Base Metals Archives - Page 18 of 97

We recently compiled a list of the Best TSX Stocks To Invest In Now. In this article, we will look at where Teck Resources (NYSE:TECK) ranks among the best TSX stocks to invest in now.

Canada’s Economy Shows Signs of Stabilization

According to Deloitte, the Canadian economy is showing signs of stabilisation after three years of turmoil, with inflation steadily declining since June 2022. Canada’s economy grew stronger in the first half of 2024 than previously forecast, but the pace of recovery is expected to be limited in the second half of the year due to slower household spending. The updated forecast projects real GDP growth of 1.2% for 2024, followed by 2.6% growth in 2025, with real GDP per person falling by 1.6% in 2024 before clawing back to gain 1.1% growth in 2025.

The Bank of Canada has begun to ease its monetary policy, paving the way for stronger economic growth. However, the pace of monetary easing is uncertain, and weak investment and productivity performance continue to pose a risk to Canada’s long-term economic outlook. The Bank of Canada is expected to cut interest rates at a gradual pace, with a rate cut in September followed by another in December and March. The overnight rate is expected to settle at a neutral level of 2.75% by the end of next year, assuming inflation continues to decrease and returns to the 2% target by the second quarter of next year.

Business sentiment in Canada is beginning to recover, with improved confidence across regions and sectors. However, business investment has been weak, directly impacting productivity and living standards. Since the 2014 commodity price crash, labour productivity in Canada has remained flat, while unit labour costs have increased by over 30%.

The economy’s current challenge is generating enough jobs to keep up with Canada’s rapidly growing population. Despite a strong pace of growth, employment has not kept up with population growth over the past 12 months, resulting in a rise in the unemployment rate. Wage growth slowed dramatically in the first quarter of 2024, and slower wage growth is expected to be the norm this year and next.

Canadian households are the most indebted in the G7, and the increases in interest rates since 2022 have hit their pocketbooks. Real consumer spending per person has fallen in five of the last six quarters, and the effect on home-building has been even more dramatic. However, consumer spending and residential investment are expected to increase as interest rate decreases work to restore demand.

Economist Predicts Stronger Economic Growth for Canada

James Orlando, a senior economist at TD Bank, is optimistic about Canada’s economic growth prospects, particularly in light of the recent interest rate cuts by the Bank of Canada. According to Orlando, Canada’s economic growth has consistently lagged behind the United States, but a change in interest rate policy could help close the gap. The Bank of Canada’s decision to cut interest rates is expected to lead to lower mortgage rates and increased consumer spending. This, in turn, could boost economic growth and help Canada catch up with the United States.

Orlando notes that the Canadian economy is highly sensitive to interest rates, particularly in the housing market. With high levels of debt and a reliance on variable-rate mortgages, Canadians are more likely to feel the pinch of higher interest rates. However, with the Bank of Canada’s rate cuts, Orlando expects to see increased investment in the housing market and potentially improved affordability. While affordability is still a concern, Orlando believes that the rate cuts will help to stimulate economic growth and create jobs.

Orlando also notes that the Canadian economy is expected to benefit from increased investment in areas such as the green transition and the production of electric vehicles. With a growing population and a need for more housing, Orlando expects to see increased investment in the housing market and other areas of the economy. While there are still challenges ahead, Orlando believes that the Bank of Canada’s rate cuts and the resulting economic stimulus will help to drive growth and create jobs in the Canadian economy.

While Canada’s economy is showing signs of stabilisation, the economy still faces significant challenges, including weak investment and productivity performance, a rapidly growing population, and high household debt levels. However, with the Bank of Canada easing its monetary policy and interest rates expected to decrease, consumer spending and residential investment are expected to increase, paving the way for stronger economic growth in the long term. With that in context, let’s take a look at the 8 best TSX stocks to invest in now.

Our Methodology

For this article, we used Finviz and Yahoo Finance stock screeners plus online rankings to compile an initial list of the 40 largest companies in Canada by market cap. From that list, we narrowed our choice down to the 8 stocks that were the most widely held by hedge funds, as of Q2 of 2024. The list is sorted in ascending order of the number of hedge fund investors in each stock.

Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Teck Resources (NYSE:TECK)

Number of Hedge Fund Investors: 69

Teck Resources (NYSE:TECK) is one of Canada’s largest integrated natural resources groups. It produces copper from its four mines in Canada, Chile, and Peru. The company also produces zinc from its Alaska operating mine and coal from its mines in British Columbia.

Copper is an essential commodity in a wide range of innovations and technologies, including electric vehicles, solar panels, and wind turbines. According to McKinsey, the world’s increasing reliance on electrification is expected to drive up annual copper demand to 36.6 million tonnes by 2031, a significant increase from the current demand of around 25 million tonnes. However, copper supply will only reach 30.1 million tonnes, leaving a substantial gap of 6.5 million tonnes.

Furthermore, a “net-zero emissions” path would require an additional 54% of copper by 2030, highlighting the need for significant investment in copper production to meet the world’s growing demand.

Teck Resources’ (NYSE:TECK) Quebrada Blanca operations are stabilising, and production is ramping up steadily. This will drive up revenue and profitability for the company. Furthermore, the company’s commitment to return 30-100% of available cash flow to shareholders.

The world is facing a severe copper supply deficit, which is expected to persist beyond 2030. This will drive up copper prices and benefit Teck Resources (NYSE:TECK) due to its exposure to the rapidly growing demand for copper in the clean energy transition. In the second quarter, the company’s stock was held by 69 hedge funds with stakes worth $1.95 billion.

Overall TECK ranks 1st on our list of the best TSX stocks to invest in now. While we acknowledge the potential of TECK as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TECK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

Disclosure. None. This article is originally published on Insider Monkey.

(Bloomberg) — China’s Zijin Mining Group Co. is considering an expansion of its jointly-owned copper mine in the Democratic Republic of Congo that would place it among the world’s biggest single sources of the metal.

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Zijin would like to scale up the massive Kamoa-Kakula mine in the African copper belt to 1 million tons a year, Chairman Chen Jinghe said in an interview. That’s well beyond the existing target of about 600,000 tons, and would mean a challenge in scale to BHP Group Ltd.’s ageing Escondida mine in Chile.

“Research is being conducted and we are making plans” for 1 million tons, Chen said at Zijin’s headquarters in Xiamen on China’s southeast coast. The Congo project is a joint venture with mining billionaire Robert Friedland’s Ivanhoe Mines Ltd.

Kamoa-Kakula is among only a handful of large-scale, high-quality mines that have entered production in the past decade, just as demand for copper from green industries starts to accelerate. The facility is also a cornerstone of Zijin’s ambitions to be a top-three global copper producer.

Chen didn’t give further details of the expansion. He said the project still needed to “better control the investment and lower costs”, and he also pointed out issues with power supplies, logistics costs and transport bottlenecks.

Zijin and Ivanhoe both hold 39.6% of Kamoa-Kakula, while the DRC government has a 20% stake. Zijin also owns more than 10% of Ivanhoe.

“We are currently conducting an updated life-of-mine engineering study on the Kamoa-Kakula Copper Complex,” Ivanhoe Mines said by email. “Timing and investment decisions on any future expansions at the complex, including the proposed Phase 4 expansion, will be informed by the new mine study, which is expected in Q1 2025.”

The mine produced nearly 400,000 tons last year, Ivanhoe said last month, and it’s currently in the third phase of a ramp-up to more than 600,000 tons a year. Zijin has previously indicated plans for peak production at 800,000 tons.

Escondida, a decades-old mine run by BHP Group Ltd., produced about 1.07 million tons in 2023. Grasberg, a big copper mine in Indonesia run by Freeport McMoRan Inc., produced around 750,000 tons last year.

–With assistance from William Clowes.

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The prospects of the Zacks Mining – Non Ferrous industry look bleak as weak demand in China has been weighing on metal prices. Industry players also grapple with inflated costs, labor shortages and supply-chain issues. However, the demand for non-ferrous metals is expected to be supported by the energy-transition trend, which should buoy the industry.Against this backdrop, we suggest keeping an eye on companies like Freeport-McMoRan Inc. FCX, Lundin Mining LUNMF, Coeur Mining CDE, Ero Copper ERO and Centrus Energy LEU. These companies are poised to gain from their endeavors to build reserves and control costs while investing in technology and improving production efficiency.

About the Industry

The Zacks Mining – Non Ferrous industry comprises companies that produce non-ferrous metals, including copper, gold, silver, cobalt, molybdenum, zinc, aluminum and uranium. These metals are used by various industries, including aerospace, automotive, packaging, construction, machinery, electronics, transportation, jewelry, chemical and nuclear energy. Mining is a long, complex and capital-intensive process. The actual mining operations are preceded by significant exploration and development to evaluate the size of the deposit. The process is followed by the assessment of ways to extract and process the ores efficiently, safely and responsibly. Miners seek opportunities to grow their reserves and resources through targeted near-mine exploration and business development. They strive to upgrade and improve the quality of their existing assets internally and through acquisitions.

What's Shaping the Future of the Mining – Non Ferrous Industry?

Volatility in Metal Prices is Concerning: Copper prices have been adversely impacted this year by weak demand in China due to the property crisis. Even though copper prices have picked up lately on reports that the country will be rolling out more stimulus measures to support the economy, it remains to be seen whether this will be sustained. The prolonged contraction in the U.S. manufacturing sector is concerning. Uranium prices have been on a downtrend this year and are currently near $79 per pound — the lowest since November 2023 as concerns about global supply have eased. Even though the world’s largest uranium miner Kazatomprom lowered its production guidance for the fiscal 2025, it indicates a 12% year-over-year improvement. This has led investors to maintain their view of sufficient supply in the near term. Gold has, however, fared better than other metals earlier this year, aided by increased geopolitical tensions, increasing bets for monetary policy easing and continuous purchasing by central banks. The yellow metal is currently around record highs of $2,660 per ounce and markets anticipate another rate cut in November and the risk of a broader conflict in the Middle East. Silver prices have also risen on these factors. However, the contraction in the manufacturing sector might hurt silver demand. Overall, industry players are dealing with depleting resources, declining supply in old mines and a lack of new mines. Development projects are inherently risky and capital-intensive. While demand has been strong, there will be an eventual deficit in metal supply, leading to a situation that will bolster metal prices. This, in turn, should favor the industry in the long run.Labor Shortage, High Costs Remain Worrisome: The industry has been facing a shortage of skilled workforce lately, which has hiked wages. Labor-related disputes can be damaging to production and revenues. Industry players are grappling with escalating production costs, including electricity, water and materials, as well as higher freight expenses and supply-chain issues. Since the industry cannot control the prices of its products, it focuses on improving the sales volume, increasing the operating cash flow and lowering unit net cash costs. Industry participants are opting for alternate energy sources to minimize fuel-price volatility and secure supply. Miners are now committed to cost-reduction strategies and digital innovation to drive operating efficiencies. Strong Demand to Support the Industry: The demand for non-ferrous metals is expected to remain high in the future, given their wide use in primary sectors, including transportation, electricity, construction, telecommunication, energy and information technology. The surging demand for electric vehicles and renewable energy is expected to be a significant growth driver for metals like copper and nickel in the years to come. The overhauling and upgrading of the nation’s infrastructure, and promoting green policies per the U.S. Infrastructure Investment and Jobs Act will also require a huge amount of non-ferrous metals.

Zacks Industry Rank Indicates Bleak Prospects

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates dull prospects for the near term. The Zacks Mining – Non Ferrous industry, a 12-stock group within the broader Zacks Basic Materials Sector, currently carries a Zacks Industry Rank #142, which places it in the bottom 44% of 250 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.Before we present a few stocks that you may want to consider for your portfolio, let us look at the industry’s recent stock-market performance and its valuation picture.

