Baja Mining (BAJFF), initially recommended for purchase at 1.32, is the subject of an upbeat report published August 4 by Haywood Securities. My source notes the following highlights:
“Annual production during the first 6 years of full production is expected to average 125 Mlb of copper, 3.7 Mlb of cobalt, and 25,400 tonnes of zinc sulphate monohydrate (100% basis). Our model includes a life-of-mine average total copper cash cost of US$0.40/lb net of cobalt and zinc credits, which places the project within the lower half of the global copper cost curve.
“Baja’s portion of this production is 70%. Baja has less than 400 million shares fully diluted and the project a minimum mine life (albeit at somewhat lower grades) of 25 years.
“I think that Haywood’s price targets are very conservative at current copper prices.”
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At the moment, Baja shares are getting savaged due to the steep decline of copper prices. The stock today is trading beneath $1 for the first time since last October and, based on Hidden Pivot analysis, could fall to as low as 0.55, a midpoint support. I would judge the selling to be egregiously overdone at that point — even moreso than it is now. Nonetheless, let the buyer beware. This was not a “hot tip” as far as I was concerned, but rather the considered opinion of an analyst whose acumen, if not timing, have impressed me in the past.
— RA