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Sunday, January 30, 2022

The Canadian Revolution

The Canadian Revolution

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As a salute to the Truck Drivers now protesting in Ottawa...I offer an oldie but a goodie...from Keith Richard who runs the ValueTrend investing blog...If you like Justin Trudeau and I don't, please be forewarned and don't read on...This one is for you guys and thank you for delivering the food on our shelves over the past two years...I know its been a trying time for you...

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Todays’ blog is my yearly off-topic rant. I’d like to present a revolutionary idea for a new type of tax system in Canada. A few points to start:

  • It’s political.
  • Its my opinion, not necessarily that of my staff.
  • I won’t take the time to argue my points in the comments section of this blog. Write your own blog if you feel differently.
  • As someone once said: “Just because you are offended, doesn’t mean its wrong!”.
  • Trolls – don’t bother. I won’t post your comments.
  • The financial figures noted were obtained from sources that I believe to be reliable however, I cannot guarantee they are accurate or complete.
  • I’ve provided links within the text for greater detail on many of my points

That said….Sit back and enjoy the ride as I first cover WHY we should examine changing our tax system, and then HOW I propose to change it. A little tongue in cheek may apply as we examine the “HOW” part of this strategy. Enjoy!

PART 1: THE PROBLEM

What’s wrong with this picture?

Canada sports the second highest income taxes in the world. Bad enough, that…But then there’s the 13% HST on top of our after-tax dollars! There’s property taxes (vs. tax deductible in the USA!), investment taxes (gains, dividends, interest), drivers licenses, and plate stickers. There’s custom/import taxes, luxury taxes, parking fees (for roads our taxes supposedly already pay for), land transfer taxes (shockingly high), and other excise taxes.  Lets not forget our lovely carbon taxes (now scheduled to rise again!) on top of existing gasoline taxes. How about probate fees, and estate taxes. These, after a lifetime of paying all those other taxes. Incredible, really.

Is it only “the rich” who are paying these tax levels? Not according to Pierre Poilievre“Right now, low-income people face marginal effective tax rates of up to 80 per cent when you count both the clawbacks and taxes.”

The taxes noted above vastly exceed income taxes, and most of them affect lower/ middle class income earners.

Despite the incredibly high and pervasive taxes in Canada, don’t you dare criticize high tax levels in the presence of some people. You’ll get this response:

“Don’t you like your streets, hospitals, police, sewers, schools, etc.?”

My answer: Yes, I agree that paying taxes for universal access to Medicare, roads, education etc. is desirable.

My beef is not about paying taxes:  I would prefer that our tax dollars  actually be used for schools, hospitals, streets, etc.

“Improving the condition of only one group has to come at the expense of another group” Lester Thurow

Tax dollars were meant to pay for these things?

All animals are equal, but some animals are more equal than others

This proclamation was made by the pigs who control the government in the novel Animal Farm , by George Orwell . The sentence is a comment on the hypocrisy of socialist governments who propagate equality of their citizens but in reality, give power and privileges to a small elite.

Take the $8.6MM cottage upgrades to allow Trudeau greater comfort while he hid from parliamentary enquiry over COVID spending and the WE scandal.  His bedroom conversion alone was $378,711. You and paid for a bedroom reno that cost as much as some peoples entire houses! We paid for a helipad at that cottage because he prefers to be helicoptered to that cottage rather than drive. He also built at our expense a tree house with a zip line, a $9,000 bee farm complete with bee farmers, a $6,000 organic garden, then spent $13,500 to protect the garden. He bought several canoes and boats, and $2,000 to improve the ice on his private skating rink.

How about the latest in a growing list of scandals, like the WE charity contributions by taxpayers that ended up back in his family pockets? Lets not forget about his first two costly ethics scandal’s.  Not to mention his narrow escaping another charge via the Norman fiasco. Then there’s the raise he attempted to give himself and MP’s (then shamed into not accepting it) right at the time of COVIDs breakout – when jobs were being lost, and businesses were closing across the nation.

How about the endless vacations, and the chef’s and costume makers he travels with. How about the 2 nanny’s he tried sneaking past the taxpayer, or the money to Aga Khan’s charity followed by the return gift of a personal vacation? On and on….