Industry Versus S&P 500 & Sector

The Zacks Mining- Non Ferrous Industry has outperformed its sector and the Zacks S&P 500 composite over the past 12 months. The stocks in this industry have collectively gained 43.5% in the past year compared with the Zacks Basic Materials sector’s growth of 11.6%. The S&P 500 has risen 33.9% in the said time frame.

One-Year Price Performance

Industry's Current Valuation

Based on the forward 12-month EV/EBITDA ratio, a commonly used multiple for valuing Mining- Non Ferrous stocks, we see that the industry is currently trading at 7.80X compared with the S&P 500’s 14.45X. The Basic Materials sector’s trailing 12-month EV/EBITDA is at 6.58X. This is shown in the charts below.

Enterprise Value/EBITDA (EV/EBITDA) Ratio (F12M)Enterprise Value/EBITDA (EV/EBITDA) Ratio (F12M)

Over the past five years, the industry has traded as high as 9.36X and as low as 3.35X, the median being 6.41X.

5 Mining – Non Ferrous Stocks to Keep an Eye on

Centrus Energy: Earlier this month, the company inked a contingent supply agreement with Korea Hydro & Nuclear Power for a decade of low-enriched uranium deliveries to feed Korea's reactors. Centrus has secured a total of $1.8 billion in contingent sales commitments to date that should support the deployment of new capacity. Under a contract with the U.S. Department of Energy, Centrus has deployed a cascade of 16 centrifuges at the American Centrifuge Plant in Piketon, OH. The company started the production of High-Assay Low-Enriched Uranium (“HALEU”) at the plant in October 2023. It is the first U.S.-owned uranium enrichment plant to begin production since 1954. Subject to the availability of funding, Centrus intends to upscale the plant with additional centrifuges for large-scale production of Low-Enriched Uranium for existing reactors as well as HALEU for the next generation of advanced reactors. The U.S. Department of Energy has issued a series of requests for proposals to jump-start domestic nuclear fuel production, backed by more than $3.4 billion in appropriations from Congress, which is the largest federal investment in uranium enrichment in decades. LEU is competing for this funding.Headquartered in Bethesda, MD, Centrus is a globally recognized supplier of Low-Enriched Uranium fuel. The Zacks Consensus Estimate for fiscal 2024 earnings has moved up 17% over the past 60 days. LEU has a trailing four-quarter earnings surprise of 107%, on average. The company currently carries a Zacks Rank #1 (Strong Buy).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Price: LEU

Freeport-McMoRan: The company's efforts to expand reserves through exploration near existing mines should fuel growth. FCX is implementing the latest technologies and data analytics in leaching processes across its North America and South America operations. Initial results are providing incremental low-cost additions to FCX’s expected annual production and supporting the potential to add to its reserves. Production from Safford/Lone Star is approaching 300 million pounds of copper annually, ahead of the initial plan to produce more than 200 million pounds per year. FCX is ramping up its underground production at Grasberg in Indonesia, increasing milling rates. It is progressing well on its smelter projects in Indonesia (the Manyar smelter and precious metals refinery projects), having substantially completed the construction of the smelter in June 2024 and initiating commissioning activities. PT-FI completed a project to install additional milling facilities in December 2023 that would increase its milling capacity to roughly 240,000 metric tons of ore per day. The company’s focus on cost management and lowering debt levels is commendable.

The Zacks Consensus Estimate for the company’s earnings for fiscal 2024 indicates year-over-year growth of 4.6%. FCX has a trailing four-quarter earnings surprise of 21.7%, on average. It has a long-term estimated earnings growth rate of 9.7%. The Phoenix, AZ-based company currently carries a Zacks Rank #3 (Hold).

Price: FCX

Lundin Mining: The company increased its stake in the Caserones copper mine to 70% in July 2024, resulting in an additional 25,000 tons of copper being added to its production profile. This move added a long-life asset in a tier-one jurisdiction strategically located in the Vicuña District, solidifying LUNMF’s position as a meaningful copper producer globally. BHP and Lundin Mining have agreed to jointly acquire Filo and form a joint venture to progress the Filo del Sol and Josemaria Projects. Filo de Sol is one of the world’s largest undeveloped copper-gold-silver deposits. The proximity of the FDS and the Josemaria projects should enable the infrastructure to be shared between the projects, with greater economies of scale and increased scope for expansions. While maintaining a focus on growth plans and capital allocation, the company is committed to optimizing assets and operational efficiencies to lower costs.

The Zacks Consensus Estimate for Vancouver, Canada-based LUNMF’s fiscal 2024 earnings suggests a year-over-year improvement of 57%. It has a long-term estimated earnings growth rate of 48.9%. The company currently carries a Zacks Rank #3.

Price: LUNMF

Coeur Mining: The company recently announced an operational update at the expanded Rochester silver-gold mine in Nevada. At Rochester, the new three-stage crushing circuit continues to provide significantly increased flexibility to serve the full range of mined ore. The three-stage crusher is now fully ramped up. With this milestone, the focus has shifted to particle sizing optimization in the second half of the year. These efforts are already exceeding expectations. sRochester is on track to achieve its full-year production targets of 4.8-6.6 million ounces of silver and 37,000-50,000 ounces of gold. It has the potential to be one of the world’s largest open-pit heap leach operations. Exploration success continues at Silvertip and Kensington, which bodes well for the company’s long-term growth. The highlights from surface and underground expansion drilling completed last year continue to support Silvertip’s status as one of the world’s highest-grade, undeveloped carbonate replacement deposits.This Chicago, IL-based company explores, develops and produces gold, silver, zinc and lead properties, with five operations in the United States, Mexico and Canada. The Zacks Consensus Estimate for CDE’s fiscal 2024 earnings suggests a year-over-year improvement of 135%. The consensus estimate has remained unchanged in the past 60 days. The company currently carries a Zacks Rank #3.

Price: CDE

Ero Copper: The company has been progressing with its strategic initiatives, which should drive significant near-term growth. The company reached a milestone with the successful production of the first saleable copper concentrate at the Tucumã Project in the early third quarter of 2024. The ramp-up to commercial production is now underway. Copper production from the Tucumã Operations is anticipated to be in the 17,000-25,000 tons range in 2024. For 2025, production is projected to be 53,000-58,000 tons, marking Tucumã’s first full year of production. The Caraíba mill expansion, which is expected to increase mill throughput capacity from 3.2 million tons per year to 4.2 million, was completed in December 2023. The Xavantina operations continues to deliver solid results. Backed by this, ERO maintains its guidance for 2024 gold production at 60,000-65,000 ounces. ERO is on track to double copper production to more than 100,000 tons in 2025.The Zacks Consensus Estimate for the Vancouver, Canada-based company’s fiscal 2024 earnings indicates year-over-year growth of 86%. The company engages in the exploration, development and production of mining projects in Brazil. It produces and sells copper concentrate from the Caraíba operations, located within the Curaçá Valley, northeastern Bahia state, along with gold and silver by-products. ERO has a trailing four-quarter earnings surprise of 54.3%, on average. It currently carries a Zacks Rank #3.

Price: ERO

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Freeport-McMoRan Inc. (FCX) : Free Stock Analysis Report

Coeur Mining, Inc. (CDE) : Free Stock Analysis Report

Lundin Mining Corp. (LUNMF) : Free Stock Analysis Report

Ero Copper Corp. (ERO) : Free Stock Analysis Report

Centrus Energy Corp. (LEU) : Free Stock Analysis Report

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Zacks Investment Research

Shares of THOR Industries, Inc. THO jumped 6.1% after reporting fourth-quarter fiscal 2024 earnings of $1.68 per share, beating the Zacks Consensus Estimate of $1.35.
Shares of NVIDIA Corporation NVDA shot up 4% on reports that its CEO, Jensen Huang, was done selling its stock for the time being.
Shares of Visa Inc. V slid 5.5% on the Department of Justice suing the company for antitrust violations.
Shares of Southern Copper Corporation SCCO gained 7.2% on mining stocks having a great session.

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Visa Inc. (V) : Free Stock Analysis Report

Thor Industries, Inc. (THO) : Free Stock Analysis Report

NVIDIA Corporation (NVDA) : Free Stock Analysis Report

Southern Copper Corporation (SCCO) : Free Stock Analysis Report

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Zacks Investment Research

The Southern Copper (NYSE:SCCO) is currently experiencing a mix of growth and challenges. Recent highlights include a 15% increase in copper production in Peru and a 36% surge in net sales, contrasted by rising operating costs and a decrease in cash flow from operating activities. In the discussion that follows, we will explore Southern Copper’s core strengths, critical weaknesses, growth opportunities, and key threats to provide a comprehensive overview of the company’s current business situation.

Unlock comprehensive insights into our analysis of Southern Copper stock here.

NYSE:SCCO Earnings and Revenue Growth as at Sep 2024Strengths: Core Advantages Driving Sustained Success For Southern Copper

Southern Copper has demonstrated significant growth in production and sales, with copper production reaching 242,474 tons in Q2, reflecting a 15% increase in Peru. Net sales surged by 36% to $3.82 billion, showcasing strong market demand. Financial health is another key strength, as evidenced by an adjusted EBITDA of $1.80 billion, up 61%, and a net income margin of 31%, compared to 24% in the same quarter last year. The company has also effectively managed costs, reducing unitary costs for several materials and services. The seasoned management team, with an average tenure of over a decade, contributes significantly to strategic goals and operational efficiency. To gain deeper insights into Southern Copper’s historical performance, explore our detailed analysis of past performance.

Weaknesses: Critical Issues Affecting Southern Copper’s Performance and Areas For Growth

Southern Copper faces several critical issues. Operating costs increased by $111 million or 8% compared to the previous year’s second quarter, impacting profitability. Additionally, cash flow from operating activities decreased by 18% to $1.62 billion in the first half of the year. The company is currently trading above its estimated fair value of $89.26, with a Price-To-Earnings Ratio of 32.5x, making it expensive compared to its peers (31.9x) and the US Metals and Mining industry average (14x). This overvaluation could pose challenges in attracting value-focused investors. To dive deeper into how Southern Copper’s valuation metrics are shaping its market position, check out our detailed analysis of Southern Copper’s Valuation.

Opportunities: Potential Strategies for Leveraging Growth and Competitive Advantage

Southern Copper has several opportunities to leverage for growth. The company’s capital investment program, exceeding $15 billion, includes significant projects like Tia Maria, Los Chancas, and Michiquillay in Peru. These expansions are expected to boost production, with silver output projected to increase by 12% to 20.6 million ounces. Market demand remains resilient, driven by the U.S. economy and new technologies such as decarbonization and artificial intelligence, which support copper demand and pricing. Additionally, the company’s successful social programs in education, healthcare, and productive development enhance its corporate image and community relations.

Threats: Key Risks and Challenges That Could Impact Southern Copper’s Success

Southern Copper faces several external threats that could impact its success. Weak demand from China’s real estate market poses a significant challenge, potentially affecting global copper prices. Regulatory risks are also a concern, as the company is coordinating with Peruvian authorities to address illegal mining activities. Operational risks add another layer of uncertainty, with the CFO indicating that certain factors have not been included in the current guidance, suggesting potential variability in future production outcomes. These threats highlight the need for strategic risk management and adaptive operational strategies.

Conclusion

Southern Copper’s impressive growth in production and sales, coupled with strong financial health and effective cost management, underscores its operational efficiency and market demand. However, the increase in operating costs and a decline in cash flow from operating activities present challenges to profitability. The company’s ambitious capital investment program and resilient market demand offer promising growth opportunities, but external threats such as weak demand from China’s real estate market and regulatory risks necessitate careful strategic planning. Given that the company is currently trading above its estimated fair value of $89.26, with a Price-To-Earnings Ratio of 32.5x, it may face difficulties in attracting value-focused investors, potentially impacting its future performance.

Next Steps

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Teck Resources Ltd

VANCOUVER, British Columbia, Sept. 25, 2024 (GLOBE NEWSWIRE) — Teck Resources Limited (TSX: TECK.A and TECK.B, NYSE: TECK) (“Teck”) noted today that one of four sections of the Trail Operations’ Electrolytic Zinc Plant has been shut down following a localized fire on September 24.

