“Garimpeiro” columnist Barry FitzGerald has covered the resources industry for 35 years. Now he’s sharing the benefits of his experience with Stockhead readers.
Looking in to 2025 Garimpeiro reckons there are four metals worth following – copper, gold, silver and uranium.
It’s not possible to get leveraged exposure to all four in a project held by an ASX junior as far as Garimpeiro knows.
But he has come across a junior with a project that has a magic mix of copper, gold and silver, with the latter two to provide handy by-product credits to the main event.
The junior is KGL Resources (ASX:KGL) , trading at 9.3c for a market cap of $60 million. It has not performed well in 2024, having started the year at 16c.
That’s a bit surprising given copper remains at historically high levels and silver and gold have performed strongly.
Its Jervois project in the Northern Territory has got bigger too, and an independent technical review of KGL’s development plans is in the works.
Rich-list backing
It could be that the Jervois project gets overlooked every now and then because it is super remote. Make a 380km road trip heading north on the Stuart Highway out of Alice Springs, turn left on to the Plenty Highway, and you’re at the front gate.
Having said that, Jervois is no mystery to Indonesia’s Salim family, the country’s richest with a net worth put at more than $US10 billion based on Indomie instant noodles and all of the other things found in Indonesian conglomerates like mining, energy, banking, property and so on.
Led by Anthoni Salim, the family holds 35% of KGL and it has supported it in capital raisings over the years.
It has a liking for Aussie mining generally, having acquired the Mt Pleasant coal mine from Rio Tinto for a bargain $224 million in 2016 and the South Australian copper developer Rex Minerals for $393 million earlier this year.
The move on Rex displayed a particular liking for the longer term outlook for copper as its Hillside project came with a development cost bill of $850 million for annual production of 42,000t of copper and 30,000oz of gold.
KGL’s Jervois project is a smaller show. But with earlier work pointing to the potential for annual output of 30,000tpa of copper along with silver and gold credits, it is not far off either.
The resource estimate of 27.45Mt grading 1.87% copper for 513,400t of contained copper is also one of the biggest and highest grade of any of the Australian projects held by ASX juniors and mid-tier companies.
Coppper development plans
Development planning envisages two open-cut mines and three underground mines from the cluster of deposits that make up Jervois, a historic operation with small time production history stretching back more than 90 years.
Industry veteran Philip Condon was recently made KGL’s chief executive with a mandate to make Jervois a happening thing, remembering that KGL acquired the project back in 2011. Condon started his career underground at the CSA copper mine in Cobar.
He told Jervois’ recent annual meeting he saw some similarities between Jervois and the CSA mine, most notably the high grade. The 40,000tpa CSA mine was acquired last year by MAC Copper (ASX:MAC) from Glencore for $US1.1bn including shares and contingent payments.
The CSA deal demonstrated just how highly valued existing copper production has become in recent times.
Jervois is not a copper producer yet but it has a goal of becoming one at a meaningful production rate. And if it enters the market in 2027, the timing dovetails with when BHP and leading forecasters expect a looming supply deficit will hit, driving prices higher.
The views, information, or opinions expressed in this article are solely those of the columnist and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.