Copper remains the bellwether metal for the global economy, with a plethora of companies at all levels offering investors exposure and upsideMarch, and then recovering to hit a 12-month high of just under US$3.00 in early July.
In a sense, then, it has been doing what it’s always done best: serving as a bellwether for the wider global economy. Back in March, when lockdown fever swept the world, the outlook for the global economy was bleak to say the least, but by July, with the Chinese economy just about back to normal, and the US and Europe at least attempting to get back onto an even keel, the outlook had turned much more positive.
August is traditionally a slow month across financial markets, and so it’s not surprising to see the price weakening slightly, but equally it would be unsurprising to see a renewed bout of strength as the year closes, stimulus money begins to feed through into actual purchases, and the copper bulls once again feel they have a story to tell.
After all, the case for copper never goes away. It’s in the wiring in our homes, in our electronic devices, and most significantly for the medium term, it’s attaining an increasing prominence in our vehicles, as electric vehicles swallow up far more of the stuff than their oil-driven counterparts.
With all that in mind, it’s not surprising to see that the major copper mining companies have also hit the comeback trail, and that investors’ minds are beginning once again to turn to the mid-tiers and the juniors to see if any particular opportunities jump out that them.
The top copper companies by production are the Chilean parastatal Codelco, Freeport-McMoRan (NYSE:FCX), Glencore (LON:GLEN), BHP Billiton (ASX:BHP)(NYSE:BHP)(LON:BLT), Southern Copper (NYSE:SCCO), Rio Tinto (LON:RIO)(NYSE:RIO)(ASX:RIO), KGHM Polska Miedz (WSE:KGH), and Anglo American (LON:AAL).
A good many of these companies are valued on the basis of the mixed basket of commodities that they produce, with only Southern Copper really jumping out as a bona fide copper proxy. But since Southern Copper is independent of Grupo Mexico only in name – the mining conglomerate holds 88.9% of the shares – there are few ways to play copper right at the top end of the equities market. For that, you need to look further down.
The first obvious port of call in London is Antofagasta (LON:ANTO), another Chilean miner with a strong pedigree and a solid track record.
Elsewhere, the choice is more varied, and we present a choice, but by no means exclusive selection here for your delectation.
One obvious place to start is with a company founded by the greatest promoter in the mining industry, Robert Friedland. Turquoise Hill Resources Ltd. (TSE:TRQ) is no longer the favoured vehicle of Mr Friedland, but it was partly thanks to him and the work of Turquoise Hill that one of the biggest new copper projects in the world was opened up at Oyu Tolgoi in Mongolia. Turquoise Hill still works here, in conjunction with the Mongolian government and Rio Tinto.
Also involved in Mongolia, and at times with vehicles associated with Mr Friedland, is Kincora Copper (CVE:KCC). The company has significant exploration ground in Mongolia and has made serious progress over the past few years, albeit that the recent focus has been on gold in Australia.
Elsewhere, Quaterra Resources (CVE:QTA) offers exposure to copper, with its assets in Yerington, Nevada. These assets the MacArthur, Yerington and Bear deposits. It also holds a 90 percent interest in the Groundhog copper prospect in Alaska.
Elsewhere, Oroco Resource (CVE:OCO) is operating the Xochipala gold project and the Santo Tomás porphyry copper projects, both of which are in Mexico.
Adventus Mining (TSXV:ADZN) is focused on copper-gold exploration and development in Ecuador. There was some slow down at the company’s projects during the coronavirus crisis, but in June, exploration activities restarted, with a feasibility study also on its way at Curipamba-El Domo.
Kaizen Discovery (TSXV:KZD) is focused on exploration in South America. The company is majority-owned by HPX, another Robert Friedland company. Kaizen has the Pinaya copper-gold project in Peru as its core focus.
Ero Copper Corp (TSE:ERO) owns a majority stake in a long-standing copper production mine in Brazil.
Camino Minerals (CVE:COR)(USOTC:CAMZF) was spun out of Canplats Resources in 2010 and is focused on copper and gold projects in Peru, though it also has assets in Mexico, the US and Canada. The flagship asset is the Los Chapitos copper-gold project, which covers 200 square kilometres near Chala in the south.
