Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

In this report we lay out what we believe is a compelling case to add exposure to copper miners at current levels, highlighting the following actionable names: Freeport-McMoRan (FCX-US), Southern Copper (SCCO-US), OZ Minerals (OZL-AU), Antofagasta plc (ANTO-GB), KAZ Minerals (KAZ-GB), Aurubis AG (NDA-DE), Grupo Mexico (GMEXICOB-MX), Ivanhoe Mines (IVN-CA), First Quantum Minerals (FM-CA), Lundin Mining (LUN-CA), Hudbay Minerals (HBM-CA), Capstone Mining (CS-CA), Turquoise Hill Resources (TRQ-US, TRQ-CA), Taseko Mines (TGB-US, TKO-CA), and MMG Ltd. (1208-HK).

In this report we lay out what we believe is a compelling case to add exposure to copper miners at current levels, highlighting the following actionable names: Freeport-McMoRan (FCX-US), Southern Copper (SCCO-US), OZ Minerals (OZL-AU), Antofagasta plc (ANTO-GB), KAZ Minerals (KAZ-GB), Aurubis AG (NDA-DE), Grupo Mexico (GMEXICOB-MX), Ivanhoe Mines (IVN-CA), First Quantum Minerals (FM-CA), Lundin Mining (LUN-CA), Hudbay Minerals (HBM-CA), Capstone Mining (CS-CA), Turquoise Hill Resources (TRQ-US, TRQ-CA), Taseko Mines (TGB-US, TKO-CA), and MMG Ltd. (1208-HK).

Copper Miners Breaking Out Around The Globe -- Buy

We continue to have a bullish outlook and we believe the path of least resistance remains higher. Perhaps the most important thing which supports our bullish outlook is the continued lack of breakdowns on all S&amp;P 500 Sectors and all the major averages. In today’s report we highlight attractive Groups and stocks within Materials: Copper, Gold, Silver, Platinum, and Uranium Mining.

We continue to have a bullish outlook and we believe the path of least resistance remains higher. Perhaps the most important thing which supports our bullish outlook is the continued lack of breakdowns on all S&amp;P 500 Sectors and all the major averages. In today’s report we highlight attractive Groups and stocks within Materials: Copper, Gold, Silver, Platinum, and Uranium Mining.

U.S. Equity Strategy: Upgrading Materials To Overweight

Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

<ul>
<li>We expect copper prices to remain elevated at over 13,000 USD/ton in the foreseeable future, leading to upgrades in the equities.</li>
<li>As highlighted in our earlier note, Copper Price Correction: Four Stocks To Look At, our top picks in the copper space: <a href="https://www.smartkarma.com/entities/ero-copper-corp" target="_blank" data-smartkarma-citation="entities:38695:1" rel="noopener">ERO Copper (ERO US)</a> and <a href="https://www.smartkarma.com/entities/lundin-mining-corp-92352503-3781-4fcb-a4db-62e6f6343783" target="_blank" data-smartkarma-citation="entities:25356:1" rel="noopener">Lundin Mining (LUN CN)</a>.</li>
<li>We also like <a href="https://www.smartkarma.com/entities/southern-copper-corp" target="_blank" data-smartkarma-citation="entities:16279:1" rel="noopener">Southern Copper (SCCO US)</a> and <a href="https://www.smartkarma.com/entities/antofagasta-plc" target="_blank" data-smartkarma-citation="entities:21814:1" rel="noopener">Antofagasta PLC (ANTO LN)</a>, although they are bigger names with richer valuations. </li>
</ul>


We expect copper prices to remain elevated at over 13,000 USD/ton in the foreseeable future, leading to upgrades in the equities.
As highlighted in our earlier note, Copper Price Correction: Four Stocks To Look At, our top picks in the copper space: ERO Copper (ERO US) and Lundin Mining (LUN CN).
We also like Southern Copper (SCCO US) and Antofagasta PLC (ANTO LN), although they are bigger names with richer valuations. 


