3SOF

1. Profile

EuroZinc Mining Corporation (EZM). The Group's principal activity is to explore, extract, process and reclamation of base metal mining. The Group explores and produces copper from the Neves-Corvo copper mine, located near Castro Verde, Portugal. The Group is also focused on the development of the Aljustrel zinc project in Portugal. On 18-Jun-2004, the Group acquired Sociedade Mineira De Neves-Corvo, S.A .

2. Technical Analysis

2.1. Long Term Chart



I still don't know if that gigantic gap was a real thing or not, but I'll soon find out (probably this isn't exactly the same company, we'll see).

2.2. Medium Term Chart



Nice medium term ascending trend. Volume started to pick up in 2006. I guess the company was at OTCBB and now it is in AMEX and that helped liquidity (and candlestick charts  ) (yes, that was it: EuroZinc to Begin Trading on the American Stock Exchange

2.3. Short Term Chart



The stock yesterday came down to touch TL2 and bargain hunters came in to bid the price higher. The stock may consolidate some, but the short and medium term trends are definitely bullish.

3. Fundamental Analysis

3.1. Number of Shares Outstanding



I only have fundamental data for the last 3 quarters, so probably this is a different company from the prior one (actually I remember of looking at EZM in January 2004 at about $0.40 per share - strange chart)

The company has a lot of shares outstanding (543 million, market cap of $771M), it is strange average volume isn't higher.

3.2. Working Capital



The current ratio doesn't seem very favourable, but underneath this ratio I see total liabilities coming down from $299M in Q1, to $253M in Q2 to $231M in Q1. Reduced debt is a positive development.

3.3. Revenues



Revenues are growing. I have to study some more to understand how these production numbers transfer into revenue numbers: EuroZinc Announces Fourth Quarter and 2005 Operating Results

But if we consider how copper prices are rising, there's no doubt revenues increased in the 4th quarter:



3.4. EPS



The 4th quarter estimate is based on an average copper price 12% higher than the 3rd quarter. This means the company probably earned 18 cents per share in 2005. Its share price is $1.42, so trailing earnings multiple is 7.88 (quite cheap).

4. General Overview

Let's read some more information about EZM:

«The net cash cost per pound of copper sold for 2005 was US$0.77 compared to US$0.64 in 2004, reflecting the higher mill feed grade in 2004 and the increased treatment and refining charges in 2005. Despite commodity price increases during the year, particularly steel and oil based products, the overall operating cost per tonne of ore milled was marginally reduced in 2005. This was achieved by an 8% increase in the mill throughput, cost control measures exercised at the mine site and a favourable move in the Euro to US dollar exchange rate.

"Management is pleased with its first full year of operating performance at Neves-Corvo and is looking forward to additional improvements in the coming years," said Joao Carrelo, Managing Director of Somincor, the wholly owned subsidiary of EuroZinc and the owner/operator of the mine. "We are particularly pleased with the progress to date in preparing for zinc production at Neves-Corvo in the second half of 2006, and the accelerated and successful exploration program that got underway late in 2005."»

I don't have zinc prices in stockcharts.com, but they're probably rising a lot too.

EuroZinc Announces Secondary Distribution

Some investments funds want to sell about 13.5% of the company. Not a great problem with this, and just a little increase in the number of outstanding shares: «to exercise warrants it holds to acquire an additional 1,400,000 shares of EuroZinc.» This is minimal.

You know I live in Portugal so I've seen this company on the news. These mines in Alentejo (the poorest region on EU) were closed for many, many years. Some of the mines are now a tourist attraction for historic reasons (their owners made a lot of money in the second World War, selling Tungsten to the germans and allies (Portugal was a neutral country at the War, that's why we didn't get the Marshall plan and that's part of the reason we didn't develop as much as other countries after the war - but that is another story)).

