Hudbay Minerals (HBM.TO)

Likes what they are doing in terms of growing their mines. Have 1 or 2 operating mines in Manitoba in the Flin Flon area and starting up another. More importantly, they have a huge base metal project in Peru. A cheap valuation, but it is a lot of CapX that they are deploying in Peru. If they can’t get things up and running and they’re tight for cash, maybe somebody steps in but he thinks they can do it on their own.

Has a bunch of cash but he anticipates that will all be spent on development plus they will have to raise money in the debt market to complete their plans. Recently cut their dividend by 90% and this is not winning them any friends. Not a bad company. They have great earnings leverage if the metal sector turns around. Expect it will just flat line from here.

He is short. Doesn’t like the base metals. Had a problem with Sky resources that they acquired and have effectively written off. Thinks they will cut the dividend.

Not encouraged by the metals area. This is a great company but copper, minerals sector in general are weak. He still has some residual positions but they could be sold. Doesn’t think this sector of the market will produce any positive news for a little while. 2.78% dividend.

(Top Pick Aug 17/12, Down 14.79%) He switched out of it. He likes copper but their projects were further out.

Just did another $150 million in the last day or so on top of the $500 million long-term debenture out to 2020. With this they have been able to relieve some of their tighter covenants with respect to their earnings before interest, taxes, depreciation and amortization against their debt holding. Have 3 projects coming on.

We need a lot clearer picture on what is going on in China but doesn’t think we will get this picture clarified, maybe for a couple of quarters. This is going to languish. It’s a relatively low yielding stock. Excellent company.

(A Top Pick Aug 17/12. Down 1.93%.) Sold his holdings and switched to a different copper play. This one is opening 2 new mines so will be spending money.

Caller is down on this stock and wants to know if she should average down. He is not a big fan on averaging down. You buy a company because you think it is going higher. If it goes lower, that means you are wrong and have no idea where it is going.

On all resource stocks, you really want to have an outlook on where you think resource prices are going. Market seems to have a pretty pessimistic outlook on where near-term resource prices are going. Thinks it’s good value, but he has a cautious viewpoint on the metals sector in the shorter-term. Good value if your outlook on zinc is positive.

Well-run company. Great-looking balance sheet but they are going to spend all of that money to bring the growth into production. You’ll have kind of a flat year and then at the end of the year and into 2014-2015 you’ll have tremendous growth. Primarily copper with a bit of gold and a bit of zinc. You might be a bit early but it is cheap and under $10 is a good place.

Some new first nation activity around their new mine. Claims need to be adjudicated Main overhang is about capital costs coming in higher in South America.

The lawsuit is just another setback. It may delay the construction on the concentrator project a little longer. But they have indications of a higher grade than expected on another project. They have a strong balance sheet so he thinks they have the wherewithal to wait it out. They may partner. We will see improvements over the year.

Likes this area because there are not many companies left in this space. Also their assets are in Canada. Chart shows a higher low this year than what was in mid-2012 and that the downtrend that ran from late 2010, has been violated.

777 mine in Flinflon. Expanding on a mine in Lalor lake and a project in Peru. Can see higher cash flows in the future. There is a risk to cutting the dividend in the near future and regardless it will hold until 2015.