I like Benguet and own quite a lot of shares in it. It owns a hodge podge of various non-producing metal projects in the Phillipines which is one of the most mineral rich countries in the world. Some highlights are:
-BENGF.OB A 100+ year old company, used to be NYSE listed.
-Inherited the King-King project in Mindinao, Southernmost Island from Eco Bay after the POG fell and Eco decided to ditch it rather than pay the lease payments. Gold/copper, low grade but very large, 6 million ozs. of gold and 3 billion lbs. of copper in the ground.
-Many other dormant gold and base metals projects that will be revived if this is truly the long term metals bull market that it now appears to be. There has been almost no share dilution over the last few years, so I view Benguet as a long term option on metals.
Another junior copper company I like a lot and that is currently producing is Mercator minerals (ml.v). The following from the newsletter writer Ted Slanker says it all:
Slankers circular 9/03: It’s (copper) been falling for 29 years. But every six to eight years or so it pops up. With copper’s last pop being in 1995, it’s due to pop now, and that’s exactly what it’s doing. After the explosive 1974 pop each succeeding constant-dollar pop has been more piddling than the preceding one. Will this pop be another piddling pop or will it ring the same bell as the 1974 pop? If it’s the latter, copper is headed for $5 a pound! The copper to gold chart clearly shows that copper and gold have a relative value tie. But every once in a while one or the other gets more attention. Back in 1974 copper soared relative to gold. Then going into 1980 gold soared and copper couldn’t keep up. Will we get a replay? Life isn’t always that simple. But I think we can expect a copper move that is more than modest. Mercator is currently a 100% copper play. Copper’s pop may take 12 to 18 months to unfold. Within 12 to 14 months Mercator plans to complete its mine expansion plan, which will boost production from the current five million pounds per year rate to 15 million pounds annually. As production expands, costs should drop from slightly less than 80 cents per pound down to around 50 cents per pound. When all is said and done, Mercator may have 16 million shares outstanding and be producing about one pound of copper per share. If copper moves to $2 and Mercator’s costs are 50 cents, then its earnings after tax could be $0.80 or so per share. At seven times earnings Mercator could be worth $5.60 per share, which is many times higher than its current price of 10 cents (C$0.13). If copper hits $5 per pound, analysts could project Mercator’s annualized earnings to be $2.40 per share. At five times those earnings projections, Mercator could top out at $12 per share. |
