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A Sneak Peek At What The Insiders Are Saying
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Copper Outlook 2023
Copper Price 2022 Year-End Review
Click here to read the previous copper price update.
Copper prices were under pressure in 2022, trending downwards during the second half of the year.
Even though the red metal hit its highest level on record in March, trading above US$10,400 per tonne, it was unable to retain that price. Falling on softer demand in top producer China, the second half of the year proved challenging for the base metal.
With 2022 rapidly drawing to a close, here the Investing News Network (INN) takes a look at copper trends for the year, including how prices performed and what analysts said about developments in the space each quarter. Read on to learn more.
Copper price in Q1: Prices hit all-time high
Copper kicked off 2022 trading at US$9,720.50 and was able to remain above the US$9,500 threshold for the entire quarter.
In late February, Russia’s invasion of Ukraine raised uncertainty in global markets, including copper. Russia is the seventh largest copper country in the world by production.
“The biggest surprise has been that copper prices have not changed much in Q1, while many other commodities have shot higher in response to the Russian invasion of Ukraine,” Dan Smith of AMT, a London Metal Exchange metals dealer, told INN back in March. “Copper rose by 6 percent, but this is compared to a 24 percent jump in the aluminum price.”
Copper’s highest point of the quarter came on March 4, when the base metal was sitting at US$10,674.
Copper’s price performance year-to-date.
Chart via the London Metal Exchange.
In Q1, top consumer China imposed new lockdown measures to contain rising COVID-19 cases. This created significant headwinds for demand, as construction activity slowed and consumer spending was hampered, Smith said.
Looking over to supply, restriction measures related to COVID-19 limited Q1 mine production in a number of countries.
“Gradually rising smelting activity in China, thanks to fading power rationing, and normalizing output in Latin America, should boost global supply and control price growth,” FocusEconomics analysts said at the end of Q1.
Despite the increased volatility seen since January, copper prices rose almost 7 percent in the first quarter and ended the three month period trading at US$10,375.
Copper price in Q2: Disappointing recovery in China
Despite coming off a strong first quarter of the year, copper prices fell sharply in Q2.
The highest point of the second quarter came early in April, when copper was changing hands for US$10,469. But after that, the trend was only downward, with prices losing more than US$2,000 by the end of the three month period.
Speaking with INN about copper’s performance in Q2, Karen Norton of Refinitiv said the price correction that continued into the third quarter was sharper than anticipated. “Inventories are low and the price collapse has been exacerbated by speculative activity,” she said back in June. “Even so, the zero-COVID policy in China and subsequent disappointing recovery to date, along with growing fears for a global recession, are combining to undermine sentiment.”
Similarly, Robert Edwards of CRU Group said he was not expecting such a sharp correction in prices, as the copper market’s micro-indicators were still relatively positive. “There were low exchange inventories (and) US/European demand remaining relatively robust; China’s physical market was weak, but not as bad as macro data was suggesting,” he said.
Commenting on the supply/demand balance for copper in the second quarter, Norton told INN that the net impact of weaker-than-anticipated demand this year looked set to be offset by a supply picture that was also coming up slightly short of expectations.
“This will leave the market in what is still a relatively modest surplus against the backdrop of low inventories,” Norton said at the end of Q2. “The prospect of a larger surplus next year though in a recessionary environment would likely weigh on sentiment.”
All in all, prices declined over 20 percent over the second quarter and ended the period at US$8,258.
Copper price in Q3: Market volatility dominates
As the year progressed, copper continued to be under pressure, with prices unable to rebound to the levels seen earlier in the year.
Speaking with INN about the major trends seen in the copper space in the third quarter, Norton said she anticipated further price weakness. That was mainly due to broadly pessimistic demand expectations that dominated the sector amid growing recession fears and measures taken to tackle rampant inflation.
“Despite this, prices found a floor just below US$7,000 early in the period, managing to stabilize to some extent as supply growth also remained lackluster to offset,” she said. “Market watchers may also be wary of sharply lower prices acting as a disincentive for new projects at a time when they should be committed if the energy transition is to keep anywhere close to the stated timelines.”
In terms of demand, Edwards of CRU Group told INN in Q3 that he was still concerned about Chinese residential real estate as a demand driver. The Asian country is the world’s top copper consumer.
“But copper demand is benefiting from end uses related to the green energy transition, such as electric vehicles and renewables, along with exports of wire and cable and some copper semi-fabricated products,” he said.
Similarly, Norton didn’t believe there would be a significant pickup in China’s demand in the final quarter.
