Bargain Barrel: 16 copper stocks primed for growth in the world’s race to go green
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We’re in the middle of a growing copper conundrum, fuelled by increasingly challenging supply streams and higher demand pressures as the shift to net-zero carbon emissions proves to be one of the greatest challenges of the 21st century.
As an efficient electrical conductor, vast amounts of copper wiring is needed to retool power systems built around fossil fuels but tensions are mounting over where and how global economies can procure critical, future facing minerals in the midst of dwindling supply.
Despite estimates of a nearly doubling in copper demand from 25Mt to 50Mt by 2035, experts over at Goldman Sachs say regulatory approvals for new copper mines has hit news lows while BHP’s chief commercial officer Vandita Pant told the FT Commodities Global Summit that as much as US$250bn in mine investments would be needed by 2030.
And whether or not that investment occurs boils down to prices being high enough.
But at US$8595/t, yesterday prices are already at levels considered strong by historical standards. In fact, according to the US Bureau of Labor Statistics Producer Price Index, copper and copper products prices today are up by about 400% since the turn of the century.
For explorers with their ducks in a row, this is a good position to be in.
Today we’re focussing on ‘nano-cap’ stocks, companies with a market cap of sub $30 million with exposure to the red metal and room to grow.
(Note: All market cap information pulled from the ASX and correct as of April 30.)
Market cap: $27.83m
Anax Metals has emerged as one of the companies best placed to grasp the coming decade’s copper boom with the release of a stellar definitive feasibility study that lays the groundwork to bring its Whim Creek mine in Western Australia’s central Pilbara region back to production.
Whim Creek, 80% owned by Anax and 20% held by JV partner Develop Global (ASX:DVP), is a project with a difference.
Containing high grade copper and zinc, with lead, silver and gold by-products, Whim Creek stands out in an environment where grade decline is becoming a massive problem for established producers.
At 10,000-12,000t of copper equivalent metal a year, Anax looms as one of only a handful of near-term copper producers poised to take advantage of the coming copper wave propelled by the transition to green energy.
Copper Search has kicked off drilling at its Peake project in the Gawler Craton of South Australia to test four high-priority Iron-Ore-Copper-Gold (IOCG) targets.
The four-hole diamond core program aims to identify large scale IOCG targets of similar scale potential to Prominent Hill and Carrapateena, starting with target AC23 to a depth of approximately 300m.
Once drilling at AC23 is completed, the rig will then drill and case the remaining three pre-collars during May before drilling the diamond tails on Curdimurka-01 (CU01), followed by Ruby Hill-02 (RH02) and Callanna-06 (CA06).
In parallel, a concurrent regional exploration is underway to identify further drill targets in the northern half of the Peak Project, with a regional exploration update and plans expected to be published in May.
Corazon owns 100% of the Lynn Lake Nickel-Copper-Cobalt Sulphide project in Manitoba, Canada, a prolific historical nickel-copper-cobalt mining centre that was mined for 24 years before its closure in 1976.
The company’s two-pronged strategy at Lynn Lake is focused on development and exploration.
Mining Centre studies are seeking cost and performance efficiencies in mining and processing practices, progressing the possible development of a significant, low-cost mining operation.
Exploration in the mine area is looking to expand the near-surface JORC resource base in search of start-up feed to complement existing resources at depth.
AUQ says construction of its 51%-owned Al Wash-hi Majaza copper-gold project in Oman remains on track for completion in the June 2023 quarter.
These are exciting times for the company, which has been plugging away at this project for well over a decade.
A revised DFS envisaged a smallish open pit operation producing 35,000tpa concentrate a year for ~80,000t copper and 21,800oz gold over 10 years. It will cost about US$60m to build.
At US$7,000/t copper, earnings before tax (EBITBA) were estimated at US$208m and at a US$9,500/t copper price, project EBITDA increases to US$370m.
Although the wet season has suspended exploration activities and access to Metalicity’s Mt Surprise project in Far North Queensland, the company has been undertaking detailed desktop reviews of historical exploration over the recently granted exploration permit EPM28653.
Metalicity has also engaged a geophysicist with significant experience in the FNQ region to carry out a review of available geophysical survey data to assist with exploration target generation.
