Copper thread

Copper as a topic appears weaved throughout a number of other threads. Thought I'd start one for it as a focus.

Here are some initial thoughts:

Background

• The copper price hit an all-time-high of $US10,724 a tonne last month, notching an over 35 per cent gain since the start of the year. It is still up nearly 26 per cent, hovering just below $US10,000 a tonne.
  
• Price expectations are off the charts, with market watchers predicting the red metal could top US$33,000 ($42,507) a tonne before the end of the decade.
  
• Late last week the Democratic Republic of Congo (DRC) — the world’s leading producer of cobalt and Africa’s biggest copper producer — made good on a longstanding threat to ban cobalt and copper concentrate exports.
  
• After bottoming at US$1.95 per pound in early 2016, copper prices have more than doubled. Copper equities (as measured by the COPX ETF) have done even better, rallying over 200 per cent — more than twice the increase of the S&P 500.

Players:

• OZ Minerals’ (ASX:OZL) Succoth copper and Nebo-Babel nickel-copper prospects in the Musgrave Province of Western Australia and $1bn Carrapateena copper-gold mine.
• Peak (PUA): Peak Minerals (ASXUA), which has secured itself a first-mover advantage in an overlooked emerging copper province in Western Australia.
• Cohiba Minerals (ASX:CHK) has been busy making headlines next door to mining giant BHP (ASX:BHP) in South Australia’s Gawler Craton – a pretty good place to be if you want to make a new iron oxide-copper-gold (IOCG) discovery.
• Norwest (NWM): Rock chip sampling carried out by Norwest Minerals (ASX:NWM) in 2018. “The high-grade copper in recent surface samples and historical drillholes makes the 8-kilometre Bali shear zone an excellent WA copper exploration target which we intend to aggressively explore with first drilling expected to commence in Q3 CY2021.” returned an average grade of 6.3 per cent with a top result of 36.8 per cent.
• Hawkstone (HWK): Hawkstone is spinning off its gold and gold-copper projects into a new company to focus entirely on its Big Sandy Sedimentary Lithium project in Arizona. Hawkstone shareholders will also have the right to participate in a $3.5 million priority offer in Diablo’s proposed $6.5m initial public offering on the ASX priced at 20c per share.
• Kincora Copper (KCC) lit up the boards at the end of March following a heavily subscribed IPO. (CEO is ex Goldman's resource lead)
  
• QMines (ASX:QML) also recently made its debut following an IPO that saw it attract over $12m worth of subscriptions, beating its minimum target of $10m
  
• Another Lachlan Fold Belt (LFB) copper hunter, Askari Metals, is also lining up to join the ASX.
  The company, which is aiming to list by early July this year with an enterprise value of $2.77m, has a portfolio of five fully owned projects located in New South Wales and Western Australia.
• Xanadu Mines (ASX:XAM) has also started to take off again this year, with shares climbing 60 per cent since February to 4.8c this week. Last week the company revealed it hit a whopping 499m at 0.31 per cent copper and 0.39g/t gold (0.51 per cent copper equivalent) from 656m during drilling at its flagship Kharmagtai project in Mongolia.
• Peel (ASXEX) shares up 40-odd per cent over the past month. But the fundamental exploration success it has achieved at Wirlong has been as much as part of that story as well.
• Bryah Resources (ASX:BYH) Investors have demonstrated their belief in Bryah and its copper-gold exploration in Western Australia by committing to a $3.95m share placement. Notably, the placement price represents a miniscule 1.06 per cent discount to the 15-day volume weighted average price of BYH shares. Each share also includes a free attaching option that expires on 31 January 2023 and has an exercise price of 9c.
• Eagle Mountain (EM2): The red hot copper play is up ~580% over the past year on some outstanding drilling success around the high grade ‘Oracle Ridge’ mine in Arizona. Acquired by Eagle Mountain in 2019, the project was last mined in the 1990s and features 18km of pre-existing underground workings.

