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On Tuesday, JPMorgan initiated coverage on Capstone Copper Corp (CSC:AU) (OTC: CSFFF (OTC:CSFFF)), issuing an Overweight rating and setting a price target of Cdn$10.80. The firm’s analysis highlighted the company’s robust production forecast and cost-effective operations, which are expected to yield significant copper output at competitive costs.
Capstone Copper is anticipated to produce approximately 250 kilotons of copper in 2025 with C1 costs around $2.3 per pound, a figure that stands favorably against the current spot copper price of approximately $4.3 per pound. The company operates four assets, which are considered to have a relatively long life and are situated in established mining jurisdictions across the United States, Chile, and Mexico.
The growth prospects for Capstone Copper are particularly strong, with plans to expand the flagship Mantoverde asset in Chile, followed by the development of the Santo Domingo project in the vicinity. JPMorgan’s projections indicate that copper production could rise to around 335 kilotons by 2030, with EBITDA potentially doubling from 2025 to 2030 to reach $1.8 billion.
The financial metrics of Capstone Copper were also noted as compelling, with the valuation described as undemanding at 0.83 times price to net present value (P/NPV) and a low estimated enterprise value to EBITDA (EV/EBITDA) ratio of 4.3 times for the fiscal year 2026. Moreover, the firm anticipates strong free cash flow yields from Capstone Copper in the coming years, even before the Santo Domingo project reaches its peak expenditure.
The JPMorgan analyst’s commentary underscores the potential for a 33% upside from the stock’s last closing price, with the $10.80 price target representing 1.1 times the net present value (NPV). This optimistic outlook is based on the company’s production expansion strategies and its ability to maintain low-cost operations in a favorable commodity pricing environment.
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