The Conversation (0)
True North Copper Investor Kit
- Corporate info
- Insights
- Growth strategies
- Upcoming projects
GET YOUR FREE INVESTOR KIT
True North Copper
Overview
True North Copper (ASX:TNC) is entering a transformative and exciting phase as we become Australia’s next copper producer. It’s 2024 and we’re ready to mine our Cloncurry copper project - low-cost, low-risk, fully funded and permitted.
Our next mine is the Vero resource at our Mt Oxide project. We are committed to developing and understanding this phenomenally mineralised project. Exploration and mining studies are underway.
Copper demand is rising, in a market of diminishing supply. The global surge in artificial intelligence, electric vehicles, decarbonisation initiatives, and broader macro trends is intensifying the demand for copper.
True North Copper is ready.
Company Highlights
True North Copper is preparing to become Australia’s next copper producer.
True North Copper's two principal assets are located in northwest Queensland, Australia - a Tier 1 Jurisdiction:
- Cloncurry Copper Project (CCP) - IOCG and ISCG copper-gold deposits proposed for open pit mining operations, with extensive surrounding exploration tenure.
- Mt Oxide Project (Mt Oxide) – IOCG high-grade, globally significant, copper-cobalt-silver deposit subject to re- optimisation studies, and exploration in surrounding tenure.
Cloncurry Copper Project (CCP)
- Mining restart study confirms positive CCP project economics - AU$367 million with free cash flow of AU$111 million, and a pre-tax NPV10 of AU$88 million over a 4.6 year mine life, at US$8,500 per ton copper price and US$1,850 per ounce gold price (0.7 AU$:USD exchange rate).
- Wallace North Mine preparation and mobilisation. Wallace North is scheduled as the first open pit (one of four – Wallace North, Great Australia Mine [GAM], Taipan and Orphan Shear) to be mined as part of the mining restart at the CCP.
- Mining ramp-up will initially build ore stockpiles, with mining expected to start Q4 FY24(AUS). Oxide copper-gold ore will be transported by road train to the Cloncurry Operations heap leach. Sulphide ore will be transported to a nearby concentrator for toll treatment under TNC's toll-milling agreement with Glencore.
- CCP’s total reserves increased. TNC’s Cloncurry Copper Project (CCP) total reserves currently include 4.7Mt probable ore reserves grading 0.80 percent copper and 0.13g/t gold, containing 37.5 kiloton of copper and 20.0koz of gold.
Figure: Cloncurry copper project and Cloncurry operations hub
Mt Oxide Project
- Highly prospective and underexplored. Phenomenally mineralised system.
- Exploration results from True North Copper's maiden diamond drill program across MT Oxide’s Vero Resource not only returned outstanding and globally significant grades but also showcase the expanding nature of the Vero high-grade ore body including:
- 66.50 metres @ 4.95 percent copper, 32.7g/t silver and 685 ppm cobalt from 234.00 metres
- [inc.] 20.60 metres @ 10.51percent copper, 63. g/t silver and 1,149 ppm cobalt from
234.60 metres and - [inc.] 8.55 metres @ 6.03 percent copper, 51.6 g/t silver and 98 ppm cobalt from
290.15 metres
- [inc.] 20.60 metres @ 10.51percent copper, 63. g/t silver and 1,149 ppm cobalt from
- 66.50 metres @ 4.95 percent copper, 32.7g/t silver and 685 ppm cobalt from 234.00 metres
- Vero Resource re-estimation and mining studies 2024.
- Vero Resource under tested to depth and along strike.
- Multiple exciting future exploration programs and high-priority potential targets along the 10 kilometres long mineralised trend that hosts Vero.
Figure: Cross-section of MOXD217 (10 metres clipping window) showing the location of geological and grade composites as well as the updated interpretation of copper grade domains based on the results from MOXD217
Funding and Strategic Partnerships
- AU$42 million (US$28 million) USD-denominated senior secured loan facility (loan facility) with Nebari Natural Resources Credit Fund II LP (Nebari)1. The Loan Facility is provided in two tranches. Drawdown of Tranche 1 – US$18M (approximately AU$25.5 million) on 9 February 2024.
- Binding offtake and toll-milling agreements with Glencore International AG(Glencore) for 100 percent of copper concentrate from TNC’s Cloncurry copper project (CCP) and toll-milling services of up to 1Mt of ore per year for the CCP’s Life of Mine (LoM).
Figure: Visual representation of Vero Resource within surrounding Mt Isa Inlier.
TNC 2024 Exploration Program
- Aggressive discovery strategy targeting transformative discoveries across TNC’s more than 850 sq km of tenure package within the Mt Isa Inlier.
- Significant potential for transformative discoveries of
copper-gold cobalt-silver) in three districts. - Numerous high-quality copper-gold-cobalt-silver targets located with mineralised structural corridors within the eastern & western fold belts such as:
- Cloncurry Fault Corridor 🡪 Host to the GAM and Mt Norma Resources
- Ernest Henry Corridor 🡪 Ernest Henry, E1 Camp and Monakoff
- Mt Gordon Corridor 🡪 Capricorn Copper and Vero
- Mt Roseby Corridor 🡪 Little Eva and Blackard.