Double standard

Trudeau calls business people tax cheats if they write off ineligible items – like a personal expense as a business expense. Well, what does he call spending our tax dollars on his personal pleasures?

 Deja vu’ 1981!

Justin learned from the best – his father!

“Don’t you like your streets, hospitals, sewers, schools, etc?”

Forget improving Medicare wait times or improving infrastructure that would benefit Canadians. Instead, Trudeau directed $761MM sent to other countries to enhance their education and family planning. Or how about the $2.6B (that’s with a B!!) sent to the Commonwealth climate change program, the $300MM Rohingya refugee program, the $125MM Caribbean reconstruction program, the $650MM sexual health program in Haiti, the $50MM to Palestine flood relief, the $840MM to Syria, the $4.6B on his botched pipeline negotiations, the $750MM given to to India.

Just this week, the Liberals announced yet another $485MM being given to the WHO for foreign aid outside of our own country. Meanwhile, countless small businesses across the nation close their doors. I’m (almost) speechless!!!!

How about the $600MM gifted to the media who’s union vowed to destroy the Liberal’s competition? Not to mention the continued yearly $1BB donation to the state-media organization, the CBC. Or the private gifts of our tax dollars of $200MM to Loblaws (associated with Weston), or the $370MM to Bombardier “to save jobs”. Bombardier promptly laid thousands of workers off after that little bonus, courtesy of you and I. Not surprising – both Weston and Bombardier, along with SNC (the subject of Trudeaus second Ethics charge) have disproportionately contributed to the Liberal party. A coincidence, of course.

All of this, yet when asked about helping our Canadian war veterans – the claim is that the government cannot afford to help???

Gambling pays

There’s no new money for medical system improvement (longest wait periods in the developed worldbecoming longer). But we have the money for select private corporations. Recently, the Fed gave $200MM to Gateway Casino.

Elections B.C. political contribution disclosures show that Gateway Casinos & Entertainment donated $218,902 to the BC Liberal Party between 2015 and 2017, and that the Great Canadian Gaming Corp. had donated $127,413 during that period. Another coincidence, of course.

You just bought a car 

Not long ago, Trudeau, along with Ontario’s Premier Doug Ford, gifted nearly $600MM of your tax dollars so Ford Motor Co. could build electric cars, then sell them for $5000 less than their sticker price. Gee, that’s nice. This is using your share of the tax bill to pay for a car that you’ve not authorized, and may not purchase. Its a cost born by you and I – benefitting only those who actually buy the car. Oh, and the corporation, of course.

Question: What right does a government have to spend our money so indiscriminately?

To paraphrase Dr. Brian Lee Crowley (Managing Director of the Macdonald-Laurier Institute):

There is an incorrect assumption by citizens in Canada that the government “knows best” as to how to spend our money. This assumption fails to recognize that the knowledge of one small group of politicians cannot possibly match the knowledge of millions of citizens. Citizens from all walks of life form a collective skillset and intelligence that exceeds a small group of elitists.

A politician cannot, and should not, be free to act outside of basic society needs without some type of consultative process.

PART 2: THE SOLUTION

Here’s the tax returns we are used to:

The new tax return – for kicks and giggles

What if your total tax bill this year was (for example) $30,000. Wouldn’t it be great if it was itemized? For fun – lets make an imaginary breakdown that might be reported on your income tax return.  I truly believe I am massively understating the discretionary figures in this example.  Of your imaginary $30,000 tax bill, you receive the following financial statement:

Questions

Here’s a question for you: Were we to pay our taxes after an itemized report like the above, how much more attention would you pay to Justin Trudeaus spending decisions?

Let me ask you another question. If you received this tax bill, and knew that a good portion of  your money was being used for expenses that you did not endorse or agree with, how would you react?

Make governments report just like a corporation

What if  our personal net costs of government expenses were presented to us every year in a fully disclosed manner for scrutiny? What if an independent audit disallowed expenses that didn’t fall into ‘allowable expenses”. You know, like personal benefits to an MP? Those expenses would be paid back by the bad guys who tried sneaking them through…like any tax cheat has to.

What if  taxes were used only for what they are meant to cover – expenses like roads, education, police, fire, Medicare, etc? In this way, Justin would be held to the same standards as a business is.  He’d have to pay for his personal pleasures just like we do…with his OWN money! BTW – this would go for all politicians.

