ADVERTORIAL
Mining Stocks Climb As Copper Nears Decade High
Editorial Feature | Dec 19, 2022 | Industry
A Scarcity Event Has Struck Copper, Sending Prices Up 184% In Just Two Years…
As It Moves Back Toward $10,000 A Ton, It’s Time To Make The Right Move Into Copper Now
On November 4, MINING revealed a new reality about copper to the world.
They surmised that expanding the copper supply was not an insurmountable goal, but it will take major investments in copper exploration, at a scale that has never before been attempted. They further emphasized the critical nature of the coming supply shortfall, claiming…
“Any copper junior with a deposit of significant size and grades, will have no problem attracting a major or mid-tier acquirer, that can help finance a future copper mine and bring it to commercial production.”1
Copper’s Big Moment Has Arrived
The global shift that’s abandoning fossil fuels for electric, solar, and wind power appears to have decades to run, as infrastructure plans continue to unfold.
A who’s who of analysts agree that the energy revolution is barreling down the track into historic copper shortages.
- Goldman Sachs’ world-famous copper analytics team forecast that copper would reach $5.40 a pound or $11,875 a metric ton.2 They went even farther with their long-term forecast. It set the price of copper at $6.80 a pound, or $15,000 a metric ton by 2025.3
- Moreover, the analysts, Nicholas Snowden, Jeffrey Currie, Daniel Sharp and Mikhail Sprogis, doubled down on their forecast. They wrote that copper’s price strength is not an irrational aberration, “Rather, we view it as the first leg of a structural bull market in copper.”4
- Mark Lewis, the chief sustainability strategist at BNP Paribas Asset Management, was just as bullish. He told The Guardian, “It feels like any market you look at, investors want to buy.” Lewis went on to say that the next 30 years should be copper’s “supercycle” thanks to a worldwide acceptance of clean and green energy.5
What that means for investors is that copper will continue to spike, and copper producers and explorers will rise right along with it. One thing we know for certainty – there will be plenty of opportunities in copper.
It’s a trend one company could be poised to exploit.
Off The Charts Copper Resources At Okeover
This company’s upside is due its potential to mine nearly $5 billion in copper from the two properties it controls.
One of its holdings, Okeover Project, is a proven property with more than 40 years of exploration success.
Originally discovered in 1965, a total of seven companies, including Noranda and Falconbridge, carried out geochemical and geophysical surveys over the course of the next decade. Those included more than 13k meters of diamond drilling in 82 holes.
Low copper prices and sluggish demand allowed the property to sit untouched until 2003 when Eastfield Resources Ltd. optioned and subsequently earned a 100% interest. This interest eventually was purchased by a subsidiary of Northwest Copper Corp, who continued exploration.
After four decades, and 104 diamond drill holes over more than 18k meters, this potentially massive mine has revealed its secrets.
Okeover looks, at a minimum, to hold 86.8 million tons that grade at 0.31% copper.
Refined, that would work out to be ~338 million pounds of copper worth about $1.7 billion at today’s soaring copper price.
And, that $1.7 billion could just be for openers because this company has barely explored the rest of the Okeover project, but that is changing quickly.
Just this month, they announced an initial 2000 meter diamond drill program focused on expanding the North Lake Zone where a historic resource is targeted. Now keep in mind, this is just one of seven zones of mineralization on the property.
Prior exploration, conducted in July 2007, revealed intercepts of 76 meters grading 0.34% copper, and 0.020% Molybdenum, including an intercept of 19 meters grading 0.42% copper, and 0.020% Molybdenum, and intercept of 23 metres grading 0.24% copper and 0.031% Molybdenum.
While previous drilling has always been shallow in nature, it has consistently ended in mineralization. The company is now aiming to test the mineralization at-depth, as part of its efforts towards the completion of a National Instrument (N.I.) 43-101 technical report planned for 2023.