- 12.55 Mt @ 0.82 percent copper (indicated and inferred resources).) and multiple prospects located within a 30-kilometre radius of the company's Cloncurry copper project represent near-term production advantage. Recent JV over highly prospective tenements with CMG deal increase TNC’s land position at the core of its Cloncurry copper project.
- TNC awarded the Queensland Government Collaborative Exploration Initiative (CEI) Grant. The CEI grant will be used towards delivery of leading edge MIMDAS induced polarisation, resistivity and magnetotellurics geophysical surveys at the Mt Oxide. The exploration aims to identify massive and disseminated sulphide mineralisation and deliver an improved understanding of the large-scale structural architecture that controls mineralisation throughout the Mt Oxide exploration leases.
Figure: Summary of exploration and development pipeline across all TNC projects.
Projects
Cloncurry Copper Project
Our Cloncurry copper project (CCP) hosts iron oxide copper-gold (IOCG) and iron-sulphide-copper-gold (ISCG) deposits with extensive surrounding exploration tenure. It is built on a strong economic basis and low-risk cost structure.
The CCP currently incorporates two reserves where mining will commence including – the Wallace North maiden resource and the Great Australia mine reserve (GAM):
- GAM includes GAM, Orphan Shear and Taipan deposits) totalling 4.7Mt grading 0.80 percent copper and 0.13g/t gold containing 37.5kt of copper and 20 koz of gold – upgrade to be announced mid-2024.
- Wallace North ore reserve totals 0.7Mt (probable) grading 1.01 percent copper and 0.46g/t gold for 6.8kt copper and 10 koz gold.
TNC’s CCP expansion is ongoing with exploration progressing and advanced projects in strategic locations surrounding the existing CCP operation, promising long-term growth prospects.
Our strategic partnerships, including a binding offtake and toll-milling agreements with Glencore International AG, supported by debt funding secured with Nebari, underscore our operational readiness and position TNC to capitalise on an extremely favourable copper market.
Mining operations will kick-off at the Wallace North open cut pit, targeting higher-grade ores (~1 percent copper) from surface mining. Ore will undergo primary crushing at the Cloncurry operations hub and the toll treatment facility, located within a 40km radius, with a predominant focus on sulphide ores.
All necessary permits for mining are secured across the CCP, bolstered by an established environmental monitoring network with a robust historical database.
TNC's operational strategy involves a phased approach to mine development, with plans to commence mining operations in 2024 and manage capacity ramp-up throughout 2025.
Cloncurry Operations Hub
The Cloncurry operations hub is strategically located to the CCP’s four open pit deposits including: Great Australia, Orphan Shear, Taipan and Wallace North.
The COH is located 2 kilometres from the township of Cloncurry and provides essential infrastructure, technical systems and support to all of TNC’s project operations. An active oxide heap leach and solvent extraction (SX) processing plant, mine buildings, site administration facilities, workshops, open pit mine facilities, onsite explosive magazines, site storage, water management systems and existing site power supply are located at the COH.
Cloncurry Copper Project – Project Economics
- Mining 4.8Mt of ore over an initial 4.6 year mine life, at a low strip ratio of 4.2, delivering 35kt copper and 29 koz gold contained metal (based on existing JORC reserves)
- Anticipated mine revenue of AU$367 million with free cash flow of AU$111 million, and a pre-tax NPV10 of AU$88 million, demonstrating strong operating economics at US$8,500/t copper price and US$1,850/oz gold price (0.7 AU$:USD exchange rate).
- Payback expected within six months post mining restart, driven by favourable commodity prices and low all-in sustaining cost (AISC) of US$2.65/lb copper.
- Low up front capex of AU$1.5 million leverages existing infrastructure, while peak operating expenditure is estimated at AU$2.2 million.
- Sulphide and oxide ore production – two copper products. copper sulphide (LoM approx. 90 percent) + copper sulphate (LoM approx. 10 percent).
- Mineral concentrate grade 22-26 percent copper (with gold/silver credits).
- Sulphide Ores more than88 percent expected recovery.
- Transitional Ores more than 77 percent expected recovery.
- Very low deleterious elements in mineral concentrate.
Cloncurry Copper Project – Exploration 2024
- CCP expansion and exploration focused on rapid copper-gold-ore source growth.
- With more than 80 prospects located within a 30-kilometre radius of the CCP, TNC is focused on significant expansion and the exploration potential for additional copper-gold-cobalt-silver mineralisation to be brought into the production fold including large-scale company transformative major discoveries.
- Thanks to our successful 2023 Exploration Program we have identified through a systematic approach, and analysis at a mineral system scale, the following new targets:
- Cloncurry Copper Project - eight new drill targets at Greater Australian and Copperhead in new Induced Polarisation.
