Copper, Natural Gas and Water
Here are three things we thought You Should Know about taking place this week in our network:
1.Copper – On Monday I was in Dublin with Brian Bergot, VP of Investor Relations of Taseko Mines (TKO-T $1.67 Mkt Cap $482 million). Brian delivered a very strong update on a North American copper story that definitely turned heads with a whole new group institutional and family office investors in the capital of the Emerald Isle that are now part of the Peterson Capital Euro network.
Key takeaway from the feedback we received from the meetings centered on the potential upside in valuation once the estimated $400-$500 million annual cash flow that Taseko is expecting to produce when the Florence Copper project in Arizona comes onstream. With the biggest hurdles of permitting and financing now behind them, Taseko management now has a clear path in front of them as the only fully permitted and fully financed new copper project to be announced in North America in what seems forever.
This new pool of potential investors in Dublin was very, very impressive as well. Here’s a 45-second video that will tell you why we’re going to be spending a lot of time in that city with our clients in 2024: Click here to view. And below is a pic of Brian and me in front of the Office of the Irish Prime Minister (Taoseach) in Dublin.
2.Natural gas – One of the key updates that many of us look forward to at the end of every quarter is the natural gas market overview that is sent out by CEO Phil Hodge of Pine Cliff Energy (PNE-T $1.54 Mkt cap $547 million). Phil’s Q3 newsletter landed in my inbox this morning – and as usual, full of interesting insights into the natural gas market in Canada and globally. (If you want to subscribe to his quarterly newsletter, here’s the link: Contact Us | Pine Cliff Energy ).
One of the key elements of the Pine Cliff value proposition is the case for higher natural gas prices when Canada’s LNG export capacity is expected to increase as early as 2025. Here’s an excerpt from Phil’s letter that highlights what happened in Australia, which he believes can be duplicated here in Canada (bold highlights and yellow shading are mine).
Australia was a natural gas producing country that went through rapid LNG export growth in the past decade. Since 2014, Australian domestic natural gas prices materially increased as their LNG exports grew. Their domestic natural gas prices rose to over $16/GJ from less than $4GJ as LNG exports increased to over 11 Bcf/d from 3 Bcf/d. This seems like a reasonable comparison to what could happen in North America.
The LNG export industry is an exciting arena for Canada to be entering. TC Energy’s Coastal GasLink Pipeline, built to supply the LNG Canada’s export facility at Kitimat, British Columbia, is now 100% complete and ready to supply gas for Canada’s first LNG exports.(16)(17) Our country has a tremendous amount of natural gas reserves that can allow us to join the ranks of the largest LNG exporters in the world if we can continue to build on the momentum of LNG Canada.
3.Water – we’re ten days away from the cutoff for shareholders of H2O Innovation (HEO-T $4.20 Mkt cap $378 million) to register their votes in favor of the proposed acquisition of the company by US private equity infrastructure fund Ember Infrastructure announced on October 3rd. If you or any of your clients hold H2O shares, here’s a micro website link that explains the transaction, walks you through what needs to be done to register your vote, and provides contact info that will allow you to call or chat with a live person to answer any questions. www.h2ovote.com
Thank you for your continued interest and support.
Rick Peterson (He/him)
Chair