Minting Pennies From Copper

As a result of lofty zinc prices, the U.S. Treasury loses money with the minting of every penny. So the U.S. House of Representatives passed a bill last week to bring back the steel penny. Clearly, your elected officials see no relief in sight from expensive base metals.

As interesting as the penny story is, there are more efficient ways to play with copper than hoarding pennies in your basement -- mainly because pennies now only contain only 2.5% copper; the rest is zinc.

While I wholly condone obvious copper plays like Southern Copper (NYSE: PCU  ) and Freeport-McMoRan (NYSE: FCX  ) , another interesting option waits in their shadow: Taseko Mines (AMEX: TGB  ) .

Taseko may have a market cap of just $740 million, but it sports a megafollowing within the Motley Fool CAPS community, with more than 1,000 players rating the stock. The company posted earnings and news this week that make the stock easy to love. Earnings before taxes rose nearly 41% year over year. Sales of copper concentrate rose 25% to 14.8 million pounds.

During the quarter, Taseko commissioned a new SAG mill (which grinds ore into smaller pieces) at the company's flagship Gibraltar Mine in British Columbia. The company also reported improved throughput volume of ore processed, as well as increased recovery rates from that ore. All of this resulted in a steady boost to copper production over the course of the quarter, from 3.3 million pounds in January to 5.5 million in March.

Looking ahead, Taseko approved a Phase III expansion to the Gibraltar operation, with a projected 50% increase in throughput capacity by Q4 2010. The company is targeting annual production of 180 million pounds of copper and 4.5 million pounds molybdenum. That represents some serious organic growth.

While Taseko will likely never attain the scale of a Freeport-McMoRan, this small cap will keep making pennies from copper, even if the U.S. Mint does not.

Further Foolishness:

Do you have an opinion on Taseko? Come join the Motley Fool CAPS community and share your views with the rest of us. It's fun, free, and financially fruitful.

Fool contributor Christopher Barker captains yachts and writes about stocks. He can also be found acting foolishly within the CAPS community under the username TMFSinchiruna. He owns shares of Freeport-McMoRan and Taseko Mines. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (12)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 646720, ~/Articles/ArticleHandler.aspx, 10/28/2016 1:04:54 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 3 hours ago Sponsored by:
DOW 18,169.68 -29.65 -0.16%
S&P 500 2,133.04 -6.39 -0.30%
NASD 5,215.97 -34.29 -0.65%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/27/2016 3:59 PM
TGB $0.44 Up +0.00 +0.28%
Taseko Mines CAPS Rating: ****
FCX $10.69 Up +0.11 +1.04%
Freeport-McMoRan C… CAPS Rating: ****
PCU $31.38 Down +0.00 +0.00%
Southern Copper CAPS Rating: ****