Here's a chart showing the divergence. Where OZL started to dip independently from the copper price was, presumably, largely due to the rising AUD hurting profitability. Now with the AUD correcting, this factor could soon be eliminated (AUD was 0.92 around this time last year).
Can anyone see the risk in a long OZL, short copper trade? Seems like a no brainer, though things are often not as simple as they seem, no such thing as a free lunch. I estimate current OZL price should be reflecting a copper price of around $3.70/lb, adjusting for exchange rate difference (was $12.45 last year, when copper was $3.40/lb). Then there's been the capital return etc, obviously this dropped the price a bit - but also gold credits are now a lot higher..
OZL Price at posting:
$12.05 Sentiment: Buy Disclosure: Held