The political donor card

Perhaps you like the idea of helping an MP upgrade his cottage. Here’s how you could do it without infringing on the rights of your fellow Canadians! Picture a new twist on the donor portion of your drivers license. Here’s what we have now:

The new tax donor card 

The Canadian Revolution

The truth behind the American revolution was not that the “rebels” rejected taxes. They rejected  taxes that would  go to a king with no benefit to themselves. They rejected having their money taken and spent without direct and fair representation of how that money would be distributed. Sound familiar?

I reject the concept that Justin Trudeau and his government have the “right” to use our tax dollars for anything that extends beyond law and order, military, health, education and multi-use infrastructure. Further: Charitable contributions to foreign entities, private corporations, special interest groups, etc. should be  by choice of the individual. Like my proposed donor card.

I believe that even the most die-hard Justin fan would reconsider the expenses this government has placed upon them if it were itemized on their tax returns. Moreover, I believe that even his most loyal voters might not be so willing to write that optional cheque (per my proposed donor card) for personal chefs and bee farms. Nor for foreign nations, and corporate donations. But…. if they did wish to gift Justin some of their money to help buy that new zipline at the cottage, or to buy Loblaws some refrigerators, then what the heck. Its their decision!

We must reject Justin Trudeau and his “right” to use our tax dollars beyond their original purpose.

Justin Trudeau has crowned himself king, and then stole from the people. It is time for a Canadian revolution.

Liar, liar, pants on fire!

“I believe in fiscal responsibility, and I, quite frankly, I think Liberals who believe that the government should be doing things well and should be doing some certain things are more motivated to therefore do them well, do them responsibly, not going to massive deficits the way certain other governments who have been less motivated to deliver good government have” – Justin Trudeau on CNN’s Foreign Affairs show in 2014 when campaigning on a $10 billion deficit.

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Keith Richard, Dec 18, 2020

Source

https://www.valuetrend.ca/the-canadian-revolution/

Is it Hot in Here, or Is It Just Me?

Is it Hot in Here, or Is It Just Me?

Is it Hot in Here, or Is It Just Me?

Print or Read as PDF

Normally when you think of January you think cold temperatures or winter. But as of late, the markets have been heating us up and not in a good way. Maybe we can compare it to when you’re wearing a thick turtleneck that you thought would keep you warm but it ended up being more of a thermal blanket that left you nervous that people would start to notice the beads of sweat gathering on your forehead or upper lip. Those nerves or surging fear is what keeps people from wanting to invest in the market, intimidates investors that should remain invested, and seeing red causes panic to rise and initiate the fight or flight instinct. And all of these feelings of uncertainty are blurring judgment as people act without taking the time to understand why things are happening the way they are.  

With that said, I wanted to follow up my rather long diatribe from Wednesday’s Newsletter (01/25) with some digestible nuggets about the lackluster Fed meeting that also took place that same that the newsletter when you. I will also paint a more vivid picture of how oversold we currently are by showing some informative charts that I find to be extremely helpful.

The Fed Meeting Commentary:

  1. No surprises: he told us he was going to rein in the bond-buying and probably do an interest rate hike in March and Wednesday, he said it again. 
  2. Inflation well above the target 2% and strong labor, thus soon appropriate to raise Fed Funds rate.
  3. Powell confirmed that he would use the Fed Funds Rate (the cost of funds charged to member banks of the Federal Reserve) as his primary tool. 
  4. The economy is continuing to strengthen. Thus far earnings for Q4 2021 are dramatically better than forecast and forward projections are stronger than initially thought.
  5. Supply / Demand imbalances related to the pandemic are the cause of inflation. Since the supply chain issues are far from easing, this is expected to continue.
  6. Will remain sensitive to economic changes and adjust accordingly. Didn't go on to mention a bunch more hikes.

What happened? The market was very strong at the open Wednesday due to Tuesday night earnings from the biggest software company on the planet far greater than expected. The difference that we have seen over the last three days was that there were fewer lows on Tuesday and Wednesday than there were on Monday. This implies that possibly this is the end of the decline and the beginning of a new basing process from which the markets could recover.

