Experts agree, we need a lot more copper to reach net zero but with supply from large orebodies declining, little discoveries are not going to cut it.<\/p>\n
The world needs big discoveries like Ivanhoe Mines\u2019 sediment hosted Kamoa\/Kakula project in the DRC, the largest copper discovery ever made in the history of mining on the African continent.<\/p>\n
The two deposits jointly contain 43Mt of contained copper at 3.13%, which is extremely high-grade when you consider the average for most existing mines is barely 1%.<\/p>\n
It ranks among the 10 largest copper deposits in the world after the world\u2019s largest copper producing orebody \u2013 BHP\u2019s Escondida mine in Chile, Anglo American\u2019s Collahuasi also in Chile and Freeport Mason\u2019s Grasberg mine in Indonesia.<\/p>\n
Thing is,\u00a0Goldman Sachs thinks we\u2019ll need 8Mt of additional annual copper production by 2030<\/a>.<\/p>\n To put that into perspective, that means another eight replicas of Escondida which is why the majors are prepping for a copper boom.<\/p>\n So, where are the massive discoveries going to come from?<\/p>\n \u00a0<\/p>\n As it stands, porphyry and sediment hosted copper deposits make up 80-85% of the world\u2019s copper supply.<\/p>\n This is further broken down to 60% porphyry and 20-25% sediment-hosted with the remainder mostly from IOCG, VMS, Mt Isa, and magmatic base-metal PGE style deposits.<\/p>\n But with delays in major porphyry projects and more sediment hosted copper mines coming online, this ratio is beginning to change.<\/p>\n The difference between the two?<\/p>\n Porphyries are typically larger than sedimentary deposits but contain lower grades and are often perceived as \u2018capital intensive\u2019 projects due to the billions of dollars required to get them up and running.<\/p>\n Exploration is expensive too, often requiring numerous deep and very expensive drill holes into \u2018blind\u2019 exploration targets hidden under cover or at great depths.<\/p>\n That alone can be a challenge for most cash strapped junior companies before development even starts.<\/p>\n But while porphyries take the cake in terms of copper supply, Antilles Gold (ASX:AAU)<\/a> managing director Christian Grainger says sediment hosted copper systems are beginning to receive a lot more attention.<\/p>\n \u201cEspecially after the Kamoa\/Kakula discoveries in the DRC, which demonstrated these systems can be large, high grade, and mined underground very profitably,\u201d he says.<\/p>\n \u201cBut generally, the copper giants are large, low-grade and partly oxidised and are often found in places like northern Chile, Columbia, Ecuador and Cuba \u2013 all containing similar geological belts, terrains and ages of formation.\u201d<\/p>\n To meet the 8Mt of additional annual copper supply by 2030, Grainger says explorers need to look in \u2018frontier\u2019 type countries, where there has been little modern exploration.<\/p>\n \u201cCountries like Cuba, Columbia, Ecuador and the DRC have the potential to contain large, at surface discoveries as compared to the more mature destinations like Chile, USA, Australia, or Zambia,\u201d he says.<\/p>\n \u201cDiscoveries in mature destinations are possible but they will be either deep and\/or blind deposits given the amount of exploration already undertaken in these mature and well-known terrains.\u201d<\/p>\n Grainger is a geologist with +25 years\u2019 experience working across precious and base metal grassroots and brownfields exploration projects in South and Central America as well as the Caribbean.<\/p>\n His work has led to some impressive mineral discoveries such as the +10Moz Buritica deposit, Columbia\u2019s largest gold mine, and the +100Moz Alacran deposit, currently in development by Robert Friedland\u2019s Ivanhoe Electric\/HPX Group.<\/p>\n More recently, he has been based out of Cuba in his role at Antilles Gold which entered into two agreements with the Cuban Government\u2019s mining company \u2013 Geo Minera SA \u2013 to explore major copper deposits.<\/p>\n From his point of view, there are a few characteristics investors should look out for when it comes to a quality copper project.<\/p>\n \u201cUltimately a porphyry should be at surface so its amenable to open pit mining as deeper discoveries incur much higher development costs and longer lead times to get to production given the technical challenges of mining large volumes of ore from deep underground,\u201d he says.