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The above based on current prices. Like they say, the market always gets it right, eventually. Share price will close in on valuation overtime and that is what has been happening over past weeks IMO.
The below is why it will get more interesting in time: Exploration and development is being cut in many places. Current producers that are not in the first quartile on costs are hurting badly. Some of those companies that are hurting are very large producers, what happens if they can't survive the current copper price?
Exploration forum cancelled in Chile as copper price fall bites
SANTIAGO
An exploration forum slated to take place next month in Chile as part of one of the copper industry's biggest annual events has been cancelled, as a fall in the copper price has hurt demand, organizers said on Wednesday.
The Exploration Forum, which would have been in its ninth year, was due to take place in Santiago on April 4. It has become the traditional opener to the CESCO/CRU week, a copper-focused event that draws attendees from across the global industry.
"The decision is due to the adjustments that the mining industry is going through," said the organizers, non-profit CESCO and Editec, a local specialist publisher, in a statement.
CESCO is working on an alternative, free-of-charge event for some of the participants on the same day in a different location, a CESCO director told Reuters.
The CESCO/CRU week promises to be a sober affair compared to the 2000's, when copper was booming. Cooling demand from key buyer China has led the price of the base metal below a six-year low, drying up new investment and leading miners to cut output and jobs.
http://www.reuters.com/article/us-chile-copper-event-idUSKCN0WP28O
A small extract from another article:
"Right now, only government aid stands between many small and medium mines and failure. State-backed loans, subsidies for essential ingredients such as sulphuric acid, and courses to help miners improve technical skills are among key measures.
"Small-scale mining is a constant concern, which is why we've run relevant initiatives that increase productivity and strengthen the sector," Mining Minister Aurora Williams told Reuters.
Under the most important of those initiatives, state-run mining company Enami purchases copper from such miners at a subsidized rate. Last year Chile spent some $22 million, and once prices recover the loans must be paid back with interest.
But if copper prices fall further, industry insiders say such measures will not be enough. The government has set aside some $20 million through June for the loans and is currently paying miners up to $2.43 per pound for their copper, some 40 cents more than average spot prices, and has said that will not increase at least until midyear. But costs for small-scale producers average around $2.50 per pound."
http://www.reuters.com/article/us-chile-copper-miners-idUSKCN0VW008
There are a multitude of similar news stories out there. If you throw away the microscope and instead use a macro scope, it is easier to make intelligent decisions about where the next wave is going. Most importantly, if you believe in copper as an investment, chose a company with low costs, high, clean grades and experienced, capable management.
...and LME stocks continue to drop. Next week we could see available warrants below 100,000 for the first time in a long time.