Copper: Remain Bullish Stocks, Copper Price To Stay Elevated At >13,000 USD/Ton

<ul>
<li>Copper prices continue to remain above 13,000 USD/ton despite a small correction. Stocks have declined much more amid market weakness, resulting in better risk-reward on copper names.</li>
<li>Stocks that stand out are <a target="_blank" rel="noopener">ERO Copper (ERO US)</a>, trading at 6.8x PE and 4.4x EV-EBITDA, and <a target="_blank" rel="noopener">Lundin Mining (LUN CN)</a>, 16.4x PE and 6.9x EV-EBITDA, for how cheap they are.</li>
<li>The bellwether copper pure plays are <a href="https://www.smartkarma.com/entities/antofagasta-plc" target="_blank" data-smartkarma-citation="entities:21814:1" rel="noopener">Antofagasta PLC (ANTO LN)</a> at 7.8x EV-EBITDA and <a href="https://www.smartkarma.com/entities/southern-copper-corp" target="_blank" data-smartkarma-citation="entities:16279:1" rel="noopener">Southern Copper (SCCO US)</a> at 13.5x EV-EBITDA. All numbers based on FY26e copper at 13,000 USD/ton.</li>
</ul>


Copper prices continue to remain above 13,000 USD/ton despite a small correction. Stocks have declined much more amid market weakness, resulting in better risk-reward on copper names.
Stocks that stand out are ERO Copper (ERO US), trading at 6.8x PE and 4.4x EV-EBITDA, and Lundin Mining (LUN CN), 16.4x PE and 6.9x EV-EBITDA, for how cheap they are.
The bellwether copper pure plays are Antofagasta PLC (ANTO LN) at 7.8x EV-EBITDA and Southern Copper (SCCO US) at 13.5x EV-EBITDA. All numbers based on FY26e copper at 13,000 USD/ton.


Copper Price Correction: Four Stocks To Look At

<ul>
<li>
 FY26E net income of US$401M (+52% YoY) reflects realized copper at ~$5.90/lb and full-year Tucumã contribution; EBITDA margin widens to 61.5%, the highest in the company's history.</li>
<li>
Three-Mine platform + Furnas optionality: Caraíba (long-life underground Cu), Tucumã (high-margin open-pit Cu ramping to 35-40 kt), and Xavantina (ultra-high-grade Au) generate diversified cash flows, while Furnas provides optionality</li>
<li>
 ERO trades at 4.5x FY26E EV/EBITDA and 6.9x P/E at current copper prices, a substantial discount to copper peers (7-9x). Net debt leverage will pave the way for capital returns.</li>
</ul>



 FY26E net income of US$401M (+52% YoY) reflects realized copper at ~$5.90/lb and full-year Tucumã contribution; EBITDA margin widens to 61.5%, the highest in the company's history.

Three-Mine platform + Furnas optionality: Caraíba (long-life underground Cu), Tucumã (high-margin open-pit Cu ramping to 35-40 kt), and Xavantina (ultra-high-grade Au) generate diversified cash flows, while Furnas provides optionality

 ERO trades at 4.5x FY26E EV/EBITDA and 6.9x P/E at current copper prices, a substantial discount to copper peers (7-9x). Net debt leverage will pave the way for capital returns.


Ero Copper (ERO US): A 4.5x EV-EBITDA Pure Copper Play With Growth Is Rare

Canada

Lundin Mining Corporation is a diversified base metals mining company with operations in Chile, Portugal, Sweden, Spain and the United States, producing copper, zinc, lead and nickel. The Company holds interest in the Tenke Fungurume copper/cobalt mine in the Democratic Republic of Congo and a cobalt refinery located in Kokkola, Finland.

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Lundin Mining (LUN CN)

Copper Miners Breaking Out Around The Globe -- Buy

In this report we lay out what we believe is a compelling case to add exposure to copper miners at current levels, highlighting the following...

Vermilion Research

U.S. Equity Strategy: Upgrading Materials To Overweight

We continue to have a bullish outlook and we believe the path of least resistance remains higher. Perhaps the most important thing which supports...

Vermilion Research

Copper: Remain Bullish Stocks, Copper Price To Stay Elevated At >13,000 USD/Ton

Risk-off rattles copper, but fundamentals intact. Record Q1s from SCCO, ANTO & LUN. Inventories peaking = bull cycle loading.

Sameer Taneja

Copper Price Correction: Four Stocks To Look At

We look at four stocks post the correction in share prices, provide a sensitivity analysis for different copper prices, and present a base-case...

Sameer Taneja

Ero Copper (ERO US): A 4.5x EV-EBITDA Pure Copper Play With Growth Is Rare

Brazil's copper champion exits a multi-year capex supercycle into an era of surging free cash flow powered by record copper prices. 4.5x EV-EBITDA...

Sameer Taneja

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