There were no injuries and there are no expected environmental impacts as a result of the fire. Production from the other three sections of the Electrolytic Zinc Plant continues at Trail Operations as does production of lead and other specialty metals and by-products. Teck is investigating the cause of the incident and will provide further information once available.

About TeckTeck is a leading Canadian resource company focused on responsibly providing metals essential to economic development and the energy transition. Teck has a portfolio of world-class copper and zinc operations across North and South America and an industry-leading copper growth pipeline. We are focused on creating value by advancing responsible growth and ensuring resilience built on a foundation of stakeholder trust. Headquartered in Vancouver, Canada, Teck’s shares are listed on the Toronto Stock Exchange under the symbols TECK.A and TECK.B and the New York Stock Exchange under the symbol TECK. Learn more about Teck at www.teck.com or follow @TeckResources.

Investor Contact:Fraser PhillipsSenior Vice President, Investor Relations and Strategic Analysis604.699.4621fraser.phillips@teck.com

Media Contact:Dale SteevesDirector, External Communications236.987.7405dale.steeves@teck.com

(Bloomberg) — Equity analysts can’t seem to figure out Commonwealth Bank of Australia.

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It’s the only bank in the world worth more than $100 billion that has zero buy recommendations. Yet the stock has surged 37% since it lost its last positive rating in August 2022, reaching a succession of record highs and outperforming gauges of peers.

Australian banks have benefited from an inflow of cash pouring out of miners amid an uncertain outlook for global demand. CBA has gotten the greatest share as the nation’s largest lender, though the bearish analyst chorus highlights how this has also made it the world’s most expensive megabank stock.

“CBA is in mesospheric territory,” Jefferies Financial Group Inc. analyst Matthew Wilson wrote in a note this week. “At some stage a violent switch back/u-turn out of banks is likely.”

Now worth about $160 billion, CBA overtook slumping BHP Group Ltd. in July as Australia’s most valuable company. That’s led to greater buying of the lender’s shares by passive funds that track the capitalization-weighted S&P/ASX 200 benchmark. A CBA spokesperson declined to comment for this story.

Goldman Sachs Group Inc. concedes it has been wrongfooted by the stock’s gains since it downgraded CBA to sell in 2019. It says the shares were helped by the Australian bank’s more conservative risk settings during the pandemic and its high percentage of ownership by individuals amid the shift to more passive investing.

The advance has been due more to such factors than fundamental performance, analyst Andrew Lyons wrote in a report dated Sept. 12, adding “we believe it is difficult to mount a case where CBA outperforms from here.”

CBA lags on metrics including profits. Its earnings per share are projected to grow 3.5% over the next 12 months compared with 19% at US megabank Citigroup Inc. and 7.6% at Bank of America Corp.

With sluggish earnings coinciding with the share price surge, CBA’s valuation has climbed above all of its major global peers’. The Australian lender’s stock is trading at 23 times expected profits, more than double the levels at Citi and Bank of America.

The high valuations have some betting on a decline. Hedge fund Regal Partners Ltd. recently took a short position in shares of CBA, saying they are too pricey. Bloomberg Intelligence notes that the stock fell at least 46% following the two previous occasions when its forward price-to-book ratio reached its current level of 3.1x.

Miners, meanwhile, are looking more attractive with stocks from BHP to Rio Tinto Ltd. down by double-digit percentages this year. Morgan Stanley earlier this month upgraded BHP to overweight after two years at equal-weight, citing stabilization in iron prices and capex while risks appear to be priced in.

While the Reserve Bank of Australia keeping rates at a 12-year high is positive for the nation’s lenders, it is expected to begin easing in February. At the same time, global investors continue to watch for signs that China’s efforts to shore up the weakest parts of its economy will restore a key global growth engine.

Australian bank stocks have “been a huge beneficiary of all these passive flows” seeking out parts of the market that aren’t exposed to the China, said Jun Bei Liu, a hedge fund manager at Tribeca Investment Partners Pty. “I actually do think that we found the bottom for miners,” which should rise into the end of the year as investors rotate back out of banks, she said.

–With assistance from Harry Brumpton.

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Centrus Energy Corp. (LEU) shares rallied 8.6% in the last trading session to close at $45.01. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 10.4% gain over the past four weeks.

Centrus Energy shares gained since the news that it inked a contingent supply agreement with Korea Hydro & Nuclear Power for a decade of low-enriched uranium deliveries to feed Korea's reactors. This deal has made a significant step forward in the company’s efforts to deploy uranium enrichment capacity at its American Centrifuge Plant in Piketon, OH. The collaboration with Korea Hydro & Nuclear Power is a critical step in Centrus' aim to re-establish a large-scale, U.S.-owned uranium enrichment facility. The company intends to expand the operation for large-scale manufacturing of low-enriched uranium and high-assay low-enriched uranium for existing and advanced reactors, pending appropriate funding and procurement agreements.

This company is expected to post quarterly earnings of $0.18 per share in its upcoming report, which represents a year-over-year change of -65.4%. Revenues are expected to be $56.5 million, up 10.1% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Centrus Energy, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on LEU going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Centrus Energy is a member of the Zacks Mining – Non Ferrous industry. One other stock in the same industry, Southern Copper (SCCO), finished the last trading session 1.2% lower at $103.60. SCCO has returned 3.1% over the past month.

For Southern Copper , the consensus EPS estimate for the upcoming report has changed -1.9% over the past month to $1.04. This represents a change of +31.7% from what the company reported a year ago. Southern Copper currently has a Zacks Rank of #4 (Sell).

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For Immediate Releases

Chicago, IL – September 20 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Exxon Mobil Corp. XOM, Salesforce, Inc. CRM and BHP Group Ltd. BHP and Oil-Dri Corp. of America ODC.

Here are highlights from Friday’s Analyst Blog: Top Analyst Reports for ExxonMobil, Salesforce and BHP

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Exxon Mobil Corp., Salesforce, Inc. and BHP Group Ltd. , as well as a micro-cap stock Oil-Dri Corp. of America . The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.You can see all of today’s research reports here >>>Exxon Mobil shares have outperformed the Zacks Oil and Gas – Integrated – International industry over the past year (+2.2% vs. -1.4%). The company being a reliable player in the energy sector, boasts a resilient capital structure, a robust balance sheet and track record of prudent capex management.Its strategic discoveries in the Stabroek Block and Permian Basin promise growth and lower greenhouse gas intensity. ExxonMobil prioritizes shareholder returns, evidenced by substantial share buybacks. ExxonMobil’s entry into the lithium market positions it for long-term gains as the demand for lithium is poised to increase with the growing adoption of electric vehicles.However, challenges loom, notably in the upstream operations, which are susceptible to volatile oil prices and regulatory hurdles. Increasing societal focus on environmental risks and climate change pose a threat to its traditional oil & gas business. Further, exposure to OPEC production cuts adds to uncertainties.(You can read the full research report on Exxon Mobil here >>>)Shares of Salesforce have gained +17.7% over the past year against the Zacks Computer – Software industry’s gain of +30.2%. The company is benefiting from a robust demand environment as customers are undergoing a major digital transformation. Its sustained focus on aligning products with customer needs is driving the top line. Continued deal wins in the international market are another growth driver.The buyout of Slack has positioned it as a leader in enterprise team collaboration and improved its competitive standing versus Microsoft Teams. Salesforce’s strategy of continuous expansion of generative AI offerings will help it tap the growing opportunities in the space.According to the Zacks analyst estimates Salesforce revenues are expected to witness a CAGR of 8.6% through fiscal 2025-2027. However, stiff competition and unfavorable currency fluctuations are concerns. Softening IT spending amid ongoing macroeconomic uncertainties might hurt its growth prospects.(You can read the full research report on Salesforce here >>>)BHP’s shares have declined -3.5% over the past year against the Zacks Mining – Miscellaneous industry’s decline of -5.0%. The company expects iron ore production for fiscal 2025 at 255-265.5 Mt. The midpoint of the range indicates in-line results with fiscal 2024. Its copper guidance of 1,845-2,045 kt indicates 4% growth at the midpoint. Iron ore prices have declined 33% year to date due to weak demand in China.Copper prices will also likely be impacted by contraction in the manufacturing sector. While the increase in production might boost BHP’s results, it will be offset by lower prices and higher costs. The Zacks analyst expects a recovery in iron ore prices aided by infrastructure demand in the United States.The long-term outlook for copper prices remains positive, supported by demand for electric vehicles. BHP’s investment in projects focused on future-facing commodities and its efforts to improve operational efficiency through technology will also drive growth.(You can read the full research report on BHP here >>>)Shares of Oil-Dri have outperformed the Zacks Chemical – Diversified industry over the past year (+6.9% vs. -0.5%). This microcap company with market capitalization of $494.38 million has acquired Ultra Pet Company, which strengthens its position in the high-growth crystal cat litter segment and is expected to boost earnings. ODC’s third-quarter fiscal 2024 sales reached $106.8 million, marking 12 consecutive quarters of year-over-year growth.The company increased its dividend 7% for the 21st consecutive year. Product launches like Cat’s Pride Antibacterial Clumping Litter enhance its competitive edge. Yet, SG&A expenses grew 51% year over year in third-quarter fiscal 2024, reducing operating income 28%.Agricultural and animal health product sales fell 24% and 17% year over year, respectively. ODC's heavy reliance on Walmart for a significant portion of its sales makes its revenues vulnerable to volatility. High advertising costs impacted the company's profitability.(You can read the full research report on Oil-Dri here >>>)

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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We recently published a list of 7 Best ASX Stocks To Invest In Right Now. In this article, we are going to take a look at where BHP Group (NYSE:BHP) stands against other ASX stocks to invest in right now.

Overview of the Australian Economy

According to a report by the Australian Bureau of Statistics, Australia’s economy is growing at a sluggish pace as GDP for the June quarter increased by just 0.2%, bringing the annual growth rate to 1% for the year to June however, Australia continues to narrowly avoid a recession. According to Katherine Keenan, head of national accounts at the Australian Bureau of Statistics, the annual financial year economic growth was the lowest since 1991-92 excluding the Covid-19 pandemic period.

For the year to July, the Consumer Price Index (CPI) fell to 3.5%, from 3.8% in June which signals that inflation may be starting to ease. This reduction was largely attributed to energy rebates introduced by state and federal governments. In response, three of Australia’s big four banks have slashed interest rates on term deposits by as much as 80 basis points, signaling expectations of a significant rate cut in 2025. However, experts warn that inflation for the year to June remains “stubbornly high.” The Reserve Bank of Australia (RBA) has an inflation target of 2%-3%, and economists predict that rate cuts will likely not occur before 2025 due to inflationary pressures. Jim Chalmers, Treasurer of Australia acknowledged the economic stagnation and attributed the slow growth to a combination of global economic uncertainty, and the burden of higher interest rates.

Despite the economic challenges, wages in Australia continue to rise steadily, with a 4.1% increase for the year to June, slightly lower than the 4.2% growth recorded at the end of 2023. Private sector wages grew by 0.7% during the June quarter, down from 0.9% in the March quarter, while public sector wages saw a 0.9% increase, up from 0.6%.

Australian Equities Amid Inflation and Rising Rates

According to Schroders’ head of Australian equity, Martin Conlon, Investor sentiment toward investing in Australia reflects a cautious yet strategically optimistic approach, over the past decade, Australian equities, particularly in technology, growth, and green energy sectors, have enjoyed significant growth driven by speculative investment and aggressive financial leverage due to low borrowing costs. However, with the recent return of inflation and the necessity of higher interest rates, this sentiment has tempered.

