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Strong commodity prices have boosted returns from several FTSE 250 shares over the past year. It’s not just gold stocks that have taken off — a soaring copper price has driven Atalaya Mining‘s (LSE:ATYM) shares through the roof.
In exactly 12 months, the red metal producer’s risen an impressive 160% in value. Earlier today (14 January), it reached new record peaks of 925p per share after releasing forecast-beating production numbers for 2025.
All this means a £20,000 investment in Atalaya a year ago would now be worth £52,000. And I think the miner can keep on delivering brilliant returns.
Want to know why?
Copper boom
Strong operational performance has helped Atalaya shares rally over the last year (more of this later). But the chief driver of its rise since last year has been a surging copper price.
At $13,160 per tonne, the base metal’s risen 46% since mid-January 2025. It’s been swept higher by fears of supply shortages following production issues in key regions.
But why has Atalaya’s share price outperformed copper over the period? It’s comes down to the leverage effect, where miners’ profits can rise more sharply, as their costs remain relatively fixed even as revenues balloon.
But the leverage factor isn’t always a good thing for holders of copper stocks. When metal values fall, profits (and by extension share prices) can unravel just as quickly.
This is a risk for Atalaya investors looking ahead. The company could fall, for instance, if economic indicators worsen and copper reverses. The good news is that things are looking good for industrial metals on enduring supply problems and strong demand from the green energy and tech sectors.
Operational strength
A rising copper price has limited benefit if a company’s struggling to pull the metal out the ground. Fortunately Atalaya has been making great progress operationally, as Wednesday’s latest update revealed.
This showed Q4 production of 11,500 tonnes, beating City forecasts by mid-single-digit percentages. As a consequence, full-year output was 51,139 tonnes, up from 46,227 in 2024.
Despite lower-than-expected ore grades, a combination of strong ore processing and better recoveries drove another strong performance from Atalaya. The company has tipped full-year production of between 51,000 and 54,000 tonnes from its Spanish assets in 2026.
It’s also been making strong progress in reducing costs in recent months. These dropped 13% between January and September, latest data showed. Averaging roughly $6,260 per tonne, this was subtantially below what copper was changing hands at over the period.
What next for Atalaya shares?
Given its operational record and strong copper price outlook, City analysts expect Atalaya shares to continue rising. Their 12-month price target is 960p per share, up 4% from current levels.
I think forecasts could be rapidly upgraded over the year, helped by the meeting of key operational milestones. These include permitting and feasibility progress at Touro, and resource expansion and plant upgrades at Riotinto (that is, the Spanish region, not the London-listed miner).
Despite its strong price gains, Atalaya shares still look dirt cheap to me, trading on a forward price-to-earnings growth (PEG) ratio of 0.4. I think the FTSE 250 company’s worth serious consideration as copper values continue to climb.
