Freeport (NYSE:FCX) Fair Value Raised by Morningstar (Nasdaq:MORN)

Morningstar (Nasdaq:MORN) said they are raising their fair value estimate for Freeport-McMoRan (NYSE:FCX) by $4 a share on the soaring price of gold.

"We are raising our fair value estimate for Freeport-McMoRan FCX by $4 per share to reflect the rapid appreciation we've seen in gold over the past few months. In contrast to our long-term price forecast for copper, which is informed by our view of the likely path of supply and demand in the coming years, we rely on the futures curve for our gold price estimate. With the yellow metal now trading at $1,374/oz in the spot market, up from a third-quarter average of $1,227/oz, the valuation implications for Freeport, which is on pace to produce 1.8 million oz this year (down from 2.6 million oz in 2009 due to mine sequencing at Grasberg), are significant," said Morningstar on their Website.

This is important because Freeport and other miners who aren't considered primarily a gold mining company, historically haven't traded at the premiums a large number of perceived pure gold miners have.

So for Freeport to have its fair value raised based on its gold assets could help the company rise in price even more, as the future of its copper business should continue add significant value to the company and its shareholders.

Concerning copper, Morningstar added, "Our higher published fair value estimate also includes the effects of the recent surge in copper prices, now at $3.81/lb in the spot market (thanks, China!), up from a third-quarter average of $3.29/lb."

Freeport is the second-largest copper producer in the world, and can produce up to 1 million ounces of gold at their Grasberg mine. They're also the No. 1 producer of Molybdenum.

Freeport was trading at $99.46, gaining $0.38, or 0.38 percent, at 1:48 PM EDT.

Ivanhoe Mines (NYSE:IVN): Miner of the Future?

Ivanhoe Mines (NYSE:IVN) may have positioned themselves as one of the top mining companies of the future, as their stake in the copper-gold mining project Oyu Tolgoi in Mongolia, ensures them a place among the top mining companies at minimum, and potential to be among the largest.

The extraordinary production numbers projected by the company through 2040, are an average of 540,000 tons of copper and 670,000 ounces of gold, starting in 2013, through the estimated 27-year life of the mine.

With proven reserves, it's hopeful the cost of financing the operation will kept to a minimum through the years, and that Ivanhoe retains solid leadership in the company.

Executive chairman Robert Friedland has said in the past that the mine could rank among the top several in the world, including legendary mines Escondida and Grasberg.

Those looking for a long-term play in the mining sector probably won't get a better company than Ivanhoe, as there's simply no known mine out there with the reserves in copper and gold for the period of time mentioned, taking into account other large mines already being operational and having resources extracted from them.

Ivanhoe is a company that must be closely watched, as it's sure to explode upwardly in price as production gets closer to launch.

Freeport-McMoRan (NYSE:FCX) Selling Grasberg Mine Stake?

Freeport-McMoRan (NYSE:FCX) is in talks about the possibility of selling a stake in its Grasberg mine to Indonesia via its Papua province, or possibly investors from that area.

Chief Executive Officer Richard Adkerson said on a conference call that "It could have some positive strategic benefits in terms of our relationship with the people there."

At this time Freeport owns a 90.64 percent stake in the mine while the Indonesian government owns the remaining 9.36 percent stake. Freeport ha operated the mine for 37 years through its PT Freeport Indonesia subsidiary.

Grasberg is the largest gold mine in the world.