Copper Mountain Mining Posts Record Quarterly Production In 1Q; Shares Pop 8%

Copper Mountain Mining shares jumped 8% in early trading Monday after the company released strong first-quarter financial and operating results. The mining company posted record quarterly production, quarterly revenue, C1 cash costs, and gross profit.

Copper Mountain Mining (CMMC) reported quarterly production of 30.4 million pounds of copper equivalent (25.5 million pounds of copper, 8,187 ounces of gold, and 160,484 ounces of silver). The C1 cash cost for the first quarter of 2021 was C$1.15/lb of copper produced.

Quarterly revenue for Q1 2021 came in at C$162.2 million from the sale of 27.5 million pounds of copper, 8,553 ounces of gold, and 161,657 ounces of silver, net of pricing adjustments. Copper’s gross profit was C$96.3 million, while net earnings per share came in at C$0.18.

Copper Mountain’s President and CEO Gil Clausen said, “Production was higher in the first quarter as we mined mostly from Phase 3, which has higher-grade ore. As we move to increase the ratio of ore production from Phase 2 of the main pit, we expect to see grades moderate somewhat. Phase 2 of the main pit has lower mining costs than Phase 3 as we are mining upper benches of ore that are closer to the primary crusher and waste dumps. As a result of our record first quarter and the expected continued strong production throughout the year, we expect production to be in the upper half of our annual production range of 85 to 95 million pounds of copper.”

After the quarter, Copper Mountain entered into a $250 million bond financing to refinance existing debt. The company used the proceeds to finance its internal growth projects at the Copper Mountain mine and the Eva Copper project. (See Copper Mountain Mining stock analysis on TipRanks)

Last week, BMO Capital analyst Rene Cartier reiterated a Buy rating on the stock with a C$3.25 (22% downside potential). Cartier said the $250 million bond offering “provides a cleaner, simpler and much more flexible balance sheet.”

Overall, the consensus among Wall Street analysts is a Strong Buy based on 4 Buys and 1 Hold. The average analyst price target of C$3.55 implies a downside potential of about 15% to current levels.