Lundin Mining drills 36.5 m of 1.44% Cu at Neves-Cuevo, earns $59-million (U.S.) in Q3 lun.to, czx.v, tnr.v, sgc.v, tck, bhp, fcx, rio, bwr.to, cs.to, imn.to, ncu.to, tko.to, wrn.to, qux.to, bls.to

  Yesterday, some headlines suggested that Lundin Mining missed estimate with its reported Q3 numbers - we are not following it yet at the depth sufficient to give here any comments on existing estimations. Earnings reported are mixed with different one time charges and we will need to dig it deeper in order to understand how financials will be effected in the short term by the announced reduced outlook for production for 2010. Nothing so far changed our own valuation and the big picture outlook.

  We are here to talk about the big picture and where this company is positioned in it. It is the play on Tenke Fungurume growth with its Cobalt and Copper production. If you believe in Friedland's future - it is about next 30 years when "phenomeon" of electric cars will drive the demand in Green metal and Lithium. Lundin Mining at these levels will be a potential target for acquisition for the slice of Tenke Fungurume. Freeport McMoran will be the natural suitor and should bid, in our view, at least for the Tenke Fungurume stake - if not for the all company. Another combination from FCX and LUN  will be to announce further expansion in production and sell all this story to the Chinese interests, who are positioned very strongly in the DRC.
    Financial Times picked up the most important for the Lundin Mining future, which market will have yet to reflect in its valuation. "Perception of risk surrounding the Tenke licence increased in August when Canada's First Quantum Minerals was stripped of the last assets in Congo." Market knew about this situation before and Lundin Mining was sold into the ground to  below 3.0CAD during last summer.
   Now, with Tenke Fungurume in full play Lundin Mining will be an easy target below 6.0CAD. Financials will drag the company for a while on the operational side, but Tenke's potential will be the blue sky here. New discovery in Europe will help to the whole picture of resources controlled by this company. The company is highly leveraged to Copper and Zinc prices as well.
     The most interesting will be to see how Lukas Lundin will use this opportunity and address its own growth prospects. Company has 300 mil credit line and can use its own currency for further acquisitions. On the technical side company has made a break out of Cup and Handle pattern to the upside, these days  stock is testing the break out level at CAD6.0 and provide an entry point according to our logic. We will monitor the new research notes coming out - to address the full potential of Tenke Fungurume for the company.

Lundin Mining Q3 presentation

"We believe that Lukas Lundin will have to make his move and show that now - with cash flow from Tenke Fungurume and further expansion of production in DRC - he can build value in Lundin Mining itself. Realisation of the facts, described above, by the market could bring the share price north of CAD10.0 (we will not be surprised to see a target price of this magnitude with company's book value at around CAD5.2 now and E/P at CAD 0.13 in Q2 2010). Lukas will be again in a very favorable position after these very tough few years for the company. He can and should use his currency - shares in the company above CAD10.0 to buy another companies with sizable projects at still undervalued valuations among juniors. He should definitely, in our opinion, to study well opportunities for acquisition in CIBC report. His another company - NGeX Resources is a part of that M&A list with its properties in Argentina, Chile, Africa and Canada is moving up nicely in price these days as well. TNR Gold has a few J/V projects with NGeX Resources in Argentina. Lukas Lundin was buying recently NGeX Resources in the market.
  We won't speculate about Lundin Mining involvement, potentially, in Los Azules story, but will point to the few facts, which are keeping us guessing about the future move. Lukas was personally involved in TNR Gold as an investor at one point, knows management there very well and Paul Conibear - Senior Vice president of Lundin Mining corporate development - served on the Board of TNR Gold for a few years. By the way - Tenke Fungurume is his baby - we would like to congratulate Paul and all team at Lunidin Mining with this ground breaking achievement for the company. Lukas was investing in Minera Andes before as well, at least before Rob McEwen came into the picture. We do not know, what stake he has now, but he knows the story about Los Azules very well. Rob is more of a gold guy and Lukas knows the basic metals commodity story very well, particularly copper. Will it make sense for Rob to sell Los Azules to Lukas Lundin at the right price after settlement with TNR Gold and clearing the property title? We do not know at this moment, but any twist in this direction can bring a new dynamic to the all situation regarding Los Azules and its development. It is too early to say more about it at this moment."
  

  

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• The Financial Post says Lundin Mining catches a break with DRC lun.to, czx.v, tnr.v, mai.to, fcx, rio, bhpbwr.to, cs.to, imn.to, ncu.to, tko.to, wrn.to, qux.to (sufiy.blogspot.com)
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Globe says Lundin Mining target boosted to $8 lun.to, czx.v, tnr.v, mai.to, fcx, rio, bhp, tck, bwr.to, cs.to, imn.to, tko.to, wrn.to, qux.to

We have first upgrades and boost in a share price target for Lundin Mining after the Tenke Fungurume news.

"Lundin Mining is in no way a junior mining company, will have attention from Majors in the Copper sector. Freeport McMoran - J/V partner on Tenke Fungurume - will be a natural suitor for this Jewell. In our logic it have to attempt at least to buy out the share of Lundin Mining in Tenke Fungurume - otherwise it will be done by others and Chinese, who are very active in DRC, will be backed by the DRC government in this case. An outright bid for all Lundin Mining operations could be in the cards as well.

