Copper Mountain Shares Pop 7% After Strong Q2

Copper Mountain Mining (CMMC) shares jumped 7% in early trading on Monday after the company reported strong second-quarter financial results. The mining company, which explores for gold, silver, and copper deposits, posted record operating cash flow and raised its production guidance.

Copper Mountain had a quarterly production of 29.6 million pounds of copper equivalent (25.5 million pounds of copper, 7,627 ounces of gold, and 147,973 ounces of silver) in the three months ended June 30.

Meanwhile, C1 cash cost for the second quarter of 2021 was $1.38 per pound of copper produced.

Quarterly revenue for Q2 2021 came at C$142.1 million from the sale of 21.7 million pounds of copper, 6,545 ounces of gold, and 121,291 ounces of silver, net of pricing adjustments.

Gross profit was C$85.8 million, while net income came in at C$38.7 million (C$0.12 per share) in the second quarter. Cash flow from operations was C$94.6 million (C$0.45 per share).

Copper Mountain’s President and CEO Gil Clausen said, “We posted yet another strong production quarter contributing to record operating cash flow. As a result of the production achieved to date, we are increasing our production guidance range for 2021 to 90 to 100 million pounds of copper. As previously guided, we expect grades to moderate for the remainder of the year as we mine proportionally more lower grade Phase 2 ore in the second half of the year, especially in Q4 as we commission and ramp up production from Ball Mill 3.”

During the quarter, Copper Mountain completed a $250 million bond refinancing program which has enabled the company to restructure its balance sheet. This allows it to access 100% of excess cash to fund its organic growth plans. (See Copper Mountain Mining stock charts on TipRanks)

On July 16, National Bank Financial analyst Don Demarco reiterated a Buy rating on CMMC while lowering its price target to C$5.25 (from C$5.50). This implies 41.5% upside potential.

Overall, the consensus among Wall Street analysts is that CMMC is a Moderate Buy based on 5 Buys and 2 Holds. The average Copper Mountain Mining price target of C$5.00 implies upside potential of about 34.8% to current levels.