Carube Copper (CVE:CUC) is focused on exploring and developing copper and gold projects in Jamaica and Canada. In Jamaica, Carube holds full interest in 11 licenses totalling 535 square kilometres, while in Canada, it holds full interest in three porphyry copper-gold-molybdenum properties within the Tertiary-aged Cascade magmatic arc of southwestern British Columbia.
Copper Fox Metals (CVE:CUU)(USOTC:CPFXF) is focused on exploring and developing copper projects in Canada and the USA. The most notable is the 25% interest in the Schaft Creek joint venture which it holds with Teck Resources (TSE:TECK.B)(NYSE:TECK) in northwestern British Columbia. It also owns the Van Dyke in-situ-leach, oxide copper project in Miami, Arizona.
Copper Mountain Mining (TSE:CMMC)(USOTC:CPPMF) owns the Copper Mountain mine in southern British Columbia, which produces 90 million pounds of copper equivalent per year. The project has a 26-year mine life, following a recent expansion.
Peruvian Metals (CVE:PER)(USOTC:DUVNF) changed its name from Duran Ventures in September 2018 to better reflect its focus on completing the final stages of commissioning its mineral processing plant in northern Peru and developing its exploration property portfolio in the country.
The company’s exploration properties in the country include the Mamanina porphyry copper project, although initial cashflow is likely to come through an 80% interest in the Aguila Norte process plant, located just off the Pan American highway near the large city of Trujillo in northern Peru.
Hannan Metals (CVE:HAN) is focused on the San Martin copper-silver project about 30 kilometres northwest of Tarapoto, Peru, in the Cordillera Ayu Mayo mountain range. The company considers itself a first mover in a new frontier basin-scale copper district.
Max Resource (CVE:MXR) has two sedimentary hosted copper silver targets are Cesar and La Guajira in Colombia. The company also holds gold exploration licenses in the Choco area and porphyry copper-gold in North Choco.
Aurania Resources (CVE:ARU) has its flagship asset at the Lost Cities-Cutucu project, in the Andes foothills in south eastern Ecuador.
Finally, for the Canadians, Kodiak Copper (CVE:KDK) is a newly created vehicle with assets in the US and British Columbia. The company has recently been drilling on its MPD project in BC.
Over in Australia, the action is no less hot.
Other notable participants include Alkane Resources (ASX:ALK), which recently discovered what could be a massive porphyry gold-copper system in Central New South Wales. Not long after, Stavely Minerals (ASX:SVY) made a huge copper discovery at its namesake project in Victoria. Then, in December, Legend Mining (ASX:LEG) said it had discovered a significant nickel-copper intercept in Western Australia’s Fraser Range.
Elsewhere, Chalice Gold Mines (ASX:CHN) has hit high-grade nickel-copper-palladium with the first-ever drill hole into the Julimar project, about 60 kilometres from Perth in Western Australia.
Meanwhile, OZ Minerals is sinking A$36mln into a copper joint venture with Cassini Resources (ASX:CZI) at the West Musgrave project in Western Australia. This should take the project to a decision to mine.
In May, OZ Minerals also agreed to carry Minotaur Exploration (ASX:MEP) through to production at the Jericho copper project.
Sandfire Resources (ASX:SFR) is another well-known company on the Australian copper scene. The company has show itself to be acquisitive recently, moving into Botswana in a big way, with the acquisition of MOD Resources. It’s also taken a stake in White Rock Minerals (ASX:WRM) in a deal which injected A$2.5mln into White Rock.
Caravel Minerals (ASX:CVV), meanwhile, reckons it has the largest undeveloped copper resource in Australia. A scoping study is the first proper look at whether a resource can be mined economically.
PolarX (ASX:PXX) owns the Alaska Range project, covering 261 square kilometres of State Mining Claims. Lundin Mining has already put A$4.3 million into a PXX drilling program and could potentially put in over A$40 million to earn a 51% interest.
And last, but not least, for those who like a London listing, there’s Taseko (LON:TKO), Castillo (LON:CZZ)(ASX:CZZ), Metal Tiger (LON:MTR), Kavango (LON:KAV), Pembridge (LON:PERE) and Rambler (LON:RMM).
It’s a mixed bunch, but with such a variety, there’s something available for every type of copper bull there is.