Copper Stocks: Short-Term Pain for Long-Term Gain

Source: Streetwise Reports  (11/17/23)

Despite stockpiles of copper growing quickly, analysts polled at London Metal Exchange Week believe the red metal will bring good returns in the long run. 

Taylor Combaluzier of Red Cloud Securities has rated the stock a Buy with a target of CA$2.15. He said World Copper has “transformed from an explorer into a developer with a portfolio of high-quality copper projects in premiere copper mining jurisdictions.

“We believe Escalones shows compelling economics when compared to other copper development projects and that it offers lots of potential for resource expansion,” he wrote. “Additionally, we believe Zonia has lots of untapped potential, as it could either be rapidly developed for nearer-term production or potentially be expanded through exploration to increase the scale of the project.”

Zacks Small-Cap Research analyst Steven Ralston has a CA$0.59 per share target price on the junior mining company. Its share price on Friday, in comparison, was CA$0.065 per share, implying a potential return for investors of more than 800%.

Earlier this year, World Copper filed an updated mineral resource estimate (MRE) for Zonia. It increased total resources by about 90% to about 198 million tonnes from a 2017 estimate, with contained copper increasing by 55% to about 1.03 billion pounds.

Escalones is about 100 kilometers from Santiago. Its PEA (preliminary economic assessment) estimates an inferred resource of 426 million tonnes of 0.367% copper, containing 3,447 pounds of copper.

Coming catalysts include permitting for Escalones and a preliminary feasibility study (PFS) of Zonia’s main deposit.

Wealth Minerals Ltd. (WML:TSX.V; WMLLF:OTCQB) owns about 15.8% of World Copper or about 19.2 million shares. About 27% is owned by management and insiders, including Director Robert Kopple with 11.84% or 14.8 million shares and Board Chairman Hendrik van Alphen with 2.67% or 3.25 million shares. CEO Peterson said he holds about 700,000 shares. The rest is retail.

Its market cap is CA$8.13 million. It has 125 million shares outstanding, including 87.2 million of them free-floating. It trades in a 52-week range of CA$0.26 and CA$0.07.

Granite Creek Copper Ltd.

Another play for copper is Granite Creek Copper Ltd. (GCX:TSX.V; GCXXF:OTCQB), “a Canadian exploration company focused on the acquisition and development of highly prospective brownfields assets in top districts of favorable North American mining jurisdictions,” according to its website. It is a member of the Metallic Group of Companies, along with Metallic Minerals and Stillwater Critical Minerals.

Per a 2023 PEA, its Carmacks Project has the potential for significant additional cash flow from the processing of oxide tailings to increase total copper recovery.

The company has also identified additional near-mine exploration targets that have the potential to increase the resource from the current 36 million tonnes grading around 1.07% copper equivalent.  The project currently has a mine life of nine years, at 7,000 tonnes per day (TPD), and any further expansion into the surrounding area could significantly extend that operational lifespan.

Recently, the company announced the preliminary results of a metallurgical study designed to increase the recovery of copper from oxide material at Carmacks, with up to 81% of the copper present in the test samples going into solution.

A Couloir Capital research report referred to Granite Creek Copper as a “promising base metals explorer with a near-term target of reaching a billion pounds of copper at its Carmacks Copper Project.”

Bob Moriarty of 321gold.com said Granite Greek was “a really easy call.”

“Green energy requires enormous quantities of copper, lithium, and graphite, far more than today,” Moriarty wrote. “Prices will have to go up. Granite Creek Copper is in the catbird’s seat, ready to move to production.”

Moriarty wrote that he’s “not a big expert on copper, but Granite has to be one of the lowest market cap copper stories with a real asset.”

Management and insiders own 5.71% of the company. Timothy Johnson owns 2.54% of the company with 4.08 million shares, Robert Sennott owns 1.84% with 2.96 million shares, Michael Victor Rowley owns 1.07% with 1.71 million shares, and John Charles Richard Cumming owns 0.26% with 0.42 million shares.

There are 160.77 million shares outstanding, with 151.59 million free-float traded shares. The company has a market cap of CA$5.63 million. It trades in the 52-week period between CA$0.03 and CA$0.105.

Fabled Copper Corp.

Fabled Copper Corp. (FABL:CSE) has continually seen high grades of copper in fieldwork results from its Muskwa Project in British Columbia.

One float sample taken at about 1,600 meters elevation contained massive sulfides and quartz veining with 60% chalcopyrite, 3% bornite, and 23.4% copper (Cu). Another sample at the western side of the occurrence found “a staggering” 29.3% Cu.

“We’re finding all this high-grade mineralization,” President and Chief Executive Officer Peter Hawley said. “So that’s a pretty good hint that, you know, we’re, we’re very close to the source . . .  It’s not very often you see high-grade numbers like this.”

Muskwa is in northwestern British Columbia near the Yukon border. It consists of the Toro, Bronson, and Neil claim blocks. All three were explored in the early 1970s before rockslides and snowfields arrested further development. One vein was developed and partly mined — 498,000 tons were milled with a head grade of about 3% Cu.

On the same day as the 29.3% Cu sample, 11 other samples were collected over an altitude of 158 meters. Of the 12 collected, 11 assayed greater than 0.5% Cu, seven greater than 10% Cu, and four greater than 20% Cu.

Fabled has applied for 15 drill sites at the project, including four in the Eagle Vein area. Negotiations with First Nations continue.

According to Yahoo Finance, about 3% of the company is held by insiders. They include Director Luc Pelchat with 1.19% or 210,000 shares, David Smalley with 0.86% or 150,000 shares, and President and CEO Hawley with 0.65% or 110,000 shares, Reuters said.

The rest, 97%, is retail.

Fabled Copper’s market cap is CA$870,000, with 21.75 million shares outstanding, 21.28 million of them floating. It trades in a 52-week range of CA$0.105 and CA$0.03.

Important Disclosures:

1. World Copper Ltd., Granite Creek Copper Ltd., and Fabled Copper Corp. are billboard sponsors of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000. In addition, Fabled Copper Corp. has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Fabled Copper Corp.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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