However, real economy sectors such as resources, energy, and materials have gained traction due to more favorable investment opportunities. The mining sector, which represents a significant portion of Australia’s economic output, remains particularly attractive. Australia’s iron ore exports have long been a cornerstone of the economy, and global demand remains robust. Some of the largest mining companies in Australia maintain competitive advantages due to their low-cost operations, especially in iron ore production, which continues to generate strong cash flows even as global commodity demand fluctuates. Furthermore, Australia’s reserves of critical minerals like lithium and rare earths, essential for renewable energy technologies, position the country at the forefront of this transformation.

Investors are now prioritizing sectors with reasonable valuation levels and sound fundamentals, particularly those with exposure to the real economy. Resource stocks stand to benefit from global deglobalization trends as Western economies reduce their reliance on Chinese manufacturing. This shift is expected to result in higher costs for goods, further supporting the case for investing in resource-heavy sectors.

Despite the economic slowdown and inflationary pressures, the country continues to narrowly avoid recession. However, Australia’s unique position as a major commodities exporter and its exposure to the energy transition present compelling opportunities.

Our Methodology

For this article, we used the Finviz and Yahoo Finance stock screeners plus online rankings to compile an initial list of the 20 largest companies in Australia by market cap. From that list, we narrowed our choices to the 7 stocks with the most hedge fund holders, as of Q2 of 2024. The list is sorted in ascending order of the number of hedge funds.

An aerial view of a mining operation in action, with large trucks and yellow diggers.

BHP Group (NYSE:BHP)

Number of Hedge Fund Investors in Q2 2024: 22

BHP Group (NYSE:BHP) is a leader in mining, metals, and petroleum. Its operations span multiple sectors, including iron ore, copper, coal, and oil.

For the year ending June 30, BHP Group (NYSE:BHP) hit several production records, including record copper output at the Spence mine and robust iron ore production. Copper production rose by 9% year-over-year, with an EBITDA margin of 51%, while iron ore production reached 259.7 Mt. Additionally, BHP Group’s (NYSE:BHP) potash projects are also progressing well, with Jansen Stage 1 ahead of schedule at 52% completion, and Jansen Stage 2 in its early phase at 2% completion. For 2025, BHP expects a further 4% increase in copper production.

On August 30, BHP Group (NYSE:BHP) announced plans to expand its smelter and refinery operations at Olympic Dam in South Australia. BHP Group (NYSE:BHP) aims to boost copper production in South Australia from 322,000 tonnes last year to 500,000 tonnes of refined copper cathode by the early 2030s, with potential growth to 650,000 tonnes by the mid-2030s. Furthermore, BHP Group (NYSE:BHP) has declared an Inferred Mineral Resource at Oak Dam, estimated at 1.34 billion tonnes with a copper grade of 0.66% and a gold grade of 0.33 grams per tonne. This includes a section with 220 million tonnes at 1.96% copper and 0.68 grams per tonne of gold.

The World Bank projects copper prices to rise by 4% next year, and Forbes estimates copper demand will increase by 75% by 2050. The company’s valuation is also appealing, as the stock is currently trading at 10.33 times earnings, a 34.87% discount compared to the sector median of 15.86. Analysts have a consensus Buy rating on the stock, with an average price target of $61.38 which indicates a potential a 13% upside from current levels. As of the second quarter, BHP Group’s (NYSE:BHP) stock is held by 22 hedge funds, with a total stake valued at $1.25 billion. Fisher Asset Management is the largest shareholder in the company and owns shares worth $1.21 billion as of June 30.

Overall BHP ranks 2nd on our list of best ASX stocks to invest in right now. While we acknowledge the potential of BHP as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BHP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

Disclosure: None. This article is originally published at Insider Monkey.

Teck Resources (TSX:TECK.B) is navigating a dynamic period marked by significant operational achievements and financial challenges. Recent developments include strong Q1 performance, strategic share buybacks, and increased copper production, contrasted by high unit costs and competitive pressures. In the discussion that follows, we will explore Teck Resources’ core strengths, critical weaknesses, growth opportunities, and key threats to provide a comprehensive overview of the company’s current business situation.

Take a closer look at Teck Resources’s potential here.

TSX:TECK.B Earnings and Revenue Growth as at Sep 2024Strengths: Core Advantages Driving Sustained Success For Teck Resources

Teck Resources has demonstrated strong operational and financial performance, with Q1 being particularly strong. CEO Jonathan Price highlighted the completion of major construction projects at Quebrada Blanca (QB), including the ship loader and molybdenum plant, which are expected to enhance production capabilities. The company has also shown a commitment to returning cash to shareholders, with $80 million in share buybacks executed under a $500 million return authorized by the Board. CFO Crystal Prystai emphasized Teck’s strong liquidity position, with $7.1 billion in liquidity, including $1.6 billion in cash as of April 2024. Additionally, Teck’s copper production saw a significant increase of 74% year-over-year, reaching 99,000 tonnes in the latest quarter.

Teck Resources is currently trading above its estimated fair value, indicating it may be overpriced relative to its intrinsic worth. However, the company’s Price-To-Earnings Ratio (23.6x) compared to the peer average (66.4x) suggests it is a good value among its peers. This valuation strength underscores Teck’s market positioning and financial health.

Weaknesses: Critical Issues Affecting Teck Resources’s Performance and Areas For Growth

Teck Resources faces several challenges. The company reported a decline in adjusted EBITDA from $2 billion a year ago to $1.7 billion in the latest quarter, as noted by Jonathan Price. High unit costs at QB, particularly during the ramp-up phase, have also been a concern. Crystal Prystai highlighted that profit attributable to shareholders is now based on a reduced 77% ownership of Elk Valley Resources (EVR), with 23% of EVR profit attributable to noncontrolling interests. Additionally, Teck’s Price-To-Earnings Ratio (23.6x) is higher than the Canadian Metals and Mining industry average (16.2x), indicating it may be expensive compared to industry standards. The company’s current trading price of CA$66.43 is above the estimated fair value of CA$60.31, suggesting it may be overpriced.

Opportunities: Potential Strategies for Leveraging Growth and Competitive Advantage

Teck Resources has several opportunities to leverage for future growth. The energy transition is expected to significantly boost copper demand, potentially adding 6.5 to 7 million tonnes over the next five years. Regulatory approvals for the full sale of Glencore are progressing as anticipated, with closing expected no later than the third quarter of this year. This sale could provide substantial financial resources for further investments. Additionally, the company is advancing engineering and design projects, with substantial completion expected by Q1 2025. Teck’s involvement in the North Pacific Green Corridor Consortium aims to decarbonize the value chain for commodities between North America and Asia, aligning with global green initiatives and enhancing its market position.

Threats: Key Risks and Challenges That Could Impact Teck Resources’s Success

Teck Resources faces several external threats that could impact its success. Market pricing pressures, particularly in the zinc market, have been a concern, with prices falling by 2% over Q4 2023. Operational risks, such as equipment failures, though temporary, can disrupt production and increase costs. Competitive pressures from potential takeovers, like the proposed Anglo volume BHP, highlight the attractiveness of the copper market and could intensify competition. Regulatory challenges also pose a threat, as the company continues to respond to information requests from regulators on the permit application for mine-life extensions. These factors, combined with the forecasted decline in earnings by an average of 1.8% per year over the next three years, underscore the challenges Teck Resources must navigate.

Conclusion

Teck Resources’ strong operational performance and significant liquidity position highlight its capacity for sustained growth, particularly with the completion of key projects at Quebrada Blanca and a notable increase in copper production. Challenges such as declining EBITDA, high unit costs, and a reduced profit share from Elk Valley Resources indicate areas that need strategic focus. The company’s proactive steps toward future opportunities, like the energy transition and regulatory approvals for asset sales, position it well for long-term growth. The current trading price above its estimated fair value suggests that investors should be cautious about potential overpricing relative to its intrinsic worth, which could impact its attractiveness in the near term.

Taking Advantage

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(Bloomberg) — In the dusty, treeless outback of Southern Australia, a brand new mining camp is home to a hundred workers, putting in 12-hour days, two weeks at a time. Dozens of trucks are scattered across the vast acreage, mounted with towering rigs drilling more than 2 kilometers (1.3 miles) underground. All are focused on the hunt for one of the world’s most coveted minerals: copper.

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Oak Dam, discovered by BHP Group geologists in 2018, is a glimmer of hope for Chief Executive Mike Henry, who sees global copper demand doubling over the coming decades as the energy transition takes hold, and wants his company to produce more of it. The deposit is also a rarity — if all goes to plan, a new operation will be built here by the world’s largest miner, from scratch.

“Globally, there would be few companies conducting drilling campaigns of this scale, to this depth,” said Michael Fonti, BHP’s main exploration geologist at the site, pointing out a diagram of the cone-shaped deposit.

Fonti has spent more than two decades on sites much like this one, working most recently at the miner’s nearby Olympic Dam, a vast, challenging copper and uranium operation. But even for BHP — a $140 billion company which generated almost $12 billion in free cash flow in the last financial year — large, greenfield projects are scarce, and becoming more so. Deals, not discoveries, are grabbing the headlines.

Copper’s bull narrative, which helped prices hit an all-time high in May, is well understood. Electrification, wealthier populations and an expanding, energy-hungry technology sector are vast new sources of demand. An electric vehicle requires roughly three times the copper that goes into a conventional car, and the energy transition won’t happen without enough red metal for grids, batteries and chips.

This should all be prompting a surge in prospecting and digging, to ensure supply keeps up, especially as large, established mines age. It isn’t — and that risks making this much-needed metal punitively expensive.

Miners have been in spending purgatory for over a decade, atoning for the excesses of the last boom. For years, investors demanded generous returns, not production growth and certainly not risk. But now that diggers can open the purse strings again, high costs, slow permits and other hurdles are pushing the largest metal producers to buy — not build.

BHP, even with its effort to build out the copper belt of South Australia, is no exception.

Asked at its earnings briefing last month, Henry said the company was opportunistic about deals and not pursuing them at the expense of exploration, nor was BHP making a blanket decision on cost. There was no rule of thumb on buying or building, he said.

Still, in less than two years, BHP has bought copper and gold producer OZ Minerals for $6.4 billion, betting on South Australia’s copper province; tried and failed to buy peer Anglo American Plc for $49 billion, in large part for its South American copper mines; then in July agreed to buy copper miner Filo Corp. jointly with Lundin Mining Corp, a bet on a project in development on the Argentina/Chile border.

“Mining is cyclical, and a key factor driving the trend of buying over building is the point in the cycle,” said Campbell Cooper, a Melbourne-based advisor at Greenhill & Co., an investment bank. “Recent years have also seen an acceleration in the cost of building new mine capacity. Arguably that cost may not be fully reflected in equity valuations, making buying more attractive.”

Building from zero, in short, is both worryingly risky and unappealingly pricey.

No wonder, then, that only roughly a quarter of the sector’s sanctioned — or approved — projects between 2019 and 2023 were of the greenfield variety, according to analysts at Jefferies LLC. That’s down from more than half in the 2009 to 2013 period. The size of new projects is also shrinking.

“There was a raft of copper discoveries in the 1950s, 60s, 70s, and 80s,” said BHP’s Fonti. “Everything being produced now is from that era of discoveries.” Escondida, the world’s largest copper mine, dates back to the late 1970s and early 1980s.

Of course, BHP has invested in development — it approved nearly $5 billion for its potash operation last year — but its exploration budget remains modest, even for copper. While it has nearly tripled its annual greenfield spending from the start of the decade to $124 million in the year to June, that compares to $324 million spent on greenfield exploration alone back in its 2012 financial year.

Peers follow similar patterns. Rio Tinto Group, which has not done large-scale deals of late, spent $300 million on greenfield exploration in 2023. Anglo American Plc and Freeport-McMoRan Inc have spent less. Glencore Plc does not detail exploration spending, but its focus has been on existing deposits in its portfolio.

“Ultimately the industry needs continual investment in exploration and new discoveries. M&A is important to put assets into the hands of the optimal owners, but will not materially increase overall industry supply,” said Sam Brodovcky, head of metals and mining M&A at Standard Chartered Plc. “And for key commodities such as copper, we need to increase supply not only to replenish depleting mines but also to keep up with growing demand as the world industrializes and transitions to clean energy.”

