Karl Simich, managing director of Sandfire Resources, complained that he really couldn’t understand the current market valuation of copper producers.
(Picture by Karl Smich, Managing Director of Shahuo Resources, from the Internet)
Copper mine prices have risen by 22.6% this year, while Shahuo Resources’ stock price has only increased by 2.6%.
OZ Minerals, which has suffered the most similar fate to Shahuo, has only risen 6% since the beginning of 2017.
Sandfire released a mining update for the DeGrussa project in late May. Based on existing reserves, mining activities will continue until 2021.
Smich said today: "I think everyone is digging into the wrong place...and I think it is very short-sighted,"
"The market is a little short-sighted, and so are the analysts."
Smich said analysts are using "lazy thinking" "Method", by mechanically applying the resource model, the result of 350,000 tons of copper was calculated in the mine plan.
But according to Smich, the company has a total of 2 million tons of copper and 4 million ounces of resources, which also includes the undeveloped Black Butte project in the United States.
Smich said: "The market has directly wiped out the value of 600,000 tons of resources,"
"Obviously this project will enter the development stage."
In the environment of rising copper prices, the company is considering processing oxidized ore, This will extend the life of the Degrusha mine by one year. The highest trading price of
Shahuo shares in 2017 was 6.99 Australian dollars in February. The copper price at that time was 6103.5 US dollars per ton, which was nearly 10% lower than now.
Shahuo's share price closed at AU$5.58 yesterday, 20% lower than its highest price in February.
Smich said: "I have been in the copper mining industry for more than 30 years. The current market valuation of the company is ridiculous. It is obvious that this is far from reality."
Analysts evaluated the target price of the company's stock should It’s A$6.48.
Smich said: "In my opinion, it is not unusual for Shahuo shares to trade at A$6.50. We are long overdue for reaching this market value. The future of the company is currently the brightest."
Shahuo Today The disclosed net profit after tax was AU$75 million, which was much higher than the AU$46.4 million in fiscal year 2016. Revenue and cash flow improved.
The company announced a dividend of 13 cents per share, all tax inclusive, up from the previous year's dividend of 9 cents per share.
's combined cash and deposits nearly doubled from the same period to $126.7 million. While
is "very active" in exploration efforts, it is also looking for M&A opportunities.
With copper ore prices rising, Smich doesn't think he's missed out on the M&A wave.
He said: "There are always opportunities for mergers and acquisitions. Everyone wants to buy low and sell high, but you need to have superpowers to do this."
He also pointed out that many opportunities are circulating in the market at high prices, but the market is still Lack of “fresh and exciting” opportunities.
Shahuo shares rose 3.6 per cent to A$5.75.
