Gold executive Steve Parsons has reemerged at the head of copper explorer Firefly Metals
\nHe says interest from institutions is showing how confident market watchers are that copper will see its day in the sun
\nEagle Mountain\u2019s Tim Mason sees support for copper explorers as supply shortages sink in<\/p>\n
Steve Parsons has made his name lifting the fortunes of micro cap gold explorers, striking lightning twice with Gryphon Minerals in Africa and then Bellevue Gold (ASX:BGL)<\/a> in WA.<\/p>\n But the gold bull\u2019s reemergence as the managing director Firefly Metals (ASX:FFM)<\/a> has shown his enthusiasm for copper, shifting the old AuTeco Minerals in the direction of the red metal having previously been focused on the Pickle Crow gold project in Canada.<\/p>\n It picked up the Green Bay project in Newfoundland in north-east Canada from administrators in August last year at a combined cost of $65m, only $35m of that in cash.<\/p>\n Since then copper has been in a holding pattern hovering between US$3.50-3.80\/lb but it is not somewhere analysts expect it being there for long.<\/p>\n Goldman Sachs expects prices to hit US$10,000\/t over the next 12 months, equivalent to around US$4.50\/lb.<\/p>\n Parsons said bullish institutions were long on the commodity despite the water its been treading in recent months.<\/p>\n \u201cWe\u2019ve had a lot of interest from a number of groups. So we\u2019re now 50% institutional of which half of those institutions are from North America and half from Australia, and typically they\u2019re resource long type institutions,\u201d he told Stockhead<\/em> on the sidelines of the RIU Explorers Conference.<\/p>\n \u201cSo they\u2019re very, very bullish on the copper price each of them.\u201d<\/p>\n \u00a0<\/p>\n Much of the excitement around copper has been not just on the demand side \u2014 S&P Global thinks the market for the metal will double against 2020 levels to 50Mtpa of refined copper by 2050.<\/p>\n But it\u2019s also come from production curtailments and mine closures in politically volatile Latin America, not the least the government shutdown of First Quantum\u2019s 350,000tpa Cobre Panama mine late last year.<\/p>\n \u201cAll the fundamentals are there especially when you read all that research. Over the next few months, the next three, 6, 12-month period you should see some really good price increases and \u2026 with those mines are having issues, especially in South America at the moment these mines being shut down,\u201d Parsons said.<\/p>\n \u201cIt all goes back to jurisdiction risk. <\/p>\n \u201cIf you\u2019ve got a project that\u2019s in a jurisdiction such as Newfoundland, Labrador in Canada, that\u2019s one of the top mining jurisdictions, it\u2019s very low risk on getting that type of a project up.\u201d<\/p>\n Green Bay contains 39.2Mt in resources at 1.85% copper and 0.5g\/t gold \u2014 equivalent to a 2.1% copper grade of 811,000t of copper metal.<\/p>\n Parsons views it as a strong candidate for revival in a higher price environment with $250 million of spending on infrastructure already sunk.<\/p>\n \u201cOfftake partner groups have approached us over the last few months,\u201d Parsons said.<\/p>\n \u201cThey all know that the concentrate is a very, very good concentrate that historically was produced on the mine at about 28 to 30% (copper) con with a gold credit on it, which is amazing. <\/p>\n \u201cWe\u2019ve already had several discussions with a few banks on debt funding, building the mine as well. So already people are coming out of the woodwork because they see the quality of the project.\u201d<\/p>\n \u00a0<\/p>\n To fill the gap in expected demand miners will need to identify and develop 10 replicas of the world\u2019s biggest copper mines over the next two or so decades, says Tim Mason \u2014 MD of fellow North American copper hopeful Eagle Mountain Mining (ASX:EM2)<\/a>.<\/p>\n That \u2018world\u2019s largest mine\u2019 \u2014 Escondida in Chile, literally named \u2018the hidden one\u2019\u2013 has not been repeated since it was opened in 1990, and that came nine years after its discovery.<\/p>\n It means it could be important to develop a larger number of smaller, high grade mines like EM2\u2019s Oracle Ridge project in Arizona, which contains 28Mt at 1.35% Cu.<\/p>\n \u201cDoubling copper output is talking about finding another 10 of the world\u2019s biggest copper mines and bringing them into production when they haven\u2019t even been found yet,\u201d Mason said.<\/p>\n \u201cArguably decarbonisation goals can\u2019t even work, because we can\u2019t actually physically find the metal that\u2019s going to be required.<\/p>\n \u201cThe other aspect is the cost of getting these projects out of the ground. There\u2019s a lot of existing mines, they\u2019re getting deeper, the cost to bring them out is getting higher. <\/p>\n \u201cSo grades are dropping, you\u2019re processing more material to get the same amount of copper out, pushing the cost of making that copper up.\u201d<\/p>\n At the same time, he said weak economic activity especially in Asia and China has hurt copper pricing given the metal\u2019s historic link to the health of the global economy.<\/p>\n Once stimulus measures kick in, Mason believes we will see a commensurate move in copper prices.<\/p>\n \u201c(Famous mine investor) Robert Friedland is talking about a tenfold increase in the copper price. That\u2019s almost akin to what we saw in lithium and uranium, absolutely going to the moon and I absolutely think that it can happen,\u201d he said.<\/p>\n \u201cI think we\u2019re still a few months away from (the uptick) occurring, but I think when it does, it\u2019s going to happen pretty quickly.\u201d<\/p>\n \u00a0<\/p>\n With costs rising across the sector, Mason thinks it is unlikely we return to early Covid lows of US$2.15\/lb, with higher prices needed to incentivise producers against a backdrop of deeper orebodies and salary increases.<\/p>\n Stockpiles are down to just days of supply as well, leaving downstream users exposed in the face of either mine or refinery supply shocks.<\/p>\n EM2 shares peaked at $1.25 as copper hit all time highs of US$10,700\/t in May 2021, a run powered by massive Chinese stimulus to counteract the impacts of its early Covid lockdowns.<\/p>\n Mason says once EM2 is in a position to consider making a decision to mine it should be able to take advantage of a rising market due to the historic quality of the Oracle Ridge concentrate.<\/p>\n \u201cI think 2025 is going to be very buoyant, especially for the copper market. So that\u2019s where I think the return for investments over the next six months to 18 months is where we\u2019re starting to see smart money coming in,\u201d he said.<\/p>\n \u201cObviously, it\u2019s hit everybody this current market, the good companies, the challenging companies or companies that have got nothing, everyone\u2019s been hit pretty badly. <\/p>\n \u201cSo I think unfortunately a few of these companies will really struggle. <\/p>\n \u201cBut the companies which have actually got assets and resources, copper in the ground are in a good position to actually get these projects into production like ours are going to be really well placed.\u201d<\/p>\n \u00a0<\/p>\n <\/span>\u00a0 The post Copper bulls are saying Robert Friedland\u2019s \u2018ten-fold\u2019 increase call can be a reality<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"Mine closures stir excitement<\/h2>\n
Where to find 10 of the world\u2019s biggest copper mines<\/h2>\n
Higher lows<\/h2>\n
Eagle Mountain Mining (ASX:EM2) and Firefly Metals (ASX:FFM) share prices today<\/h2>\n\n
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