RBC Capital lifts Antofagasta to 'outperform' on valuation

The bank, which trimmed its price target on the stock to 950p from 980p, said the shares have de-rated significantly, which is a rarity for ANTO and provides a "compelling" entry point.

RBC said the company's first half was one to forget but the second half suggests better prospects. It expects the stock to regain a premium valuation over the coming months, possibly enhanced by its copper exposure, which has significantly underperformed iron ore by 10% year-to-date. It said the recent weakness in the shares is partly down to the weakness in copper price.

"We expect solid long-term fundamentals should limit the downside and a rebound could provide some recovery for the shares. On a relative basis, weakness in other commodities, should they develop is likely to allow Antofagasta to outperform."

RBC said ANTO ticks nearly all of the boxes that its look for in a mining company for long-term investment. It pointed to large, long-life and expandable assets in a mining-friendly jurisdiction producing a commodity into a structurally compelling market, at a reasonable margin, with little to no debt.

It also said that the previous "invincibility" in the rating, much like the Ark from Indiana Jones, is likely to return in its view, in due course.

"We also think this window might be brief, providing investors an opportunity to switch a proverbial bag of sand with the proverbial golden idol of outperformance."

RBC attributed the target price downgrade to the first-half results and its inclusion of $300m of new value from the likely monetisation of water infrastructure.

At 1235 BST, the shares were up 2.8% to 827.40p.