ERO Copper (NYSE: ERO) Update - Oct 9

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dan_s
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Joined: Fri Apr 23, 2010 8:22 am

ERO Copper (NYSE: ERO) Update - Oct 9

Post by dan_s »

I added ERO to our Small-Cap Growth Portfolio because (a) I am bullish on copper prices and (b) ERO is a very profitable copper & gold mining company with significant near-term growth potential.

By James Attwood at Bloomberg -- The Chinese physical copper market today is “really pretty solid” despite macro-economic uncertainties, Freeport CEO Richard Adkerson told a mining conference.
* Prices of the metal have fallen of late amid the country’s
property and energy concerns and as Beijing sells strategic
metal reserves and tries to “jawbone down commodities”
* There are a lot of moving parts in China, but inventories of
copper there are declining and consumption remains strong,
Adkerson said
* “I still have a lot of confidence in China’s macro-economic
situation for the long term”
** “We’re not traders. We run our business for the long term”
* Freeport is “very confident about the future of copper,” with
the market likely to encounter a supply deficit as demand grows
and new deposits get harder to find and develop, he said

* Freeport is focusing expansion efforts on its own pipeline of
projects in places like U.S. and Indonesia
* The world’s biggest publicly traded copper producer also has a
very attractive multibillion-dollar expansion project in Chile,
but won’t pull the trigger near term as congress there debate
tax hikes, he said
* While the company’s growth strategy isn’t predicated on M&A,
it is positioned to take advantage of opportunities should they
arise, Adkerson said < ERO would be a prime takeover target for Freeport.
* Such opportunities in the industry are limited, he said
* Asked about retirement, Adkerson said he’s enjoying the job
and plans to be back at the same event next year.
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ERO is generating a lot of free cash flow and I expect them to start paying a dividend next year, which should draw a lot of attention.
Dan Steffens
Energy Prospectus Group
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