The past two quarters have been tough on precious metals miners owing to several factors which entail a detailed inquiry and analysis. Not so for Freeport-McMoRan (FCX). Heavily dependent on its prize asset, the world’s largest gold mine and second biggest copper mine, a single long-running event has so significantly impacted recent earnings and share price that the company is being viewed as an attractive takeover target.
Freeport-McMoRan is an unusual firm for two reasons. It is unlike the quartet of Goldcorp (GG), Barrick Gold (ABX), Agnico-Eagle Mines (AEM), and El Dorado which are Canadian mining firms with an exclusive or very strong gold focus. Unlike Rio Tinto, BHP Billiton, and Anglo American, it is not a mining giant with diverse mineral and extraction interests. As a mining industry player headquartered in the United States (as opposed to London, England, Canada or Australia), it is somewhat unusual. Its dual focus, reflected in its name, make it even more unusual. (Only Barrick has the same two focus points, but for Barrick, gold is king and copper is truly the ‘base metal’.) (Only the explicit focuses are unusual, practically speaking, gold-and-copper as a duo makes perfect sense because geologically, gold deposits and copper deposits frequently occur together.)
Freeport-McMoRan does have one proper peer, Newmont Mining (NEM).Similar to Freeport-McMoRan it is headquartered in the United States, in Colorado; what’s more, it too focuses on gold and copper! The striking difference is in their ages: Newmont was founded in 1918 which makes it the grandfather to young Freeport-McMoRan, birthed only in 1987.To continue reading, click here.