You’ve spoiled my day 
Rightly or wrongly, when I look at a chart like this I assume I’ve missed the boat and put it on a watchlist. Its been relentlessly rerated over many months already.
Looks like a fantastic mine – producing copper concentrate with gold and silver credits at reported less than all in cost of $2/lb Cu. What they’re getting paid for it by the off-take partner I haven’t come across yet but the spot price is $4.09? Anyway the proof they’re going well is in the cash build plus commitment to plant expansion in two stages – eventually targeting 65 kt per day. Is that for for real? The plant must already be gi-normous – I am only used to gold plants and a big gold plant might be 5mtpa, like one that RRL has, whereas this copper plant will soon be shifting maybe 14mtpa. I assume 320 days per year operational, so conservative. And that’s before the next expansion stage.
I think the company claims the mine’s worth US$1B net present value over the “first” 10 years = AUD$1.3B, and for current market cap I get AUD$680m at 208m shares outstanding and a $3.27 s.p. Considering the risk for a copper mine over 10 years, not very exciting, but gets better when you consider the “development ready” Mt Isa region ‘Eva Copper Project’ which is also big scale. Also to consider, the management is saying that they can see 21 years of mine life at Copper Mountain on reserves alone, not 10.
By my quick and crude measures I would think it to be around fair value on present year earnings just declared. I just go by book value and ROE then make a rough intuitive adjustment* for earnings stability, debt and rate of share dilution. All these last three are negatives for C6C in my book.
For Fy20 just ended:
eps was 0.19 making a p/e of around 17
ROE = 13%, Book Value = 1.31
Nothing else considered I would think 3 x book value would be fairish = $3.93, but with the negatives mentioned* I think current price is fair with no margin of safety. If I choose to risk faith in management’s growth projections and suggestions it’s worth more than current price.
I wouldn’t have a clue really, it’s just moved too fast to be an investment for me, potential for a quick trade would be something else.
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