This brings me to my final point: where we are on the "downside momentum" spectrum. The Debbie Downers are out in force. Jeremy Grantham calling for an additional 50% downside, Ralph Acampora's call for another 20% down (he is affectionately called Ralph (I Can Make Ya Poorer). On top of this, the UN is mobilizing troops to the Russia / Ukraine border, not to speak of China's cancerous continuous creep into Taiwan and the continuously declining support for the Biden Administration. Corrections can be sharp and deep, as we have experienced since the beginning of this year, but this does not necessarily begin a bear market. The market's current technical status is akin to a giant coiled spring fully compressed and ready for a violent snapback. Remember the adage of the sage of Wall Street, Warren Buffet, "Be fearful when others are greedy and greedy when others are fearful."

I am going to insert a few charts for comparative understanding. For starters, the markets are almost as sold off as they were at the COVID lows of March 2020.  Some indicators are showing the most oversold readings on record! When these lows have been registered in the past, the next place the market traveled was upward. Here are five charts that I believe are worth at least considering.

Oversold readings are seen at or near market bottoms. Currently, NAUD is registering the most oversold reading on record. 

 

Similarly, the NAHL also registered the most oversold reading on record. 


This chart also registered the most oversold reading on record

 

On Monday morning, January 24th, this indicator slid to a record low

 

Readings below -1000 are oversold. At this writing, the NYUD is registering the most oversold reading on record. 

These are five charts that provide perspective. What they don't provide is an exact answer. Every time is a little different. What we do know is there is no major calamity (like COVID) in the offing. What Powell is doing is because our economy is good, not because it is bad. I am not about to tell you that the market decline is definitely over, but rather that it is much closer to an end than a beginning. We are paying attention to what we own, why we own it, and what is going on in the world to provide runways for their respective futures. 

We are here to answer any questions you may have, address your individual concerns, and make any changes you would like us to make to assist you in achieving your individual goals and objectives. I realize that the information I have provided above is really quite technical in nature, but I am hoping that the pictures make the technical nature understandable. If you would like a greater explanation, please call us and we will answer your questions. 

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Important Disclosures: 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy. 

Investing involves risks including possible loss of principal.

The Standard & Poor's 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by individuals and institutional investors.

The Nasdaq-100 is a large-cap growth index. It includes 100 of the largest domestic and international non-financial companies listed on the Nasdaq Stock Market based on market capitalization.

The Russell 2000 Index is an unmanaged index generally representative of the 2,000 smallest companies in the Russell 3000 index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index.

The Bloomberg Barclays U.S. Aggregate Bond Index is an index of the U.S. investment-grade fixed-rate bond market, including both government and corporate bonds.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

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Source

https://www.tower68.com/blog/is-it-hot-in-here-or-is-it-just-me

Friday, January 28, 2022

Do We Really Need Big Corporations?

Do We Really Need Big Corporations?

Big tech. Big pharma. Big food. Big banks. Big oil. We’ve got questions about all of them. Big tech is surveilling us and stealing our privacy. Big pharma is exploiting us and poisoning us. Big food is compromising our health and fitness. Big banks are destabilizing boom-and-bust machines. Big oil is destroying the planet.

Do we need them? In the past, they were necessary to tackle problems of scale – the accumulation and control of sufficient capital to undertake massive industrial-era projects like building railroads or oil fields or pipelines or energy grids or fleets of ocean-going ships, or airplanes, or supplying every household in America with 1.88 vehicles.

These achievements – and many, many more – have delivered tremendous benefits and improvements in productivity and in the quality of life. They’ve opened up the globe to trade and eliminated most poverty. They were part of what Professor Deirdre McCloskey calls The Great Enrichment, the flowering of opportunity and economic growth since the 19th century that is unparalleled in human history.

But capital accumulation is not needed in the same way in the digital age as in the Industrial age. To a large degree, scale can be downloaded from the internet and capital can be controlled by renting it by the minute. Amazon Web Services (AWS) is the epitome of capital rental. Companies don’t need their own server farms and specialized software to run their digital operations – they rent from AWS. Their storefronts and fulfillment and customer service run on AWS.

According to Wikipedia, as of 2021, AWS comprises over 200 products and services including computing, storage, networking, database, analytics, application services, deployment, management, machine learning, mobile, developer tools, RobOps, and tools for the Internet of Things.

