Future looks bright for Taseko Mines Ltd. (AMEX:TGB)

After a deep sell-off in November, things are definitely looking better for Taseko Mines Limited (AMEX:TGB). I’m kicking myself for not buying in.

I’ve been kicking myself for not buying shares in Taseko Mines Limited (AMEX:TGB) after a deep sell-off in November. Investors punished Taseko shares after the Canadian government rejected plans to develop TGB’s massive Prosperity gold and copper deposit in British Columbia.

Taseko shares bounced around for a month on the bad news. Since then they’ve been on a tear, rising more than 40 percent over the past three months in the face of surging copper demand and, most recently, on plans for expansion at Gibraltar. Things are definitely looking better for TGB. Here are a few recent developments that might make the stock a great addition to your portfolio:

  • Gibraltar’s getting bigger. Pending approval by partners, Taseko announced plans earlier this week for a $325 million expansion at Gibraltar – a large copper and molybdenum mine in British Columbia. A new concentrator at the site should grow copper production by 60 million pounds a year to 180 million pounds a year by Q4 in 2012, according to MiningWeekly.com. Taseko’s also budgeting a new molybdenum recovery facility that will boost production in the steel alloy ingredient by 1 million pounds a year.
  • Price target gets a boost. On the heels of the announcement that Taseko’s expanding its Gibraltar mine, Canaccord Genuity raised its price target on the stock from C$7.00 to C$7.75 yesterday. The Globe and Mail reports that “analyst Orest Wowkodaw (at Canaccord) likes the company’s strong balance sheet, attractive relative valuation and significant leverage to the red metal.”
  • Prosperity could see daylight yet. The contentious development of Taseko’s Prosperity mine has some powerful political allies that could help the company ultimately get the mine approved. The B.C. government, for instance, pledged its support, and a candidate for B.C. Premier, Christy Clark has moved the mine to the top of her agenda, according to The Globe and Mail.
    “I think the Prosperity Mine needs to move ahead, not just for the thousands of jobs that would be created over the years in the Williams Lake area, but as a signal to investors across the world that British Columbia is open for investment, and if you want to tell people not to come the Prosperity Mine is a pretty big signpost telling them we don’t really want investment here,” Clark told the paper early this month. “We have to change that.”

Related

SMART MONEY


Top 10 best stock sectors for 2011


IPO CALENDAR


The unofficial tech IPO calendar for 2011


GLOWING GROWTH


How to invest in physical uranium ETFs or stocks


GOLD BUGS


Triggers that could push gold to $5,000 per ounce


$5 BILLION MAN


Five stocks picks for 2011 from John Paulson

MUSIC FIX


Six reasons to buy shares in Pandora’s IPO

How to Invest in Copper

Copper isn’t as glitzy or glamorous as gold or silver, but in many ways it feels safer, but how does one invest in copper? Here’s a short list of copper stocks to consider.

Copper has surged from just under $3 per pound to just shy of $4 a pound over the past calendar year. That’s a gain of 33 percent, and that means copper has risen faster than the price of gold over the same period of time. There are a number of real and perceived reasons for the rise, but chief among them has to be the looming threat of inflation. If the dollar continues to fall, the true cost of copper will rise relative to the fall in the dollar. That – coupled with growth in India and China – has investors pouring into the conductive metal ore.

Copper isn’t as glitzy or glamorous as gold or silver, but in many ways it feels safer. Since copper is regularly used in electronics, it’s consumption per person (particularly in the developed world) has been on the rise for decades. So how does one invest in copper?

The simplest way, of course, is through the purchase of copper mining stocks or ETFs. Here’s a quick primer on some of the players in the industry a jumping off point for further research:

1) Try a copper ETN. Want to get some exposure to copper without investing in a single company? Try the iPath Dow Jones-UBS Copper Subindex Total Return ETN (NYSE:JJC). This copper ETN invests in copper futures contracts traded on the COMEX. JJC is up 30.7 percent over the past year with most of that rise (23 percent) taking past over the past three months.

2) Invest in specific mining stocks. ETNs and ETFs offer a measure of protection against the extreme price volatility inherent in investing in a single copper company, but the promise of large gains is also limited. Investing in a moderate-growth copper mine could outstrip performance in the iPath Copper ETN (JJC). Here’s a look at a few copper stocks of note:

  • Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX): A mature and stable company with a market cap of $50+ billion, FCX mines copper and gold
  • Rio Tinto (NYSE:RIO): Another large company with a diverse portfolio of mines, Rio Tinto extracts aluminum, diamonds, coal, even uranium and gold in addition to copper
  • Southern Copper Corporation (NYSE:SCCO): A focused copper miner, shares in SCCO have surged 20 percent in the past month
  • Augusta Resource Corp. (AMEX:AZC): A smaller, more speculative play on copper and silver, AZC owns the Rosemont copper property in Arizona. The stock’s up just 1 percent over the past month, but I wouldn’t be surprised to see it pop if the price of copper continues to rise
  • Taseko Mines Limited (AMEX:TGB): A riskier copper play, TGB has see-sawed in price as the Canadian government green-lights then red-lights TGB’s fabled Prosperity mine. The latest news is TGB won’t be allowed to mine the Canadian Prosperity mine, but I’m not so sure of that. If the company does get the green light, this stock will be back over $6 in a day or two. Keep an eye on it for further developments.

Related

Is there a bomb strapped to Taseko Mine’s (AMEX:TGB) chest?

I’ve long been a fan of Canadian gold mining company Taseko Mines Limited (AMEX:TGB). TGB’s trading at a P/E Ratio of 7.5 and the future at their massive Prosperity Mine appears bright. At least, it did until several Indian chiefs started a very vocal protest in the run-up to some necessary governmental approval for the mine. What exactly does the future hold for Taseko?

I’ve long been a fan of Canadian gold mining company Taseko Mines Limited (AMEX:TGB). TGB’s trading at a P/E Ratio of 7.5 and the future at their massive Prosperity Mine appears bright. At least, it did until several Indian chiefs started a very vocal protest in the run-up to some necessary governmental approval for the mine.

“At a news conference in Ottawa last week, (Xeni Gwet’in Chief Marilyn Baptiste) said she and members of her nation are willing to lay down their lives to protect Fish Lake, and suggested there could be confrontation,” according to the B.C. Local News.

The Department of Fisheries and Oceans, Transport Canada, and Natural Resources Canada have until Sept. 10 to weigh in on the mine with the Canadian Environmental Assessment Agency.

All told, 12 environmental groups have urged the agency to block construction at the Prosperity Mine. Not good. Taseko’s hung a big chunk of their future on Prosperity.

The mine could prove immensely profitable. Even after construction costs of $775 million, they expect their cost per ounce to be negative $330 (assuming gold prices of at least $900 per ounce)!

Expect an enormous pop in the stock if the Canadian government green lights the project. If they don’t? Well, I wouldn’t want to be holding TGB.