The Canadian mining stocks we’ve discovered have realized the biggest cost savings during the past five years
SmallCapPower | May 9, 2019: Today we have dug up three Canadian mining stocks that have realized the biggest cost savings over the past five years. We have taken into account the highest operating margins (five-year average) to calculate the cost savings. The selected stocks have market capitalizations in the range of $80 million to $4 billion.
*Market caps based on the closing price on May 06, 2019.
Largo Resources Ltd. (TSX:LGO) – $1.70
Largo Resources is a Toronto-based strategic mineral company focused on the production of vanadium flake, high-purity vanadium flake and high-purity vanadium powder at the Maracás Menchen Mine located in Bahia State, Brazil. On April 22, 2019, Largo Resources indicated that its financial results for Q1 2019 will be impacted significantly by the decline in the price of vanadium pentoxide (V2O5) since the start of 2019 and the impact of the remeasurement of trade receivables under the Glencore off-take agreement during the quarter.
- Operating Margin (5 year average): 33.26%
- Market Cap: $899.7 Million
Sherritt International Corporation (TSX:S) – $0.215
Sherritt International is a world leader in the mining and refining of nickel and cobalt from lateritic ores, with projects and operations in Canada, Cuba and Madagascar. The Corporation is the largest independent energy producer in Cuba, with extensive oil and power operations across the island. Sherritt licenses its proprietary technologies and provides metallurgical services to mining and refining operations worldwide. On April 25, 2019, Sherritt reported its financial results for the three months ended March 31, 2019. Sherritt’s share of finished nickel production at the Moa Joint Venture in Q1 2019 was up 54% YoY to 4,397 tonnes, while finished cobalt was up 27% YoY to 426 tonnes. Q1 2019 Adjusted EBITDA was negative $1.2 million, down from positive Adjusted EBITDA of $35.5 million in Q1 2018. Net loss for Q1 2019 was $61.8 million, compared to a loss of $0.6 million for the same period of last year. Sherritt ended Q1 2019 with cash, cash equivalents and short-term investments of $177.3 million.
- Operating Margin (5 year average): 19.52%
- Market Cap: $85.4 Million
Turquoise Hill Resources Ltd. (TSX:TRQ) – $1.91
Turquoise Hill is an international mining company focused on the operation and further development of the Oyu Tolgoi copper-gold mine in southern Mongolia, which is the Company’s principal and only material mineral resource property. On April 15, 2019, Turquoise Hill Resources announced first-quarter 2019 production for Oyu Tolgoi. Copper production was up 18.2% YoY to 45,800 tonnes, while gold production surged 187.6% to 120,000 ounces. Oyu Tolgoi is expected to produce 125,000 to 155,000 tonnes of copper and 180,000 to 220,000 ounces of gold in concentrates for 2019. Mill throughput for 2019 is expected to be approximately 40 million tonnes.
- Operating Margin (5 year average): 5.75%
- Market Cap: $3.84 Billion
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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