At the beginning of the year, a rock chip sample returned up to 11.15% copper, increasing the area of priority targets identified during maiden field work in October 2022.
This sample was collected 500m from a previous high grade rock chip sample of 11.65% copper.
Diamond drilling kicked off at the Mount Margaret copper-gold project in mid-April after a ground-based electromagnetic (EM) geophysical survey in 2022 detected a strong and relatively deep conductor at the FC4 prospect, 7km north of the large Ernest Henry copper-gold mine.
A single deep diamond drill hole is testing for the presence of Eloise-type Iron Sulphide Copper Gold mineralisation (ISCG) within the same magnetic belt that hosts the EHM.
The total hole length is planned to 550m and drilling is scheduled to be completed in the next three weeks with final results expected in late June subject to laboratory turnaround.
Culpeo completed a Phase 2 drilling program at the Lana Corina copper and molybdenum project in Chile, which remains open in all directions and was designed to expand the mineralised footprint.
Standout results from this drilling include 104m at 0.74% copper and 73ppm molybdenum (0.81% copper equivalent), 257m at 0.95% copper and 81ppm molybdenum (1.10% copper equivalent), and 173m at 1.05% copper and 50ppm molybdenum (1.09% copper equivalent).
Culpeo says these results, combined with the results of a geochemical survey at Vista Montana, strongly support the company’s exploration model and belief that Lana Corrina has the potential to host a substantial mineralised system.
Horseshoe Metals has been busy with exploration and drilling at its historical, flagship Horseshoe Lights project, 60km from Sandfire Resources’ (ASX:SFR) DeGrussa mine, which recently pulled up thick and shallow copper.
Horseshoe Lights has already produced ~316,000oz gold and 55,000t copper metal in two phases of mining and contains a current resource of 128,000t copper metal at 1.0% (0.5% cut-off) and 36,000oz gold, however another resource upgrade could be on the cards after it intersected thick, shallow copper mineralisation outside the existing resource envelope.
Reverse circulation drilling returned results such as 55m grading 0.88% copper from a down-hole depth of 22m including 14m at 1.3% copper from 22m and 21m at 1.15% copper from 44m (RC1191 – NW Zone) and 10m at 1.62% copper from 252m including 2m at 5.19% copper from 252m (RC1187 – Motters).
Importantly, it highlights the significant mineralised potential outside the existing in situ resource of 128,000t of contained copper as well as clear expansion potential at depth within both the Motters Zone and Main Zone.
The company recently raised $2m to accelerate Horseshoe Lights development with planning underway to create drilling access on the Northwest waste dump to allow testing of the northern strike and down plunge extension of the mineralisation.
Alicanto intends to use the proceeds from a recent $3.15m share placement to explore the major mineralised system at its high-grade, 1,000-year-old copper-gold-zinc ‘Falun’ mine in Sweden.
Multiple high-priority targets have already been identified along 10km of mineralisation horizon where drilling has returned up to 774 grams per tonne silver, 32.4% zinc, and 1.9% copper at the Skyttgruvan target along the mineralised trend from the historical Falun mine, which produced 28Mt at 4% copper, 4g/t gold, 5% zinc, 2% lead and 35g/t silver.
“We have made some excellent progress at Falun on the back of very limited investigations to date. The work we have done is supportive of our concept that the historical Falun mine is only a small part of a major mineralised belt stretching over at least 10km,” managing director Rob Sennitt said.
“The proceeds of the raising will enable us to refine and grow our high priority targets ahead of a major drilling program to test this view.”
Noronex’s exploration package covers ~7,000km2 of the highly prospective but relatively under-explored Kalahari Copper Belt which runs from central Namibia to northern Botswana.
The Kalahari copper belt is dotted with a high calibre of copper explorers and producers including Rio Tinto and Sandfire Resources (ASX:SFR), which is just days away from bringing its Motheo mine into production.
Noronex’s tenement package covers about 300km of prospective strike length targeting the key NPF-D’Kar formation contact point where most copper deposits occur on the Kalahari Copper Belt.
The company’s exploration focus has centred on the Witvlei project, which comprises two exclusive prospecting licences (EPLs 7028 and 7029) prospective for sedimentary copper-silver mineralisation.
