7 Best Copper Stocks to Buy According to Analysts

5. Metals Acquisition Limited (NYSE:MTAL)

Number of Hedge Fund Investors  in Q1 2024: N/A

Analyst Average Share Price Target: $17.60

Upside: 38.26%

Metals Acquisition Limited (NYSE:MTAL) is a pureplay copper and silver miner with operations in Australia. It’s one of the younger copper stocks on our list, and the shares were listed on the NYSE in June 2023 through a SPAC deal. As such, Metals Acquisition Limited (NYSE:MTAL)’s shares hinge on its future production and asset development. The firm raised A$325 million through its ASX listing earlier this year to fund operations for its mine in New South Wales, Australia. Metals Acquisition Limited (NYSE:MTAL) expects that this mine has a life of 11 years, and for 2024, the firm aims to produce 38,000 to 43,000 tons from the site, which it estimates has proven copper reserves of 293 tonnes. However, as Metals Acquisition Limited (NYSE:MTAL) is an upstart, it has to remain well financed to keep funding operations. In today’s environment, as raising debt financing is expensive, Metals Acquisition Limited (NYSE:MTAL) might issue more shares or exercise existing warrants – both of which will dilute equity and potentially impact the stock price.

Metals Acquisition Limited (NYSE:MTAL)’s management commented on these key liquidation issues during its Q1 2024 earnings call where it shared:

On Slide 12, here I wanted to take you through a high-level liquidity update as at the end of March 2024. As you can see, we started off the year with liquidity of around $32 million, which included the drawdown of our revolving facility of $25 million. We then completed a very successful oversubscribed equity raise on the ASX, which brought us in so much needed liquidity of around $215 million or AUD325 million before cost.

Almost immediately, we paid a deferred Glencore consideration of around $83 million, which was one of our higher debt costs on our balance sheet as it carries the same interest as the mxx debt facilities, so immediately accretive to earnings. Alternatively, this liability could have been converted to shares, which would have been RDWS [ph], so paying that back as soon as possible was the best thing to do for us there. We then reduced further some additional interest-bearing liabilities by repaying the revolving facility of $25 million and reducing some of our principal on our senior facility as well of around $8 million. We ended up the quarter with around $100 million of liquidity, which is around that AUD155 million Mick has outlined as well.