3. Hudbay Minerals Inc. (NYSE:HBM)
Number of Hedge Fund Investors in Q1 2024: 31
Analyst Average Share Price Target: $12.13
Upside: 50.31%
Hudbay Minerals Inc. (NYSE:HBM) is a Canadian mining company that focuses on mining copper, zinc, and gold. It has a sizeable copper portfolio, which includes impressive names such as the Copper World project in the US which is one of the highest grade open pit mining projects in this part of the world. Phase 1 of this site has an expected life of twenty years, and it can produce 92,000 tons per year. Additionally, Hudbay Minerals Inc. (NYSE:HBM) also acquired Copper Mountain in 2023 to create what it terms the third largest copper producer in Canada. The deal added six new copper production sites to its portfolio and set Hudbay Minerals Inc. (NYSE:HBM) as a long term copper producer. The firm is also aided by the fact that it generates healthy cash flow by mining gold, which helps its cash position to finance the copper mining projects. Raising capital is key for Hudbay Minerals Inc. (NYSE:HBM)’s success, as phase one of Copper World will cost $950 million. The firm is interested in selling a minority stake in the site to interested parties to help offset some of the costs.
Hudbay Minerals Inc. (NYSE:HBM)’s management commented on the costs and future copper production during its Q1 2024 earnings call. Here is what they said
. . .Copper World is the next promising greenfield copper development project in our growth pipeline. As we progress towards making the sanctioning decision, we will continue to be prudent with our financing plans for Copper World by remaining focused on meeting all of the prerequisites outlined in our 3-P Plan that we introduced in late 2022. Copper World is one of the highest grade open pit copper projects in the Americas with proven and probable reserves of 385 million tonnes at 0.54% copper in Phase 1. There is roughly 60% of the total contained copper remaining in the measured and indicated resources excluding reserves, which provides significant upside potential for Phase 2 expansion and mine life extension beyond 20 year.
. . .We expect to launch the formal Joint Venture process later this year, after we secure our permits and prior to commencing a definitive feasibility study, which would allow the potential Joint Venture Partner to participate in the funding of definitive feasibility study activities as well as in the final project design for Copper World. We have seen strong initial interest from potential Joint Venture Partners, as many industry participants are focused on increasing copper exposure. Securing copper supply becomes a growing global concern, as evidenced by BHP’s recent bid by Anglo American in an effort to increase their copper exposure. Copper World will be a key contributor to the domestic US supply chain, with our intention to produce made-in-America copper cathode by building a concentrate leach processing facility in the fourth year of operations.