<\/p>\n \u201cIf it\u2019s at surface, you have the flexibility of a low-grade system with size or a smaller higher-grade deposit that can be developed rapidly.<\/p>\n \u201cThis is the case for all types of systems, you ultimately want higher grade deposits at surface and sediment-hosted copper-gold deposits can have both as well.\u201d<\/p>\n \u00a0<\/p>\n Over in North America, American West Metals (ASX:AW1)<\/a> is working hard at proving up its resources across two sedimentary-hosted projects in Utah and Canada.<\/p>\n Its Copper Warrior project is an extremely large sedimentary sequence within the same geological units as the 40Mt Lisbon Valley copper mine, roughly 15km to the southeast, in Utah\u2019s Paradox Basin.<\/p>\n The company has just commenced its first drill program at the project, comprising an initial 10 drill holes to downhole depths of less than 150m.<\/p>\n AW1 managing director Dave O\u2019Neill was part of the team that discovered the large Succoth copper-PGE deposit in Western Australia, now part of BHP\u2019s West Musgrave project.<\/p>\n Like all projects, he says copper projects come down to size and grade.<\/p>\n \u201cFavourable mining geometries, location and infrastructure, and metallurgy are also key variables to consider,\u201d he says.<\/p>\n\n \u00a0<\/p>\n But the narrative around resource scarcity and the green energy transition with EVs, renewables and the build out of electricity grids means a substantial copper supply gap is opening up over the next 10 years.<\/p>\n In fact, Robert Friedland \u2013 the billionaire chairman behind Ivanhoe Mines who made his fortune finding profitable deposits in remote areas \u2013 says this combination of factors suggests the world is heading for a train wreck in terms of copper supply from 2027.<\/p>\n O\u2019Neill believes this deficit could come much sooner and the development pace is unlikely to fill the gaps.<\/p>\n \u201cVery large porphyry copper deposits are only able to be realistically developed by the major mining companies due to their large capital requirement so I would argue that sediment-hosted copper deposits offer more potential for the smaller miners,\u201d he says.<\/p>\n \u201cIn terms of metrics for new discoveries, it\u2019s interesting to note that the average (50% percentile) size for sedimentary-hosted deposits is around 10-12Mt, at a grade of around 1.5-1.7% copper.<\/p>\n \u201cAnd in terms of exploration potential, they can be giant (>1Bt), and also usually form in clusters or mining camps that contain multiple deposits,\u201d he says.<\/p>\n Grainger reckons it all boils down to two main issues \u2013 a lack of exploration and sovereign risk by the greater population towards mining.<\/p>\n \u201cInvestors want rapid returns and low risk which has resulted in exploration on known regions and near existing or old mines, and therefore few discoveries in comparison to previous decades,\u201d he says.<\/p>\n \u201cThere\u2019s also a massive ignorance regarding mining, its benefits and how it is a pillar of modern society \u2013 we all know that society needs a lot more metals and fast, but society in general has forgotten, or has been told that mining is the enemy.<\/p>\n \u201cFrom discovery to large-scale development, copper projects can take up to 15 years to get off the ground so it\u2019s pretty obvious to us in the industry that copper supply can\u2019t just be turned on when required.<\/p>\n \u201cMaybe when an iPhone is $10,000 society will wake up to that?\u201d<\/p>\n \u00a0<\/p>\n There are plenty of examples of ASX explorers making a solid effort towards proving up copper resources with boots on the ground exploration and drill rigs spinning in search for large deposits.<\/p>\n \u00a0<\/strong><\/p>\n In Australia, the gold and copper-rich Macquarie Arc in central west NSW has long been touted as the country\u2019s foremost porphyry province.<\/p>\n It\u2019s home to a host of highly profitable world-class mines including Australia\u2019s biggest operating gold mine and one of the largest and lowest cost mines globally \u2013 Newcrest\u2019s Cadia operation \u2013 with an endowment of 50Moz of gold and 9.5Mt of copper.<\/p>\n Other deposits in the area include Alkane\u2019s (ASX:ALK)<\/a> Boda gold-copper porphyry discovery near Dubbo in the North Molong project, about 120km north of Cadia, with an inferred resource of 624Mt at 0.26g\/t gold, 0.14% copper for 5.21Moz gold and 900,000t of copper released in May 2022.