There’s a perfect storm sweeping copper to new highs.
When CV-19 showed up, prices dipped…but then they took off.
The last year has been amazing for copper.
Prices for the red metal recently broke just through the $10,000 mark for the second time in a decade.
Even with the current volatility, the Bank of America believes copper could more than double to $20,000 per tonne by 2025.1
Because we’re using more copper than ever today, but copper inventories are at levels seen 15 years ago.2
Meanwhile, there are multiple drivers for growing copper demand as a base metal:
- Vaccines and boosters are rolling out3
- The global economy is recovering4
- Government stimulus is increasing5
That all adds up to a major tailwind that’s helped copper stocks like Taseko Mines and Copperbank Resources generate big value in the past year.
Especially since there’s another MAJOR factor behind the increases in copper demand and prices…
…the rise of electric vehicles (EVs).
EVs rely heavily on copper. They use 3X to 4X as much copper wiring as a traditional vehicle.6
With EV sales expected to skyrocket in the near term, copper demand and prices are expected to skyrocket too.
But EVs are just one catalyst driving copper to new highs.
Copper is also essential to our future existence since renewable energy technologies also need lots of copper.
The International Energy Agency says copper will remain the most widely used metal in renewable energy technologies.7
Goldman Sachs predicts that by 2030, copper demand will surge by nearly 600%.8
That’s all good news for copper miners and their stocks.
But which copper stocks are likely to get the biggest boost from this perfect storm?
The ones that have a proven team and enough strategic projects in hot regions so they can produce a steady stream of news.
Meet Today's Hot New Copper Stock
- Newly listed discovery-focused company (so lots of upside potential)
- Proven team with street cred (more on that later)
- 3 large copper projects (2.9X the size of Manhattan Island combined)
- Located in Nevada, Arizona & Idaho (3 of the world’s top regions for mining investment attractiveness)9
- Plus 2 gold projects (just to sweeten the pot)
They’re also fully financed to complete their aggressive exploration programs (last financing was $9M).10
Reason #1 - Riding the Near-Term & Long-Term Copper Wave
The copper boom over the last year isn’t some SHORT-term market blip.
In the NEAR-term, copper has already surpassed Goldman Sachs’ price forecast of $10,000 per tonne copper in 2022, marking the second time in history the metal has reached 5 digits.
Over the LONG-term, major copper demand growth is expected to come from electric vehicles (EVs).
Last year, EV sales were around 3 million.
By 2040, they could be as high as 70 million.12
That’s a 23X increase in EV sales!
That means huge copper demand increases.
There’s also the extra demand for copper wires in EV charging stations and infrastructure.
Wood Mackenzie estimates that by 2030 there will be 20+ million global EV charging points.13
That ALONE would consume 250% more copper than in 201914.
Then there’s more copper demand expected from the rise of other tech advances, like renewable energy infrastructure.15
But growing copper demand doesn’t just come from new sectors. Copper makes up the very backbone of our modern way of life.
It’s in most everything that has wires: electric motors, generators, buildings and houses, planes, cars, and every electronic device you can imagine.16
So it only makes sense that:
- Copper demand will continue to grow
- That demand will support strong copper prices
- Copper companies will be rewarded for exploring, finding and producing more copper…in the NEAR-term and the LONG-term.
Reason #2 - Three Very Promising Copper Projects in Development
- #1 = Nevada
- #2 = Arizona
COPPER PROJECT #1: DEWDROP MOON PROJECT
This is a large Nevada-based project (18.5 square miles; 48 km2).
The appeal of the district is confirmed by the active mid-tier and major mining companies nearby.
The neighboring Pumpkin Hollow Mine (to the north of Zacapa’s project) went online in 2019, making it America’s first new copper producer in the last decade.22
The mine is projected to average 60 million pounds of copper annually in years 1-5, and 50 million pounds annually after that.23
Sampling has already identified encouraging results, including:
- 4.3% copper associated with exotic copper-oxide (2020)
- Outcropping epithermal gold targets with up to 3.7 grams per ton (g/t) gold (2020)
- Additional copper and gold anomalous zones with up to 3.8% copper and 2.8 g/t gold (2021)
- Yerington: 128 million tons (Measured + Indicated)24
- Ann Mason: 2.2 billion tonnes (Measured + Indicated)25
- Resolution (Rio Tinto/BHP)
- Superior East (Rio Tinto/BHP)
- Pinto Valley (Capstone Mining)
- Carlota (KGHM International)
- Ray (ASARCO)
- San Manuel-Kalamazoo (BHP)
- Florence (Taseko)
The Resolution-Globe-Miami area includes 4+ giant porphyry copper deposits that are over 1 billion tons each and over 7.4 billion tons @ 0.73% copper (that means 120 billion pounds of copper!)27
Just 5 miles (8 km) to the southwest of Zacapa Resources (TSXV:ZACATSXV:ZACA) Red Top project, the world’s 2 largest mining companies – Rio Tinto and BHP28– are developing the Resolution Copper deposit.
Resolution Copper is one of the largest undeveloped copper projects in the world.29
It has an estimated copper resource of 1.8 billion tonnes at an average grade of 1.5% copper.
That means this single nearby mine has the potential to supply nearly 25% of all the copper demand in the US.30
The company is expecting drill results in Q4 2021, and they’re starting a 3-hole program later in October.
So watch for ongoing news flow from this project.