Henry says large players like BHP are well placed when it comes to adding supply. As greenfield risks increase, the industry’s behemoths can unlock more metal with the expansion of existing projects, thanks to large balance sheets and technical capability.

They are also betting on less risky exploration by supporting junior miners — as with BHP’s Xplor program, which provides modest funding with the potential for much more if prospecting is successful.

What is less clear is whether this will be enough to provide the metal the world needs.

Juniors, lower down the mining food chain, have long taken on much of the sector’s exploration risk. But that proportion is now increasing just as investment in smaller outfits falls.

“We've got to a point where we're quite reliant on juniors to explore. It's very difficult seeing that continuing if they're not getting the equity that they need,” said Sandra Occhipinti, a geologist and researcher at Australia’s national science agency, Commonwealth Scientific and Industrial Research Organisation.

Richard Schodde, a veteran geologist and expert on South Australia’s copper belt, puts the number of discoveries made each year at only a handful. He describes BHP’s lucky strike at Oak Dam in 2018 “was probably the most spectacular” of recent years.

Price is clearly one reason holding back the splurge that could change that. Copper has enjoyed a bull run on fears of supply disruption and hopes of soaring green demand. Prices topped US$11,000 a ton earlier this year. But the global economy is faltering and copper needs to reach $12,000 a ton — a near-30% jump on current prices — to incentivize large-scale investments in new mines, according to Olivia Markham, who co-manages the BlackRock World Mining Fund.

Copper’s improvement since the price trough of 2020 has not been enough. Costs are rising too fast as exploration teams need go deeper, into more technically challenging deposits or into less desirable regions.

Take Oak Dam, where the bottom of the deposit is some four kilometers underground — depths where heat from the earth’s core starts to become a problem. Or even Olympic Dam’s next phase of exploration, Olympic Dam Deeps. BHP’s recently acquired Filo asset in South America, meanwhile, sits some 5,000 meters above sea level, where the air is so thin helicopters struggle to hover.

“Once upon a time you could just kick rocks. It’s not for the faint-hearted — and only one exploration campaign out of a thousand results in a discovery,” says Karol Czarnota, a director at Geoscience Australia, a government agency set up to encourage mining. Oak Dam was found using some of its data.

One area of good news is technology. New gadgets and better geological information are allowing even the reassessment of existing repositories of data. Core libraries around Australia, for example, hold over 100 million meters of rocks from drilling campaigns of past booms, free for geologists looking for mineralization missed by others.

But even at Oak Dam, a deposit that was almost missed until new geophysics techniques could unlock it, that cheer is tempered. The slow pace of mine development means a final investment decision will not come until 2027 at the earliest. Copper production will still be years away.

–With assistance from James Attwood.

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Thursday, September 19, 2024The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Exxon Mobil Corp. (XOM), Salesforce, Inc. (CRM) and BHP Group Ltd. (BHP), as well as a micro-cap stock Oil-Dri Corp. of America (ODC). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.You can see all of today’s research reports here >>>Exxon Mobil shares have outperformed the Zacks Oil and Gas – Integrated – International industry over the past year (+2.2% vs. -1.4%). The company being a reliable player in the energy sector, boasts a resilient capital structure, a robust balance sheet and track record of prudent capex management. Its strategic discoveries in the Stabroek Block and Permian Basin promise growth and lower greenhouse gas intensity. ExxonMobil prioritizes shareholder returns, evidenced by substantial share buybacks. ExxonMobil’s entry into the lithium market positions it for long-term gains as the demand for lithium is poised to increase with the growing adoption of electric vehicles. However, challenges loom, notably in the upstream operations, which are susceptible to volatile oil prices and regulatory hurdles. Increasing societal focus on environmental risks and climate change pose a threat to its traditional oil & gas business. Further, exposure to OPEC production cuts adds to uncertainties.(You can read the full research report on Exxon Mobil here >>>)Shares of Salesforce have gained +17.7% over the past year against the Zacks Computer – Software industry’s gain of +30.2%. The company is benefiting from a robust demand environment as customers are undergoing a major digital transformation. Its sustained focus on aligning products with customer needs is driving the top line. Continued deal wins in the international market are another growth driver. The buyout of Slack has positioned it as a leader in enterprise team collaboration and improved its competitive standing versus Microsoft Teams. Salesforce’s strategy of continuous expansion of generative AI offerings will help it tap the growing opportunities in the space. According to the Zacks analyst estimates Salesforce revenues are expected to witness a CAGR of 8.6% through fiscal 2025-2027. However, stiff competition and unfavorable currency fluctuations are concerns. Softening IT spending amid ongoing macroeconomic uncertainties might hurt its growth prospects.(You can read the full research report on Salesforce here >>>)BHP’s shares have declined -3.5% over the past year against the Zacks Mining – Miscellaneous industry’s decline of -5.0%. The company expects iron ore production for fiscal 2025 at 255-265.5 Mt. The midpoint of the range indicates in-line results with fiscal 2024. Its copper guidance of 1,845-2,045 kt indicates 4% growth at the midpoint. Iron ore prices have declined 33% year to date due to weak demand in China. Copper prices will also likely be impacted by contraction in the manufacturing sector. While the increase in production might boost BHP’s results, it will be offset by lower prices and higher costs. The Zacks analyst expects a recovery in iron ore prices aided by infrastructure demand in the United States. The long-term outlook for copper prices remains positive, supported by demand for electric vehicles. BHP’s investment in projects focused on future-facing commodities and its efforts to improve operational efficiency through technology will also drive growth.(You can read the full research report on BHP here >>>)Shares of Oil-Dri have outperformed the Zacks Chemical – Diversified industry over the past year (+6.9% vs. -0.5%). This microcap company with market capitalization of $494.38 million has acquired Ultra Pet Company, which strengthens its position in the high-growth crystal cat litter segment and is expected to boost earnings. ODC’s third-quarter fiscal 2024 sales reached $106.8 million, marking 12 consecutive quarters of year-over-year growth.The company increased its dividend 7% for the 21st consecutive year. Product launches like Cat’s Pride Antibacterial Clumping Litter enhance its competitive edge. Yet, SG&A expenses grew 51% year over year in third-quarter fiscal 2024, reducing operating income 28%. Agricultural and animal health product sales fell 24% and 17% year over year, respectively. ODC's heavy reliance on Walmart for a significant portion of its sales makes its revenues vulnerable to volatility. High advertising costs impacted the company's profitability.(You can read the full research report on Oil-Dri here >>>)Other noteworthy reports we are featuring today include SAP SE (SAP), Cintas Corp. (CTAS) and The PNC Financial Services Group, Inc. (PNC).Mark VickerySenior EditorNote: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>

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Key Insights

The considerable ownership by individual investors in Lundin Mining indicates that they collectively have a greater say in management and business strategy
48% of the business is held by the top 25 shareholders
Recent purchases by insiders

Every investor in Lundin Mining Corporation (TSE:LUN) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 47% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While individual investors were the group that benefitted the most from last week’s CA$427m market cap gain, institutions too had a 37% share in those profits.

Let's delve deeper into each type of owner of Lundin Mining, beginning with the chart below.

See our latest analysis for Lundin Mining

ownership-breakdownWhat Does The Institutional Ownership Tell Us About Lundin Mining?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Lundin Mining already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Lundin Mining's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth

We note that hedge funds don't have a meaningful investment in Lundin Mining. Our data shows that Nemesia S.À R.L. is the largest shareholder with 15% of shares outstanding. With 10% and 4.9% of the shares outstanding respectively, Capital Research and Management Company and FMR LLC are the second and third largest shareholders.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Lundin Mining

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own less than 1% of Lundin Mining Corporation. However, it's possible that insiders might have an indirect interest through a more complex structure. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around CA$30m worth of shares (at current prices). Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 47% stake in Lundin Mining. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 15%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 2 warning signs we've spotted with Lundin Mining .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Vancouver, British Columbia–(Newsfile Corp. – September 18, 2024) – Flying Nickel Mining Corp. (TSXV: FLYN) (OTCQB: FLYNF) (the "Company" or "Flying Nickel") clarifies the disclosure in its press release of earlier today.

Flying Nickel is pleased to announce that, further to its press release dated August 21, 2024, Flying Nickel has entered into an amended and restated arrangement agreement (the "A&R Arrangement Agreement") dated September 17, 2024 with Norway House Cree Nation ("NHCN") and 10197729 Manitoba Inc., a wholly owned subsidiary of NHCN, (the "Purchaser"), pursuant to which Flying Nickel agreed to sell its Minago Nickel project and its related assets located in the Thompson Nickel Belt of Manitoba, Canada (the "Minago Assets") to the Purchaser in consideration for $8,000,000 in cash and the surrender of 17,561,862 common shares in the capital of Flying Nickel ("Flying Nickel Shares") held by NHCN (the "Transaction"), by way of a statutory plan of arrangement under Section 288 of the Business Corporations Act (British Columbia) (the "Arrangement"). The A&R Arrangement Agreement was executed to, among other things, clarify certain closing and transfer mechanics with respect to the Minago Assets.

Details of the Arrangement and the special meeting to approve the Arrangement will be set out in Flying Nickel's management information circular and proxy statement which will be mailed to Flying Nickel shareholders. The meeting is scheduled to be held on October 21, 2024, at the offices of MLT Aikins LLP located at 2600-1066 W Hastings St., Vancouver, B.C., at 10:30 a.m. PT.

About Flying Nickel Mining Corp.

Flying Nickel is an exploration-stage mining company focused on vanadium and nickel resources. The Company owns a 100% interest in the Gibellini vanadium project in Nevada, United States and a 100% interest in the Minago nickel project in the Thompson nickel belt in Manitoba, Canada.

Further information on Flying Nickel can be found at www.flynickel.com.

FLYING NICKEL MINING CORP.

ON BEHALF OF THE BOARD

John Lee

Chief Executive Officer

For more information about Flying Nickel, please contact:

Suite 1610 – 409 Granville StreetVancouver, BC V6C 1T2Phone: 1.877.664.2535 / 1.877.6NICKELEmail: info@flynickel.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Arrangement and has neither approved nor disapproved the contents of this news release.

Forward-looking Statements and Cautionary Disclaimers

References to $ herein refer to the lawful currency of Canada.

This press release does not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States absent U.S. registration or an applicable exemption from U.S. registration requirements.

Completion of the Arrangement is subject to a number of conditions, including but not limited to the standard closing conditions contained in the A&R Arrangement Agreement, TSXV acceptance, court and shareholder approval. Where applicable, the Arrangement cannot close until the required approvals are obtained.

There can be no assurance that the Arrangement will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the Arrangement, any information released or received with respect to the Arrangement may not be accurate or complete and should not be relied upon. Trading in the securities of Flying Nickel should be considered highly speculative.

This news release is not an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

This news release contains certain "forward-looking statements" and "forward-looking information" under applicable Canadian and United States securities laws. Forward-looking statements and forward-looking information include, but are not limited to, statements with respect to the Arrangement including timing, closing and terms of the Arrangement and the ability of Flying Nickel to obtain the requisite TSXV, shareholder, court and other approvals in connection with the Arrangement. Except for statements of historical fact relating to Flying Nickel, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as "anticipates," "may," "can," "plans," "believes," "estimates," "expects," "projects," "targets," "intends," "likely," "will," "should," "to be", "potential" and other similar words, or statements that certain events or conditions "may", "should" or "will" occur, including, without limitation, that all conditions precedent to the Arrangement will be met and the realization of the anticipated benefits derived therefrom for shareholders of Flying Nickel and perception of (i) the quality and the potential of Flying Nickel's assets, (ii) the consideration offered to Flying Nickel, and (iii) the potential of Flying Nickel's business following completion of the Arrangement. Forward-looking statements are based on the opinions and estimates of management of Flying Nickel at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Many of these assumptions are based on factors and events that are not within the control of Flying Nickel, there is no assurance they will prove to be correct and are not guarantees of future performance and actual results may differ materially from those in the forward- looking statements.

Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include changes in market conditions; cash flow and availability of financing; the ability of Flying Nickel to obtain the requisite court, shareholder, TSXV and other third party approvals in respect of the Arrangement; exercise of any dissent rights, trades in the market, issuances of securities or exercises of convertible securities and other factors that could alter the share capital of Flying Nickel or other parties; risks relating to the availability and timeliness of permitting and governmental consents and approvals; and other risks of the mining industry.

These factors are discussed in greater detail in Flying Nickel's most recent MD&A filed on SEDAR+ at www.sedarplus.ca, which also provides additional general assumptions in connection with these statements. Flying Nickel cautions that the foregoing list of important factors is not exhaustive. Investors and others who base themselves on forward-looking statements contained herein should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. Flying Nickel believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These statements speak only as of the date of this news release.

Although Flying Nickel has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Flying Nickel undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements. Statements concerning mineral reserve and resource estimates may also be deemed to constitute forward-looking statements to the extent they involve estimates of the mineralization that will be encountered as the property is developed. Further, Flying Nickel may make changes to its business plans that could affect results.

Not for distribution to United States newswire services or for dissemination in the United States.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/223775

Vancouver, British Columbia–(Newsfile Corp. – September 18, 2024) – Flying Nickel Mining Corp. (TSXV: FLYN) (OTCQB: FLYNF) (the "Company" or "Flying Nickel") is pleased to announce that, further to its press release dated August 21, 2024, Flying Nickel has entered into an amended and restated arrangement agreement (the "A&R Arrangement Agreement") dated September 17, 2024 with Norway House Cree Nation ("NHCN") and 10197729 Manitoba Inc., a wholly owned subsidiary of NHCN, (the "Purchaser"), pursuant to which Flying Nickel agreed to sell its Minago Nickel project and its related assets located in the Thompson Nickel Belt of Manitoba, Canada (the "Minago Assets") to the Purchaser by way of a statutory plan of arrangement under Section 288 of the Business Corporations Act (British Columbia) (the "Arrangement"). The A&R Arrangement Agreement was executed to, among other things, clarify certain closing and transfer mechanics with respect to the Minago Assets.

About Flying Nickel Mining Corp.

Further information on Flying Nickel can be found at www.flynickel.com.

FLYING NICKEL MINING CORP.

ON BEHALF OF THE BOARD

John LeeChief Executive Officer

For more information about Flying Nickel, please contact:Suite 1610 – 409 Granville StreetVancouver, BC V6C 1T2Phone: 1.877.664.2535 / 1.877.6NICKELEmail: info@flynickel.com

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Arrangement and has neither approved nor disapproved the contents of this news release.

Forward-looking Statements and Cautionary Disclaimers

References to $ herein refer to the lawful currency of Canada.

Not for distribution to United States newswire services or for dissemination in the United States.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/223713

(Bloomberg) — BHP Group expects its $10.6 billion potash mine in Canada to make money even with weakened fertilizer prices, says the head of the project.

Most Read from Bloomberg

Jansen mine is expected to produce potash at costs that are less than the top Canadian operations of fertilizer giants Nutrien Ltd. and Mosaic Co., according to BHP’s Karina Gistelinck. She said the massive size of the operation and BHP’s heavy investment in automation are key to keeping costs down to be more competitive than other mines in Canada, the world’s top supplier.

“The strategy is to be the most cost-effective mine possible,” she said in an interview. “Even with depressed prices, we’ll be profitable.”

BHP remains optimistic on Jansen even though potash prices have tumbled more than 60% from highs seen two years ago. Prices soared in early 2022 after sanctions on Belarus and Russia’s war in Ukraine stoked fears of supply shocks in a tight market. The two nations are among the top producers of potash and, combined with Canada, account for two-thirds of the global trade.

The world’s biggest miner had already committed $5.7 billion to building the first stage of Jansen in the western Canadian province of Saskatchewan back in August 2021. Two years later, BHP earmarked an additional $4.9 billion for an expansion due to its confidence in the potash market. The spending is on top of an earlier $4.5 billion investment in the area.

Since Jansen’s approval, flows of fertilizer from Russia and Belarus have rebounded and driven down potash prices. BHP’s flagship mine is now expected to pour millions of fresh tons into a balanced market rather than one crying out for new supplies that BHP had anticipated.

Jansen is expected to deliver 4.2 million tons of potash when the first phase starts production in 2026, adding 5% to the current global potash supply, according to Gistelinck. Output is expected to double by 2031, when the project reaches full capacity.

Gistelinck said she anticipates Jansen will produce potash for less than $140 a metric ton. Market prices are expected to range from $300 a ton — in the worst-case scenario — to as high as $450 a ton in the medium to long term, she said.

BHP plans to sell the fertilizer to distributors rather than directly to farmers. The company has already secured commitments for its full potash production, which are expected to become binding contracts next year.

The Melbourne-based company is also mulling initial discounts to gain market share, Gistelinck said.

BHP is targeting Brazil — an agricultural powerhouse that’s highly dependent of fertilizer imports — as well as Southeast Asian nations and the US as major markets for selling its potash as it seeks to reduce exposure to China, she said.

Gistelinck sees demand for the crop nutrient rising 2% annually over the next two years, tracking population growth, while external factors such as the impacts of climate change could also boost consumption.

“Catastrophic events will happen more often and for longer,” she said. “And potassium helps a lot with the resilience of agricultural products.”

–With assistance from Thomas Biesheuvel.

Most Read from Bloomberg Businessweek

Written by Amy Legate-Wolfe at The Motley Fool Canada

If there’s one sector investors need to watch closely, it’s copper. Copper stocks are poised to dominate the TSX in the future because copper is essential to the green energy revolution and global infrastructure development. As the world pushes towards renewable energy sources like wind, solar, and electric vehicles, the demand for copper is expected to surge due to its crucial role in electrical wiring and components.

Plus, with large-scale infrastructure projects on the horizon in Canada and globally, copper’s use in construction and technology sectors will keep demand high. This growing need makes copper stocks a hot commodity, likely driving their prominence on the TSX as companies ramp up production to meet global demand. So, let’s look at one to watch.

Lundin Mining

Lundin Mining (TSX:LUN) is a major player in the mining industry, known for its focus on base metals like copper, zinc, and nickel. With operations spread across the Americas, Europe, and Africa, Lundin has a diverse portfolio of mining assets that positions it well to benefit from the increasing demand for these critical metals. The company is particularly bullish on copper, which aligns perfectly with the global shift towards renewable energy and electric vehicles. Both of which require significant amounts of this versatile metal. Lundin’s strong operational performance and strategic acquisitions have made it a solid contender on the TSX.

The company has invested heavily in extending the life of its mines and improving efficiencies, ensuring that it remains competitive in a rapidly changing market. As the demand for essential metals continues to rise, especially with the ongoing green energy transition, Lundin Mining is well-positioned to capitalize on these trends.

Into earnings

Lundin Mining’s recent earnings report showcased a solid performance, giving investors plenty to be optimistic about. The company reported record quarterly revenue of $1.1 billion, driven by strong commodity prices and effective operational strategies. This impressive revenue translated into a robust adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $461 million and a significant free cash flow of $338 million. These numbers highlight Lundin’s ability to generate substantial cash even in a challenging market environment. Moreover, the company’s focus on cost management paid off, with cash costs coming in at the lower end of guidance, setting the stage for a strong second half of the year.

Another key takeaway is Lundin Mining’s strategic growth initiatives, particularly its decision to increase ownership of the Caserones mine to 70%. This move is expected to add an additional 25,000 tonnes of copper to Lundin’s production profile, strengthening its position in the copper market. Furthermore, the company reduced its sustaining capital expenditures by $45 million, demonstrating prudent financial management. With these strategic moves and strong financial results, Lundin Mining is well-positioned to continue delivering value to its shareholders.

Bottom line

Alright, but is the stock valuable? Investors should take away that Lundin Mining’s current valuations reflect a mix of strong growth prospects and some cautious considerations. The company’s trailing price-to-earnings (P/E) ratio of 49.39 might seem high at first glance. However, it’s important to note that this is largely due to the cyclical nature of mining and the recent fluctuations in commodity prices. However, the forward P/E ratio of 16.23 suggests that earnings are expected to improve. This makes the stock more reasonably valued based on future earnings potential. That is further supported by the company’s impressive quarterly revenue growth of 84.10% year over year, indicating that Lundin is capitalizing well on the current demand for base metals, particularly copper.

Furthermore, the stock offers a price-to-book ratio of 1.62 and an enterprise value-to-EBITDA ratio of 6.16. Therefore, Lundin Mining is trading at a level that reflects a fair valuation, given its solid balance sheet and operational performance. The company’s enterprise value to revenue ratio of 2.26 also suggests that investors are paying a reasonable price for the company’s revenue-generation capabilities.

Despite a payout ratio that seems high at 126.23%, this is not unusual for mining companies, especially when they are investing heavily in growth and expansion projects. Investors should see Lundin as a company with strong fundamentals and growth potential, albeit with the typical risks associated with the mining sector

The post The 3% Dividend Stock About to Take Over the TSX appeared first on The Motley Fool Canada.

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Most Read from Bloomberg

Futures in Singapore fell as much as 2.7% on Tuesday, adding to Monday’s 4.2% slump — the biggest daily drop in three months. Disappointing Chinese manufacturing and property data has bolstered bears who see little chance of a meaningful recovery in demand.

There’s limited upside for steel in China and the environment for iron ore prices is “challenging,” Goldman Sachs Group Inc. said in an emailed note that took a cautious tone on prospects for commodities demand in the nation.

The steelmaking material climbed above $100 a ton last week, but slumped back to two digits on Monday after the underwhelming Chinese data. Port stockpiles of iron ore are back above 150 million tons, a relatively large volume that will keep pressure on prices.

Futures in Singapore were trading at $94.70 a ton as of 1:04 p.m. local time. That’s only about $3 above their lowest point during the August selloff, when concerns about China’s steel sector intensified. Miners including BHP Group Ltd. have said they see iron ore getting support below $100, a level that puts pressure on high-cost producers.

Most Read from Bloomberg Businessweek

BHP Group Limited

TORONTO, Sept. 03, 2024 (GLOBE NEWSWIRE) — BHP Xplor, the six-month accelerator program aimed at revolutionizing critical mineral exploration, has officially opened applications for the 2025 cohort.

Following the success of the 2023 and 2024 cohorts, BHP Xplor is excited to invite early-stage explorers to join its next chapter. Once again, the program is seeking visionary teams focused on uncovering new sources of critical minerals crucial for a sustainable future.

The BHP Xplor program is designed to accelerate participants' exploration opportunities while fostering long-term relationships with BHP. Participants will benefit from up to $500K equity-free funding, expert mentorship, and invaluable connections within BHP’s extensive network of suppliers and service providers.

Since inception BHP has entered partnerships with three of program’s alumni. The partnerships strive to be industry-leading in how they are structured to foster collaboration and the opportunity for mutual value creation between a major and junior explorer.

BHP Xplor and Exploration Vice President, Sonia Scarselli, said: “Xplor in 2024 was an unforgettable journey filled with growth, innovation, and discovery. The program applications doubled from 2023 to 2024, and we are excited to see who will come forward for our 2025 program. The increased demand for critical metals presents a unique opportunity for junior explorers, but success requires strong two-way partnerships built on trust. Xplor is a boldly different way of thinking, it’s about shared vision. We believe this approach will help us to be better as an exploration industry and expedite the discovery of critical minerals required for a greener future.”

Additionally, the 2025 cohort will join our BHP Xplor alumni community to continue sharing insights and learnings on their journey.