“The new energy sector is a bright spot, but accounts for a much smaller proportion of demand than the real estate sector, which remains weak and an area of continued concern,” she said.
Looking over to the supply side of the story, disruptions in major copper-producing countries were under the spotlight in the third quarter. “South America — Chile and Peru — remain the primary supply risk going into 2023, plus the inevitable uncertainty around the startup of some large-scale projects,” Edwards said.
Chile remained the top copper-producing country in 2021, with a total output of 5.6 million metric tons, according to the US Geological Survey. Peru came in second again, with production reaching 2.2 million metric tons.
All in all, prices ended the three month period down, trading at US$7,560 — a decline of more than 6 percent for the quarter.
Copper price in Q4: Uncertainty remains
During Q4, copper prices began to slowly increase, breaking the US$8,000 mark and hovering around that level in December.
Copper kicked off the fourth quarter trading at US$7,508, with supply disruptions in top-producing countries Peru and Chile making news headlines to begin the last three month period of the year.
China’s COVID-19 measures continued to put pressure on copper demand, as did the uncertainty of what may happen with the real estate sector. Around 23 percent of China’s copper end use comes from civil and building construction.
“While in the short-term, macro headwinds and recession fears are likely to put downward pressure on the copper market, the long-term fundamentals are looking more supportive amid low visible stocks, supply disruptions and expectations of a China recovery,” Ewa Manthey of ING said.
Another trend seen in the fourth quarter so far has been the increase in copper premiums in Europe on the back of expectations for higher demand, plus increases in energy and transport costs.
The world’s biggest miner, Chile’s Codelco, agreed a record benchmark premium for European buyers at $234 per tonne for 2023, up 83 percent from the 2022 level. Meanwhile, Aurubis, Europe’s biggest copper smelter, will charge its European customers a premium of $228 per tonne above the benchmark price in 2023.
Looking at 2023, investment bank Goldman Sachs (NYSE:GS) is forecasting that copper prices will increase to record levels in the next 12 months, predicting “a huge deficit” in copper supply paired with robust demand for the red metal.
On December 5, copper was changing hands for US$8,391, down 13.67 percent year-to-date.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Copper Price Forecast: Top Trends That Will Impact Copper in 2023
Click here to read the previous copper forecast.
Pull quote was provided by Investing News Network client Western Copper and Gold. This article is not paid-for content.
Copper prices traded with high volatility this past year, and even though the market’s long-term fundamentals look bright, the red metal has lost more than 13 percent year-to-date.
Macroeconomic factors, including rising inflation, increasing energy costs and climbing interest rates, impacted copper in 2022; paired with subdued demand, these elements put pressure on prices.
With the year at an end, the Investing News Network (INN) asked analysts in the field for their thoughts on what’s ahead for the vital base metal. Read on for their predictions.
How did copper prices perform in 2022?
Copper prices hit an all-time high in 2022, surpassing the US$10,000 per metric ton (MT) mark for the first time ever. However, the metal was unable to sustain these gains and was volatile for most of the year.
“Prices exceeded our expectations in 2022, propelled higher in part by constrained supply growth against a backdrop of low visible inventories,” Karen Norton of Refinitiv told INN.
Copper’s price performance year-to-date.
Chart via the London Metal Exchange.
Early in the year, the copper market felt the outbreak of the Russia-Ukraine war, which sent energy prices and inflation soaring. Last year, Russia produced 820,000 MT of copper, according to the US Geological Survey.
“This had the twin effect of slowing both demand and supply growth, which helped to keep the copper market relatively tight,” Dan Smith, head of research at Amalgamated Metal Trading, told INN. “We have seen some big swings in prices this year, but with so much uncertainty about the war in Ukraine and the potential for a ban on Russian metal, this was to be expected.”
Another surprise this year was that while central banks hiked interest rates, global copper demand remained resilient, helped by the green energy transition and a tight scrap market, he continued.
“Sectors such as solar and wind have been booming in China, which has more than compensated for weakness in the property market,” Smith said. “Demand is currently growing by around 4 percent, relative to a typical rate of just 2 percent.”
All in all, copper prices have declined 13.67 percent year-to-date and were sitting at US$8,391 on December 5.
Copper supply and demand dynamics in 2023
At the end of 2021, analysts were expecting a modest surplus in the market on the back of robust mine output.
“The copper market has turned out to be tighter this year than we expected at the start of the year,” Smith said.
