High metal prices have spurred mining stocks this year, even when a company doesn’t always have the best news for shareholders.
Taseko Mines Ltd. (TSX:TKO) is one of those stocks.
On November 2, the federal government rejected the company’s proposed Prosperity project, a massive copper-gold play near Williams Lake.
The decision saw Taseko’s stock spiral downward to a low of $4.33 per share November 16 compared with a value of $6.58 the day before the decision.
Since then, the company’s stock has crawled back to the $5.30 range while the Toronto Stock Exchange continues to gain ground and copper trades near five-year highs of $4.20 per pound.
And despite the fact Prosperity is on hold for now, at least one analyst is relatively bullish on the company.
“I would say that if you’re reasonably bullish on copper and molybdenum, it’s probably undervalued right now,” said the analyst, who asked to remain anonymous.
Prior to the Prosperity decision, Taseko’s stock hit a 52-week high of $7.27 per share on October 14, and the analyst believes there would have been even more of a payoff for shareholders had the project been approved.
“There was room for a modest increase on the positive news, that would be fairly typical.”
But Taseko isn’t the only company that has found value in high metal prices.
Vancouver-based First Majestic Silver Corp. (TSX:FR) has seen its stock price increase 371% to a December 7 high of $14.34 from a March 25 52-week low of $3.04.
This while silver prices trade at 25-year highs of $29.64 per ounce.
Check out this week’s edition of Business in Vancouver for B.C.’s top performing mining stocks of 2010.
Also in this week’s edition is the third part of BIV’s four-part “Chasing Prosperity” series, which takes an in-depth look at Taseko’s project.