Well, the company has been on the news for very good reasons. It is hiring people to work on the mines, expanding production capacity and it is studying the potential to open/acquire other mines in Portugal. These mines were shut down because raw material prices were very depressed. But now, with these increases in  raw materials and commodity prices, highly profitable investments can be made.

Even on a trailing basis EZM seems very attractive to me. Earnings growth can be outstanding going forward, because I don't think copper prices will come down soon. There can be a 20 year bull market in commodities, like in the 60's and 70's (Jim Rogers defends that, among others).

China, India and South America economies are booming and that's the main explanation for the commodities bull market.

I believe EZM should be bought today for the Stocks on Fire Portfolio. That's what I'll do, around the open, 10% of the portfolio.

Link list:

1) Analysis
http://www.stockhouse.ca/comp_info_tech.asp?view=tech&Displaycurrency=&symbol=EZM&table=list

2) Financials
http://www.stockhouse.ca/comp_info_financials.asp?view=financials&Displaycurrency=&symbol=EZM&table=list
3) Short update 
EZM: Short Interest UP 100.0% to 18.0K in Jan 2006
Friday , January 20, 2006 16:15 ET
According to new short interest data from AMEX, short interest for Eurozinc Mining Corporation (AMEX: EZM) INCREASED 100.0% to 17,990 shares for the month ended mid-January, 2006.

SYMBOL    DECEMBER     JANUARY     CHANGE       %CHANGE  DAYS/COVER
--------   -------------   -------------   -------------  ------------  ----------
EZM                    0          17,990         +17,990      +100.00%           1

Based on EZM's 20-day average daily share volume of 367,794, it would require approximately 1 day(s) of buying to cover this short interest.

4)
Thu Feb 9, 2006
Share Structure
Shares Issued: 543,821,610

Outstanding:
Options: 18,241,836
exercisable at various prices from $0.10 to $0.95

Warrants: 8,829,402
133,750 exercisable at $0.75
8,695,652 exercisable at $0.60

Fully Diluted: 570,892,848

5)
January Newsletter:
http://www.eurozinc.com/i/pdf/January_News_Letter.pdf

6) EZM presentations:

Investor presentation (check slides 40 to 45 ):
http://www.eurozinc.com/i/pdf/Copper_Conf_Jan_2006.pdf

EZM company sum. (45 slides):
http://www.eurozinc.com/i/pdf/EZM-ppt.pdf

7) Annuals

http://www.eurozinc.com/s/Annuals.asp

Maybe I read your link wrong la-onda, but the stockhouse info showed that EZM closed at 1.69.  I had that it was at 1.46 yesterday. 

this was the canadian stock price.
please switch to the AMEX price:
http://www.stockhouse.ca/comp_info.asp?symbol=EZM&table=AMEX

EZM seems to be a great long term investment but as always with these commodity stock it pays off to look at the commodity.

As David rightly points out Copper has had a fantastic run based on the fact that demand is outstripping supply. We had however moved into overbought territory and it seems like copper is pulling a bit back.

I will keep an eye on Copper and be on the buying side if I feel we have hit the bottom.

Mike

Commodity stocks selling off today. Copper prices might be falling.

http://www.bloomberg.com/apps/news?pid=10000086&sid=aTrjsIE0ZoMQ

(edited post with new article)

EZM: RBC Capital Starts @ Sector Perform; Analyst Notes
Friday , February 10, 2006 10:11 ET
Issuer: Eurozinc Mining Corporation (AMEX: EZM)
Analyst Firm:  RBC Capital Markets
Ratings Action: INITIATE
Current Rating: Sector Perform

Analyst Comments: The firm sets their target price to C$1.60.

Quote from: Michael on February 10, 2006, 12:00:27 PM
EZM seems to be a great long term investment but as always with these commodity stock it pays off to look at the commodity.

As David rightly points out Copper has had a fantastic run based on the fact that demand is outstripping supply. We had however moved into overbought territory and it seems like copper is pulling a bit back.

I will keep an eye on Copper and be on the buying side if I feel we have hit the bottom.

