Jennifer's avatar
$26.1m follower assets
Considering Companies for the Coming Copper Crunch?
Image upload

“It’s copper that is the biggest worry, with the biggest driver of scarcity being the energy transition and increased EV demand, although the demand for more power transmission will also add strain to the supply of copper.”


For some time now, I’ve been writing about the case for the copper bull. Recent headlines indicate that we are quickly approaching a dire situation for the metal, one that could have “explosive effects on the market”:

Image upload

The implications are being felt across the market, as the world’s largest copper consumer becomes more reliant on imports to meet its near-term needs at a time when global stocks are already at historically low levels. The Chinese copper market is at its tightest in more than a decade as traders pay massive premiums for immediate supplies.

For now, the miners, traders and financiers arriving in London this weekend for the annual LME Week jamboree are largely cautious on the near-term prospects for copper, given concerns about the global economy. But many in the market say they are braced for price spikes when the macroeconomic news eventually improves. And without its buffer of bonded stocks, any pickup in Chinese demand could have an explosive effect on the market.



Image upload

Copper buyers are so worried about future availability of the metal that they’re seeking to secure longer-term deals than normal, according to top miner Codelco.

The Chilean state-owned company recently signed some contracts for three to five years with customers in Europe, in contrast to the more standard annual deals, Chairman Maximo Pacheco said in an interview.



Image upload

I will always be grateful to TinBaron, Nate Smith (@natesmi19691323), who hooked me on copper many months ago by sharing GoRozen’s report, “The Problems With Copper Supply”. If you haven’t read it yet, I strongly suggest you do (link for the free download below). Much of what they discussed has come to fruition and the case has only gotten stronger.


I’ve been asked recently, and with increasing frequency, about some of my favourite juniors. I decided to gather them together in a single post and provide a brief description as to why I am keen on these ones. As the S&P Global graph below shows, new copper discoveries are sorely lacking – making it an excellent time to consider adding one or two of these riskier but potentially very rewarding plays to your portfolio.

As always, please DYODD. The junior mining sector is very high risk and I never invest more than I can afford to lose. For me, that means a 1-2% allocation and never more than 5% maximum. If you have any questions regarding the companies below, please don’t hesitate to ask and I am always happy to provide any information that I can.


Image upload


Juniors For Your Consideration

Image upload

$ATX.V – Atex Resources Inc.

If you’re not familiar with the name Pierre Lassonde, you can read about him in my previous Commonstock post about Atex. When the University of Toronto names their Institute of Mining after someone, it’s probably not a name to be ignored – the man is a legend.


I would also recommend watching the video below, where Mr. Lassonde mentions that he doesn’t often invest in junior miners and that he believes Atex may be one of the “copper discoveries of the decade”.


It appears the mining legend has invested accordingly:

Image upload

Image upload

Image upload

Image upload

Image upload

Valeriano is located in a mineral belt that hosts a number of major copper gold porphyry deposits:

Image upload

Link to Atex Resources most recent corporate presentation:


$ACOP.V – Atacama Copper Corporation

Image upload

In the video below, former Atacama CEO Gino Zandonai tells Crux Investor that he wishes to increase the company's market cap by 50-60x it's current number within five years.


Though Mr. Zandonai is no longer in the role of CEO, he remains a significant shareholder and has transitioned to the role of Senior VP of Business Development, focusing on identifying and evaluating acquisition targets. "Gino’s long experience and extensive connections in Chile and across South America will be integral to the company’s growth strategy."

Image upload


Image upload

Because management is a critical component when assessing junior miners, it's important to note who replaced Mr. Zandonai in the role of CEO.

Allow me to introduce to you to Mr. Tim Warman:

Image upload


The item that piqued my interest initially in Atacama was their Placeton project's proximity to Teck & Newmont's NuevaUnión:

Image upload


Image upload

Link to Atacama's most recent corporate presentation:


$FDY.CN - Faraday Copper Corp.

Image upload

Though I personally find North America almost as risky as other jurisdictions some find questionable, it's certainly nice to add some home turf to my holdings:

Image upload

I always believe your odds of success are significantly improved by following those with a proven track record, and I can't recall any other incidence where I have seen this high-powered trio mentioned together:

Image upload

Faraday will be graduating from the CSE to the TSX, final approval pending:


With exploration upside yet to come, a MRE & PEA expected in the second quarter of next year, Faraday has some exciting upcoming catalysts:

Image upload

Link to Faraday's most recent corporate presentation:


$NGEX.v - NGEx Minerals Ltd.

Three names tell a big part of this story: Josemaria, Filo del Sol, Lundin. If you're not familiar with the Lundin family and their generational copper discovery in Argentina, it's worth learning about.

Image upload


Then feast your eyes on the chart of Filo del Sol (huge credit to Nate Smith again here as he shared incredible info on Twitter regarding the deposit):

Image upload

NGEx finds itself on the Chilean side of this monstrous district.

Image upload

In June, NGEx reported the discovery of a third zone of high-grade copper-gold mineralization at the Los Helados project, which they named "Alicanto", after a mythical bird of the desert which feeds on gold and silver.

