King advised market participants to look at large players in the copper market, but didn’t discount smaller companies.
The copper price has reached new all-time highs this year, and investor interest in the metal is heating up. But what’s the best way to get exposure?
Speaking to the Investing News Network, Byron King, who writes Whiskey & Gunpowder at St. Paul Research, which is part of Agora Financial, said looking at major miners is key right now.
“If you want to make money off of the current copper price … then you need to be in the really big companies,” he said, mentioning names such as Freeport-McMoRan (NYSE:FCX), BHP (ASX:BHP,NYSE:BHP,LSE:BHP), Glencore (LSE:GLEN) and Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO).
While King advised market participants to look at large players, he didn’t discount smaller companies.
“We’re in a really hot time for copper — you can make some really nice money if you’re in the right place at the right time with the juniors,” he explained. “The intermediates you’re going to do very well, and the big guys are already doing very well.”
However, it’s important to be aware of how long it takes for projects to move from discovery to production — a fast-moving project could take 15 years, while a normal project could take 20 to 25 years.
“If you want to invest in juniors … you’re not going to catch this cycle,” King said in the interview. “What you might catch is sort of an upswing of the early days of excitement of discovery. (So) don’t forget to sell along the way, because it takes years to turn an incredibly good discovery into a working mine.”
He also spoke about the copper supply and demand situation, noting that demand is strong not only from China, but also from other parts of the world. Meanwhile, the world’s largest mines are depleting.
“(These dynamics) are the recipe for higher prices for copper, they’re the recipe for really promising junior-type exploration or early stage development companies to do very well,” he said. “They’re a recipe for mergers and takeovers in the big copper and intermediate-size copper (companies).”
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Western Copper and Gold (TSX:WRN,NYSEAMERICAN:WRN), which is mentioned in this interview, is a client of the Investing News Network. This article is not paid-for content.
The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. 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.