13:38 1. Screen miners by jurisdiction first — the market now pays for safe ground
The repeatable method
- Map each producer's production and reserves by country; flag tier-one (Canada, US, Australia) vs higher-risk jurisdictions.
- Check the evidence: compare the share-price record of miners in risky jurisdictions against peers in safe ones, and note which companies are actively rotating their portfolio toward safer countries.
- Treat a tier-one, growth-in-the-US profile as a premium the market may not yet fully price — and as takeover appeal.
Here: "Now jurisdiction matters much more" —
B "underperformed everybody else with a better jurisdiction";
GFI shifting from South Africa/Ghana to Australia and Canada, "the market rewards that" (
14:04);
HBM "is perfect for that… more likely to be acquired" (
14:24).
Watch for
- Resource-nationalism events (royalty hikes, permit revocations) in Latin America and Africa; bids for mid-tier miners with North American growth.
02:40 2. Read the cost curve net of by-products — and quantify the sensitivity
The repeatable method
- Split revenue and reserves by metal to see the mix today and where it is heading.
- Note where the company sits on the C1 cash-cost curve and how much of that is by-product credits (a negative cost is "somewhat misleading" — it depends on the second metal's price).
- Take the company's own sensitivity (e.g. cash flow per 10% move in the by-product price) and ask whether the two metals hedge each other through the cycle.
Here: HBM revenue 55% copper / 38% gold, reserves 66/20, long-term ~80% copper; negative C1 cost on gold credits; +10% gold ≈ +$75m cash flow and EBITDA (
03:16); gold "can offset some of the cycle" in a rate-cut recession (
14:45).
Watch for
- The copper/gold ratio: a falling ratio signals slowdown (bad for copper, supportive for gold); cost guidance as the mix shifts toward copper.
16:01 3. Back-test management's guidance before trusting the growth plan
The repeatable method
- Pull the company's projections from five to seven years ago (production, capex, costs).
- Compare them with what was actually delivered; be most suspicious of "more growth with less capex" decks.
- Only lean on current guidance in the model if the record shows follow-through; otherwise haircut it.
Here: "usually what I find is that… they just made numbers up and they didn't follow the guidance. Not the case here" — so he models
HBM's 250k t medium-term target at face value (
16:01).
Watch for
- Copper World capex and schedule slippage versus today's guidance; the next production-guidance revision.
11:01 4. For a growth miner, raise the terminal growth — then read value against spot
The repeatable method
- Run the same three-commodity-price grid as for the majors ($5 / $6 / $7 copper, 10% discount rate).
- Set terminal growth from the pipeline, not a default: where the post-2030 plan can double output again, use a higher perpetual rate (5% vs 2% for a mature major).
- Hold share count flat when the company reinvests rather than buying back; hold growth capex at a level above sustaining.
- Interpolate fair value at today's spot between the scenarios and compare with the price.
Here: HBM: 5% perpetual growth, $600m capex, flat shares, operating cash flow +10% a year 2026–30 → bear −4% / base +14% / bull +42% (
12:21); copper ~$6.60 sits halfway between base and bull → ~$33 fair vs $26 (
17:21). Contrast Teck, modelled at 2% terminal growth (
2026-SEP-16).
Watch for
- Copper toward $8–9 ("a cheap stock in that case"); any rise in the discount rate you'd demand if jurisdictions deteriorate.
04:05 5. Check who shares the capex — a strategic JV partner de-risks the build
The repeatable method
- For each major project, find whether a partner bought in, at what price, and whether it also funds its share of future capex.
- Use the partner's entry price as an external mark on the project's value.
- Credit the reduced equity burden when judging whether the balance sheet can carry the pipeline without dilution.
Here: 8058.T Mitsubishi paid $600m for 30% of Copper World and funds 30% of future equity capex — "significantly reducing the company's capital burden and… de-risking the project" (
04:34).
Watch for
- Further stake sales in Cactus or Mason; partner funding terms at final investment decision.
05:36 6. After a dilutive deal, check that FCF deleveraged the company despite heavy capex
The repeatable method
- Identify the source of past dilution (an all-share acquisition vs routine issuance).
- Track debt/equity, interest coverage and net debt from that point while growth capex stays high.
- If free cash flow carried both the capex and the debt paydown, and the credit rating improved, treat the dilution as absorbed.
Here: 2023 all-share Copper Mountain deal (~84m shares) (
07:02); now 16% debt/equity, 19× coverage, net debt −$81m, rating up to BB− (
06:03).
Watch for
- A move to investment grade; new equity issuance for Copper World — acceptable only if value-accretive.
19:05 7. Rank by mispricing and sequence the cycle: oil now, copper after the crash
The repeatable method
- Keep one ranked list across sectors; the top page goes to the most mispriced (here oil and tobacco), not to the best story.
- Hold attractive cyclicals like copper miners as a ready watchlist with fair values attached.
- Sequence: own the late-cycle winner (energy), sell into its peak as high energy prices and rates push the economy into recession, then rotate into the copper names at the bottom.
Here: HBM tops the second page behind oil and tobacco; "I'm going to wait for a crash before buying anything in copper" (
19:05); dream scenario: "oil stocks triple… the economy crashes… buy copper stocks at the bottom" (
19:35).
Watch for
- Energy prices and long yields rising together (his recession trigger); copper-miner drawdowns toward the bear-case values on the watchlist.
Methods distilled from the public YouTube video "Hudbay: One of the Best Copper Plays—and It Might Be Cheap | Copper Series" (Peter Lukacs Research). Not investment advice.