As an even more specific example of distributed control over capital, consider AWS Ground Station. Do you need satellite capability to collect data? Check the website:

AWS Ground Station is a fully managed service that lets you control satellite communications, process data, and scale your operations without having to worry about building or managing your own ground station infrastructure. 

…..you can use Amazon S3 to store the downloaded data, Amazon Kinesis Data Streams for managing data ingestion from satellites, and Amazon SageMaker for building custom machine learning applications that apply to your data sets. You can save up to 80% on the cost of your ground station operations by paying only for the actual antenna time used, and relying on the global footprint of ground stations to download data when and where you need it. There are no long-term commitments, and you gain the ability to rapidly scale your satellite communications on-demand when your business needs it.

This is the new age: capital on demand. Who needs big corporations?

This realization frees some brain capacity to think about some of the bad things that come with big corporations. There are plenty.

Bureaucracy

We want our corporations to create value, and to improve people’s lives through innovation and service. Parts of them do. But those parts are surrounded by, and sometimes suffocated by, bureaucracy. Bureaucracy was developed by corporations not for purposes of innovation, but for the opposite. It’s an engine of control, to limit the autonomy and creativity of people who work in the corporation, and to impose rules, guidelines, methods, and processes. Compliance is a big word for corporate bureaucracies. 

Loss of speed

Big corporations are structured. They have hierarchies and layers, divisions, functional departments, regions, and subsidiaries. Structure is the enemy of speed. When any individual or team has to seek approval, ask for funding, submit for compliance and check for authority before acting, time is used and wasted. Speed of action and speed of responsiveness to marketplace and competitive changes are imperative in the digital era. Losing speed is losing productivity. It’s a loss imposed on the firm and the economy. 

Regulation

Big corporations attract regulation, and in many cases initiate it. It’s called crony capitalism. By agreeing with government how to regulate their industry, they achieve three things: (1) a known environment in which to operate (the opposite of systems innovation); (2) employment for an expanding bureaucracy (big banks, for example, have huge compliance bureaucracies); and, consequently, (3) competitive insulation, since smaller entities can’t afford to divert resources into their own compliance bureaucracies. 

Regulation, of course, is a huge drain on productivity and a huge barrier to innovation. It’s one of the major ways government undermines the economy, and big corporations are complicit.

Financial engineering

The creation, maintenance, and profitability of big corporations often have more to do with financial engineering than serving customers and innovating. This term includes all activities that appear to strengthen financial reporting on paper without improving customer value. Stock buybacks are a perfect example. There is no customer purpose in stock buybacks. The activity is purely for changing proforma “per share” ratios. The same is often true for M&A – most acquisitions do not improve customer value because they are not executed with customers in mind.

Generally, the financial engineering mentality of today’s big corporation is not customer-favorable.

Defensiveness

Once corporations get big, they have something to defend: their size (investors insist they must grow), their revenues (the topline, as it is called, must slope upwards), their market share (they must not “lose” share), and their influence (more lobbyists). Their focus is diverted from innovation and improved customer service to maintenance and “sustainability”. Defensiveness does not generate growth.

Contra-capitalist

Big corporations are not anti-capitalist. But they often get capitalism a bad name. Robert Bradley Jr. created the term contra-capitalist when describing the corporate behavior of Enron (for whom he once worked). This company abandoned and subverted capitalist practices, often with the support of institutions like the Ex-Im Bank, and mostly stayed within the law. Freewheeling accounting practices, contorted debt structures, hyped projections, and hubristic imprudence all contributed to Bradley’s realization that his former employer practiced contra-capitalism. 

Do we need big corporations in the interconnected digital era of distributed control over capital? Not really. We should certainly never use big corporations as good examples of capitalism and free markets; they are far too often contra-capitalist.

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Hunter Hastings, Jan 24, 2022

Source

https://mises.org/power-market/do-we-really-need-big-corporations

Tuesday, January 25, 2022

Industry Overview...Metals & Minerals

Industry Overview...Metals & Minerals

Our 2022 Sector Outlook

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The global economy is no doubt in a better position than we thought it would be at this time last year. But while year-ahead growth expectations rose rapidly through the early part of the year as vaccines rolled out, the optimism has pulled back sharply in recent months. Stepping back from the noise, 2021 has still proven to be a stronger-than-expected year, with that momentum likely carrying over into the start of 2022 . The relative buoyancy of global demand, against a complex and inelastic web of global supply chains has boosted inflation around the world. Fiscal and monetary stimulus has supported the elastic demand response. Many of these factors are expected to fade in 2022. That being said, TDS expects global GDP growth of ~4% y/y in 2022, which will be supportive for base metals consumption.

