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Lebed.biz Alert – CUM exploding hits $2.30 we up 77%!
Posted on 04 January 2010 by admin
Copper Mountain Mining (TSX: CUM) just hit a new 52-week high of $2.30 up 77% since I announced it as my big pick on August 21st at $1.30 and up 69% from its opening price on August 24th of $1.36!
I just announced on New Years Eve that CUM is one of my top ten picks for 2010!
Here is my original alert on CUM:
Lebed.biz Alert - Copper Mountain (CUM) could explode next week!
Fri, Aug 21, 2009 at 5:37 PM
My new HUGE copper play is Copper Mountain Mining. It trades on the TSX under the symbol CUM and is currently $1.30 per share. CUM could be the closest thing to a sure winner I have come across in 2009!
http://finance.yahoo.com/q?s=cum.to
CUM is one of the biggest discoveries of my life and I believe it has the potential to explode next week!
Copper prices have been skyrocketing! Over the past six months, copper prices are up about 100%! In fact, copper was up 5% on Friday alone! Copper has more momentum right now than any other commodity!
CUM owns an 18,000 acre copper project near Princeton, BC, Canada and Mitsubishi just closed on the purchase of a 25% interest in CUM's project for $28.75 million! That's right, Mitsubishi, one of the world's largest diversified materials companies, has just paid $28.75 million for 25% of CUM's copper project!
CUM's project was owned and operated from 1972 to 1988 by Newmont Mining (NEM)! NEM sold the project in 1988 when they got out of the base metal production business, and it remained in production until 1996 when copper prices collapsed. It has historically produced 1.7 BILLION pounds of copper, 730,000 oz of gold, and 9.1 million oz of silver!
Today, copper prices are skyrocketing and CUM expects to begin production at the project in mid-2011 with annual production of 100 million pounds of copper, plus additional production of gold and silver!
CUM only has approximately 31.6 million shares outstanding giving it a market cap at $1.30 of about $41 million. If Mitsubishi just paid $28.75 million for 25% of the project, we can figure that CUM's 75% interest is worth at least $86.25 million.
CUM is using most of the $28.75 million to pay off the $25.3 million line of credit they had from Mitsubishi. At the end of the last quarter, CUM had $4.7 million in cash and we can assume that after paying off the debt CUM will now have about $8 million in cash.
If you add $8 million to the estimated value of CUM's 75% interest in the project of $86.25 million, you get a potential market cap for CUM of $94.25 million. With 31.6 million shares outstanding, I believe CUM deserves to be trading for approximately $3 per share.
Mitsubishi has agreed to arrange for $250 million in debt financing to get the project into production and CUM has agreed to raise an additional $43.25 million in equity financing. If CUM raises the $43.25 million at the current price of $1.30 per share, we are looking at an additional 33.3 million shares of dilution before they enter production. Therefore, CUM could have approximately 65 million shares outstanding in 2011 when they expect to begin production.
If CUM produces 100 million pounds of copper per year, at the current copper price of $2.90 per pound we would be looking at $290 million in annual revenues. CUM expects their gold and silver production to add approximately 12% to their copper revenues, so the project's total annual revenues could reach approximately $324.8 million of which CUM's 75% interest would equal $243.6 million.
Imagine a price/sales ratio of 2 to 3 with $243.6 million in annual revenues, with 65 million shares outstanding after the projected equity financing... that would give CUM a future potential share price of $7.50 to $11.24 per share!
If copper, gold and silver prices continue to skyrocket like I expect... I believe CUM's future annual revenues could far exceed $243.6 million and in that case, it's impossible to predict how high this stock could go!
I believe CUM's upside potential at $1.30 is astronomical and this is one of the biggest opportunities of our lives!
I know some of you never invested into a TSX stock before, but many of the best precious and base metals companies in the world are choosing to list on the TSX over the U.S. exchanges. In the months ahead, an increasing percentage of my new picks will be TSX stocks!
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My firm Lebed Biz LLC was compensated by a third-party (B&D Capital Partners) $20,000 cash for a one-month CUM investor relations contract which has since expired. We could potentially be compensated more for providing investor relations services regarding CUM in the future, although no agreements have been made at this time. Never invest into a stock we discuss unless you can afford to lose your entire investment. For our full disclaimer go to: www.lebed.biz/disclaimer.htm
Jonathan Lebed
Lebed.biz
Staff
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