“While demand growth has been held back by the war in Europe, supply growth has been unexpectedly weak as disruptions in key mining areas such as Chile and Peru have taken their toll,” he added.
Looking at what might happen in 2023, Norton said she is expecting reasonable copper demand growth overall next year, although the early months may prove difficult. “We would anticipate higher demand from China in 2023 in particular as the negative impact of strict zero-COVID policies starts to ease off,” she said.
Similarly, Smith said copper demand in China looks likely to accelerate from what has been a poor year in 2022.
“Next year should see a green energy boost combined with a recovery in property, and the growth rate is expected to accelerate from around 2 percent in 2022 to 5 percent in 2023,” he said. “The rest of the world is likely to struggle under the weight of persistent inflation and high interest rates.”
For his part, CRU Group’s Robert Edwards expects 1.9 percent growth in Chinese refined copper consumption in 2023. For the rest of the world, that number rises to 2.4 percent.
Moving on to what might be ahead for copper supply, Norton said Refinitiv’s base case currently assumes growth in 2023 will be higher than the average over the past decade.
“With stocks already around historical lows, we would be concerned for another year of below-trend supply growth where water shortages, lower ore grades and other disruptions hamper production in the world’s top producers,” Norton said.
For Smith, the biggest concern for copper supply is that the market is becoming increasingly reliant on countries that have been unstable and chaotic in the recent past.
“The Democratic Republic of Congo (DRC) is a particular concern as the country now accounts for 11 percent of global mine output, and there are lots of projects in the pipeline in the country that are due to come onstream in 2024 and 2025,” he said.
“The other problem is that when copper prices rise, we tend to see more disruption as miners go on strike to demand higher wages. This could be a challenge for next year.”
Disruptions in key copper countries were unsurprising in 2022; mine workers at Chile’s Escondida and Antofagasta threatened to strike over safe labor conditions, while in Peru protests disrupted work at mines, including Glencore’s (LSE:GLEN,OTC Pink:GLCNF) Antapaccay, MMG’s (HKEX:1208,OTC Pink:MMLTF) Las Bambas and Hudbay Minerals’ (TSX:HBM,NYSE:HBM) Constancia.
For CRU’s Edwards, production difficulties experienced in Chile and Peru this year will be the biggest challenge for copper supply next year. “In 2023, we expect 80 percent of mine growth globally from those two countries.”
In terms of projects to watch out for in 2023, Edwards mentioned Quebrada Blanca Phase 2, Oyu Tolgoi’s underground phase, the Carrapateena block cave, Udokan and two Codelco projects — El Teniente and Rajo Inca.
Refinitv’s Norton said she will also be monitoring the ramp up of the Quebrada Blanca Phase 2 project in Chile.
“It is expected to make a sizeable contribution next year, so anything short of that will have an impact,” she said.
The Kisanfu project in the DRC will also be on her radar. “We will be keen to see whether it can follow in the footsteps of the Kamoa-Kakula mine, which has ramped up and expanded at a fast clip.”
Refinitiv is building in higher production at some of this year’s more troubled mines, such as MMG’s Las Bambas mine and major mines in Chile. Smith of Amalgamated Metal Trading expressed a similar view, saying, “There is now quite a large wave of copper mine supply coming through, suggesting that growth will be at least 4 percent in 2023.”
As they do with other commodities, miners continue to face challenges to bring new supply onstream. In the case of copper, supply will play a key role in the green energy transition, with the red metal expected to experience a significant shortage by the end of the decade if the current output pace remains unchanged.
“Securing funding in a challenging economic environment may prove difficult for those with projects that are considered to be less promising prospects,” Norton said. “It seems likely that major miners will look to sweep up some of the small- to mid-sized firms that have promising projects potentially on the path to development over the medium term.”
In terms of market balance, CRU was expecting a small deficit in 2022, which has materialized.
“For 2023 we have a very small surplus of less than 150,000 MT, which is out of a total market size of around 25 million MT, so you could argue this is almost balanced,” Edwards said.
Meanwhile, Refinitv is still looking for a surplus next year, but nothing more than a relatively modest one that shouldn’t knock back prices to any great extent on an annual average basis.
What factors will move the copper market in 2023?
When asked about what other industry catalysts investors should consider as 2023 begins, Smith said that there is significant potential for an acceleration in secondary copper output.
“The scrap market has been very tight this year, but this should ease in response to high prices,” he said. “This will help reduce the pressure on mine supplies, although there is a limit on how much this will help based on existing technologies and scrap generation.” He is also following the green energy transition, which is now starting to exert a powerful impact on copper.
