Teck Resources Ltd. and First Quantum Minerals Ltd. were upgraded at Canaccord Genuity, where analyst Dalton Baretto sees a “pinprick of light in the commodities tunnel.”

Telling clients that the long-term demand fundamentals remain positive, he assumed coverage of the Canadian base metals sector by raising his rating on Teck to hold from sell, and upping his recommendation on First Quantum to buy from hold.

The other two names under coverage – HudBay Minerals Inc. and Lundin Mining Corp. – are rated buy.

Baretto’s top pick is Lundin, partly because it appears to be the least expensive of the four stocks.

The analyst also pointed out that its set for significant net asset value gains through 2017, as major capex spending is completed for the Los Diques tailings management facility at the Candelaria mining project in Chile.

“While we note the lack of production growth at Lundin as a major drag on the company’s stock price in the current environment, we believe that the outcome of the strategic review process on Tenke and the related choices made by management could be a significant catalyst for the shares over the next few months,” he said in a report.

First Quantum is what Baretto considers his growth pick, as it is the only company he covers with a growing copper production profile. It is set to rise by 75 per cent by 2019 as both the Sentinel and Cobre Panama projects ramp up.

The analyst also noted that First Quantum is his riskiest and most expensive name on near-term metrics, but the cheapest on a net asset value basis.

As for Teck, Baretto noted that the stock is trading far outside its historical range on both short and long-term metrics, and it remains significantly leveraged – something the analyst doesn’t see improving in the near term.

“…However, given the company’s status as the largest and most diversified base metals producer in Canada, we believe that Teck will continue to trade at elevated levels as investor funds continue to enter the sector in anticipation of a cyclical upturn in the base metals,” he said. “We also believe that the ongoing improvement in met coal and zinc prices will provide support to current trading multiples.”