- Salebury and Rocklands South - Compelling untested geophysical anomalies in historic data.
- Mt Norma- untested surface anomalies and down plunge resource extension targets on mining lease within 30 kilometres of the Cloncurry operations hub.
- Wynberg, Notlor, Marimo Trend and Tanbah limited historic exploration significant copper-gold in surface sampling and drilling, limited testing.
Figure: High priority exploration targets at the CCP
Mt Oxide Project
The Mt Oxide project hosts the Vero resource of 15.98 Mt @ 1.43 percent copper(measured, indicated and inferred) a Mt Isa style sediment-hosted copper-silver-cobalt system. Analogues include Capricorn copper and Mt Isa copper.
The Vero resource at our Mt Oxide project is our next mine. We are focused on understanding this phenomenally mineralised system.
Mt Oxide’s Vero Resource 2023 exploration program returned outstanding and globally significant grades. The program included our 2023 maiden drilling program across the Vero resource and results showcased the expanding nature of the Vero high-grade ore body.
During 2024, TNC will be exploring multiple, exciting high-priority exploration targets along a 10 kilometres mineralised trend that hosts Vero.
We will also be delivering during 2024 the Vero Resource re-estimation and mining optimisation and feasibility studies.
Vero Resource maiden drilling program
In 2023, TNC completed an initial 12-hole diamond drilling program at Mt Oxide designed to confirm historical high-grade intersections and test the depth and strike extensions to the existing Vero Resource.
2023 Vero resource drilling highlights included (* = Estimated True Width):
MOXD217 returned phenomenal results that placed the drill hole in the top globally ranked copper drill holes of 2023 including :
- 66.50 metres (48.00 metres*) @ 4.95 percent copper, 32.7 g/t silver and 685 ppm cobaltfrom 234 metres.
- 11 metres (8.19 metres*) @ 3.06 percent copper, 34.2 g/t silver and 682 ppm cobalt from 357.50 metres.
- 8.55 metres (8.55 metres*) @ 6.16 percent copper, 45.9 g/t silver and 140 ppm cobalt from 172.50 metres.
MOXD221 intercepted a wide interval of high-grade shallow dipping mineralisation as well as a second deeper intercept, providing indications of rapidly increasing grade and widths of mineralisation to the south including:
- 42.10 metres (41 metres*) @ 1.66 percent copper, 13.5 g/t silver and 1,083 ppm cobalt from 154.90 metres.
- [including] 4 metres (2.24 metres*) @ 7.65 percent copper, 57.3 g/t silver and 1,164 ppm cobalt from 191.20 metres.
MOXD226A returned three key zones of strong mineralisation including a broad interval of 69.95 metres and further intervals of up to 11.19 percent copper.
Highlights include:
- 69.95 metres (42.85 metres*) @ 1.91percent copper, 17.7g/t silver and 675 ppm cobalt from 224.55 metres
- [including] 9.65 metres (5.89 metres*) @ 2.74 percent copper, 24.1g/t silver and 993 ppm cobalt from 239.50 metres
- [including] 18.15 metres (11.07 metres*) @ 3.23 percent copper, 26.8g/t silver and 585 ppm cobalt from 276.35 metres
- 16.75 metres (16.75 metres*) @ 5.30 percent copper, 44- g/t silver and 120 ppm cobalt from 165.25 metres
- [including] 4.65 metres (4.65 metres*) @ 11.19 percent copper, 93.9g/t silver and 136 ppm cobalt from 172.55 metres
Figure: Location of geological and grade composites as well as the updated interpretation of copper grade domains based on the results from MOXD226A
Mt Oxide Discovery Strategy
TNC is committed to unlocking Mt Oxide’s underexplored high-quality targets.
- Mt Oxide lies adjacent to a large crustal scale structure - the Mt Gordon Fault Zone. Splays off this structure (Dorman Fault) host Vero.
- Mt Oxide has evidence of large-scale fluid flow, big mineral system potential.
- Copper-silver-cobalt mineralisation interpreted to have been formed near surface and upper parts are preserved.
- Excellent depth potential of mineralisation in the Mt Oxide project.
- Limited systematic modern exploration outside of the Vero resource.
- Significant opportunity to apply leading-edge mineral exploration to build a larger copper inventory in a well-endowed mineral system.
- More than 10 kilometres trend along Dorman fault zone of intermittently outcropping gossanous / silica breccias, virtually no drilling, surface sampling or effective geophysics.
- Multiple untested targets with significant alteration-mineralisation footprints.
- No application of tried and tested geophysics or systematic surface rock chip geochemistry and mapping.
- Low cost highly effective exploration techniques to filter and prioritise drill targets.
Multiple exciting future exploration programs and high-priority potential targets along 10km long mineralised trend that hosts Vero including:
- Aquila & Mt Gordon
- Ivena North
- Camp Gossans
- Cave Creek
- Big Oxide
Figure: Multiple exciting future exploration programs and high-priority potential targets along the 10-kilometre long mineralised trend that hosts Vero resource’s Mt Oxide project.