That's enough to get started, I think.

In terms of a core 80%/satellite 15%/speculative 5% spread, was thinking OZL/PUA/PEX. The HWK split with Diablo is interesting as well.

Thoughts?

 

This should be of interest to many who look at the '10 bagger' thread as well. Also copper often is found where Gold is- so at present prices for both Cu & Au it's a nice double bang for your buck No advice of course

 

Is there an ASX copper-focussed ETF?

 

Thanks for starting this new copper thread @d3outguncom

 

Because you do so much sewing?

 

May not be the wrong thread at all @geoffw. Could go in any direction

 

Here's another copper play...New World Resources (NWC)

It has a brownfields copper exploration play called Antler in Arizona (US). Last mining at Antler occurred in 1970. This is a pro mining jurisdiction with decent infrastructure (roads/rail) available. It has had recent good drilling intersections with more to come. It will also spin out its cobalt assets into a new ASX listed company. NWC shareholders will receive an in specie distribution of shares in the new listed company. Closed at 10.5c last Friday.

Broker valuation below says 30c price target (caveat though Cannacord Genuity did the recent capital raise for $20m at 10c a share so valuation could arguably contain a bias):-

https://newworldres.com/wp-content/uploads/CanaccordResearch03Jun21.pdf

 

Thanks @Ajax , good NWC article here: New World Resources running on bumper copper hits

 

Unfortunately @Baker looks like just the AU commodity ETFs:
Betashares QRE has 2% in copper with 34% in BHP, 11% in RIO
VanEck MVR with a %% holding in OZL and the big players (RIO, BHP, 7% each.)

If you trade the US market there are these 2 that track the copper price rather than miners:
There are 2 distinct copper ETFs that trade in the U.S. These ETFs track the price of copper and do not invest in copper mining companies. Copper prices have risen 93.9% over the past 12 months, as of May 5, 2021.1 By comparison, the S&P 500 has posted a total return of 49.0%, as of May 4, 2021.2 The best copper ETF, based on performance over the past year, is the iPath Series B Bloomberg Copper Subindex Total Return ETN (JJC).

There's also COPX in the US.

 

Cheers @d3outguncom , very informative.

 

Have a look at VXR, guys (Venturex)

Pilbara copper play based primarily on their sulfur springs project, also a stake in whim creek.

new guy at the helm - the legendary bill beament - has seen the share price rocket.

it’s had a rough week on the stock market, so getting back down into but territory.

i’ve got a small position myself, i’d add to it if it gets back down into the 60-70c range.

my buddy who invests professionally has 10% of his portfolio allocated to it after buying at 55c. I’m not that brave, but if you’re feeling bold there’s a lot of potential upside.

 

@Ajax , another good copper/NWC article: Guy on Rocks: I see red... metal supplies diminishing as Chile courts a leftie president - Stockhead

 

Copper dip starting:
copper prices: Copper hits 7-week low as funds, traders cut long positions - The Economic Times

 

China (buyer/user of 50% of global copper stocks) releasing reserves to force slowdown of copper, aluminium and zinc futures. They have less than 6 months reserves, so will either have to use them up to force prices staying low and buy at whatever the price is later in the year (unless they force manufacturers to reduce production and profit as they did with steel to force use/prices down), or slow down release of reserves once prices reach what they consider acceptable.

Either way, will play out by end of next quarter.

 

Looks like it's going into that range over the past few hours,as i have a small holding bought middle of 2000 for between 4-6 cents ..

 

Copper prices starting to rise, China has 4 months of reserves yet to release. AU copper stocks still dropping (OZL down 20%, SFR down 20%, etc)

Fund managers putting 2022-23 timeframe for return to peaks.

 

POS having a good run last few days.

 

Great article: The best way to play the coming copper boom

 

Another good article on China releasing reserves (13% released now), slow demand growth H22021: Key commodities and our preferred exposures