2024 BHP Xplor Alumni and CEO & Director of East Star Resources, Alex Walker, said: “The toolkit that we have brought to East Star from BHP Xplor has elevated us in terms of professionalism. Having someone who feels like they are absolutely in your corner has been amazing. Since Xplor, we’re expanding, we’ve built a bigger team, and we have bigger targets. We expect that this will result in a better outcome for all stakeholders.”

Selected participants will receive up to USD $500,000 in equity-free cash from BHP, along with access to a network of industry experts to support technical, business, and operational development.

For BHP, this initiative presents an opportunity to tap into a diverse pipeline of exploration projects across new geographies and new geological concepts, enhancing our global portfolio and shaping future growth.

Applications for the BHP Xplor 2025 cohort are open from September 2, 2024, to October 9, 2024.

For the latest program updates and to apply visit, visit bhp.com/Xplor.

CONTACT: Media inquiries should be directed to Josie Brophy via email at Josephine.brophy@bhp.com

We recently published a list of 10 Best Australian Stocks To Buy According to Hedge Funds. In this article, we are going to take a look at where BHP Group (NYSE:BHP) stands against the other Australian stocks.

A Look at Australia’s Economic Performance in 2024

According to a report by KPMG, the global economy has shown remarkable resilience during monetary policy tightening and ongoing geopolitical tensions. In contrast, the Australian economy was close to entering a recession in 2024, with a mere 0.1% growth in the first quarter. Over the past year, the economy grew by only 1.1%. Household consumption increased by 0.4% during Q1, slightly better than Q4 of 2023. However, labor productivity, measured as GDP per hour worked, remained stagnant as the growth in hours worked matched GDP growth. The mining sector plays a crucial role in the economy of Australia making up 14.3% of the industry’s output, while finance contributes 7.4%, and manufacturing and construction add 7.1% and 5.7%, respectively. Australia’s export market is primarily driven by its mining resources, with China being the largest destination, accounting for 32.4% of exports, followed by Japan at 13.1%.

The March 2024 survey of private capital expenditure reveals strong actual investments in the first nine months of FY24, along with positive momentum for the remainder of the financial year and into FY25. Private new capital expenditure rose by 1% in the March quarter of 2024. Business investment in non-mining industries grew by 3.3%, partially offsetting a 4.7% decline in mining capital expenditure. This quarterly growth marks a slowdown from the robust levels seen in late 2022 and early 2023. The transport, postal, and warehousing sectors experienced the strongest growth, driven by increased vehicle investments and ongoing spending on large infrastructure projects. Similarly, capital expenditure on equipment and machinery in the information media and telecommunications sector rose significantly due to continued investment in data centers. However, the weakening demand for consumer goods and services impacted the retail sector and its upstream industries.

Australian Equities vs. U.S. Stocks

Chris Leithner, joint managing director at Leithner & Co. investment company, is bullish on Australian equities and expects the market to outperform the S&P 500’s returns in coming years. According to him, over the past decade and more, the total returns of the All Ordinaries and ASX 200 indexes, have underperformed the S&P 500 Index. Some analysts, such as Roger Montgomery, attribute this underperformance to Australian companies’ overly generous dividend payments, inadequate earnings retention, and restricted capital expenditure. However, Leithner disagrees and says that a significant factor of this underperformance is the difference in earnings growth between the two markets. American stocks have benefited from substantial earnings growth, partly driven by debt-financed share buybacks, leading to higher debt-to-equity and CAPE ratios. In contrast, Australian equities have experienced a decline in CPI-adjusted earnings per share (EPS), as share buybacks have not played the same role. As a result, Australian companies are more conservatively financed and offer superior medium and long-term prospects. This analysis suggests that while American equities have generated significant rewards since the Global Financial Crisis (GFC), they also pose considerable risks at current prices. Conversely, Australian equities, despite their recent underperformance, are better positioned for future growth due to their robust financial foundation and conservative pricing.

Share buybacks have dramatically increased over the years, with S&P 500 companies repurchasing a staggering $825 billion worth of stock in the 12 months leading up to January 2024. This is part of a broader trend that has seen buybacks rise from an average of around $200 billion per year in the early 1990s to over $1 trillion per year before the COVID-19 pandemic. While buybacks can boost earnings per share (EPS) by reducing the number of shares outstanding, they also artificially inflate the growth of earnings. For instance, a company that repurchases shares can show a much higher EPS growth rate than its net profit after tax growth rate. While this inflation of earnings through buybacks is significant, research suggests that buybacks have contributed between 30-40% of the long-term EPS growth of the S&P 500, with some estimates as high as 71%. The cumulative effect of these repurchases is immense, with S&P 500 companies buying back a CPI-adjusted total of $17.7 trillion worth of shares since 1990, an amount equivalent to nearly 45% of the current U.S. GDP.

The leverage used to finance these buybacks is also noteworthy. In contrast to Australian companies, which have a relatively low debt-to-equity ratio and conduct minimal buybacks, U.S. companies have significantly increased their leverage over the past two decades, with the debt-to-equity ratio surpassing above 80% in recent years. This increased leverage, coupled with the substantial buybacks, has led to a higher cyclically adjusted price-to-earnings (CAPE) ratio for the S&P 500 compared to the All Ordinaries Index in Australia. As a result, while the S&P 500 has outperformed the All Ords in recent years, the high CAPE ratio suggests that future returns for the S&P 500 may be lower, while the Australian shares may offer better medium- to long-term prospects.

According to IG’s biannual Client Sentiment Survey, Australian traders are bullish towards the S&P/ASX 200, with 65% expecting a rise in the next six months. Despite this confidence, there is a noticeable shift towards international markets, particularly in the United States, where many traders believe the Nasdaq will outperform the ASX 200. Australian traders have nearly doubled their focus on US markets over the past six months. International markets provide exposure to a broader range of industries, especially in technology and growth stocks, and offer opportunities for risk management and enhanced returns. Australia’s market lacks diversity, by fostering innovation and supporting emerging industries the market could attract more local investment.

While the global economy demonstrates resilience, Australia’s economic performance in 2024 has been less robust. The mining sector continues to be a key driver, alongside finance and infrastructure investments, but the broader economy faces challenges, particularly in retail and upstream industries. However, the outlook for the remainder of FY24 and into FY25 remains cautiously optimistic, with private capital expenditure showing some positive momentum. With that in context, let’s take a look at the 10 best Australian stocks to buy according to hedge funds.

Is BHP Group (BHP) The Best Australian Stock To Buy According to Hedge Funds?

An aerial view of a mining operation in action, with large trucks and yellow diggers.

BHP Group (NYSE:BHP)

Number of Hedge Fund Holders: 22

Market Capitalization as of August 30: $139.76 Billion

BHP Group (NYSE:BHP) is a multinational mining, metals, and petroleum company. It is one of the world’s largest resource companies, with operations spanning various sectors, including iron ore, copper, coal, and oil.

Despite subdued iron ore prices and rising costs, BHP Group (NYSE:BHP) has maintained solid production performance. For the year ended 30 June, BHP Group (NYSE:BHP) achieved several production records, including record copper output at the Spence mine and strong iron ore production. The company’s copper production increased 9% year over year with an EBITDA margin of 51% and Iron ore production totaled 259.7 Mt. The company’s potash projects are also progressing well, with Jansen Stage 1 ahead of schedule at 52% completion and Jansen Stage 2 just beginning at 2% completion. For the year 2025, BHP Group (NYSE:BHP) expects a further 4% increase in copper production.

On August 30, BHP Group (NYSE:BHP) announced its plan to expand its smelter and refinery operations at Olympic Dam in South Australia. The South Australian Government has initiated an application and assessment process for this expansion. BHP Group (NYSE:BHP) aims to increase its copper production in South Australia from approximately 322,000 tonnes last financial year to 500,000 tonnes of refined copper cathode by the early 2030s, with potential growth to 650,000 tonnes by the mid-2030s. Additionally, BHP Group (NYSE:BHP) has announced an Inferred Mineral Resource at Oak Dam of 1.34 billion tonnes at 0.66% copper grade and 0.33 grams per tonne gold grade, within which is an area that contains 220 million tonnes at 1.96% copper grade and 0.68 grams per tonne gold.

The company’s diversified commodity portfolio provides a balanced exposure to different markets and reduces reliance on any single commodity. Copper, which contributed significantly to the company’s EBITDA, continues to show potential for more growth. According to a report by the World Bank, copper prices are forecasted to increase by 4% next year. According to Forbes, the demand for Copper is forecasted to increase by 75% by 2050. BHP Group’s (NYSE:BHP) strategic initiatives, market positioning, and growth in copper production support its long-term growth prospects.

In the second quarter, BHP Group’s (NYSE:BHP) stock was held by 22 hedge funds with stakes worth $1.25 billion. Fisher Asset Management is the largest shareholder in the company with a stake worth $1.21 billion as of June 30. Industry analysts have a consensus on the stock’s Buy rating, setting an average share price target at $61.38, which represents a 10.7% upside potential from its current level.

Overall BHP ranks 4th on our list of the best Australian stocks to buy according to hedge funds. While we acknowledge the potential of BHP as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BHP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

Disclosure. None. This article is originally published at Insider Monkey.

Key Insights

Using the 2 Stage Free Cash Flow to Equity, Lundin Mining fair value estimate is CA$16.48
With CA$13.98 share price, Lundin Mining appears to be trading close to its estimated fair value
The US$17.04 analyst price target for LUN is 3.4% more than our estimate of fair value

Today we will run through one way of estimating the intrinsic value of Lundin Mining Corporation (TSE:LUN) by taking the expected future cash flows and discounting them to their present value. This will be done using the Discounted Cash Flow (DCF) model. There's really not all that much to it, even though it might appear quite complex.

We would caution that there are many ways of valuing a company and, like the DCF, each technique has advantages and disadvantages in certain scenarios. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you.

View our latest analysis for Lundin Mining

Is Lundin Mining Fairly Valued?

We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.

Generally we assume that a dollar today is more valuable than a dollar in the future, and so the sum of these future cash flows is then discounted to today's value:

10-year free cash flow (FCF) estimate

	2025	2026	2027	2028	2029	2030	2031	2032	2033	2034
Levered FCF ($, Millions)	US$363.0m	-US$83.7m	US$547.5m	US$547.6m	US$551.3m	US$557.5m	US$565.5m	US$574.9m	US$585.4m	US$596.7m
Growth Rate Estimate Source	Analyst x7	Analyst x4	Analyst x2	Est @ 0.02%	Est @ 0.67%	Est @ 1.12%	Est @ 1.44%	Est @ 1.66%	Est @ 1.82%	Est @ 1.93%
Present Value ($, Millions) Discounted @ 7.1%	US$339	-US$73.1	US$446	US$417	US$392	US$370	US$351	US$333	US$317	US$301

("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$3.2b

The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.2%. We discount the terminal cash flows to today's value at a cost of equity of 7.1%.

Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = US$597m× (1 + 2.2%) ÷ (7.1%– 2.2%) = US$12b

Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$12b÷ ( 1 + 7.1%)10= US$6.3b

The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is US$9.5b. In the final step we divide the equity value by the number of shares outstanding. Compared to the current share price of CA$14.0, the company appears about fair value at a 15% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope – move a few degrees and end up in a different galaxy. Do keep this in mind.

dcfThe Assumptions

The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Lundin Mining as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.1%, which is based on a levered beta of 1.186. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.

SWOT Analysis for Lundin Mining

Strength

Debt is not viewed as a risk.

Weakness

Earnings declined over the past year.

Dividend is low compared to the top 25% of dividend payers in the Metals and Mining market.

Opportunity

Annual earnings are forecast to grow faster than the Canadian market.

Current share price is below our estimate of fair value.

Significant insider buying over the past 3 months.

Threat

Dividends are not covered by earnings.

Annual revenue is forecast to grow slower than the Canadian market.

Next Steps:

Whilst important, the DCF calculation shouldn't be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For Lundin Mining, we've compiled three further factors you should look at:

Risks: Every company has them, and we've spotted 2 warning signs for Lundin Mining you should know about.

