Now the past investments are unfolding with brute force! A new mine plan and higher extraction rates as well as a new central shaft position these companies perfectly for the future!
there are companies that seem to do everything right and are cheered for it by their shareholders! This is definitely the case with Copper Mountain Mining. At Caledonia Mining, the management has also done everything right, but in our opinion the share price has not yet begun to appreciate the increases in value! While one company, Copper Mountain Mining, will continue to rise in price due to the fundamentals, Caledonia Mining should reassess the company.
Copper, gold and silver are currently experiencing a real renaissance! Therefore you should take a closer look at the raw materials, but also the companies Copper Mountain Mining and Caledonia Mining!
For industrial metals, copper is and will remain the most important raw material, especially in times of e-mobility! Especially through electric vehicles, copper demand will increase massively in the next ten years. The increase in electric mobility could lead to a nine-fold increase in global copper demand by 2027.
Because copper is used in both the batteries of electric vehicles and their electric motors. According to the International Copper Association (‘ICA’), a single electric car can easily contain up to six kilometers of copper cable.
Whether for drives, energy storage, power electronics or the expansion of the infrastructure network: copper remains THE determining functional metal of the future. Due to its good electrical conductivity, which is only surpassed by silver, copper forms the basis for all electrical and electronic future technologies! For this reason, no market expert is yet able to predict a trend reversal in copper demand. So far there has been almost unanimous agreement that with the advancing electrification of road traffic and everyday life, the demand for copper will also increase extremely sharply.
That is why it is very important to develop new copper production facilities and to increase existing production capacities! And embodies exactly this Copper Mountain Mining (ISIN: CA21750U1012 / TSX: CMMC), a company that has recently been able to delight its investors with spectacular news and will continue to delight them in the future!
Because not only is the copper price rising and rising, there is also apparently no stopping the share price of Copper Mountain Mining!
New mine plan catapults Copper Mountain Mining into new dimensions! Processing capacity and mine life increase massively!
In the latest ad hoc announcement (LINK to the press release) the Canadian copper producer has presented a new mine plan according to NI 43-101 for its 75% own ‘Copper Mountain’ mine in southern British Columbia! And this can definitely show itself. Because the mill production capacity will be increased from 45,000 tons to 65,000 tons per day, with the mine life being extended to 21 years due to significantly increased reserves.
These significant changes of course also significantly increase the net present value after taxes by more than 60% to now more than 1 billion US dollars!
Cost down, share price up!
By using newer and proven technologies and equipment, a significant reduction in costs and a significant reduction in energy consumption have been achieved, which means that the grinders can be operated much more efficiently.
The share price is slowly beginning to incorporate the increased copper price and progress into the price.
The analysts at Haywood and Cormark, whose price targets are CAD 2 and CAD 2.50 respectively, see significant potential!
Significant expansion potential available!
The current production plan is based solely on and includes mineral reserves no other mineral resource categories. There is therefore still enormous potential to significantly increase the service life of the mine by converting resources into reserves and increasing resources through further exploration. This mine expansion and the option to expand resources clearly illustrate the immense potential that the Copper Mountain mine offers.
The fact that the company is run by top management is shown by the performance of the past two years, in which not only the mine life was significantly extended, but also the production capacity was doubled, the net asset value was massively increased and the production costs were significantly reduced, and that in a rather difficult time for raw materials companies!
But it goes on at full throttle, because new groundbreaking decisions on the development of new areas are to be made after the submission of the technical report 2020.
This is what Gil Clausen, President and CEO of Copper Mountain Mining says about what has been achieved so far:
“The 65,000 ton per day expansion that will bring the Copper Mountain mine to an asset of approximately $ 1 billion clearly underscores the quality of the mine and our team’s ability to continue to grow reserves and value. This mill expansion study builds on ongoing growth projects and illustrates the immense potential that the Copper Mountain mine offers. In two years, we have more than doubled the life of the mine, significantly increased production capacity, increased net asset value and significantly reduced overall production costs. Upon completion of this 2020 technical report, we will continue to refine the capital estimates for this project in preparation for a decision on development. “
At least as important is the statement:
“All of the Copper Mountain mine deposits are still open and have significant exploration potential that can be added to our reserves and resources. We are continuously working to unlock the unrealized value and low risk growth potential of the mine and we expect to finance this production growth with the mine’s internal cash flow. ”
A new year-end mineral reserve and resource estimate is expected to come in the first quarter of 202
But the reserves and resources to date are also more than impressive!
Source: Copper Mountain Mining
You should also know that: Since the effective date of the previous mineral reserve and mineral resource for the ‘Copper Mountain’ mine is September 1, 2020, this still includes Not the most recent wells the Company drilled in the second half of the year.
Copper Mountain plans to include these drill results in its year-end mineral reserve and mineral resource estimate, which will be released in the first quarter of 2021.
This study on the expansion of the mill shows once again the enormous potential that the ‘Copper Mountain’ mine offers. The entire Copper Mountain Mining team did an excellent job once again. The mill has been expanded, the mine life has been extended and the remaining potential has been roughly shown. All in all, one can say that the company is headed for rosy times! Strong copper and gold producers are also in great demand! With the implemented cost reduction program and the excellent future prospects, Copper Mountain Mining is one of the best copper stocks on the market at the moment!