“It will be interesting to see whether this can be maintained in the face of strong inflation and governments in Europe being hamstrung by high debt levels,” he said.
Norton is also following the potential for growth in demand from the new energy sectors, which she expects will continue to gather momentum, regardless of the economic backdrop.
“On the other side, there is potential for more commitment to recycling projects in developed countries, which has to be a positive, even though to some extent it would stem from increasing economic insularity,” she added.
Norton said that as 2023 approaches, investors should also watch out for more resource nationalism and possible national stockpiling by some countries if the material is available.
For Edwards, investors should keep an eye out for new applications that could boost demand for copper, as well as any substitution threats, which could be negative for red metal demand.
In terms of prices, CRU is expecting copper to remain close to today’s trading levels next year.
For Norton, a move back above US$10,000 cannot be ruled out, especially if supply continues to fall short of expectations and demand from China in particular surprises to the upside on easing COVID-19 restrictions.
“Whether such a move would be sustainable for any length of time is another question,” she elaborated. “Certainly in the early months, we would expect a generally gloomy economic climate to weigh on sentiment.”
In the short term, Smith expects copper prices to fall back in response to weak demand in China. “The country is currently facing strict lockdowns in places like Chongqing, and activity has slumped despite government attempts to boost the economy,” he said.
However, Smith is bullish for next year, as China is pumping a huge amount of money into the property market and the US dollar is likely to weaken. “Given that inventory levels are very low, a surge above US$10,000 would be no surprise,” he added.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Rob McEwen: Gold for Wealth, Copper for Electrification — How to Position Right Now
After a slow summer, where should resource investors be positioning right now?
In an interview, Rob McEwen, chairman and chief owner of McEwen Mining (TSX:MUX,NYSE:MUX), reiterated his positive stance on gold and copper, two metals to which his company has strong exposure.
In terms of gold, McEwen noted that central banks around the world continue trying to cool inflation with interest rate hikes, which is widely perceived as a headwind for the yellow metal. But in his view that’s not the case.
“Too many people are looking at interest rates rising and saying that’s negative for gold. I think it’s very positive for gold,” he told the Investing News Network. “A lot of the speculative areas are being hit now because it’s costing more to carry — it didn’t cost anything before with interest rates close to zero.”
Looking over to copper, McEwen spoke about the progression of McEwen Copper, a subsidiary of McEwen Mining that launched last year to house the Argentina-based Los Azules project.
In late August, McEwen Copper closed an oversubscribed US$81.85 million offering. In the interview, McEwen shared how the company plans to move forward at the asset. Drilling is scheduled from October of this year until June 2023, and an updated preliminary economic assessment is set for Q1 next year. An initial public offering is expected in H1 2023.
Although recession concerns have left some market participants wondering if a copper slowdown is in store, McEwen is optimistic about the base metal‘s future as the electrification trend continues.
“Most, if not all, the reports I’ve seen have been talking about a large (copper) deficit looming in the not-too-distant future. If you combine a deficit with the lengthening of the timelines to bring on production, there’s some very optimistic price forecasts for copper,” he explained. “Copper is the metal of electrification.”
He emphasized that Los Azules also has a strong gold component. “I think there’s a lot of (copper) value there, and the gold is definitely for free — that exposure at the current share price,” he said.
Watch the full interview above for more from McEwen on gold, copper and his company.
Don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Tavi Costa: Gold, Silver, Copper Aren’t Going Away — Strategies for Juniors
With concerns about inflation running high, where should investors focus?
Speaking to the Investing News Network, Tavi Costa, partner and portfolio manager at Crescat Capital, said his firm is taking a long view on inflationary assets and is short expensive financial assets such as mega-cap stocks.
“The obvious plays are usually not going to work,” he explained. “The obvious plays are software, technology, crypto — all those things are the things that are actually down significantly this year. And I think there’s further go in those issues.”
In his view, commodities are a segment of the market that should work for a variety of reasons. According to Costa, those include deglobalization, labor market trends, infrastructure development work and many other factors.
He explained that producers and developers appeal to a wider variety of investors because they are easier to evaluate, while understanding exploration-stage companies requires some knowledge of geology.
“Because of that, and because of the lack of folks that can really navigate this space, there’s a ton of inefficiencies here,” Costa said. “So we think this is the time to be allocating capital here, knowing that most of the majors are also going to be facing a supply cliff; they’ve been depleting their reserves and not really replenishing those reserves over time. So they’re going to actually at some point have to be purchasing — either purchasing or actually doing their own exploration.”