Planning is underway to drill Noronex’s extensive claim package to the east of Witvlei, including the domal structure at the Helm prospect and the Humpback Project.
American West Metals is kicking off its 2023 field season, launching an extensive 10,000m RC drilling campaign across three key prospects at the Storm copper project in Canada in a bid to deliver maiden resources.
An RC rig is being mobilised to the high priority project at Somerset Island in Nunavut, with drilling to start shortly to define a resource at the 4100N Zone.
It has already shown promise, with historical drilling striking 15m at 3.88% copper from 72.4m, 27.2m at 1.9% copper from 78.8m and 5.8m at 3.6% copper from 38.6m – widths, grades and depths that would make any explorer smile.
“The initial phase of drilling is designed to define maiden JORC resources within the 4100N, 2750N and 2200N Zones, where high-grade copper mineralisation starts from surface,” AW1 managing director Dave O’Neill said.
Assays have been returned for DMC Mining’s legacy Exploration Incentive Scheme (EIS) funded drillhole KCDD19001 at its Gibb River copper project in WA.
KCDD19001 was drilled in 2019 by a previous explorer and was never analysed – despite copper minerals observed.
That has proven to be the case with local zones of anomalous copper and gold identified, including 3m at 244ppm copper and 21ppb gold from 199m, including 1m at 366ppm copper from 201m, and 1m at 37ppb gold from 199m.
The presence of anomalous mineralisation in the hole – which is over 10km from the historical outcrop drilling to the north – supports a large area of exploration area potential.
DMM is now progressing the application to grant and review exploration rationale for the region, and anticipates the processing of HyLogging (a fancy machine that uses visible and infrared light to characterise selected minerals from drill cores and chips) to be completed by CSIRO/GSWA and made available soon.
This Queensland-based copper and gold explorer is focused on its flagship Mt Chalmer project – a historic mine that produced 1.2Mt at 3.6g/t gold, 2% copper and 19g/t silver between 1898 and 1982.
In November 2022, the company delivered its third and fourth resources at the Mt Chalmers project since listing in May 2021.
The company has a further two resources that it plans to deliver in the near term at the Mt Warminster and Botos prospects ahead of targeted production in 2025, subject to a final investment decision.
QMines’ focus in 2023 is on transitioning its Mt Chalmers deposit towards production whilst continuing to undertake further regional exploration and making new discoveries.
Sultan owns 326km2 of ground in NSW’s Lachlan Fold Belt prospective for gold-copper, epithermal gold, placer-style gold and base metals.
The portfolio lies near several established and recently discovered porphyry gold and copper deposits such as Alkane’s Boda discovery, Newcrest’s operating Cadia mine, and Magmatic Resources Wellington North project.
During the March quarter, Sultan continued to review and compile all exploration data collected so far across its suite of exploration targets in the Macquarie Arc volcanic rocks of the Lachlan Fold Belt.
No field work was undertaken, with the review aimed at defining the next round of exploration and drill targets across the projects.
NT Minerals received 2,879 regional soil samples covering roughly 600km2 at the Redbank project in the Northern Territory’s McArthur Basin in January this year, which returned a maximum value of 1209ppm copper-in-soil.
Multi-element anomalism at the Calvert South prospect has highlighted a significant target for copper mineralisation which NTM says requires priority investigation through airborne geophysics, ground reconnaissance and drilling as part of the 2023 field season.
Signs suggest Castillo could be onto a Big One within its NWQ project in Queensland’s Mt Isa copper belt, which has an Inferred JORC mineral resource estimate at 2.1Mt at 1.1% copper for 21,886t of copper metal.
Entech Mining has been engaged to undertake a pit optimisation study and mine design study for the Big One deposit, which should articulate a clear pathway to begin copper mining operations.
Alongside this work, Castillo Copper will knuckle down on capitalising Big One’s exploration potential via drill testing known targets north of the line of lode.
At Stockhead we tell it like it is. While Alicanto Minerals, Anax Metals, American West Metals, Corazon Mining, DMC Mining, GBM Resources, Metalicity, and Sultan Resources are Stockhead advertisers, they did not sponsor this article.