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Gold/Mining/Energy : Copper Mountain Mining Corporation (CUM.TO) -Toronto
CPPMF 0.170-1.7%2:56 PM EST
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To: Sultan who wrote (5)6/29/2012 2:11:34 PM
From: E_K_S  Read Replies (1) of 55
 
I am also in w/ a tracking position yesterday at $3.17 $US (CPPMF). Went through their presentation again and am looking forward to see what production levels they reach for 2012 (2912 Q1 look very good). With a new operation there are bound to be snags. If management can show good sustained operations w/ steady production levels, investors will be apt to assign a higher PE to the company.

For example, Southern Copper Corp. (SCCO) ( goo.gl ) is about 50x bigger than CUM.TO and has a longer production history. This is a profitable company generating good earnings and selling at a forward PE of 12. The company has 2.75B in debt but also has net annual income of 2.48B.

CUM.TO 2012 earnings could top $94.4M or about $0.96/share (extrapolated from Q1 2012 results of $23.6 M/Q1 or about $7.87M/month net income).At 10 PE company is worth $9.70/share; 12 PE company is worth $11.50/share.

Current price of CPPMT $3.50/share. Therefore company is undervalued by 290%. The risk/reward is definitely there as long at spot copper holds it's value.

As of June 29, 2012:

 COPPER FUTURE (USd/lb.)	  351.350       18.200	5.46%
 GOLD 100 OZ FUTR (USD/t oz.)	1,603.000	52.600	3.39%
 SILVER FUTURE (USD/t oz.)	   27.555        1.264	4.81%


EKS
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