If you've ever stood beneath Michelangelo's sculpture of David in Florence, you know that the commensurate underdog is anything but a pipsqueak. Taseko Mines
Although true industry goliaths such as Freeport McMoRan Copper & Gold
Taseko recorded a 200% increase in net earnings over the second quarter of 2008, but those results were heavily influenced by a foreign-exchange gain of $7.9 million (compared to a corresponding $600,000 loss in the prior-year period). Notwithstanding the impressive strength of copper's price recovery in recent months, the average realized price dropped 46% from the prior year, offsetting a 69% increase in copper concentrate sales volume.
When we look to mining costs, Taseko starts to increase in stature. The miner's operating cash costs, net of by-product credits, came in at just $0.96 per pound. Of course, goliath Southern Copper
Taseko's golden bullet
With less than 10% the production scale of Southern Copper, Taseko possesses a secret weapon to slay the competition. The pending Prosperity project, which Taseko is "extremely confident" will clear regulatory hurdles, offers not only 2 billion pounds of copper, but a large-scale gold reserve of 4.7 million ounces.
Whereas copper giant Teck Resources
Copper has been on a tear lately, reaching more than $2.80 per pound as China continues to build stockpiles, invest abroad, and foment commodity speculation. As a result, I perceive a near-term price correction on the horizon, with the potential for more favorable entry points ahead.