Why Copper Prices Could Go Either Direction

Although copper prices per ton have been rebounding over the last couple of days, it isn't clear as to whether or not it has really found a bottom as some think, or it still has a way to go before bottoming out.

Bank of America Merrill Lynch (NYSE:BAC) is among those that believe copper isn't close to leveling off, as it projects it to drop to about $5,000 per ton over the next year; even after plunging about 9 percent so far in 2015.

In 2014 it was down 14 percent on the year.

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Newmont (NEM) Easily Beats Earnings Estimates on Rising Gold Prices

In a preview of what gold miners in the future will face, Newmont this time around was able to generate a healthy earnings gain because rising gold prices were able to overcome increased costs, resulting in earnings easily beating analysts' estimates.

Newmont of course has a strong copper exposure, so is more than just a gold miner. Even so, its earnings were generated by rising price of gold more than anything, although copper has been no slouch in that regard either.

First-quarter earnings, adjusted for some items, were $513 million, or $1.04 a share, compared with $408 million, or 83 cents a share, last year in the same quarter.

Sales jumped 10 percent to $2.5 billion, according to Newmont, which operates mines in North and South America, Africa, Australia and Indonesia.

Analysts on average were looking for adjusted earnings of 99 cents a share and revenue of $2.4 billion.

Production targets for the full year 2011 of 5.1 million to 5.3 million ounces of gold and 190 million to 220 million pounds of copper were kept in place by Newmont.

The Newmont board also approved a second-quarter dividend of 20 cents a share linked to the gold price, based on the net average realized price of $1,382 an ounce in the first quarter.

"The price link dividend is one that provides some certainty and flexibility in that upward pricing environment and there is an opportunity to share more with investors over time through that, should we choose to do so," said Chief Executive Officer Richard O'Brien.

Newmont Mining closed Thursday at $59.23, gaining $0.38, or 0.65 percent.

Freeport-McMoRan (FCX) Driven Up By Metals

Freeport-McMoRan Copper and Gold (NYSE:FCX) had a blowout quarter led by higher copper prices and production, along with better-than-expected sales of molybdenum.

The surge in gold prices hasn't hurt the diversified miner either.

Freeport generated a profit of $1.5 billion, or $1.57 a share, up from $945 million, or $1 a share, last year in the same quarter, adjusted for the stock split. Revenue jumped 31% to $5.71 billion. Analysts polled by Thomson Reuters had estimated a $1.26profit on $5.3 billion in revenue.

Copper production grew 2.3% while gold production rose 3.8%. Molybdenum output increased about 18 percent.

It sold 926 million pounds of copper, more than the 840 million pounds it had projected.

Prices for gold and copper both rose 26 percent, while molybdenum prices increased 20percent. It also sold 20 million pounds of molybdenum, surpassing the 17 million pounds projected.

Freeport has also been successfully reducing it debt load, which had reached about $17.5 billion after the acquisition of Phelps Dodge. It has been cut to $3.7 billion.

Freeport was trading at $53.82, gaining $2.10, or 4.06 percent, as of 11:52 AM EDT.

Taseko Mines (TGB) Copper Production at Gibralter Falls 17 Percent

Taseko Mines (AMEX:TGB) reported copper production at its Gibraltar mine in British Columbia fell 17 percent, as a hard winter resulted in operations being shut down for four days because of unscheduled maintenance.

Production at Gibraltar, which Taseko has a 75 percent stake in, fell from 23.2 million pounds of copper last year in the first quarter to 19.2 million pounds of copper this year in the same quarter.

For molybdenum the results were different, as the company was able to extract 316,000 pounds from the mine, an increase of 63 percent.

Taseko said in a statement, "This is a strong indication that the new molybdenum plant ... will add appreciably to total molybdenum metal production."

Taseko was trading in New York at $5.45, falling $0.03, or 0.55 percent, as of 2:14 PM EDT.

Taseko (TGB) Increasing Production at Gibraltar

Saying increased production has helped the company perform strongly, Taseko Mines (AMEX:TGB) said it is going to boost production at its flagship Gibraltar Mine to 180,000 pounds of copper and one million pounds of molybdenum annually.

In 2010, the miner said copper production rose by 30 percent and molybdenum production by 50 percent.

Russell Hallbauer, Taseko CEO, said, "As announced in February, we are moving forward with a further capacity increase at Gibraltar. This $325 million investment will allow us to leverage the strong copper price environment and further enhance Taseko's cash flow generating ability."

"Strong financial performance in 2010 was driven by improved copper production and the rising copper price environment. ...These improvements are the result of ongoing investments in mine and concentrate equipment," he added.

Taseko produced 92.3 million pounds of copper in 2010 and 941,000 pounds of molybdenum.

Taseko closed Friday at $5.94, up $0.11, or 1.89 percent.