Management Team
Ian McAleese - Executive Chairman
Ian McAleese worked as a mine geologist at Mt Isa, Jabiluka and Bougainville for 15 years before moving into copper concentrate marketing on Bougainville. On returning to Australia in 1987, he worked initially as a mining analyst and subsequently as a portfolio manager specialising on investment in mining companies for a number of large investment institutions. McAleese then returned to the mining industry in business development and investor relations roles for a number of coal mining companies, including Macarthur Coal and Whitehaven Coal. After retiring from Whitehaven Coal in late 2020, he joined Duke Exploration as a non-executive director just prior to the Duke Exploration IPO. In December 2022 he became the non-executive chair of True North Copper.
Bevan Jones - Managing Director
Bevan Jones is a seasoned operations officer offering nearly 30 years of experience in mine management across a diverse range of commodities and has a proven track record in directing business improvement initiatives and operational transformation. Jones’ previous roles include chief operating officer at Karora Resources (TSX:KRR), as well as general manager of Gold Fields Limited’s (JSE:GFI) St Ives Gold Mine in WA, where he executed transformative growth strategies and delivered exceptional operational results. Most recently, Jones was the managing director at Brisbane-based Extra Mining Solutions, where he played a leading role in establishing the company focusing on business transformation and operational excellence. Jones gained international operational experience as chief operating officer of BCM Group International in West Africa, general manager of the Wetar Copper Mine in Indonesia and general manager of the Hidden Valley Mine in Papua New Guinea, as well as mining manager of Barrick Gold’s Lumwana Copper Mine in Zambia.
Craig Gouws - Chief Financial Officer
Craig Gouws, a chartered accountant, has extensive Australian and international experience as a CFO and board of director with a demonstrated history of successfully leading financial operations across diverse industries and international markets. Gouws holds a Bachelor of Commerce and a Post Graduate Diploma in Accounting from the University of Cape Town and is a fellow of the Institute of Chartered Accountants in England and Wales and a member in South Africa.
Marty Costello - Executive Director, Business Development
Marty Costello is recognised as one of Australia’s leading project development and sustainability strategists across the resource sector, with more than 20 years of professional experience.
After working for several companies and government departments (domestic and international) managing, developing and implementing environment, sustainability and risk (ESR) programs and policies he established his own environmental consultancy – Northern Resource Consultants (NRC).
In the space of nine years, Costello developed NRC into an industry specialist with more than 25 employees focusing on environmental management and sustainability solutions for the resource sector. NRC delivered agile, best practice ESR strategies and multi-disciplinary environmental and sustainability services for clients like Evolution Mining, Futura, Sojitz, Adani, Red River Resources, CU River Mining, and others.
In 2018, NRC was acquired by SLR, a global leader in environmental and sustainability solutions. The acquisition facilitated considerable additional capability and geographic coverage to SLR’s existing mining and minerals in Asia Pacific business. During his consulting life, Costello was retained by Evolution Mining over an eight-year period to provide strategic project development, ESG advice to the board and executive management team.
Costello holds a Bachelor of Applied Science (environmental management) and Diploma of Applied Science.
Peter Brown - Chief Operating Officer
Peter Brown has held senior management roles in the resources sector, both domestically and internationally, including recent positions at Round Oak Minerals and Diatreme Resources where he oversaw project development and operations. Brown has diverse experience and an impressive track record that demonstrates his ability to successfully deliver projects and foster positive relationships with all project stakeholders.
He has managed discovery programs for gold, copper and chromite in South America, Japan, Vietnam and Indonesia, including government and community relations. He also drove improvements and provided training in mine geology, resource evaluation and mine technical services at prominent mines such as Mt Muro Gold Mine, George Fisher Mine and Peak Gold Mines. Additionally, Brown played a significant role in reviving abandoned satellite projects at Peak Gold Mines.
Other achievements include successfully re-permitting and constructing the 1-Moz Toka Tindung Gold Mine in Indonesia as director of Indonesian companies and general manager at Archipelago Resources; leading the permitting, engineering redesign and construction of the 0.8-Moz Mt Carlton Gold Mine in Queensland; the successful development of Mt Carlton and Pajingo projects, which contributed to the establishment of Evolution Mining; and recommissioning and developing several mining projects in the Mount Isa and Cloncurry region.
Sven Sewell - Sustainability & Net Zero Manager
Sven Sewell has over 25 years’ experience working in a range of environmental fields, including environmental consulting, environmental regulation and within the industry.
For the 15 years prior to joining TNC, Sewell held senior environmental positions at several operating mines across northern Australia. At those operations, he was generally the most senior environment, responsible for all aspects of permitting, compliance, rehabilitation and general environmental management. Sewell's experience in northern Australian mines includes several new and established gold, uranium and bauxite operations.
Sewell holds a BSc (with honours) in environmental science.
