This year has brought plenty of reports of a copper surplus, but some analysts and investors believe a deficit is on the horizon. Relatedly, some copper companies have seen interest from larger miners, suggesting a confidence in the red metal that investors may want to note.
One company that has been garnering interest is Anfield Resources (TSXV:ARY), which holds uranium and copper assets across Chile, Arizona, Colorado and Utah. Although Anfield does not yet have a formal resource in place for its Binghampton Copper Queen project in Arizona, it already has an offtake partnership with Blue Zen Memorial Parks (CNSX:BZM). In addition, Anfield has a unique strategy for generating near-term cash flow, selling copper ore directly to mills in Chile at a discounted price. Overall, Anfield looks to be in a secure place for a junior miner.
Copper Investing News (CIN) recently spoke with Anfield’s CEO, Corey Dias, about the company’s strategy and what it has been up to lately. In addition to giving some insight into Anfield’s strategies for its copper and uranium projects, the CEO shared his thoughts on what factors are important for investors to consider in the junior mining space.
CIN: Just to start off with, could you give our audience a general update on what’s been happening with Anfield recently?
CD: We are a company with two different types of commodities: copper and uranium. The copper assets are in Chile and in Arizona. Our copper asset in Chile is actually a small-scale producer. The asset in Arizona is a large-scale development asset, and we actually have a joint venture partner with that project in order to advance it to production.
On the uranium side, we have assets in both Colorado and Utah. Our plan at the moment is to develop those assets and sell the ore to the only conventional operating uranium mill in the US, White Mesa, which is owned by Energy Fuels (TSX:EFR). All of our assets lie within about 100-125 miles of that mill.
CIN: Great. So, your company recently reported on data regarding its Binghampton Copper Queen project. The data was considered to be good, but the release states that further testing is needed to correlate the data with results from 2013. Can you explain why that’s important and give a rough idea of your exploration timeline?
CD: We’ve acquired some data from a former geologist who worked on the asset back in the 1970s and 80s. We’ve done some work on the project ourselves, but in terms of the data that we’ve acquired and the data that we’ve compiled ourselves via drilling and ground work, there seems to be a gap between the two. Our plan is to bridge that gap. To do that, we’ll conduct some additional drilling and some further work on the property in order to make sure that we get the most comprehensive understanding of the properties.
The new data that we’ve acquired was for primarily the larger of the two mines, the Binghampton mine, which we had very little data on. From that perspective, it was a great win for us. We were able to get a better understanding of that property, and it’s very complementary to what we have at Copper Queen.
CIN: Anfield is in the unique position of being a copper-producing junior miner. How has this model worked out for you so far, and what have the benefits and challenges been?
CD: Well, we are a producer of copper, which is great in the junior resource space. There are very few producers of any commodity in this segment of the market, and I think that helps us stand out vis-a-vis most of the competitors in the space.
It’s obviously challenging when we’re operating outside of our local area. In Chile, the rules are a little bit different, the laws are a bit different. We have learned as we’ve gone along in many way, but that said, we have been able to generate enough cash to help cover some of the costs down in Chile.
A good thing about the model that we use in Chile is that we’re looking to replicate it on the uranium side in the US. We sell to a government agency that facilitates small- and medium-sized miners down in Chile, selling our product to a mill at a discount, so we generate cash flow just from selling the ore. We don’t have to do any processing, especially given the scarcity of water and the high energy costs in Chile, so we don’t have to worry about those costs.
We plan a similar process for the uranium. We’re going to sell our ore to a mill, and the mill will process it and own it and we’ll be paid a discounted price. In that way, we get cash flow in the near term and we don’t have to incur the time and costs of building a mill or any liabilities associated with building a mill. I think from that perspective, it makes a lot of sense for us and it’s worked really well.
CIN: Are you looking at doing that with both uranium projects in both of the states?
CD: Yes, well, the one mill that is operating in the US is close enough to all of our assets. All of our assets are within that 100- to 125-mile radius from the mill, so from that perspective, they’re well within shipping distance, so our plan is to ship from all of these sites.
We have 600 claims with probably over 100 targets, including past-producing mines and underground workings associated with those 600 claims, so we think that there are a number of prospects from which we could generate money.
CIN: And would they be in situ mining or hard-rock mining?
CD: It would be hard-rock mining. It’s all conventional mining down there.
CIN: I see. And what is the significance of your purchase agreement with Blue Zen Memorial Parks? How has this benefited Anfield?
CD: Well, I was talking about the joint venture down at Binghampton Copper Queen, the primary Arizona copper asset. Blue Zen is a publicly traded company on the CNSX, and one of its principal shareholders is a Chinese billionaire who has a copper manufacturing business in China. He is also building a giant copper smelter in China and needs feed for it.
His plan is to vertically integrate, and he’s looking for assets that can help him fill the smelter, essentially. He liked our plan for Binghampton Copper Queen and thought that it would serve as a beachhead into the US and into Arizona in particular, because Arizona is the largest copper-producing state in the US. For him, now he’s got a partner in the US, he can continue not only working with us, but also working with other assets once he’s got his beachhead in Arizona. And we’re happy to work with him because another distinguishing feature for us is that he and his group want to take all of the copper that we can produce once we get to production, assuming that we get there.
As a junior with no resource in place already, it’s a very unique position to be in because to find an offtake partner at this stage is pretty incredible. There are a number of companies out there which have feasibility studies and are still seeking offtake partners and aren’t able to find them. So for us to have it today, it’s good for us.
CIN: Last question, what do you think is important for investors to look at when investing in junior copper miners?
CD: I think from our perspective, cash flow is very important. Cash flow is king. I think you need to look at assets where you have visibility on a return going forward. It’s very difficult nowadays as opposed to years ago when you could entice investors with the potential of a return in five years. I think an investor wants to know that there’s a real possibility of getting a return on his or her investment in the nearer term, and that is our goal. We’re all about cash flow, so whatever we can do to generate cash flow in the near term is the most important thing for us, and that’s why we’re following the model that we have in Chile. We’re going to follow the same model down in the US for our uranium assets.
CIN: Great. Thank you for taking the time to talk to us about Anfield today.
CD: Thank you.
Securities Disclosure: I, Teresa Matich, hold no investment interest in any companies mentioned.
Editorial Disclosure: Anfield Resources is a client of the Investing News Network. This article is not paid-for content.
Interviews conducted by the Investing News Network are edited for clarity. The Investing News Network does not guarantee the accuracy or thoroughness of the information reported. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
| Updated December 2015
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