He emphasized the importance of being early to macro trends like the one he sees building in commodities.
“Nobody is really focused on silver, (but) silver is not going away, gold is not going away, copper is not going away. It’s all going to be with us for many, many years and decades and centuries,” Costa said. “I think value and macro investors need to be taking the approach of buying things that are cheap, that have the likelihood of doing very well.”
Watch the interview above for more from Costa on macro trends and the junior resource space. You can also click here to read our recap of the New Orleans Investment Conference and here for our full event playlist on YouTube.
Don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Top 5 Copper Stocks on the TSX (Updated December 2022)
Click here to read the previous best TSX copper stocks article.
After faltering following its success earlier this year — including a leap to an all-time high of US$10,910 per metric ton (MT) — copper prices have begun to climb back up to end 2022.
Looking forward, the Investing News Network spoke with experts to get their takes on where copper is headed in 2023, including supply and demand factors that will affect prices, and how financing is necessary to bring more projects through development.
More than one expert said they see potential for a run above US$10,000 again next year. “Given that inventory levels are very low, a surge above US$10,000 would be no surprise,” said Dan Smith of Amalgamated Metal Trading.
The list below shows the top-performing TSX-listed copper stocks by share price performance so far this year. It was generated on December 8, 2022, using TradingView’s stock screener, and only TSX copper companies with market capitalizations greater than C$50 million at that time are included. Read on to learn more about what’s moving their share prices.
1. Turquoise Hill Resources (TSX:TRQ)
Year-to-date gain: 104.22 percent; market capitalization: C$8.56 billion; current share price: C$42.54
Turquoise Hill Resources operates the Oyu Tolgoi copper-gold mine in Mongolia, which it claims has the potential to run for 100 years from five deposits. Oyu Tolgoi is jointly owned by Turquoise Hill (66 percent) and Mongolian government-owned entity Erdenes Oyu Tolgoi (34 percent). Turquoise Hill itself is 50.8 percent owned by major global miner Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO), which is the operator of Oyu Tolgoi. The Oyu Tolgoi mine has been in production since 2013.
The company performed well through mid-March, when Rio Tinto proposed a plan to buy the remaining 49.2 percent of Turquoise Hill that it does not already own for C$34 per share. The news drove Turquoise Hill’s share price up nearly C$9 the day of the announcement. Turquoise Hill created a special committee to review the proposal in April, and after it found that the offer “did not reflect the full and fair value of the company,” Rio Tinto raised the offer to C$43 per share.
On September 5, Turquoise Hill signed a definitive agreement with Rio Tinto at that price point. This news resulted in the company’s share price hitting a four year high of C$41.99 on September 8. However, International Shareholder Services recommended that shareholders reject the takeover offer, as the firm believed C$43 per share did not reflect the company’s value; this echoed concerns from some majority shareholders. Turquoise Hill responded, requesting that shareholders vote in favor of the transaction.
After various postponements and making and canceling of agreements with minority shareholders, the vote finally took place. Including Rio Tinto, the vote was 86.67 percent in favor; of the minority shareholders, 60.5 percent voted in favor.
With regards to progress at Oyu Tolgoi, on August 22, Turquoise Hill provided an update, including the latest news on updating the project’s integrated mine plan. The mine plan will include “minor refinements” at the Hugo North underground and the Oyut open-pit mines. The mine plan should be available in the fourth quarter of this year. The company’s Q3 production results show copper output of 36,000 MT; it also shared its financial results for Q3 in November.
2. Filo Mining (TSX:FIL)
Year-to-date gain: 63.67 percent; market capitalization: C$2.53 billion; current share price: C$20.95
Filo Mining is focused on advancing its Filo del Sol copper-gold-silver project in Chile along the Chile-Argentina border.
Filo’s share price began to see significant growth in mid-March after it closed a C$100 million strategic investment from BHP Western Mining Resources, which is a subsidiary of BHP (ASX:BHP,NYSE:BHP,LSE:BHP). Further positive exploration news continued to drive the company’s share price, culminating in a year-to-date high of C$26.58 on June 2. On June 3, Filo shared that it had been included in the S&P/TSX Composite Index (INDEXTSI:OSPTX).
In September, Filo Mining appointed Ian Gibbs as chief financial officer and Arndt Brettschneider as vice president of operations and projects, as well as Ron Hochstein to its board of directors. The company released its Q3 results in November, summing up its exploration work so far in 2022 and sharing its financials. According to the release, Filo would mobilize further drilling rigs in Q4.
