Welcome To the Copper Fox Metals Inc. HUB On AGORACOM

CUU own 25% Schaft Creek: proven/probable min. reserves/940.8m tonnes = 0.27% copper, 0.19 g/t gold, 0.018% moly and 1.72 g/t silver containing: 5.6b lbs copper, 5.8m ounces gold, 363.5m lbs moly and 51.7m ounces silver; (Recoverable CuEq 0.46%)

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Message: Copper: Too much, too soon or just the beginning?

Intro to a TD Securities Action Notes Summary follows (apologies to TD for infringing copyright). There may be a way of posting a link to the full report available to TD Waterhouse subscribers but I don’t know how to do it. No mention of CUU nor of Teck in this summary.

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A look at copper miner leverage to higher prices

Equity Research November 18, 2016

TD Investment Conclusion

• It is not just a Trump rally - The blame for the surge in copper prices over the past week is largely being laid at the feet of Donald Trump's election and his pledge to invest heavily in US infrastructure. But we believe that there is more to it than that. To put a potential surge in infrastructure spending in the US into perspective, if we assume that demand growth rates in the U.S. doubles from current levels of ~1.5% per annum, the net impact on global copper demand would be ~30,000 tonnes per year. And that is not enough to move the needle in a 20 million tonne per year global market.

• Copper rally started before Trump elected - The copper price started to move higher during LME Week (October 31–November 4), as market participants acknowledged that demand growth in China this year has been better than expected (Wood Mackenzie is projecting 4% y/y growth in 2016) and that global inventories are declining. Since the beginning of October, LME copper inventories have dropped 31%, or more than 110,000 tonnes, while SHFE copper stocks have declined by ~7.5% or 9,000 tonnes. The supply surge in 2016 is also running its course, with most of the larger new supply sources (Las Bambas, Cerro Verde mill expansion, Sentinel, etc.) now at or close to full run rates. After a mine supply increase of 4% y/y in 2016, supply growth is projected at approximately +1% y/y in 2017.

• Too much, too soon - The surge in the copper price has moderated over the past week from the peak of US$2.70/lb reached on November 11, but is still up 15% from the start of October at US$2.52/lb. We believe that part of the move is based on fundamentals, part is speculation and part is driven by copper playing catchup after being a significant laggard versus other commodities YTD. The move higher does appear to be excessive and we would expect some retracement as the positive Trump effect starts to lose steam and investors ponder the potential negative Trump effect of restrictive trade policies and a stronger dollar.

• Who has leverage to higher 2017 copper prices? Among the larger Canadian copper producers, Turquoise Hill has the best copper leverage, off a very low base, to higher 2017 copper prices. The next best leveraged is Lundin Mining. First Quantum's leverage is hampered by its hedge position (although we agree with the company hedging copper given its balance sheet and still-high spend capex in 2017 and 2018 for Cobre Panama). Among the smaller producers, Copper Mountain and Taseko have the best leverage due to their higher cost structures. We are in the process of reviewing our metal price assumptions and will revisit our targets/ratings at the time of our price deck update.

Greg Barnes
Craig Hutchison, P. Eng
Derick Ma, (Associate)

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