Speaking with the Investing News Network (INN) at this year’s Prospectors & Developers Association of Canada (PDAC) conference, author Gianni Kovacevic shared his thoughts on the copper market, his favorite top stocks and what other commodities he is following this year.
In a previous interview with INN, Kovacevic shared his insights on the electric car revolution and its impact on the copper market. At PDAC, he explained why copper is not just an EV story.
“It’s really a story of global growth and the per capita copper consumption around the world,” he said. He also shared what he thinks is the only thing that could derail the copper story.
Kovacevic is also following other commodities this year, including battery metals, but he still believes copper will outperform them in the long term. Finally, Kovacevic, who is also executive chairman of CopperBank Resources (CSE:CBK), shared his top stocks in the resource sector.
Watch the video above to learn his thoughts on copper, battery metals and his must-own copper stocks this year, or read the transcript below. And don’t forget to check out the Investing News Network’s other PDAC 2018 videos.
INN: We are here at PDAC, day two. How are you finding the conference this year?
GK: Well on the temperature scale, lots of people here. There’s interests so I think people are taking more time in the meetings that I have personally. There’s more questions, lots of notes are being taken. There is a reception for this industry at this moment in my opinion.
INN: Last time we spoke, we were at VRIC and we talked about the future of copper and the electrification of the world. And you told us that the electric car side is just one part of that story. Can you share with our audience a little bit about what other uses will copper have in the future?
GK: Yes, it’s really a story of global growth and the per-capita copper consumption around the world. I’m talking about the smallest village in Africa to the developed cities around the world. The things that we buy increasingly so have an electrical cord stuck at the back of them. This requires copper within that product but also when you go up the process of energy the way we transfer energy and the way we generate energy is increasingly going to be electrification. So in my opinion, the per-capita copper consumption around the world is either going to have steady growth in the developed economies you know, with a higher amplitude. But it’s really going to pronounced in places like Africa, India and increasingly so still in China, people can’t believe it.
INN: Are there any factors that could derail the story for copper? Can something happen for copper not to perform at the level that you’re predicting?
GK: The CAGR for copper demand for copper since 1900 is about 3.5 percent. Then you get a little bit of times of where that didn’t take place. I believe what the only thing that can disrupt copper is a calamity in collective global growth. If that was to manifest itself this would be negative, we would not have demand for copper even though I believe there’s going to be an increase in the electrification of global energy. It would offset that. I don’t believe we’re in it going into an environment where we’re going to have negative global growth. Anything is possible but that is not what keeps me awake by night.
INN: And we know that you’re a copper bull, but are you interested in any other commodities this year?
GK: Well I’m interested in all the electric metals. I think that copper has not really participated perhaps. The valuations of the various companies like some of the other metals so I think still and it’s been sort of theme for the last three interviews I gave that you still want to look at copper equities. They are undervalued relative to the price of copper. In the past 15 months, copper went from a $2 a pound to now it’s $3. 10, $3.20 you know. Share prices haven’t really moved so I think you still want to be looking at copper equities.
INN: We have a lot of investors here that are interested in the exploration sector, the junior resource sector. What is your favorite stock in that space?
GK: Well I have a few that I like. I think we talked about the Maricunga and what the Lundin groups of companies are doing there. We talked about Southern Ecuador and what Ross Beatty and his team are doing there with Lumina Gold. And I have to also highlight CopperBank and some of my investors have been telling me, yes it’s an optionality story. So if you’re within junior mining, CopperBank is a school bus, you know, it’s not risky we bought, researched, a lot of money’s been spent on the projects we own, but it’s also a magic word, it’s growth. CopperBank is growth and optionality and it’s a creed of growth through exploration, through development and through the pounds on the ground strategy. We have a lot of people in our technical team and we are measuring and looking at how we can enhance our portfolio. This doesn’t take a lot of dilution but when the market normalizes, we’re ready to execute on those cost effective measures. So I think people need to look at CopperBank from a long term longer term perspective and of course don’t be conflicted it’s a company that I’m the largest shareholder of.
INN: And for investors that maybe more conservative, do you have particular stock pick in the copper sector?
GK: General investors are wandering up the food chain. Lundin Mining (TSX:LUN) has a lot of cash. What is this company going to do with this cash hoard? So I think that’s something that if you want to look at a blue chip copper stocks they’ve got copper and zinc and some other base metals. Let’s see what that company does in the coming months. I think we’ll have a nicer calm down.
INN: Finally Gianni, what’s next for you this year? Are you going to be talking in any other conferences?
GK: Yes. I am going to be traveling all over the world. I have a deep schedule and my book which is now 19,000 copies are on the street. And it’s hitting audible.com today, March 5th 2018. And I recently listened to the quality from my publishing house and the voice that was picked. And I think the themes that are discussed in my book are very relevant even more so now than they were 2 years ago when I did my initial book tour. And if people, you know, enjoy books, maybe they’ve seen my book but haven’t read it, audible.com hitting the streets today and it’s a very thematic if you’re interested in anything to do with electricity.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: 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.