Mark Brown - General Manager, Cloncurry Operations
With more than 30 years of domestic and international mining industry experience, Mark Brown offers a comprehensive skill set grounded in practical resource sector execution and invaluable leadership experience. His career journey has been marked by a commitment to safety, operational excellence, and fostering positive work cultures.
Brown has held a variety of senior leadership operational roles throughout his career, overseeing various aspects of mining operations. He has extensive experience across all mining regulatory and compliance aspects and has expertise in health and safety management including emergency response, crisis management, contractor management, and comprehensive incident investigations.
Michelle Ellis - Cloncurry Projects Exploration Manager
Michelle Ellis retains over 15 years’ mineral exploration, resource and mining experience predominantly in iron-oxide-copper-gold deposits and terrains across South Australia and Northwest Queensland.
Over the past 11 years, she has actively explored a range of commodities and deposit styles throughout the Mount Isa Inlier.
Ellis has an MSc in economic geology, MSc in environmental management and BSc in applied science - geoscience, and is a member of the Australasian Institute of Mining and Metallurgy.
Rhonda Freeman - Group Manager (Human Resources)
Rhonda Freeman has more than 18 years’ experience attracting top talent, fostering employee development and helping organisations develop safe and supportive work environments. She has worked extensively across the resource sector, including for large national-wide drilling companies.
Freeman has worked for mining companies across a variety of geological settings including brown coal, black coal, uranium, mineral sands and oil & gas. She brings a diverse skill set specific to the resource sector, having worked across all commercial aspects of drilling operations including as an exploration manager.
When Will Copper Go Up? (Updated 2024)
“Most analysts are modeling growing deficits in the copper market balance by 2027-2028, with a near-term forecast (2024-2026) hinting at surpluses until then; however, recent developments suggest a shift toward deficits by late 2024 due to production shortfalls by large producers," Joe Mazumdar of Exploration Insights said via email.
These concerns have driven copper to highs several times in recent years. A copper supply/demand imbalance sparked a record-breaking rally in 2021, pushing prices to a then all-time high of US$10,724.50 per metric ton (MT) — a record that the metal broke in March 2022, when it hit US$10,730.
20 year copper price chart.
Chart via Federal Reserve Economic Data.
Copper had pulled back to about US$8,000 by mid-August 2022 on growing fears of a global recession. In early 2023, prices mounted a campaign to breach the US$9,300 level, once again giving market watchers a reason to believe highs for the metal would soon to be retested. However, that reason soon faded as rising interest rates dampened the outlook for copper-dependent industries globally. China's ongoing real estate crisis also hit copper demand hard in 2023.
With the demand picture unclear, copper couldn't hold above the US$9,000 level. As a result, it went on a slide, reaching US$7,910 as of early October 2023. Copper managed to close the year close to the US$8,500 mark.
This trajectory continued into the first quarter of 2024, keeping copper trading in a range of US$8,000 to US$8,500. Recent production curbs out of top Chinese copper smelters are also helping to support prices.
The closure of First Quantum Minerals' (TSX:FM,OTC Pink:FQVLF) Cobre Panama copper mine last year and Anglo American (LSE:AAL,OTCQX:AAUKF) revised 2024 copper production target were also significant factors behind copper's price momentum.
It began climbing in earnest in Q2 on building anticipation that the Federal Reserve may soon launch its rate cut cycle alongside a worsening supply side picture. On May 20, 2024, the price of copper reached its highest recorded price of US$5.20 per pound, or US$11,464 per MT.
However, the price of the base metal moved back under US$10,000 by the end of the month.
Is the optimism of an impending bull market for the red metal still warranted? Let’s look at the current supply and demand factors that could influence copper prices to the upside.
Green energy in driver’s seat for copper demand
Copper’s many useful properties have translated into demand from diverse industries. Construction and electronics have long been the main drivers for copper demand, and with a conductivity rating that's second only to silver, it’s no wonder copper is also an ideal metal for use in energy storage, electric vehicles (EVs) and EV charging infrastructure.
Energy storage may prove to be one of the most copper-intensive markets in the 21st century. According to a 2022 report on the future of copper by S&P Global Market Intelligence, “The rapid, large-scale deployment of these technologies globally, EV fleets particularly, will generate a huge surge in copper demand.”
The firm is projecting that global refined copper demand will nearly double from 25 million MT in 2021 to about 49 million MT in 2035. Energy transition technologies are expected to account for nearly half of that demand growth. “The world has never produced anywhere close to this much copper in such a short time frame,” the firm notes in its report.
China is the world's largest consumer of the metal, and unsurprisingly its zero-COVID policy wreaked havoc on its economy and demand for copper. When China ended that policy in early 2023, it contributed to the boost seen in copper prices at the time. However, repercussions continue to be seen in the country, particularly in its real estate market.
China's property sector turmoil is in its third year, with housing starts down by more than 60 percent compared to pre-pandemic levels, as per the International Monetary Fund. However, analysts are starting to call for a bottom as China's aggressive efforts to energize the sector slowly right the ship — property investment in China fell by just 9 percent year-on-year in the first two months of 2024, compared with a 24 percent fall in December 2023, reported Reuters.