25 Billion Pounds Worth Of New Demand
Like lithium, copper is key for building the new fleet of electric vehicles.6
Today, the average EV holds about 200 pounds of copper. That’s 60% more than the content in an average internal combustion powered vehicle. Right now there are 5.6 million EVs on the road worldwide, but that’s a drop in the bucket compared to the future.7
There could be between 125 and 220 million EVs on the road across the globe by 2030 because of rising ambitions to meet climate goals and sustainability targets, according to a report released by the International Energy Agency.8
The math is simple, 125 million EV’s will require about 25 billion pounds of copper, which is about 12 million metric tons.
Broken down to a more granular level, the EV market alone will likely need at least an additional 1.84 metric tons a year.9
And not only do EVs require more copper, but their chargers, both in homes and in public, will require copper, too.
Remember, that’s on top of current demand, and we’re not yet factoring in wind and solar energy yet. Or the fact that copper is a key component of the global 5G buildout. Even though 5G is wireless, its deployment involves a lot more fiber and copper cable to connect equipment located within a building.
Moreover, copper output is dropping, and so are copper grades.
Richard Adkerson, CEO of Freeport McMoran, the world’s biggest publicly traded copper miner explained the copper crisis this way,
“There’s no shale oil for copper,” he told Bloomberg Television. “Unlike the oil industry, where you have an ongoing flow of discoveries… copper mines of size are very rare to find.”10
Adkerson said if prices were to double tomorrow, Freeport would be unable to bring on new supply within five years.
Miners Need To Double Their Output
Now keep in mind, S&P Global’s forecast is short term – just three years out.
BloombergNEF just made a mid-term forecast that’s just as dire.
Bloomberg reports that copper miners need to double the amount of global copper production, just to meet the demand for a 30% worldwide penetration rate of electric vehicles.11
It will require a jump from the currently produced 20 metric tons a year to 40Mt.12
A report by Roskill supports that.
Roskill forecasts total copper consumption will exceed 43 million metric tons by 2035.
Along with EVs and green energy, the huge jump in demand will also be driven by population and GDP growth, urbanization, and electricity demand.13
But there’s more.
In fact, those forecasts are too conservative according to the consultancy CRU Group.
It says copper consumption by green energy sectors globally is expected to jump fivefold in the next 8 years.
Fivefold means 100 million metric tons… and the world has no idea where that is coming from.
Without fresh capital investments in new or expanded mines, the CRU Group predicts global copper production will drop from the current 20 million metric tons to below 12Mt a year by 2034.14
What to do now…
Right now, copper presents a high upside opportunity.
The mining sector’s card are face up on the table as demand for copper only grows more intense. Yet, sizable new mines, the kind that this company could be sitting on, are hard to find.
Sign up with your email address to learn more about this early – entry opportunity, before more drilling results come out.
1https://www.mining.com/web/copper-discovery-cupboard-bare/
2https://www.mining.com/goldman-sees-copper-price-breakout-risk-of-extreme-scarcity-episode/
3https://www.mining.com/goldman-sees-copper-price-breakout-risk-of-extreme-scarcity-episode/
4https://www.miningweekly.com/article/copper-bull-market-now-fully-under-way-goldman-sachs-2020-12-02/rep_id:3650
5https://www.theguardian.com/business/2021/feb/17/mining-boom-commodity-supercycle-copper-nickel-price-investments-clean-energy
6https://www.reuters.com/article/sponsored/copper-electric-vehicle
7https://policyadvice.net/insurance/insights/electric-car-statistics/
8https://www.reutersevents.com/downstream/supply-chain-logistics/125-million-electric-cars-be-road-next-decade-chemical-industry-must-prepare
89https://www.spglobal.com/marketintelligence/en/news-insights/research/green-energy-revolution-boost-for-industrial-metals-demand
10https://www.bloomberg.com/news/articles/2021-05-27/freeport-ceo-sees-copper-scarcity-trumping-fed-cooling-fears
11https://www.mining.com/web/copper-discovery-cupboard-bare/
12https://www.mining.com/web/copper-discovery-cupboard-bare/
13https://www.mining.com/web/copper-discovery-cupboard-bare/
14 https://www.mining.com/web/copper-discovery-cupboard-bare/
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