Taseko Mines Limited (USA) (NYSEMKT:TGB)

CAPS Rating: 3 out of 5

The Company focuses on enhancing production of copper and molybdenum from its Gibraltar mine and acquiring and advancing development of tonnage mineral deposits.


Player Avatar TSIF (99.96) Submitted: 6/10/2011 6:46:14 PM : Outperform Start Price: $4.61 TGB Score: -47.50

I've held on some of the miners the last six months while commodities cycled like a roller coaster. Taseko Mines Limited is a favorite of several of our resident "commodity bugs" here on CAPs and they have done very well with it as it rose steadily the last two years. Taseko Mines Limited was "double hammered" the last few weeks as markets corrected and copper prices/demand were questioned and secondly as Taseko Mines reported earnings below expectations. The "problem" with "valuing" resources, such as the copper and molybdenum, that Taseko Mines mines is productin, are three major factors to valuation.

1. What is really below the ground that can be extracted?
2. What will it cost to extract it? (include environmental, energy costs, infrastructure costs, mining costs).
3. What will it be worth on the day it is extracted, (in the future)?

Mix in varying efficiency, management, world unrest, (especially in their area of operations), and what you have is a moving target that is a brief snapshot in time, built on many unknowns. In Taeko Mines case the weather in Canada cut copper production by about 15% I would guess weather would fall into the bucket 2.

I'll take the advice of my fellow fools on Taseko Mines and "play them" after their earnings hit which appears to be caused by one time items. Over the last year Taseko Mines has had TWO very sharp, 2-3 day 30% downturns. On November 3rd they traded 30% of their float on a drop from $6.50 to $4.57 before climbing back. I'll take my entry here slighlty above that level and see if I can ride them back up. Fundamentally and technically, from a longer term perspective they look attractive. They have most of the financing to expand their molybdenum production substantially. Copper continues to be well priced and in high demand. There are some "fire sales" on. These can either be a disaster to investors or an opportunity.

Report this Post 4 Replies
Member Avatar Gonzhouse (25.92) Submitted: 6/27/2011 10:02:15 PM
Recs: 1

I am also a long term TGB holder, with some acquired at 80 cents a share in 2004. I agree the company is hugely undervalued for its asset base. But I'm getting concerned about management. The Prosperity application was a disaster and they seemed to be completely clueless about the outcome. While they have a 2nd chance, it is far from a slam dunk and I don't believe relations between them and First Nation are very good. Their last earning release was also lousy, with a surprise operational problem as the culprit. I know the goal of managing a company is not to be at the top of each analysts recommendation list but they haven't made any friends either.

I'm not suggesting I'm going to sell; I've seen it through this far and believe they have too much going for it for the stock not to finally get its due. Guess I'm overdue for some good news that is reflected in the stock price.

Member Avatar TSIF (99.96) Submitted: 6/28/2011 5:38:59 PM
Recs: 1

I hope you get your "good news". TGB is not one of my favorite plays, but bears watching. Investors can only take so many roller coaster rides up and down the shaft without getting sick and getting off. I'm hopeful their assets will eventually shine through. Thanks for the thoughts. Good LUCK!!! ;)

Member Avatar Gonzhouse (25.92) Submitted: 7/7/2011 9:02:38 AM
Recs: 1

TGB just hedged their copper prices at $3.50/lb for the next 18 months. The market reacted well; while it does limit some upside the goal was to minimize downside price exposure, presumably to enable them to fund Prosperity irrespective of the current price of copper. The Canadian government is expected to issue their findings on Prosperity and begin the 90 day review process by Sept 4, 2011. We'll know soon.

Member Avatar Sparticus501 (< 20) Submitted: 9/14/2011 10:27:36 AM
Recs: 0

Not only is Prosperity looking good, but they also have a Nioium project:

"Taseko Mines Limited announces an inferred resource of 159 million tonnes grading 0.43% Nb2O5 at the Company's wholly-owned Aley Niobium Project, approximately 130 km north of Mackenzie, B.C.

The resource estimate is based on drill data gathered from Taseko's 2010 drilling program, along with historical drill data. The data formed the basis for the development of a geological model incorporating mine engineering studies."

The price is cheap, they have Copper, Gold, Niobium and other minerals. I am long TGB and buying future calls.

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