Property sector aside, copper demand out of China is likely to get a boost from the Chinese government's commitment to investing in its electrical infrastructure and green energy economy.
This push can be seen in ongoing structural reforms intended to secure the nation's place as a global economic powerhouse — these include the Made in China 2025 and China Standards 2035 initiatives. A part of the country's 14th five year plan, these policies target sectors that are heavily reliant on copper, such as 5G networks, robotics, electrical equipment, EVs, industrial internet, intercity transportation and rail systems, ultra-high-voltage power transmission and EV charging stations.
While the next five-year plan is still in the works, there are indications that measures to achieve carbon neutrality and increase renewable energy consumption are still very much a part of China's long-term economic objectives.
On the EV side, S&P Global projects that sales in China will reach 11.5 million units in 2024, up 22 percent from 2023. The country's photovoltaic market is also expected to remain strong in 2024.
The EV market is a growing global source of demand for copper outside China as well. As the Copper Alliance has noted, EVs can use three to four times as much copper as an internal combustion engine passenger car.
Automakers are making large investments in growing their EV production capacity, with some even looking to secure copper supply. Last year, McEwen Copper, a subsidiary of McEwen Mining (TSX:MUX,NYSE:MUX), received a US$155 million investment from Stellantis (NYSE:STLA), the fourth largest carmaker in the world.
Watch the full interview with Rob McEwen and Michael Meding above.
In a recent interview, Rob McEwen and Michael Meding discussed McEwen Copper's plans to release a feasibility study for the company's Argentina-based Los Azules copper project by the first quarter of 2025.
Companies struggling to keep copper supply coming
Of course, demand is just one side of the story for copper prices. For more than a decade, the world’s largest copper mines have struggled with steadily declining copper grades and a lack of new copper discoveries.
The alarm bells have been ringing for a few years now. In a mid-2020 report, S&P Global Market Intelligence metals and mining analyst Kevin Murphy painted a “dismal” picture for copper mine supply. He stated that out of the 224 copper deposits discovered between 1990 and 2019, a mere 16 were discovered in the last decade. These circumstances have led to questions about whether peak copper has arrived.
The COVID-19 pandemic further exacerbated challenges in the global copper supply chain as both mining and refining activities in several top copper-producing countries were slowed or halted altogether. The economic uncertainty also led miners to delay further investments in copper exploration and development — a complicating factor given that it can take more than 15 years to develop a newly discovered deposit into a producing mine.
Speaking at the Prospectors & Developers Association of Canada (PDAC) convention in March 2024, Murphy discussed another factor influencing new copper supply coming to market: inflation. He presented data highlighting how inflation has hamstrung the mining sector. In 2023, exploration budgets for all metals totaled US$12.8 billion, down 3 percent over the previous year.
Murphy also suggested that current economic trends are not only preventing projects from entering the pipeline, but also sandbagging current projects.
“Drilling has been in a downtrend as well, and it’s a bit worse than budgets in 2023, which indicates some inflation has hit the mark," he stated. "It’s a hard industry. The standard is about 3 percent, (and) at the moment we’re thinking that budgets are probably down 5 percent (in 2024)."
Supply instability out of the world’s largest copper-producing countries, Chile and Peru, has also weighed heavily on the market in the past few years. Together, they represent a combined 40 percent of global output.
In Chile, some of the world’s biggest copper miners, including BHP (ASX:BHP,NYSE:BHP,LSE:BHP) and Anglo American (LSE:AAL,OTCQX:AAUKF), are facing royalty rate increases due to a tax reform bill. The country is also dealing with water woes as drought intensifies, causing tension for miners that rely on water to pump copper to the surface, and for the smelting and concentration processes.
To the north, in Peru, copper miners have been nervous about the sociopolitical unrest following the impeachment and jailing of former President Pedro Castillo in December 2022, including protests against the mining industry.
However, mining investment is still alive and well in Peru, especially when it comes to copper, and current President Dina Boluarte supports the industry. According to EY, "Of the new mining investments, US$38.5 billion is expected to be allocated to mining projects in Peru, with copper projects accounting for 72 (percent) of the total."
The supply side of the copper market is also being impacted by production challenges out of some of the world’s major producers. Facing sociopolitical pressure, First Quantum Minerals had to shut down its Cobre Panama mine in late 2023; it accounted for about 350,000 MT of annual global copper production.
Furthermore, Anglo American revised down its 2024 copper production target to a range of 730,000 to 790,000 MT of copper compared to the previous guidance of 1 million MT. This was due in large part to production shortfalls at its Los Bronces copper mine, which is expected to continue into 2025.
Bull market for copper or bust?
So when will copper go up? Together, strong demand and tight supply can create the right market environment for higher prices.
Copper’s strong rally in recent years has encouraged the idea that even higher copper prices are ahead, which could be a golden opportunity for junior copper companies in the long-term. At a Vancouver Resource Investment Conference copper panel, one speaker explained why this segment of the metals market has piqued his interest.