With slowing fiscal and monetary stimulus and likely some easing in supply chain bottlenecks, we think that it is unlikely that metal prices will return to their 2021 highs, but we also do not believe that a rout in metal prices is in the offing. Recent negative supply shocks are also unlikely to be fully resolved in 2022 due to what look like semi-permanent scarcities of labour, logistics, and other infrastructure resources. In conjunction, we also believe that resource nationalism could intensify into 2022, particularly in South America. A reversal of these issues will be required for a sustained and rapid pace of production increases. At this stage, available inventory of metals such as zinc and copper are quite limited, which is a situation that we do not expect to change very much next year. We are forecasting tightly supplied markets for copper, nickel and zinc through at least H1/22.

Mine supply is taking hits from all directions. We continue to anticipate above average copper mine supply growth over the next two years. Although supply growth is heavily weighted toward the latter part of 2022 and 2023 with several large, new copper mines reaching production. In the interim, constrained supply (particularly following the closure of the Las Bambas mine in Peru, 2% of global mine supply) will support prices. While we expect a substantial increase in total nickel supply, demand is expected to grow at a faster rate in 2022. Thus far, China's power crisis has forced stainless steel mills to curtail their operating rates, but the power shortage has cut both ways, as the impact of these restrictions on Nickel Pig Iron (NPI) has further tightened nickel supply in China. Power shortages and surging power costs have also become critical for zinc smelters. However, while some smelters have sufficiently felt the squeeze from the power crisis to curtail production, zinc miners have benefited from exceptional margins. We forecast that refined supply growth will likely moderate as high power prices and low treatment charges pressure smelter output.

Our Sector Stance: Overweight

Overweight sector recommendation maintained. We continue to believe that copper has very positive medium to long term fundamentals, supported by the transition to a low-carbon economy and weak copper supply pipeline.

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Our High Conviction Buy

Solaris Resources Inc.

SLS-T: C$16.11; SPEC BUY

12-Month Target: C$22.00

■ Solaris has been a preferred name of ours for risk tolerant investors since we initiated coverage in September 2020. Given current market conditions, we believe exploration-stage companies (pre-resource) could get to a valuation above C$3bln (SLS currently ~C$1.8bln) if they continuously deliver positive results.

■ World-class discoveries are rare and unique, and we believe that Solaris is in the early stages of making multiple world-class discoveries among the 7km x 5km cluster of porphyries on the Warintza property in Ecuador. The company has already made discoveries at West/East (last year). First results from South are expected soon and Solaris recently proposed a spin-out to unlock additional value.

■ Our model for Warintza is based only on Central (we anticipate resources of ~620 Mt at ~0.65% CuEq), however, recent drilling suggests that we could potentially see a much bigger resource and does not incorporate the potential at the company's other targets (West, East, South, Yawi, etc.).

■ Copper M&A cycle has begun –Solaris, in our view, continues to be the best copper take-out development story in our coverage universe. Copper M&A cycle has begun, demonstrated by Sandfire's $1.9bln acquisition of MATSA (September 2021), Capstone's purchase of Mantos (November 2021), Lundin Mining's proposal to acquire Josemaria (December 2021), among others.

■ We expect the stock to continue to re-rate higher as the company demonstrates the growth potential of the project.

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TD Securities Inc,

Equity research,

January, 2022

Monday, January 24, 2022

Best Copper Stocks on the TSX

Best Copper Stocks on the TSX

copper piping

Leon Tuey is a noted yet under the radar commodity technician from back in the day who knows his trade. Two weeks ago his report noted that Gold, Oil, and Copper were on the cusp of resuming bull trends. On January 2nd he put an updated report out. Gold had triggered his buy signal.

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What are the best copper stocks on the TSX so far this year? These five companies have seen the biggest gains year-to-date.

Click here to read the previous best TSX copper stocks article.

Copper had a stellar first half of 2021, with prices rallying to their all-time highest level during Q2.

