BC Business
The junior mining company seemingly came out of nowhere to take a place in Canada’s premier stock index. Here’s why
The stock: NGEx Minerals (TSX:NGEX) is something of a prodigy. Not yet six years old, the company’s stock has returned 83.7 percent over the past 12 months, 3,750 percent over five years and just last month got added to the S&P/TSX Composite index, the chief proxy for Canada’s corporate elite. NGEx has achieved all this without generating any revenues, let alone profits. Between its Vancouver headquarters and field operations in South America, it has all of three dozen employees.
The drivers: What NGEx does have is three exploration properties straddling the Chile-Argentina border in an up-and-coming region for copper and gold exploration known as the Vicuna District. It also has a pedigree. It’s part of the Lundin Group of Companies, 36-percent controlled by the Swedish-Canadian Lundin family, which has a history of turning llama pasture into gold and other kinds of mines.
The most advanced of NGEx’s projects, Lunahuasi in Argentina and Los Helados in Chile, lie within 30 kilometres of the Caserones mine operated by Lundin Mining (TSX:LUN) and the Josemaria and Filo del Sol projects, jointly owned by Lundin Mining and BHP, that are nearing production. Drilling at Lunahuasi over the past two years suggests a high-grade copper deposit. The indicated resource at Los Helados is 18.4 billion pounds of copper, 10.2 million ounces of gold and 97.5 million ounces of silver.
But both are still a long way from even a feasibility study for a mine. That makes NGEx, with a $3-billion market capitalization as of Tuesday’s (January 21) $14.60 close, a long-term play on the rising demand for copper as the energy transition progresses. Can the company keep adding value? Many in the investment community think it can.
Word on the street: Jeffries analyst Matthew Murphy maintained his ‘buy’ rating and raised his price target to $16 from $14 on January 7. National Bank’s Rabi Nizami initiated coverage in November with an ‘outperform’ rating and $17 target.
Coming and going: Telus International, the customer service technology offshoot of telecommunications company Telus Corp. (TSX:T), has rebranded itself Telus Digital. The ticker TIXT remains the same.