“I’m a copper bull, it’s a long-term performing asset, but 'quality' is what you have to add to the phrase, and I think copper is essential. As we all see the population growth, modernization, electrification, it’s going to be a key metal going forward,” said panelist Ivan Bebek, chairman of Torq Resources (TSXV:TORQ,OTCQX:TRBMF).
"Copper is the new oil," declared Jeff Currie, chief strategy officer of Energy Pathways at Carlyle, during his mid-May Bloomberg TV interview. The analyst is pointing to the explosion of AI technology, the energy transition and military spending as top drivers of copper demand that could push prices for the red metal up to US$15,000 per MT in the near future.
The Bank of America sees potential for copper prices to reach US$12,000 per MT for 2026. As demand is set to increase, the bank's analysts have said the severe lack of new copper projects is "finally starting to bite."
For its part, Citigroup (NYSE:C) is also projecting a copper price of US$12,000 by 2026 in its base-case scenario on higher demand for the red metal from the green energy revolution. The firm's analysts do see a more bullish case for US$15,000 copper over the next two to three years in the event of a strong economic recovery.
This is an updated version of an article first published by the Investing News Network in 2021.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Melissa Pistilli, 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.
Boosting North America's Copper Supply
Understanding these measures, as well as copper's supply and demand dynamic, is essential for anyone seeking to invest in this important metal.
Unstable, unsustainable supply chains
Copper prices rallied significantly over the past year, increasing from US$3.75 per pound in December 2023 to US$5.15 per pound around the beginning of May 2024.
What's more, copper prices on May 20 reached a record high of US$5.20 per pound, effectively freezing out Chinese spot trading for a day before closing at US$5.11. Analyst firm Morningstar has even referred to copper as the new oil.
A complex mixture of supply and demand issues drive the copper price today. There are several critical factors contributing to the dynamic price changes:
- Chinese economic recovery
- Supply chain disruptions (mine closures, poor production, labor issues)
- Inadequate production growth
- Rising demand from electric vehicles and green energy
- Falling demand from housing construction
While these factors can force short-term fluctuations in the copper price, most analysts agree that the long-term trend appears to be upwards.
In a May 23 Financial Times article, veteran hedge fund manager and commodities trader Pierre Arnurand said that what we've witnessed this year is only the beginning. He predicts copper prices could increase by as much as 288 percent over the next few years. This demand, says Arnurand, will be driven both by traditional applications, such as power infrastructure, and emerging ones, such as electric vehicles, wind farms, solar panels and the defense sector.
The digital economy will also play an incredibly important role in driving copper demand, particularly artificial intelligence.
A single server rack in an AI data center, for instance, will draw up to 60 kilowatts of power. In contrast, a traditional data center rack usually tops out at roughly 15 kilowatts. Powering and maintaining these facilities will require a massive volume of copper, increasing demand by up to 1.5 percent in the US alone.
Electric vehicles are even more copper hungry, with the International Energy Forum projecting that full electrification will require that copper production increase by as much as 55 percent.
According to the Energy Information Administration, sources of renewable energy like wind and solar use between 2.5 and seven times more copper per unit of power — copper demand from these two sources alone is projected to reach 600,000 MT by 2040.
Giant bank BMO Capital Markets projects copper demand could reach 40.4 million metric tons per year by 2030, with a compound annual growth of 3 percent.
In addition to falling short of projected demand, the current copper supply is heavily impacted by permitting issues, political risks, environmental impacts and development challenges, effectively slowing the pace at which new mines come online. These issues are also heavily impacting supply chains. Moreover, the increasing instability of supply from South America is already causing a shortage, one which analysts predict could last until at least 2030.
"In early 2024, data from underperforming copper mines from 2023 and the Panamanian government shutdown of the Cobre Panama Mine brought the ongoing copper supply issue front and center," explains Matthew Badiali, CEO of Quetzal Copper (TSXV:Q). "And while we saw a rapid rise in the copper price, it was hardly unprecedented in the commodity space. Historical context shows that copper could run much higher."
Boosting domestic copper production
Copper is part of both the Canadian federal government's C$4 billion Critical Minerals Strategy and the Inflation Reduction Act in the US. These strategies from both governments include multiple tax incentives for sustainability, mining and exploration. In Canada, for instance, provincial mining taxes and royalties related to mineral resource income are fully deductible on federal income tax.
The Canadian government also provides favorable capital cost allowances, allows exploration expenses to be claimed at a 100 percent deduction, and allows development expenses to be deducted at 30 percent. The government also offers a C$1.5 billion critical minerals infrastructure fund and investment tax credits of 30 percent for exploration activities.
In addition to these tax benefits, Canada offers the Mineral Exploration Tax Credit (METC), a 15 percent non-refundable tax credit that can be applied by investors against tax they would otherwise pay for a year and may be carried back three years and carried forward 20. In 2024, Deputy Prime Minister and Minister of Finance Chrystia Freeland announced that the current METC, set to expire on March 31, 2024, will instead be extended through 2025.