COPPER PROJECT #3: PEARL
This project is located directly south of Zacapa Resources’ Red Top copper project.
It’s also right next to BHP’s former San Manuel/Kalamazoo mine, which operated from 1955 to 1999, and was once the world’s largest underground copper mine31.
The Pearl project features favorable host rocks with up to 3.8% copper at surface and outcropping copper oxides that extend for over 650 meters (~2,132 feet).
Upcoming news flow will come from mapping and sampling at Pearl in Q4 2021.
- Produces over 80% of the gold mined in the US
- Averaged ~5.5 million ounces of gold production per year over the past decade32
- Has 28 active gold mines33
Better yet, Nevada is home to recent high-grade gold discoveries.
The world-class Goldrush deposit – a JV between Barrick and Newmont (Nevada Gold Mines) – will start producing in 202134, with an expected mine life of 21 years and annual gold production targeted at 450,000 ounces.35
Right next to Goldrush is the Fourmile deposit.
Each of these deposits could produce 5 million ounces of gold over a decade.
Nevada also enables small gold mining companies to join the big players…like when Corvus Gold more than doubled their market cap in the last year and a half and got bought out by AngloGold Ashanti for their Nevada assets for US$370M in September.36
Before we look at how Zacapa Resources (TSXV:ZACATSXV:ZACA) is in one of Nevada’s most prolific gold trends, the table below shows some of their world-class neighbors and gold companies they’re working to be like.
Reason #4 - Drilling Two Very Promising Gold Projects
- The historic Bullfrog Mine, which produced 2.33 million ounces (Moz) gold
- Corvus’ North Bullfrog deposit (2.1 Moz gold M+I)37 and Mother Lode deposit (1.55 Moz gold M+I)38
- Recent exploration success by Corvus at Lynnda Strip (108.2m @ 1.13 g/t gold, 114.3m @ 0.96 g/t gold and 100.6m @ 0.94 g/t gold)39
- Augusta Gold’s C$25 million exploration program underway to the west at Bullfrog’s 1 Moz maiden gold source40
- Their ground geophysics program planned for Q4 2021 to ensure they’re choosing the right targets to drill
- Their 10,000-meter drill program expected to start in Q1 2022
GOLD PROJECT #2: MILLER MOUNTAIN
The 7.7-square-mile (20 km2) property is 3 miles (5 km) northeast of the Boise Basin, which produced ~2.9 Moz gold.41
The project lies in the regional Trans Challis fault system, which contains numerous epithermal gold-silver deposits and over 3 Moz of historic production.
The Miller Mountain project covers a ~4.7-mile (7.5-km) strike length of the fault system.
Historic drilling on the property intercepted up to 22 feet (6.7m) of 23.7 g/t gold.42
The Miller Mountain project also hosts historical resources at the Miller and Specimen mines.
- Mapping, sampling and augering in Q4 2021
- 2,500-meter drilling program in Q2 2022
Reason #5 - Proven Leadership Team
Adam Melnik – CEO and Director
- Over 15 years in natural resources, cleantech, investment banking & consulting
- Experience in strategy, corporate development, operations, and IR through his time with Vedanta Resources, Pembridge Resources, London Business School, Innovate UK, and Y Combinator-backed CarbonChain
- Former research analyst with Canaccord Genuity in Toronto and London focused on precious and base metals producers and developers
Dr. Timothy MacIntrye, PhD – VP Exploration
- Economic geologist
- Over 15 years researching and exploring for copper deposits
- 5 years with Ivanhoe Mines exploration teams in the DRC, including at the world class Kamoa deposit, ultimately as Regional Exploration Manager
- Former Senior Consulting Geologist for Rio Tinto Exploration in Zambia
- Completed PhD with First Quantum Minerals at the Kansanshi Cu-Au deposit, Africa’s largest copper mine
Ian Slater – Executive Chairman
- Chartered accountant, entrepreneur & founder of numerous companies
- Over 24 years in mining industry
- Former Managing Partner of both Ernst & Young’s Canadian and Arthur Andersen’s Central Asian Mining Practices
Marc Boissonneault – Director
- Former Head of Global Nickel Assets for Glencore
- Led the development of key business opportunities: new geological discoveries, early-stage capital project developments & collaborative mine agreements between mining companies
- Fostered productive relationships with top government officials
- Cultivated constructive relations with aboriginal communities internationally
James Hynes – Director
- Geological engineer
- Over 15 years in mining and metals sector
- Former head of exploration for Lafarge Northwest Division
- Co-founder of Reperio Resources and Executive Chairman of Kore Mining
- Board member for various mining sector companies
- Expertise in preliminary resource identification, resource evaluation and testing, reserve calculations, financial analysis
- Strong copper market fundamentals providing tailwind for stock price gains
- Newly-listed stock with lots of upside growth potential
- Located in enviable copper and gold production regions
- Leadership & technical team capable of building a sector-leading company
- Fully funded for aggressive work programs
- Large drill-ready projects that can be drilled year round
- Diversified with promising copper and gold projects
17 https://www.riotinto.com/-/media/Content/Documents/Invest/Reports/Annual-reports/RT-annual-report-production-2020.pdf (total reserves at operating mines + total reserves at development projects)
20 Taseko Mines – Annual Information Form for the year ended Dec. 31, 2020 (accessed on Sedar.com)
42 Zacapa Resources Investor Presentation, Slide 18
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