC-T) C$3.87

Guidance Reaffirmed; Announcement on Eva Expected in December

Event

We have updated our estimates to reflect Copper Mountain's Q3/21 results.

Impact: NEUTRAL

Solid Q3/21 results — We calculate that Copper Mountain generated $50mm in FCF in the quarter, driven by better-than-expected production and sales, allowing the company to further deleverage its balance sheet. Adjusted net debt, including the amounts previously owed to Mitsubishi, has declined from a peak of $361mm in Q1/20 to $165mm at the end of Q3/21.
2021 production and cost guidance maintained, but inflationary pressure building — As a reminder, in July, the company raised its full-year 2021 production guidance to 90-100mmlbs copper from a range of 85-95mmlbs previously, with all-in cost guidance left unchanged at US$1.80-US$2.00/lb. The company now expects to finish the year at the upper end of these ranges, highlighting the impact of inflationary pressure on the costs of fuel and steel.
Progress continues at Eva; update expected in December — The company expects to announce the final cost estimates on its Eva Cu-Au development project in Australia by December, to be followed by a Board decision. The company noted on its Q3/21 earnings call that it has seen cost escalation on the capex side, but some offsetting costs on opex.
We have re-sequenced our estimates for the Copper Mountain mine (CMM) and Eva — We have accelerated our production estimates for Eva by one year to 2024, which now assumes that the Board will sanction the project before year-end or early-2022. Given commentary from management on its conference call, we now expect the previously announced CMM expansion to 65ktpa to be postponed to reflect some positive exploration results at CMM and to prioritize Eva. The net impact has lowered our NAV estimates, but boosted our EBITDA estimates next year on lower cost assumptions.

TD Investment Conclusion

We are maintaining our BUY rating and $4.75 target price. The next significant catalyst for the company, in our view, is a final decision on Eva. Although inflationary costs and COVID-19 restrictions are risks, the company's balance sheet continues to improve q/q at these metal prices and we believe that there is support for a mid- sized copper project in a good jurisdiction.