January 27, 2006
SpeculatingStocks.com Stock Pick: Taseko Mines Limited (TGB)
Stock Price: $1.67 (short-term strong buy)
"Taseko Mines Limited owns and operates an increasingly successful mine in western Canada known as the Gibralter mine. This is one mining company yet to be raided by the bulls, expect strong returns."
Price to Earnings: 7.26
Profit Margin: 27% (Based on after-tax 2005 Annual Results)
Market Cap: $172.77 million
TGB News Stories
December 30th, 2005: Taseko Reports Year End Results & Plans for Fiscal 2006
December 12th, 2005: Taseko Update Confirms 30% Increase of Gibraltar Mineral Reserves
November 16th, 2005: Taseko Re-Initiates Work on Prosperity Copper-Gold Project
Bottomline: Taseko Mines is just beginning to taste success and is hungry for more after pulling off a so far unrewarded annual $24.4 million after-tax profit on $87.6 million revenue. This mining outfit lost $81.4 million in fiscal 2004. The Gibraltar mine recorded revenue of $71.9 million from copper sales and $15.7 million from molybdenum sales. Molybdenum is a hard, silvery-white metallic element used to toughen alloy steels and soften tungsten alloy. Molybdenum sold for an average price of $31 per pound, while copper sold at a price of $1.48 per pound based on company reports.
Taseko Mines Limited confirmed through tests in early December that the Gibraltar mine now has 194 million tons of mineral reserves, up 30% from original expectations. This extends the life of the mine to 15.5 years, and sending this company's future potential soaring even higher. However, investors still don't realize the opportunity inherent in Taseko's Gibraltar operation. Long-term the company may construct a copper refinery in close proximity to the Gibraltar mine. The finished refinery would reduce costs by $0.20 on every pound of copper eventually sold. Think the profit margin is great now, wait til this refinery comes into operation.
Right now... Investors are beginning to catch on to this opportunity. Volume hit an all-time high on January 17th when 2.68 million shares traded. This all-time volume record will be surpassed in the near future as mining stocks become hotter and hotter. With volume comes surprising price jumps. TGB needs to fill out to $2.30 in the short-term.
A little history... Ten years ago TGB was a $7.87 stock, of course shares have been issued driving down the share price, but we doubt this company has ever had brighter times.
Technical issues... Expect TGB to exceed its resistance at $1.85 within the next day or two.
Back to the future... Taseko Mines re-initiated work on the Prosperity Copper-Gold Project. This will be something to keep an eye on. It will be interesting to see if this mineral field turns out to be as rewarding as Gibraltar.
SpeculatingStocks.com Target Price: We expect TGB to reach $4.00 within the next three to six months.