First Quantum Minerals (FM.TO)

Thinks copper will do very well 3 or 4 years out, but it depends on your patience and willingness to endure some short-term pain with regards to their balance sheet, which is still stretched.

Their Cobre copper project in the Panama will make this company one of the largest copper miners in the world. They have to get through the construction. They have debt on the balance sheet, which makes things a little precarious. He would probably stay on the sidelines.

He is not short this one anymore. He thinks it is fully priced, however. They have quite a bit of debt and are building an asset in Panama. There is political risk in Zambia.

Base metals, primarily in countries that he wouldn’t necessarily take vacations in. Higher risk environments, but from that you get higher returns. He prefers more stable jurisdictions. The company has decent assets that are generating cash flow. Also, they got $1 billion in cash on a recent deal which gives them some flexibility.

(Market Call Minute.) You want to be in materials, and this is one of the leaders.

It has risen to the forefront to be a go to. They are global. Their primary exposure is to copper and is a leveraged way to play a recovery in copper. Keep in mind it is leveraged so it will go the other way just as far if copper drops.

He is short the stock. He would suggest the fundamentals of the copper market are bearish. They have a leveraged balance sheet. It is expensive here.

First Quantum (FM-T) or Teck Resources (TCK.B-T)? His view is definitely more constructive on Teck.

One of the best silver plays out there. We are seeing a little bit of short term weakness. It is pretty over extended, although it could stay there. It was a pretty big move since the beginning of the year, breaking a long down trend. The challenge is how do you leap into this one. You can get a pretty significant swing in these names. If it does not hold at $19 it could go to the mid teens. Pick your best spot and go from there.

Ranks fairly well in his process, both from a fundamental and a technical basis. This is a result of 2 factors. One has been a rising price in commodities. Also, it got beaten up so badly in 2015, that people who were under-exposed to the sector are really clambering to try to get in.

(Market Call Minute.) This would be a hold based on reflation and China coming back.

A very, very leveraged bet on copper prices in problematic jurisdictions, namely Zambia. This has an excess of debt load, negative all in sustaining costs, in that they are losing money for every pound of copper they produce. Not the sort of name he would want to own. He doesn’t have a bullish outlook on copper, and he is Short this company.

This whole complex is very volatile. The stock has formed a nice base. In its sector, it is a pretty volatile stock. It would be interesting if it could get above the $10 mark, because then it could move up to $15.

(Market Call Minute.) Good leverage to zinc. Sees the refinancing on the debt as being a positive catalyst.

The timing of their acquisition is not good and burdened them with a lot of debt. They need a higher copper price to get a good return.