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Sturdy commodity costs have boosted returns from a number of FTSE 250 shares over the previous yr. It’s not simply gold shares which have taken off — a hovering copper worth has pushed Atalaya Mining‘s (LSE:ATYM) shares by means of the roof.
In precisely 12 months, the crimson metallic producer’s risen a powerful 160% in worth. Earlier at present (14 January), it reached new document peaks of 925p per share after releasing forecast-beating manufacturing numbers for 2025.
All this implies a £20,000 funding in Atalaya a yr in the past would now be value £52,000. And I feel the miner can carry on delivering sensible returns.
Wish to know why?
Copper growth
Sturdy operational efficiency has helped Atalaya shares rally during the last yr (extra of this later). However the chief driver of its rise since final yr has been a surging copper worth.
At $13,160 per tonne, the bottom metallic’s risen 46% since mid-January 2025. It’s been swept increased by fears of provide shortages following manufacturing points in key areas.
However why has Atalaya’s share worth outperformed copper over the interval? It’s comes all the way down to the leverage impact, the place miners’ income can rise extra sharply, as their prices stay comparatively fastened at the same time as revenues balloon.
However the leverage issue isn’t at all times a superb factor for holders of copper shares. When metallic values fall, income (and by extension share costs) can unravel simply as shortly.
This can be a threat for Atalaya buyers wanting forward. The corporate might fall, as an example, if financial indicators worsen and copper reverses. The excellent news is that issues are wanting good for industrial metals on enduring provide issues and powerful demand from the inexperienced vitality and tech sectors.
Operational energy
A rising copper worth has restricted profit if an organization’s struggling to tug the metallic out the bottom. Fortuitously Atalaya has been making nice progress operationally, as Wednesday’s newest replace revealed.
This confirmed This fall manufacturing of 11,500 tonnes, beating Metropolis forecasts by mid-single-digit percentages. As a consequence, full-year output was 51,139 tonnes, up from 46,227 in 2024.
Regardless of lower-than-expected ore grades, a mix of sturdy ore processing and higher recoveries drove one other sturdy efficiency from Atalaya. The corporate has tipped full-year manufacturing of between 51,000 and 54,000 tonnes from its Spanish belongings in 2026.
It’s additionally been making sturdy progress in decreasing prices in latest months. These dropped 13% between January and September, newest knowledge confirmed. Averaging roughly $6,260 per tonne, this was subtantially beneath what copper was altering palms at over the interval.
What subsequent for Atalaya shares?
Given its operational document and powerful copper worth outlook, Metropolis analysts count on Atalaya shares to proceed rising. Their 12-month worth goal is 960p per share, up 4% from present ranges.
I feel forecasts could possibly be quickly upgraded over the yr, helped by the assembly of key operational milestones. These embrace allowing and feasibility progress at Touro, and useful resource growth and plant upgrades at Riotinto (that’s, the Spanish area, not the London-listed miner).
Regardless of its sturdy worth positive factors, Atalaya shares nonetheless look dust low-cost to me, buying and selling on a ahead price-to-earnings development (PEG) ratio of 0.4. I feel the FTSE 250 firm’s value severe consideration as copper values proceed to climb.