We believe that Lukas Lundin will have to make his move and show that now - with cash flow from Tenke Fungurume and further expansion of production in DRC - he can build value in Lundin Mining itself. Realisation of the facts, described above, by the market could bring the share price north of CAD10.0 (we will not be surprised to see a target price of this magnitude with company's book value at around CAD5.2 now and E/P at CAD 0.13 in Q2 2010). Lukas will be again in a very favorable position after these very tough few years for the company. He can and should use his currency - shares in the company above CAD10.0 to buy another companies with sizable projects at still undervalued valuations among juniors. He should definitely, in our opinion, to study well opportunities for acquisition in CIBC report. His another company - NGeX Resources is a part of that M&A list with its properties in Argentina, Chile, Africa and Canada is moving up nicely in price these days as well. TNR Gold has a few J/V projects with NGeX Resources in Argentina. Lukas Lundin was buying recently NGeX Resources in the market."

StockWatch:

Globe says Lundin Mining target boosted to $8

2010-10-26 05:45 ET - In the News

The Globe and Mail reports in its Tuesday edition that Lundin Mining jumped 15 cents to finish Monday at $6.90. The Globe's Darcy Keith writes in the Eye On Equities column that Lundin Mining stock has a 52-week range of $2.91 to $7.04. Lundin Mining will now hold a 24-per-cent ownership interest in the Tenke mine following an agreement between Freeport-McMoRan Copper & Gold and the government of the Democratic Republic of Congo. CIBC World Markets analyst Alec Kodatsky says the deal clears the way for further investment to expand the mine. Mr. Kodatsky boosted his price target by half a buck to $8. UBS Securities Canada analyst Onno Rutten upgraded his rating on Lundin Mining to "buy" from "neutral" with a price target of $5.20 in the Eye column on June 23. The stock was then worth $3.62. TD Securities analyst Greg Barnes maintained Lundin Mining at "buy" in the Eye column on Feb. 24. Lundin Mining stock could then be had for $4.44. Mr. Barnes targeted the stock at $7. The Globe's Allan Robinson wrote on Sept. 18 that Lundin Mining stock still had room to rally. It was then trading at $3.89. The Globe's David Parkinson said Lundin Mining was underpriced on Sept. 2. It was then worth $3.71.

Stockwatch:

FP says HudBay missed a big opportunity with Lundin

2010-10-26 06:03 ET - In the News

See In the News (C-HBM) HudBay Minerals Inc

The Financial Post reports in its Tuesday, Oct. 26, edition that Lundin Mining's successful conclusion of the review of Tenke Fungurume Mining's contracts in the Democratic Republic of Congo must have HudBay Mining shareholders wondering what life would be like now had the Nov. 21, 2008, merger gone through. The Post's Barry Critchley writes that it is a certainty that HudBay shareholders would have ended up a lot better off had the miner been successful in issuing $488-million of stock and buying Lundin. Try about $800-million better off, or $5 to $6 a share given that HudBay has 149 million shares outstanding. HudBay shares closed Monday at $16.39. As of Monday, HudBay has a market cap of $2.44-billion, while Lundin has a cap of $4-billion -- a gap of $1.56-billion. Half the difference, or $780-million, was left on the proverbial table by HudBay shareholders. "By their actions the HudBay shareholders have deprived themselves of an enormous windfall," says an unnamed observer. Another unnamed observer says, "Notwithstanding all the noise at the time, it looks like that the smartest guys in the room were actually" former chief executive officer" Allan Palmiere and the board of HudBay after all."

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The Financial Post says Lundin Mining catches a break with DRC lun.to, czx.v, tnr.v, mai.to, fcx, rio, bhp, bwr.to, cs.to, imn.to, ncu.to, tko.to, wrn.to, qux.to

  

  We have the first reaction from the press now. Analyst with new research and target prices to follow. With all recent press for REE Lundin Mining will get more attention later with its Cobalt production and reserves at Tenke Fungurume. Cobalt is used in some chemistries for lithium ion batteries.

"Tenke Fungurume is back and so we are with our pen and paper to share with you this story again. We have another M&A target in the Copper market now back in business. We would expect a new coverage issued on the company and more investment research from Canadian financial institutions with potential upgrades on valuation. Company is up today on volume - chart shows the cup and handle formation - break out to the upside is in the cards with high copper prices. Share price will have to reflect new valuation with settled political uncertainty over this huge copper project in DRC. Country discount will always be there, but the fact that Tenke Fungurume is now producing and will expand its production rate at these prices will drive the valuation."

StockWatch:

"FP says Lundin Mining catches a break with DRC

2010-10-25 08:43 ET - In the News

The Financial Post reports in its Saturday, Oct. 23, edition that Lundin Mining and Freeport McMoRan Copper & Gold have obtained a bit of stability in the Democratic Republic of the Congo after they reached agreement on contract terms with the government covering the massive Tenke Fungurume copper-cobalt mine. The Post's Jonathan Ratner and Peter Koven write that the deal removes a significant political risk overhang over the two companies, and particularly Lundin Mining. The news has been good to Lundin's stock. Last Tuesday, Lundin shares finished at $5.47. On Friday Lundin closed at $6.75. While the new agreement includes some concessions by Freeport and Lundin, analysts do not consider them to be excessively onerous. RBC Capital Markets analyst Fraser Phillips says, "Freeport and Lundin now have the greater confidence level needed to make further capital investments at Tenke, leading the way for them to capture its significant upside potential." Mr. Phillips considers the deal to be a positive catalyst for Lundin. The new arrangement includes an increase in the ownership interest of state-owned Gecamines to 20 per cent from 17.5 per cent, which will come from both Freeport and Lundin."

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