Mike

Is it EZM great for long term investment?
Ok, i'm IN (long side)

VectorVest Stock Analysis of Eurozinc Mining as of 2/10/2006


Business: EUROZINC MINING CORP, (EZM) Explores, acquires and develops mineral properties The company's primary focus is the Aljustrel base metal project in Portugal The company plans to produce zinc, lead and other minerals
Business Sector: EZM has been assigned to the Mining Business Sector. VectorVest classifies stocks into over 200 Industry Groups and 40 Business Sectors.
Industry Group: EZM has been assigned to the Mining (Other) Industry Group. VectorVest classifies stocks into over 200 Industry Groups and 40 Business Sectors.
 

 
Value: Value is a measure of a stock's current worth.  EZM has a current Value of $2.86 per share. Therefore, it is undervalued compared to its Price of $1.52 per share.  Value is computed from forecasted earnings per share, forecasted earnings growth, profitability, interest, and inflation rates. Value increases when earnings, earnings growth rate and profitability increase, and when interest and inflation rates decrease. VectorVest advocates the purchase of undervalued stocks. At some point in time, a stock's Price and Value always will converge. 
   
RV (Relative Value): RV is an indicator of long-term price appreciation potential. EZM has an RV of 1.58, which is excellent on a scale of 0.00 to 2.00. This indicator is far superior to a simple comparison of Price and Value because it is computed from an analysis of projected price appreciation three years out, AAA Corporate Bond Rates, and risk. RV solves the riddle of whether it is preferable to buy High growth, High P/E stocks, or Low growth, Low P/E stocks. VectorVest favors the purchase of stocks with RV ratings above 1.00.
 
RS (Relative Safety): RS is an indicator of risk. EZM has an RS rating of 1.00, which is fair on a scale of 0.00 to 2.00. RS is computed from an analysis of the consistency and predictability of a company's financial performance, debt to equity ratio, sales volume, business longevity, price volatility and other factors. A stock with an RS rating greater than 1.00 is safer and more predictable than the average stock in the VectorVest database. VectorVest favors the purchase of stocks of companies with consistent, predictable financial performance.
   
RT (Relative Timing): RT is a fast, smart, accurate indicator of a stock's price trend. EZM has a Relative Timing rating of 1.46, which is excellent on a scale of 0.00 to 2.00.  RT is computed from an analysis of the direction, magnitude, and dynamics of a stock's price movements over one day, one week, one quarter and one year time periods. Once a stock's price has established a strong trend, it is expected to continue in that trend for the short-term. If a trend dissipates, RT will gravitate toward 1.00. RT will explode from bottoms, dive from tops, and reflect changes in price momentum. VectorVest favors the purchase of stocks with RT ratings above 1.00. 
 
VST (VST-Vector):  VST is the master indicator for ranking every stock in the VectorVest database. EZM has a VST rating of 1.36, which is very good on a scale of 0.00 to 2.00. VST is computed from the square root of a weighted sum of the squares of RV, RS, and RT. Stocks with the highest VST ratings have the best combinations of Value, Safety and Timing. These are the stocks to own for above average, long-term capital appreciation. VectorVest advocates the purchase of safe, undervalued stocks rising in price. 
 
Recommendation (REC): VectorVest gives a Buy, Sell, Hold recommendation on every stock, every day. EZM has a Buy recommendation. REC reflects the cumulative effect of all the VectorVest parameters working together. These parameters are designed to help investors buy safe, undervalued stocks rising in price. They also help investors avoid or sell risky, overvalued stocks falling in price. VectorVest recommends that investors buy high VST-Vector, Buy-rated stocks in rising markets.