<\/p>\n That\u2019s a large find by modern standards and well received by the market after almost three years and 71,400m of drilling since Alkane stirred interest with the initial discovery back in 2019.<\/p>\n In central Queensland, Alma Metals (ASX:ALM)<\/a> is looking to help plug this copper supply gap via its flagship Briggs project in Queensland, southwest of Gladstone.<\/p>\n Currently, the project holds a 415mt at 0.25% copper inferred resource.<\/p>\n During September, ALM wrapped up Stage-1 of the earn-in at Briggs, which is a JV with Canterbury Resources (Alma can earn up to 70%). The copper player has now committed to Stage-2, looking to spend $3m and earn up to 51%.<\/p>\n Meanwhile, BHP-backed Resolution Minerals (ASX:RML)<\/a> owns a massive 3,000km2 position in the new, under-explored geological frontier of the Northern Territory\u2019s South Nicholson Basin.<\/p>\n During August and September, RML completed three deep stratigraphic diamond core drill holes for a total of 2,002m at the Benmara battery metals project \u2013 the first phase of a multi-year program.<\/p>\n The program was fully funded via a farm-in and JV agreement with BHP who will spend up to $4m in stages over five years to earn an initial 51% interest.<\/p>\n \u00a0<\/p>\n \ufeff<\/span><\/span><\/span><\/p>\n New World Resources (ASX:NWC)<\/a> has said it will resume drilling at the high-grade Antler copper project in Arizona in the \u201cvery near term\u201d.<\/p>\n Antler currently has an 11.4Mt resource grading 2.1% copper, 5% zinc, 0.9% lead, 32.9g\/t silver and 0.36g\/t gold but further drilling could potentially grow the project\u2019s resources and boost the economics of the deposit.<\/p>\n Over at its Javelin project about 75km to the southeast of Antler and south of the large Bagdad copper deposit operated by Freeport McMoran, a drill permit application has been submitted with approval expected sometime this quarter.<\/p>\n Once this has been granted, drilling will begin across an identified IP anomaly which was outlined during reconnaissance mapping.<\/p>\n Down in Chile, advanced copper explorer Hot Chili (ASX:HCH)<\/a> is upscaling its already significant 2.8Mt copper, 2.6Moz gold flagship Costa Fuego flagship project in Chile with a move to acquire the nearby Comet asset.<\/p>\n Hot Chili says Costa Fuego is already\u00a0\u201cone of the world\u2019s lowest capital intensity major copper developments\u201d<\/strong><\/a>\u00a0and one of only a handful of projects outside of the control of major miners capable of delivering meaningful new copper supply this decade.<\/p>\n The company is now focused on upscaling Costa Fuego\u2019s resource base to support an increase in the copper production profile to 150,000tpa ahead of its Pre-Feasibility Study, which is expected to be delivered in the first half of 2024.<\/p>\n Up in Ecuador, Sunstone Metals (ASX:STM)<\/a> has a portfolio of high-quality gold and copper assets at the Bramaderos and El Palmar projects.<\/p>\n It\u2019s still early days on the El Palmar concession, but the company believes the potential is huge with multiple porphyry systems and mineralisation extending from surface at the T1 target exceeding 1,100m and copper grades greater than 0.2%.<\/p>\n A second drill hole at the large T3 target also intersected a strongly mineralised porphyry gold-copper system at depth returning up to 0.11% copper, indicating the company is onto another significant discovery and perhaps a district-scale opportunity with multiple close-spaced and mineralised porphyry centres across T1, T2, T5 and the yet to be tested T4 target.<\/p>\n \u00a0<\/p>\n \ufeff<\/span><\/span><\/span>\u00a0<\/p>\n At Stockhead<\/em> we tell it like it is. While Antilles Gold, American West Metals, Alma Metals, Resolution Minerals, New World Resources and Hot Chili are Stockhead<\/em> clients, they did not sponsor this article.<\/p>\n <\/span><\/p>\n The post Got copper? Here are the stocks looking to make a dent in the supply deficit<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"The copper giants <\/strong><\/h2>\n
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What makes a quality copper project?\u00a0<\/strong><\/h2>\n
The dearth of new large copper discoveries <\/strong><\/h2>\n
Who\u2019s looking for a copper giant? <\/strong><\/h2>\n
In the land of OZ <\/strong><\/h2>\n
Copper explorers in OZ share prices today:<\/h2>\n\n
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North and South America <\/strong><\/h2>\n
North and South America copper explorers share prices today:<\/h2>\n\n