Unlike the first half of 2020, the trend in copper prices was upward for most of the first half of this year, with the red metal hitting an all-time high in May.

Heading into the home stretch of 2021, the market is still robust, and there is plenty of optimism that copper remains in bullish territory. Many analysts and companies expect a boom in the coming years as electrification and electric vehicles grow in popularity and subsequently increase the world’s appetite for the vital base metal.


Some of the top copper stocks on the TSX so far have seen significant gains year-to-date, as shown on the list below. The list was generated on December 7, 2021, using TradingView’s stock screener, and only companies with market capitalizations greater than C$50 million at that time are included.

1. Solaris Resources

Current share price: C$13.29; year-to-date gain: 118.59 percent

Solaris Resources (TSX:SLS) has a portfolio of copper and gold projects in the Latin American region, including in Ecuador, Chile, Peru and Mexico. The company has established a high-grade resource with expansion and additional discovery potential at the Warintza copper-gold project in Ecuador.

Solaris has had a steady flow of news in 2021 from its drilling program at Warintza. In September, the company reported 1,184 meters of 0.68 percent copper equivalent from surface at the project’s Central zone. The company’s drilling efforts continue to expand the footprint of this zone toward defining a large, high-grade open-pit resource. In November, Solaris reported assay returns of 920 meters at 0.62 percent copper equivalent, including 326 meters at 0.8 percent copper equivalent from 46 meters depth.

2. Copper Mountain Mining

Current share price: C$3.54; year-to-date gain: 95.58 percent

Copper Mountain Mining’s (TSX:CMMC) flagship asset is the Copper Mountain mine, located in British Columbia near the town of Princeton. It produces about 100 million pounds of copper equivalent per year.

In Q3, Copper Mountain’s production was 26.3 million pounds of copper equivalent. The company’s 2021 production guidance is set in a range of 90 million to 100 million pounds.

3. Josemaria Resources

Current share price: C$1.32; year-to-date gain: 71.43 percent

Josemaria Resources (TSX:JOSE) is advancing its wholly owned namesake Josemaria copper-gold-silver project in Argentina’s San Juan province. According to the company, the asset is one of the largest undeveloped copper-gold projects in the world, with a proven and probable reserve profile of 6.7 billion pounds of copper, 7 million ounces of gold and 30.7 million ounces of silver.

An October 2020 feasibility study shows an open-pit operation with 152,000 tonnes per day being fed to a conventional process plant over a 19 year mine life. Highlights from the study include a US$1.53 billion after-tax net present value at a discount of 8 percent and a 15.4 percent internal rate of return; figures are based on metal prices of US$3 per pound copper, US$1,500 per ounce gold and US$18 per ounce silver. The project is proceeding to basic engineering with the goal of completion during Q2 2022, and the company anticipates that Josemaria's environmental social impact assessment process will be completed in H1 2022.

4. Amerigo Resources 

Current share price: C$1.30; year-to-date gain: 62.5 percent

Amerigo Resources (TSX:ARG) has a long-term relationship with the world’s largest copper producer, Chilean state-owned Codelco. Through this relationship, Amerigo produces copper concentrate and molybdenum concentrate as a by-product by processing fresh and historic tailings from the world’s largest underground copper mine, Codelco’s El Teniente operation.

Amerigo’s Q3 production figures from its Minera Valle Central tailings processing facility in Chile include 16 million pounds of copper, of which 8.62 million pounds were from fresh tailings. The company notes that its third quarter production was 109 percent above guidance for the period due to higher fresh tailings tonnage and grade.

5. Teck Resources

Current share price: C$35.63; year-to-date gain: 54.07 percent

Last on this best copper stocks list is Teck Resources (TSX:TECK.B,TSX:TECK.A), one of Canada’s top mining companies. Teck has a diverse portfolio in terms of both metals and geography. When it comes to copper, Teck is a significant producer with four operating copper mines and a robust pipeline of copper projects in the Americas.

Teck’s ties to a green energy metal like copper have paid off well, as the company’s share price has benefited immensely from rising copper prices in 2021.

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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

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Melissa Pistilli, Dec 8, 2021

Source

https://investingnews.com/daily/resource-investing/base-metals-investing/copper-investing/best-copper-stocks/