  GRT (Earnings Growth Rate): GRT reflects a company's one to three year forecasted earnings growth rate in percent per year. EZM has a forecasted Earnings Growth Rate of 31.00%, which VectorVest considers to be excellent. GRT is computed from historical, current and forecasted earnings data. It is updated each week for every stock in the VectorVest database. GRT often foretells a stock's future price trend. If a stock's GRT trend is upward, the stock's price will likely rise. If GRT is trending downward, the stock's Price will probably fall. VectorVest favors the purchase of stocks whose GRT is rising and is greater than the sum of current inflation and interest rates, (7.55%).

EPS (Earnings per Share):  EPS stands for leading 12 months Earnings Per Share. EZM has a forecasted EPS of $0.19 per share. VectorVest determines this forecast from a combination of recent earnings performance and traditional fiscal and/or calendar year earnings forecasts.

EY (Earnings Yield): EY reflects earnings per share as a percent of Price. EY is related to P/E via the formula, EY = 100 / (P/E), and may be used in place of P/E as a measure of valuation. EY has the advantages that it is always determinate and can reflect negative earnings. EZM has an EY of 12.82 percent. This is above the current average of 2.85% for all the stocks in the VectorVest database. EY equals 100 x (EPS/Price). 
 
GPE (Growth to P/E Ratio): GPE is another popular measure of stock valuation. It compares earnings growth rate to P/E ratio. EZM has a GPE rating of 3.98.  High growth stocks are believed to be able to justify high P/E ratios. A stock is commonly considered to be undervalued when GPE is greater than 1.00 and overvalued when GPE is below 1.00. Unfortunately, this rule of thumb does not take into account the effect of interest rates on P/E ratios. The operative GPE ratio of 1.00 is valid when and only when interest rates equal 10%. With long-term interest rates currently at 5.35%, the operative GPE ratio is 0.29. Therefore, EZM may be considered to be undervalued. 

Dividend Analysis:
 
DIV (Dividend): VectorVest reports annual, regular, cash dividends as indicated by the most recent payments. Special distributions, one-time payments, stock dividends, etc., are not generally included in DIV. EZM does not pay a dividend. 
 
DY (Dividend Yield): DY reflects dividend per share as a percent of Price. EZM does not pay a dividend, so it does not have a Dividend Yield rating. . DY equals 100 x (DIV/Price). It is useful to compare DY with EY. If DY is not significantly lower than EY, the dividend payment may be in jeopardy. 
 
DS (Dividend Safety): DS is an indicator of the assurance that regular cash dividends will be declared and paid at current or at higher rates for the foreseeable future. EZM does not pay a dividend, so it does not have a Dividend Safety rating . Stocks with DS values above 75 typically have RS values well above 1.00 and EY levels that are much higher than DY.

 
DG (Dividend Growth Rate): Dividend Growth is a subtle yet important indicator of a company's financial performance. It also provides some insight into the board's outlook on the company's ability to increase earnings. EZM does not pay a dividend, so it does not have a Dividend Growth rating . 
 
YSG (YSG-Vector): YSG is an indicator which combines DIV, DY and DG into a single value, and allows direct comparison of all dividend-paying stocks in the database. EZM does not pay a dividend, so it does not have a YSG rating . Stocks with the highest YSG values have the best combinations of Dividend Yield, Safety and Growth. These are the stocks to buy for above average current income and long-term growth


CI (Comfort Index): CI is an indicator which reflects a stock's ability to resist severe and/or lengthy price declines. EZM has a CI rating of 1.78, which is excellent on a scale of 0.00 to 2.00. CI is quite different from RS in that it is based solely upon a stock's long-term price history. VectorVest advocates the purchase of high CI stocks.



Sales / Market Capitalization Information:
 
Sales: EZM has annual sales of $294,000,000
 
Sales Growth: Sales Growth is the Sales Growth Rate in percent over the last 12 months. EZM has a Sales Growth of 10.00% per year. This is good. Sales Growth is updated each week for every stock. It is often useful to compare Sales Growth to Earnings Growth to gain an insight into a company's operations. 
 
Sales Per Share (SPS): EZM has annual sales of $0.55 per share. SPS can be used as a measure of valuation when comparing stocks within an Industry Group. 
 