Image upload


Link to NGEx's most recent corporate presentation:


$SURG.V – Surge Copper Corp

Image upload

Exploration upside in an established Canadian copper district:

Image upload

An impressive team that includes one of my favourites, Craig Parry:

Image upload

Cashed up and permitted:

Image upload

A lengthy & impressive history of insider buys:

Image upload

Image upload

Image upload

Image upload

Image upload

Link to Surge's most recent corporate presentation:


$TM.v – Trigon Metals Inc.

Image upload

Here's what I had to say about Trigon in a previous Commonstock post (link below):

It's rare that a junior miner checks all the boxes for me, but I felt like Trigon Metals did just that...

JURISDICTION

Fully permitted and in active development, Trigon’s projects are based in mining-friendly Namibia and business-friendly Morocco. Both are stable countries with great infrastructure and capable local workforces.

Namibia ranked as the second most favourable mining jurisdiction in Africa on the Fraser Institute Survey of Mining Companies Report, a significant improvement from its ranking of fifth position in 2020

Morocco had the highest Policy Perception Index (PPI score) and ranked first in Africa.

MANAGEMENT

Trigon’s management combines an unique blend of expertise in the resource sector and capital markets, with a great track record of successful exploration, development and production.

JED RICHARDSON
PRESIDENT, CEO AND DIRECTOR
Mr. Richardson is a qualified mine engineer with a background that includes mine finance and resource development over a 20-year career. As CEO of Great Quest, a fertilizer resource developer active in Mali, West Africa, he gained valuable experience operating and creating shareholder value in Africa. He has also held an executive position at Amazon Mining developing resource assets in Brazil. Mr. Richardson spent a large portion of his career in capital markets working as a research analyst at Sprott Securities and RBC Capital Markets. He also worked as a Mining Engineer for Alcan Aluminum after graduating from the University of Toronto. Mr. Richardson holds a B.A.Sc in Mineral and Geological Engineering.

LARISA SPROTT
DIRECTOR
Ms. Sprott is the President of Sprott Money, an online retailer of gold, silver and platinum bullion to investors and collectors, founded by her father celebrated resource investor Eric Sprott. Prior, she worked as an investment advisor with Sprott Asset Management. Her work history includes experience in Public Relations with Toronto-based firm DKPR. Amongst a list of charitable work, she sits on the Board of Directors of the Sprott Foundation.

FANIE MÜLLER
VP, OPERATIONS AND COUNTRY MANAGER
Mr. Müller is a professional mining engineer registered with the Engineering Council of South Africa. Mr. Müller has a wide range of commodity experience with a strong focus on development to production stage assets. Mr. Müller started his career in the production environment, before also gaining experience in the technical and management divisions of operating mines. Mr. Müller gained experience on a variety of commodities as a mining consultant before mainly focusing on operational start-ups. In addition to a Mine Manager’s Certificate, Mr. Müller holds a Bachelor of Engineering (Mining) and a Master of Engineering (Project Management) from the University of Pretoria.

INSIDE OWNERSHIP

Image upload

EXPLORATION UPSIDE

Silver Hill is located in an emerging copper and silver mining district in the Anti-Atlas region of Morocco, highlighted by ancient workings.

Image upload

At Kombat, Trigon is taking a fresh look a major copper system in the Otavi Mountainlands.
Image upload

EXISTING INFRASTRUCTURE

Image upload

LOM (Life of Mine)

Image upload

FUNDING

On July 20, 2022, Trigon announced a US$27.5M silver streaming term sheet with Sprott Streaming.

Pursuant to the Transaction, Trigon shall sell and deliver to Sprott 100% of silver produced from the Kombat Mine. The expansion of the Kombat Mine is projected to increase annual copper production and reduce forecasted operating costs. Proceeds will be used to complete ongoing works to dewater the mine, re-establish services, and continue exploration drill work, as well as to deliver a National Instrument 43-101 Compliant Feasibility Study for underground mining and for general corporate and working capital purposes.



Link to Trigon's most recent corporate presentation:


$VCU.V – Vizsla Copper Corp.

Image upload


Image upload

My computer is freezing up and I have spent several hours on this post, so I will make Vizsla short! A Craig Parry spinoff of the successful Vizla Silver (VZLA now listed on the NYSE). Vizla Copper has an impressive team in British Columbia, and recently acquired the Woodjam Project located near the community of Horsefly, approximately 55 kilometers east of the regional center of Williams Lake.


The Project contains multiple porphyry deposits with combined historical resource estimates containing approximately 1.7 billion pounds of copper and almost 1 million ounces of gold.

"This transaction immediately positions the Company as a potential developer in the battery metals space, given the presence of several porphyry copper and porphyry copper-gold deposits on the Woodjam Project," stated Craig Parry, Executive Chairman of the Company. "We expect to see continued strength in the copper markets in the long term, with electrification demand and jurisdictional supply disruptions being key drivers."

Did anyone else notice the word "Global" on that slide? Because I sure did and if you don't know Craig Parry, allow me to introduce you:

Image upload

Link to Vizsla's most recent corporate presentation:


Again, junior mining stocks are high risk - please invest accordingly and DYODD.


Image upload
No comments yetBe the first to add your insight!

Author

Related

Already have an account?