Western Copper and Gold CEO Paul West-Sells talks about copper’s role in electrification and the importance of having a gold asset.
In the interview below, West-Sells discusses the role that copper is expected to play in the green revolution, as China continues to roll out its green initiatives. He also touches on alternative conductors to copper, but doesn’t believe that any of them will replace the metal. According to West-Sells, the price of copper could soon receive a boost if the adoption of EVs becomes more prominent.
West-Sells also provides an update on Western Copper and Gold’s Casino project in the Yukon, Canada. The company completed a feasibility study for the property in 2013 that returned robust economics. The property currently has a proven and probable reserve of 8.9 million ounces of gold and 4.5 billion pounds of copper with upside potential. According to West-Sells, this could make the company an ideal acquisition target for gold companies looking for a large gold deposit.
Below is a transcript of our interview with Western Copper and Gold CEO Paul West-Sells. It has been edited for clarity and brevity.
Investing News Network: Please give our investor audience an overview of the copper market.
Western Copper and Gold CEO Paul West-Sells: It has been a great year for copper. Our share price took a beating at the end of 2018, but 2019 is off to a good start. We’ve had movement in the market because gold and copper prices are up. People have come up to me and told me that they think copper will hit US$3 [per pound] tomorrow, and I think it will.
The copper story is simple. Electrification and EVs are driving demand. China is launching electric bus fleets the size of London’s entire bus fleet every six weeks. On the supply side, we’ve had depressed copper prices for seven years. No one has built any new mines. Now that the price of copper is rising, new mines will come online, such as the one we’re developing.
INN: Is there a substitute for copper?
PW-S: It’s not going to be replaced by anything, including new batteries. There are several types of battery technology out there, but copper is essential to all of them. Electric motors, for example, contain four times the copper that a regular vehicle has. That’s not even including the charging infrastructure and electricity grids. There are other metals involved, but copper is a safe bet because it’s essential to electrification.
INN: Will the EV market continue to grow?
PW-S: The market is currently 3 percent, but the sky’s the limit. Each year they revise their projections and they keep going up. Analysts aren’t saying that people are adopting EVs at a slow rate, it’s the reverse. I put my money where my mouth is and bought a Tesla last year and I love it. My “gas station” is in my house. It’s easy.
INN: Why is copper essential to the efficient transfer of electricity?
PW-S: The physical nature of copper makes it a good conductor. It’s not the best conductor, gold is, but copper is a close second and the one we’re going to use. The only other alternative is aluminum, which has a 25-percent loss in transmission and power. Aluminum wiring was used in homes and one caught on fire, so it’s been banned and won’t be replacing copper anytime soon.
INN: When will the copper market take off?
PW-S: Copper prices started going up in 2018 and reached US$3.20. Then Trump placed the tariffs on China and the market pulled back, but we’re now seeing it rise again, even without tariff news. Copper is essential to the green economy. It’s producing electricity in cars and electrifying everything else. It’s the new green metal.
INN: Copper also has applications for solar and wind power, correct?
PW-S: Absolutely. Wind turbines contain an astounding amount of copper because they are essentially motors in a generator. Again, it’s going to be a big part of electrification and EVs. At our Casino project, we have 10 billion pounds of copper.
INN: Please give our investor audience an overview of the company’s Casino project in the Yukon.
PW-S: We’ve been developing the Casino project for about a decade. It’s located in the mining-friendly Yukon. Canada has a history of mine building, and Western Canada is home to numerous big, established copper mines, such as Teck Resources’ (TSX:TECK.B,NYSE:TECK) Highland Valley copper project and Taseko Mines’ (TSX:TKO,NYSEAMERICAN:TGB) Gibraltar mine.
We completed a feasibility study in 2013. We’re currently working on permitting. This year, we’re going to drill some more. It’s a billion-tonne reserve, and there’s more mineralization there. Following the drilling, we’d like to release an updated feasibility study.
INN: What are Western Copper and Gold’s long-term goals?
PW-S: This is a $2.5-billion-capital-cost project. It’s too big for a junior mining company like us to do alone. We’ll look for a partner when the right time and deal comes along. We’ve had interest from others due to the price of copper. First, we’d like to update our feasibility study and get our permitting done before we bring on a partner.
INN: What are your gold reserves and prospects?
PW-S: Copper comprises half of the projected revenue from our mine, and close to 40 percent is gold. Our resource contains 18 million ounces of gold, but half of that is in the reserves and we’re adding to it with drilling. After drilling, we’ll have over 10 million ounces of gold in the reserves, which is important.
We’ve been seeing big mergers between companies like Barrick Gold (TSX:ABX,NYSE:GOLD), as well as Newmont Mining (NYSE:NEM) and Goldcorp (TSX:G,NYSE:GG). These companies need big gold deposits and we have one. The Casino deposit is a big gold-copper asset with a fair amount of permitting and good economics. We have a 24-percent initial rate of return on the project.
We’re also in a stable jurisdiction, which isn’t the case for some of our peers. Over a year ago, Trudeau made an investment into the infrastructure in the Yukon. There are three road projects and one of those roads goes to the Casino mine.
INN: Is there anyone on your management team that you’d like to highlight?
PW-S: Our Chairman Dale Corman leads the team. He has been in the industry for a long time and has been involved in the sale of Western Silver and the Penasquito mine to Goldcorp. The Penasquito mine is actually the largest revenue generator for Goldcorp. It’s a lower-grade lead–zinc-silver-gold mine that was sold to a gold company. We’d like to do the same thing. Our engineering team also worked at the Penasquito mine and is now working on Casino.
INN: Why should investors invest in Western Copper and Gold?
PW-S: If you like copper, buy our shares. The economics for copper are simple, and if prices hit US$3.50, our share price is likely to go up. The history of our share price is good. There could even be a bonus when we bring in a partner or if we sell the company.
There are not a lot of copper assets out there. We have one in a good jurisdiction with a large gold deposit. When I saw the big gold mergers I said, “this is great for our company because these companies need big gold assets.” We have that big gold asset as well.
This interview is sponsored by Western Copper and Gold (TSX:WRN,NYSEAMERICAN:WRN). This interview provides information which was sourced by the Investing News Network (INN) and approved by Western Copper and Gold, in order to help investors learn more about the company. Western Copper and Gold is a client of INN. The company’s campaign fees pay for INN to create and update this interview.
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