ZACKS·2025-11-28 14:36Core Insights - The competition to scale copper production is intensifying, with Hudbay Minerals (HBM) and Teck Resources (TECK) representing two distinct future pathways for copper leadership [1][2] - Both companies have shown strong year-to-date performance despite operational challenges, focusing on long-term growth assets [1] Hudbay Minerals (HBM) - HBM has improved its balance sheet, reduced costs, and de-risked its Copper World project, achieving a year-to-date stock performance increase of 89.5% [3][5] - The company reported consolidated cash costs of negative 2 cents/lb and sustaining cash costs of $1.65/lb, with an improved full-year cash cost guidance of 15-35 cents/lb [5][6] - HBM has generated nine consecutive quarters of free cash flow and reduced net debt to 0.5x EBITDA, ending the third quarter with $611 million in cash and total liquidity of $1.04 billion [6][10] - The Copper World project, supported by a joint venture with Mitsubishi, is advancing towards a 2026 sanction decision, with first production expected in 2029 [10][11] Teck Resources (TECK) - TECK reported an adjusted EBITDA of $1.2 billion for the third quarter of 2025, a 19% year-over-year increase, with exceptional liquidity of $9.5 billion [14] - The merger with Anglo American is a significant event, creating "Anglo Teck," a top-five global copper producer with 1.2 million tons of annual capacity and $800 million in annual recurring synergies [15][25] - At the Quebrada Blanca (QB) operation, TECK faces tailings management facility constraints but has a plan to eliminate these by 2027, with a resource base that remains largely untapped [16][17] - TECK's zinc business has also performed well, contributing significantly to earnings [18] Valuation Comparison - HBM and TECK are trading at forward 12-month price to sales multiples of 2.76 and 2.65, respectively, both above the industry average [20] - HBM is viewed as more stable in the near term due to consistent free cash flow and improving costs, while TECK is seen as having a more substantial long-term growth potential [24][25]