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Stock of the Day by Investment U Research Team
It’s no secret that many mining companies are thriving at the moment, as a weak dollar and the prospect of inflation attract investors to precious metals.
Prices for commodities typically rise when the dollar falls and fall when the dollar rises. So metals make a steady investment during the recession.
In light of this, the share price of Canadian-based Taseko Mines Ltd (AMEX: TGB) has risen steadily this year. From a price of $1.50 per share in June, it hit a 52-week high of $3.59 this week. And buying intensity has grown with the company’s recent sale of mining assets.
Taseko’s mining and exploration projects include copper, molybdenum, gold and niobium. And interest in these metals is strong as the economy slowly improves.
Earlier this week, Taseko announced sale of 25% its stake in its wholly owned copper-molybdenum mine in Gibraltar. Japanese trading house Sojitz Corp paid $170.5 million for its part in the project, with the deal set to take effect early 2010.
And that’s not the only project drawing attention…
Taseko Mines Ltd: Prosperity By Name… And By Nature
Taseko Mines Ltd. just increased estimates for its Prosperity project to 7.7 million ounces of recoverable gold and 3.6 billion pounds of recoverable copper. That makes Prosperity Canada’s largest gold reserve.
What’s more, cash-on-hand from the company’s Gibraltar sale this week will help in further development of gold and copper mines for Prosperity. The life of the mine is estimated at 20 years. And at a grinding rate of 70,000 tonnes daily, it would produce 247,000 ounces of gold and 108 million pounds of copper per year.
At current market prices, that’s nearly $300 million in gold and $340 million in copper. Every year! For the next 20 years!
And while the focus is currently on Gibraltar and Prosperity, Taseko has two other projects in Canada that are less developed…
- Harmony: Located off the coast of British Columbia, the Harmony mine boasts a large gold deposit. Taseko bought the mine in 2001, but hasn’t yet completed full appraisal of the project’s potential.
- Aley Niobium: Niobium is a metal present in high strength steels used in automobiles, bridges, pipelines, jet turbines, super conductors and other high technology applications. Taseko purchased the Aley Niobium project in northern British Columbia in 2007 and while the firm isn’t currently working on the project, it expects to resume exploration in the future.
So you can see why Taseko has received more attention recently. And this could make the company a takeover target, which would send the company’s stock even higher.
Sheena Martin
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Here's how you can claim your stake in the company before this cash infusion sends shares soaring.
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