Production increase by 45% ahead! New central shaft creates considerably more cash flow! Dividend increase inevitable?
Another TOP success story in the raw materials sector, which is far from over, is this gold producer from Zimbabwe! Because the new central shaft provides sensational business figures! And all this in an environment where gold prices continue to rise, which, according to market experts, could even rise well over US $ 5,000 per troy ounce in the medium term, driven by inflation!
In addition to Copper Mountain Mining, in our opinion Caledonia Mining is one of the future top performers, which is only now beginning to develop its potential. It all starts with competent management and a good project in a top location. This was and is with Caledonia Mining (ISIN: JE00BD35H902 / TSX: CAL) given until today! The next step is to focus on the key business figures!
And that should actually be very easy to implement for an experienced management team. Because increasing production and lowering costs is the maxim for success, but this is where a large number of managers fail. But not with Caledonia Mining!
Completion of the construction phase of the new central shaft!
In his latest press release (LINK to the press release) Caledonia Mining announced that the phase of fully equipping the central shaft from the base to the surface collar has now been completed and commissioning will take place on schedule in the first quarter of 2021. It is important to mention that the construction work clear Done under budget and on time.
For Caledonia, this milestone is the springboard to an expansion of production to around 80,000 ounces per year, by 2022 at the latest!
Construction work began on August 3, 2015 and commissioning will take place in the first quarter of 2021. The construction project was financed from the cash flow and even carried out independently under the supervision of Sinking Engineering Mining Construction. Compared to the offers previously obtained, which were all over USD 100 million, the shaft has now been completed with only around USD 60 million!
Not only will the new shaft significantly extend the life of the ‘Blanket’ mine by 2034, it will also increase production by around 45% from around 55,000 ounces of gold to 80,000 ounces per year from 2022. In addition, the total production costs will be increased from currently around USD 855 to between USD 700 and USD 800 per ounce through economies of scale and operational efficiency.
With ongoing exploration work, the ‘Blanket’ mine life will almost certainly be extended well beyond the year 2034!
This is what Steve Curtis, Chief Executive Officer of Caledonia Mining, says about the completion of the central shaft:
“Completing the equipment phase is a huge milestone for the company and nobody should underestimate this achievement. We have invested approximately $ 60 million in this project since it was first announced in 2015. It was built by us, fully funded from internal cash flow, and completed at a cost well below the original cost estimates.
The central shaft is one of the largest investment projects for gold mining in Zimbabwe and will represent a transformation for our company: Our target production is to increase by 45 percent to 80,000 ounces by 2022, while our long-term total costs are expected to decrease to 700 to 800 US dollars per ounce. The central shaft will also enable us to intensify our exploration at depth, which, if successful, could extend the life of the ‘Blanket’ mine, which currently extends to 2034.
Over the past five years we have laid a solid foundation for the company, we have a healthy balance sheet, strong gold price, and a highly cash-generating asset with free cash flow that is expected to increase significantly as production increases. This is a very exciting time for Caledonia Mining. “
Increase production and reduce costs!
The completion of the central shaft is a groundbreaking milestone for Caledonia Mining! An increase in production of around 45% with a simultaneous cost reduction of around 10-20% means a considerable increase in cash flow from 2022!
Already this year stable production due to investments in the energy supply in combination with a high gold price and good cost control led to significantly higher profits.
Continuous dividend increases!
Since the investment rate will decrease significantly from 2021 onwards due to the termination of the six-year investment program at the ‘Blanket’ mine, further dividend increases for the future can be considered in addition to possible investments in new projects. Increasing production will also make a positive contribution.
On October 1st, 2020, Caledonia Mining was able to report a further increase in the quarterly dividend to 10 US cents for the 3rd quarter of 2020. This represents an increase of 18% compared to the previous quarterly dividend of 8.5 cents, which was last paid in July 2020. This is the third dividend increase since October 2019 and represents a 45% cumulative increase of 6.875 cents!
Caledonia mining at an extremely affordable level!
In the course of the latest precious metal correction, Caledonia Mining Performance also had to give up! In view of the latest progress and future prospects, the current level can be assessed as extremely favorable.
Source: Wallstreet: Online.de
Up to the previous year’s high alone, there is a 75% chance of price gain. And why should the company, as it is now positioned, better than ever, not reach or surpass this course again if gold prices continue to rise?
Aspiring gold producer with great opportunities!
Despite the negative impact of the coronavirus pandemic on supply chains and operating agreements, the ‘Blanket’ mine achieved robust production results in the first nine months of 2020 and produced 42,896 ounces of gold even 12% more than in the first nine months of Year 2019. Due to the strong production, the Caledonia Management Board increased the production forecast for the full year 2020 from 53,000 to 56,000 ounces to 55,000 to 58,000 ounces of gold at the last presentation of the results. This means the company is definitely on track to meet its future production target of 80,000 ounces annually by 2022!
The successful gold producer has demonstrated its considerable economic resilience in the COVID 19 pandemic! With the completion of equipment for the central shaft and its commissioning by the end of 2021, the company is excellently positioned for the future. In addition to increasing production and saving costs, the central shaft offers access for further deep explorations in order to extend the mine life well beyond the year 2034.
We would say that Caledonia Mining is heading for very hopeful and profitable times from which shareholders benefit twice. On the one hand through rising dividends and on the other hand through rising share prices!
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