Future Earnings: How does LUN's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.

Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered!

PS. Simply Wall St updates its DCF calculation for every Canadian stock every day, so if you want to find the intrinsic value of any other stock just search here.

We recently compiled a list of the 18 Best 52-Week Low Stocks to Buy Now According to Short Sellers. In this article, we are going to take a look at where BHP Group Limited (NYSE:BHP) stands against the other 52-week low stocks.

Buying low and selling high is a popular investment strategy that value investors inspired by Warren Buffett have perfected over the years. The legendary investor has consistently emphasized the importance of identifying stocks of undervalued companies with significant growth prospects and holding onto these investments for an extended period.

Some of the most undervalued stocks to buy are those trading near their 52-week lows, backed by solid underlying fundamentals. A lot of these companies have durable competitive advantages but have fallen due to an overreaction by pessimists to short-term headwinds. The companies should boost strong brands in their respective fields with high barriers to entry.

Value investing means paying attention to more than just the stock price but by focusing on valuation. A pullback often creates buying opportunities where quality companies become available at low price-to-earnings multiples or low price-to-sales ratios relative to their industries.

Over the past 20 years, 95% of investment firms have failed to beat the S&P 500. In contrast, Buffett has averaged an annual return of 20%, nearly double the S&P 500 over the same period.

With the S&P 500 up by about 20% for the year, most stocks are trading at premium valuations above their 52-week highs. The impressive gains have come amid unfavorable market conditions, with interest rates near all-time highs of between 5.25% and 5.50%.

On the other hand, some stocks have pulled back significantly and are currently trading close to the 52-week lows, their core business hurt by the high interest rate environment. Additionally, some of the stocks have underperformed due to deteriorating macroeconomics. Concerns that the U.S. economy could plunge into recession have always hurt some of the stock's sentiments. The U.S. Federal Reserve is expected to cut interest rates in September and these stocks might not be near their lows for long.

According to Stuart Keiser, Citi head of equity trading strategy, the high interest rate environment has left the market in a very unstable situation amid a “ tricky environment.” Likewise many investors are on edge as to whether there will be a soft or hard landing. Keiser said, in an interview on CNBC's Fast Money:

“Basically you had a 12 to 18 month period of positive economic surprise of what I would call higher for longer growth strong rate cuts getting pushed out. Markets were able to deal with that because growth was really positive. Since late June economic data surprised negative, economic data momentum negative. The market is now trading instead of higher for longer trading, a bit of growth slowdown. That’s why you are getting this schizophrenia because as growth decelerates you get into a borderline at which the risk becomes really big that you could go hard landing instead of soft landing. So our view is that the risk reward is not what it was a couple of months back”

Amid the market outlook uncertainty, focusing on stocks near the 52-week lows is a sure way of balancing the risk reward amid the premium valuation in play. While the focus has been on artificial intelligence investment plays, stocks in various sectors are trading at discounted valuations and are sure to offer significant returns.

Our Methodology

To compile the list of the best 52-week low stocks to buy now, according to short sellers, we first screened for stocks that were trading near their 52-week lows (0-10% range) using the Finviz stock screener. Next, we looked at their short interest and picked the stocks with the lowest short interest that were the most popular among elite hedge funds. The stocks are ranked in descending order of their short interest.

At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

An aerial view of a mining operation in action, with large trucks and yellow diggers.

BHP Group Limited (NYSE:BHP)

52 Week Range: $51.73 – $69.11

Current Share Price: $55.67

Number of Hedge Fund Holders: 22

Short interest rate: 0.33%

BHP Group Limited (NYSE:BHP) is one of the best 52-week low stocks to buy now according to short sellers for diversifying an investment portfolio into the basic materials sector. While operating as a resources company, it mines copper, silver, zinc, Molybdenum, gold, and iron ore.

The underperformance in recent months has mostly been attributed to the company facing a major setback on its $43 billion planned takeover of Anglo American. BHP Group Limited (NYSE:BHP) had hoped to complete the acquisition to optimize its long-term growth potential with its higher-margin cash-generative assets and growth projects.

Amid the setback, BHP Group Limited (NYSE:BHP) had an impressive six months of the year as its profit came in at $6.6 billion. The company also announced a 72 cents per share dividend of $3.6 billion, translating to a 56% payout.

BHP Group Limited (NYSE:BHP) exhibits a price-to-earnings (P/E) ratio of 10, indicating investors' positive outlook regarding its profit capabilities. Nevertheless, the stock also appears undervalued, going by the average P/E of 25 for the energy sector. Importantly, BHP offers a dividend yield of 5.51%, highlighting its dedication to providing returns to its investors—a practice that has been ongoing for an impressive 45 years. The stock boasts of a low short interest of 0.33%.

At the end of June, 22 hedge funds in Insider Monkey's database owned stakes in BHP Group Limited (NYSE:BHP), down by three over the preceding quarter. Fisher Asset Management remained bullish on the stock, growing its position in the company by 4% in the second quarter of the year to 21.31 million shares.

Overall BHP ranks 3rd on our list of the 52-week low stocks to buy now according to short sellers. While we acknowledge the potential of BHP as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BHP, check out our report about the cheapest AI stock.

Disclosure: None. This article is originally published at Insider Monkey.

(Reuters) – BHP Group is continuing to push ahead with the expansion of its copper smelter and refinery at Olympic Dam in South Australia, as global miners ramp up their efforts around the key metal for greener energy transition.

The world's largest miner on Friday said the government of South Australia has begun an application and assessment process for the expansion, citing a notification in the South Australian Government Gazette.

BHP is strengthening its efforts in copper expansion, given the commodity's extensive role in the global shift towards greener energy and a subdued outlook for its top revenue generator, iron ore, as leading customer China's economic growth loses pace and supply rises.

"We are already growing BHP's copper production in South Australia with projects and studies underway at all of our operating sites, and we're moving at pace to potentially double our current production by the middle of the next decade," said Anna Wiley, BHP asset president copper for South Australia.

BHP is eyeing to lift its annual output from the region to 500,000 metric tons of cathode by early 2030s, from 322,000 tons produced last financial year. It expects to raise the output to up to 650,000 by the mid-2030s.

BHP will make a final investment decision on the expansion in 2027, it added.

(Reporting by Rishav Chatterjee in Bengaluru; Editing by Rashmi Aich)

(Bloomberg) — BHP Group Ltd. is moving ahead with a major expansion of the Olympic Dam copper smelter and refinery in South Australia, with permit applications now before the state government.

Most Read from Bloomberg

The world’s biggest miner aims to increase yearly output from 322,000 tons of cathode to 500,000 tons in the early 2030s, according to a statement on Friday, with a possible further boost to 650,000 tons also under consideration. It comes as BHP prepares for increased ore production from the region.

Global miners are ramping up efforts to develop copper resources as the metal is set to play a key role in the energy transition. While BHP cautioned this week that the market is in surplus at present, it expects rising demand to trigger a prolonged worldwide deficit later this decade, potentially boosting prices.

“We are already growing BHP’s copper production in South Australia, with projects and studies underway at all of our operating sites,” said Anna Wiley, asset president for the copper business in the state. “We’re moving at pace to potentially double our current production by the middle of the next decade.”

The project will include a new furnace, according to filings with the government. BHP will make a final investment decision on the expansion in 2027.

Most Read from Bloomberg Businessweek

In the latest market close, Southern Copper (SCCO) reached $101.43, with a +0.57% movement compared to the previous day. Meanwhile, the Dow gained 0.59%, and the Nasdaq, a tech-heavy index, lost 0.23%.

Shares of the miner have depreciated by 5.39% over the course of the past month, underperforming the Basic Materials sector's loss of 0.05% and the S&P 500's gain of 2.55%.

The investment community will be closely monitoring the performance of Southern Copper in its forthcoming earnings report. The company's earnings per share (EPS) are projected to be $1.06, reflecting a 34.18% increase from the same quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.81 billion, up 12.13% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $4.29 per share and a revenue of $11.59 billion, demonstrating changes of +37.94% and +17.09%, respectively, from the preceding year.

It is also important to note the recent changes to analyst estimates for Southern Copper. Recent revisions tend to reflect the latest near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.18% downward. Right now, Southern Copper possesses a Zacks Rank of #4 (Sell).

In terms of valuation, Southern Copper is currently trading at a Forward P/E ratio of 23.5. For comparison, its industry has an average Forward P/E of 12.09, which means Southern Copper is trading at a premium to the group.

It is also worth noting that SCCO currently has a PEG ratio of 1.04. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As of the close of trade yesterday, the Mining – Non Ferrous industry held an average PEG ratio of 0.69.

The Mining – Non Ferrous industry is part of the Basic Materials sector. Currently, this industry holds a Zacks Industry Rank of 86, positioning it in the top 34% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Southern Copper Corporation (SCCO) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

Written by Amy Legate-Wolfe at The Motley Fool Canada

The TSX has been on a remarkable run, reaching all-time highs. And there are a few key factors driving this surge. First and foremost is the strong performance of the energy and financial sectors. These pillars of the Canadian economy have played a significant role. With oil prices stabilizing and even climbing, energy stocks have been powering up, contributing to the TSX’s upward momentum. Meanwhile, the financial sector, buoyed by solid earnings from major banks and insurance companies, has added more fuel to the fire, helping to push the index to new heights.

So, how can investors get in on the action? Let’s look at two stocks to help your Registered Retirement Savings Plan (RRSP) climb higher.

VDY

The Vanguard FTSE Canadian High Dividend Yield Index ETF (TSX:VDY) is an excellent choice to add to an RRSP, even as the TSX reaches all-time highs. One of the key reasons is its focus on high-quality, dividend-paying stocks. These offer both income and potential for capital appreciation. In a market environment where prices are elevated, having a steady stream of dividends can provide a cushion against market volatility. VDY’s portfolio is packed with some of Canada’s most stable and reliable companies, particularly in the financial and energy sectors, which have long histories of paying and increasing dividends. This makes VDY a solid defensive play, ensuring that your RRSP continues to grow even if the market faces a correction.

Another advantage of VDY is its cost-effectiveness and diversification. The Exchange-Traded Fund (ETF) has a low management expense ratio (MER). This means more of your money stays invested rather than being eaten up by fees. Additionally, VDY gives you exposure to a broad range of top Canadian dividend payers, reducing the risk associated with investing in individual stocks. This diversification, combined with the tax-sheltered growth potential in an RRSP, makes VDY an attractive option for long-term investors. Especially those who want to build a resilient portfolio that can weather the ups and downs of the market while still benefiting from the compounding effects of reinvested dividends.

Lundin

Lundin Mining (TSX:LUN) is another compelling stock to consider adding to an RRSP, even as the TSX hovers around all-time highs. One of the standout reasons is its impressive growth trajectory. The diversified base metals miner recently saw quarterly revenue growth of 84.1% year-over-year and a remarkable 105.7% increase in quarterly earnings. These figures highlight the company’s ability to thrive in a strong market. This makes it an attractive option for long-term investors looking to benefit from both capital appreciation and income.

Another reason LUN stands out is its solid financial foundation and dividend potential. With a forward annual dividend yield of 2.8% and a history of stable payouts, LUN offers a steady income stream – one that can enhance the growth of an RRSP over time. The company’s strong cash flow generation, with $1.4 billion in operating cash flow and a manageable debt-to-equity ratio of 24.6% further reinforce its position as a resilient and reliable investment. For investors looking to build a robust retirement portfolio, LUN’s combination of growth potential and income stability makes it a top contender.

The post 2 Stocks I’ll be Adding to My RRSP – Even With the TSX at All-Time Highs appeared first on The Motley Fool Canada.

Should you invest $1,000 in Lundin Mining Corporation right now?

Before you buy stock in Lundin Mining Corporation, consider this:

Consider MercadoLibre, which we first recommended on January 8, 2014 … if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,801.82!*

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