Price to Sales Ratio (P/S): EZM has a P/S of 2.75. This ratio is also used as a measure of valuation. Here, too, it is useful when comparing stocks within an Industry Group.
 
Shares: EZM has 533,000,000 shares of stock outstanding.
 
Market Capitalization: EZM has a Market Capitalization of $810,000,000. Market Capitalization is calculated by multiplying price times shares outstanding.


Summary:
 
EZM is undervalued compared to its Price of $1.52 per share, has about average safety, and is currently rated a Buy.
 
The basic strategy of VectorVest is to buy Low risk, High reward stocks. We suggest that Prudent investors buy enough High Relative Value, High Relative Safety stocks to keep the overall RV and RS ratings of their portfolios above 1.00. As you do this, you'll find that your risk will go down and your investment performance will improve.

Thanks for the interesting analysis you posted 

Copper prices had a steep correction on Friday, and copper related stocks as EZM followed the commodity's steps.

From the latest financial report from the company:

QuoteNet earnings in the quarter were $25.3 million or $0.05 (Cdn$0.06) per share

$0.05 in net income for the third quarter. If we annualize this we get $0.20 EPS per year without any growth. This means EZM's earnings multiple is 6.65. On Terlisa's article we see that firm expecting 31% annual average growth in EPS going forward, so there is no doubt EZM is very undervalued.

As we go deeper into these mining stocks, we see there are very different groups underneath the «mining stocks». Clearly, gold related companies seem to be very expensive, and copper related stocks look incredibly cheap. That doesn't make any sense, because copper is outperforming gold (for the past 6 months, copper rose 38% and gold rose 28%)

I think EZM and TGB (on a comparative basis I prefer TGB, but they are both great - I would welcome if any of you could find some more copper plays, thanks) are sure things as time goes by, neverming short term timing. I'll continue to hold EZM on the Stocks on Fire Portfolio.

CUP, Peru Copper is a copper related stock. I dont know much about the stock.

Another is PCU. Souther Copper Co. This one is a fast growing co. with PEG of 0.47.

David can make best analysis. Looking forward to that.

I'm down over 17% for this trade... what happen? EZM drops like a rock... whoooooo man!!!

EZM broke the 61.8 Fibonacci retracement, looks like going for double bottom
David, what is your take on this one?

This is being pulled down by copper prices.  A lot of analysts are saying they are going into a correction because they rose too high too fast.  I am out about that much on this stock too . TGB's conference call is Thursday I think, so maybe that could help this stock as well(if it is positive)

EuroZinc Announces Closing of Secondary Distribution
Tuesday February 14, 1:58 pm ET

VANCOUVER, British Columbia--(BUSINESS WIRE)--Feb. 14, 2006--EuroZinc Mining Corporation ("EuroZinc") (TSX:EZM - News; AMEX:EZM - News) announced today that further to its news release of January 25, 2006, Resource Capital Fund L.P. and Resource Capital Fund II L.P. have sold an aggregate of 71,430,000 common shares of EuroZinc at a price of $1.40 per share for gross proceeds before expenses and underwriting fees of $100,002,000. The shares were sold to an underwriting syndicate and EuroZinc did not receive any proceeds from the sale of these shares. As a result of the secondary distribution by Resource Capital Funds I and II LP, Resource Capital Funds II and III LP together now beneficially own a total of 99,640,533 shares representing 18.32% of the issued and outstanding shares of EuroZinc.

EuroZinc is a Canadian based company engaged in the acquisition, exploration, development and mining of base metal deposits internationally.

Quote from: Terlisa on February 14, 2006, 12:03:38 AM
I'm down over 17% for this trade... what happen? EZM drops like a rock... whoooooo man!!!

EZM broke the 61.8 Fibonacci retracement, looks like going for double bottom
David, what is your take on this one?

Looking good... EZM bounce back @ 61.8 Fibonacci Retracement
Looks like will close @ HOD