10:50 AM EDT, 04/03/2024 (MT Newswires) -- RBC Capital Markets said Tuesday as we approach Q1 results, it expects seasonality to play a role ("Q1 is often impacted by rain or cold weather"), offset by some help from higher copper prices (+3%) along with precious metals (gold +5%, silver +1%). North American copper equities were up 11% in Q1 2024 vs. copper up 3% and valuations remain slightly above historical averages at near 1.1x NAVPS, 6.4x NTM EBITDA, and near 5% 2024E FCF yield at spot prices.

The bank remains constructive on copper in 2024 as it expects supply constraints and solid demand to continue, set against solid demand resulting in a deficit market.

On preferred names, RBC said it continues to see re-rating potential for Teck Resources Ltd. (TECK-B.TO, TECK-A.TO) as it ramps up the QB operation and divests coal in the third quarter. "Accounting changes could result in a messy quarter from Teck and weather may limit BC coal and copper production, although the focus remains on the ramp-up at QB and closing the coal sale in Q3."

According to RBC, Ivanhoe Mines Ltd. ( IVPAF ) is putting the pieces in place for another production step-change with lower costs in 2025. "Ivanhoe could have a weaker quarter as they continue to deal with power disruptions in the DRC before the generator installations and hydro plant refurbishments are completed later this year."

RBC said Capstone Copper Corp. ( CSCCF ) continues to execute its near-term growth. It noted Capstone's production is H2 weighted due to the ramp-up at Mantoverde, so the bank expecst Q1 to look similar to Q4 2023.

For First Quantum Minerals Ltd. ( FQVLF ) , RBC said the rainy season and power disruptions in Zambia could weigh on the miner's first-quarter results. The election in Panama on May 5th remains a key near-term catalyst, it added.

Meanwhile, RBC said Lundin Mining Corp. ( LUNMF ) could have a softer quarter as they guided to lower production at the Candelaria mine due to grade sequencing. Production was also suspended at the Neves-Corvo mine due to a fatality.

RBC said Hudbay Minerals Inc. ( HBM ) continues to benefit from higher grades at the Pampacancha mine but its results could moderate from a strong second half of 2023 as the company resumes blending with ore from the Constancia main pit, which would reduce overall grades.

For Champion Iron Ltd. ( CIAFF ) , the bank expects sales to again lag production due to the rail disruption, while noting that the first quarter is typically a weaker quarter due to weather.

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