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At a time of lower commodity prices, the mining stocks with the greatest speculative appeal are those with new projects that enhance their value even before prices rebound. Today we look at Hecla Mining and Amerigo Resources, two mining firms that are moving ahead with large developments. In both cases these projects promise to expand production considerably. Hecla is beginning production at a Mexican silver mine that last operated a decade ago, and has also purchased one of North America’s largest undeveloped silver deposits. Amerigo has launched a new copper tailings project in Chile that could double its production by next year.
HECLA MINING COMPANY (New York symbol HL; www.hecla-mining.com) explores for, mines and processes silver and gold in the U.S. and Mexico. Most of the company’s silver output comes from its Greens Creek mine in Alaska and its Lucky Friday project in Idaho. Hecla’s Casa Berardi mine in Quebec supplies the majority of its gold production.
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HECLA MINING COMPANY (New York symbol HL; www.hecla-mining.com) explores for, mines and processes silver and gold in the U.S. and Mexico. Most of the company’s silver output comes from its Greens Creek mine in Alaska and its Lucky Friday project in Idaho. Hecla’s Casa Berardi mine in Quebec supplies the majority of its gold production.
VISA INC., $78.75, New York symbol V, set up its European operations (Visa Europe) as an independent firm in 2008. Over 3,700 European banks own this business, which uses Visa’s brand and payment networks under a licensing deal. This week, Visa agreed to buy Visa Europe. Under the deal, it will pay 11.5 billion euros in cash (1 euro = $1.07 U.S.) plus stock worth 5 billion euros. Depending on Visa Europe’s future results, Visa may have to pay an additional 4.7 billion euros at the end of four years. Visa’s balance sheet is strong, so it can comfortably afford this purchase. As of September 30, 2015, it held cash of $3.5 billion and was debt-free....
TRANSCANADA CORP., $43.32, Toronto symbol TRP, fell 4% on Friday after the U.S. rejected its proposed Keystone XL pipeline, which would have pumped crude from Alberta’s oil sands to refineries on the U.S. Gulf Coast. So far, TransCanada has spent $2.4 billion U.S. on this $8.0-billion U.S. project. However, it can use some of the line’s equipment on other projects, which would minimize a writedown. Meanwhile, the company’s earnings fell 2.2% in the three months ended September 30, 2015, to $440 million (Canadian), or $0.62 a share, though that was still ahead of the consensus estimate of $0.60. A year earlier, it earned $450 million, or $0.63....
CP Rail hit an all-time high of $248 in October 2014, following a major cost-cutting plan put in place by CEO Hunter Harrison, who was installed by a prominent U.S. hedge fund in 2012. The stock has moved down lately, as the railway has shipped less crude oil and other commodities. However, CP’s improving efficiency sets it up for more gains as the economy rebounds. CANADIAN PACIFIC RAILWAY $181.50 (Toronto symbol CP; Shares outstanding: 161.0 million; Market cap: $27.8 billion; TSINetwork Rating: Above Average; Yield: 0.8%; www.cpr.ca) ships freight over a 22,000-kilometre rail network between Montreal and Vancouver and links with hubs in the U.S. Midwest and northeast. In the three months ended September 30, 2015, CP’s earnings per share rose 16.5%, to $2.69 from $2.31 a year earlier. Revenue increased 2.3%, to $1.71 billion from $1.67 billion....