In the US, the Inflation Reduction Act provides a US$7,500 per vehicle consumer tax credit when purchasing electric vehicles from select suppliers. By 2026, 80 percent of all EV components will need to be extracted and processed either in the US or with one of the country's free trade partners. If at least half of a battery's components are manufactured or assembled in North America, there is also an additional US$3,750 tax credit.
Most notably, the legislation extends additional loan guarantees of up to US$40 billion to support critical minerals projects.
Together, these incentives are being leveraged by junior mining companies to fuel a new wave of exploration and development in highly prospective regions, such as BC and the Yukon. Already, there are many different copper projects at varying stages of development across North America.
Below, we've listed a few of the more promising investment possibilities.
Princeton
Located immediately north of the Copper Mountain mine, Quetzal Copper’s 11,500 hectare Princeton copper property houses multiple promising anomalies, including three drill-ready targets. Quetzal identified Bud South and Knob Hill as particularly high-priority targets — both have standout geophysical anomalies with supporting trenching and drilling data. Drilling is set to commence in 2024.
Quetzal has the option to earn 80 percent interest in the Princeton project, as well as the option to earn a 100 percent interest in the Big Kidd and DOT properties near Merritt, BC.
Black Butte
Notable for being one of the world's highest-grade undeveloped copper projects, Black Butte is 87 percent owned by Sandfire Resources (ASX:SFR) subsidiary Sandfire Resources America (TSXV:SFR,OTCQB:SRAFF). Sandfire intends to combine best-practice technology and modern mining techniques to develop Black Butte into an underground mine that has a minimal environmental impact and a low surface footprint. In February 2024, Sandfire scored a major win on the project when the Montana Supreme Court reversed a 2022 decision to invalidate its mining permit.
Murray Brook West
Owned and operated by Canadian Copper (CSE:CCI), Murray Brook West is an underexplored project located adjacent to the Murray Brook deposit. Due to the fact that it is situated between the Caribou and Restigouche mines, the property is highly prospective for copper. Future work at the property will involve comprehensive exploration and drill target development, including prospecting activities geared toward identifying potential mineralization.
Investor takeaway
Copper is arguably one of the most critical minerals to both electrification and the clean energy transition. Unfortunately, current copper supply is not keeping pace with demand. In order to change that, governments are working to incentivize further exploration and development with the goal of developing a stable domestic supply.
In North America, this represents a considerable investment opportunity — anyone interested in adding copper properties to their portfolio would do well to pay attention.
This INNSpired article is sponsored by Quetzal Copper (TSXV:Q). This INNSpired article provides information which was sourced by the Investing News Network (INN) and approved by Quetzal Copperin order to help investors learn more about the company. Quetzal Copperis a client of INN. The company’s campaign fees pay for INN to create and update this INNSpired article.
This INNSpired article was written according to INN editorial standards to educate investors.
INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.
The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Quetzal Copper and seek advice from a qualified investment advisor.
Potential Extension to 8 Mile Dam Gold Deposit Outlined by IP Survey at Gidji JV
- IP survey outlines potential extensions to 313koz 8 Mile Dam gold deposit
- Significant aircore EOH gold results above IP anomalies offset by faulting
- Drill testing at 8-Mile planned after maiden Bangemall Ni-Cu-Co-PGE drilling campaign
A recently completed IP survey at the 8-MileTarget (Figure 1) has extended the chargeability anomaly offset from the northern end of the 8 Mile Dam gold deposit and which underlies multiple significant aircore end of hole (EOH) gold results (Figure 2).
Miramar’s Executive Chairman, Mr Allan Kelly, said the new IP anomaly was shallower than expected.
“It appears the 8 Mile Dam deposit could continue for some distance to the north but has been offset by faulting, including at the tenement boundary,” he said.
“The fact that we have multiple aircore holes ending in elevated gold over the IP anomalies strengthens this theory,” he said.
“It’s also pleasing to see that the northern part of the IP anomaly is shallower than expected,” he added. “We look forward to drill testing this high priority target later in the year,” he said.
Figure 1. Collecting IP data at Miramar’s 8-Mile target.
Figure 2. IP anomalies and aircore EOH gold results in relation to the 8 Mile Dam gold deposit.
Background
According to publicly available data, the 8 Mile Dam gold deposit (7Mt @ 1.4g/t Au for 313,977oz1) comprises shallow supergene and deeper primary gold mineralisation hosted in:
- Quartz-carbonate-sulphide veins within hanging wall sediments; and
- A hydrothermally altered mafic unit cut by quartz veins with sphalerite, chalcopyrite and visible gold
Figure 3 shows a cross section through the deposit, approximately 60m south of the tenement boundary.
Click here for the full ASX Release
This article includes content from Miramar Resources Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
True North Copper Investor Kit
- Corporate info
- Insights
- Growth strategies
- Upcoming projects