In terms of Q4 results from ongoing exploration at Filo del Sol’s Aurora zone, October assays saw highlights including 1.54 percent copper, 12.08 grams per MT (g/t) gold and 20.5 g/t silver over 4 meters. In late November, new assays shared by the company included a large interval of 1,313.2 meters grading 0.65 percent copper equivalent.
While the company’s share price has fallen from the highs seen in June, it hit an H2 high of C$22.58 on December 12.
3. Entree Resources (TSX:ETG)
Year-to-date gain: 39.51 percent; market cap: C$219.74 million; current share price: C$1.13
Entrée Resources is another company that has its hands in the Oyu Tolgoi pot. The company has a 20 to 30 percent interest in mineralization extracted at the Entrée/Oyu Tolgoi joint venture property, with the amount determined by the depth of mineralization. In addition to its interest in the Oyu Tolgoi project, Entrée has a 56.53 percent interest in the Blue Rose joint venture with Giralia Resources, and a 0.5 percent net smelter return royalty with Candente Copper (TSX:DNT) on the Cañariaco project.
Entrée’s share price saw a steep spike in late January when it shared news that multiple outstanding issues between the Mongolian government and the companies involved in Oyu Tolgoi — Turquoise Hill in particular — had been resolved. Its share price saw another large jump in March, and it remained elevated through mid-April, during which time Entrée released its 2021 results and corporate highlights, and also appointed a new member to its board of directors.
On May 26, Entrée “commenced binding arbitration proceedings to seek declarations and orders for specific performance relating to certain provisions of the Equity Participation and Earn-in Agreement with Turquoise Hill Resources.” The company’s board concluded that these agreements would need to be enforced as soon as possible. The company further discussed its goals with these proceedings in its Q2 results, as well as developments at Oyu Tolgoi.
The company’s most recent news was the release its third quarter results, which include further discussion of those topics, as well as Rio Tinto’s acquisition of Turquoise Hill Resources. The company’s share price has been elevated since late October, and on December 12 it matched its previous year-to-date high of C$1.17.
4. Ivanhoe Mines (TSX:IVN)
Year-to-date gain: 16.02 percent; market cap: C$14.4 billion; current share price: C$11.95
Ivanhoe Mines is a mining company operating in the Democratic Republic of Congo (DRC) and South Africa. Its copper projects are all located in the DRC, the largest of which is the Kamoa-Kakula mining complex, which began operations in July 2021. The mine is a joint venture in which Ivanhoe and Zijin Mining Group (OTC Pink:ZIJMF,HKEX:2899) both have 39.6 percent, Crystal River Global has 0.8 percent and the DRC government has 20 percent. Its other projects are the Western Foreland copper project and the Kipushi zinc-copper project, and it has the Platreef platinum-group metals project in South Africa.
Ivanhoe’s share price was strong in the first half of the year, hitting a year-to-date high of C$12.90 on February 28, but it faltered in mid-year. May saw the completion of production shaft 1 construction at Platreef, and the company shared that production was on schedule for Q3 2024. In September, Ivanhoe began construction at Kipushi with a celebration to commemorate it.
In Q4, Ivanhoe’s share price has trended upwards, nearing its earlier high at C$12.28 on December 13. On October 5, the company shared its Q3 production results, including a new record of 97,820 MT of copper, beating its previous record of 87,314 just set in Q2. On November 14, it released its Q3 financial results, going into depth on its construction activities over the period as well.
5. Western Copper And Gold (TSX:WRN)
Year-to-date gain: 14.71 percent; market cap: C$350.19 million; current share price: C$2.34
Western Copper and Gold is focused on developing its Casino copper-gold project in Yukon, Canada. The company has been developing Casino since 2008, and a preliminary economic assessment (PEA) was completed for the project in 2021.
Western Copper and Gold’s share price climbed steadily from February to April, when it hit its peak of C$2.97 on April 13, but it trended down throughout Q2. The company followed its PEA with a feasibility report that was released in August this year. According to the report, the company expects to see a total production over the 27 year life of the mine of 4.27 billion pounds of copper, 6.96 million ounces of gold, 36.09 million ounces of silver and 346 million pounds of molybdenum.
In late October, the company announced it had been asked to revise its environmental and socioeconomic statement, which it issued in 2016. However, it stated that this should not have an effect on its permitting timeline. Most recently, Western Copper and Gold announced that Rio Tinto, an investor in the company, is extending its rights. The company’s share price has risen in December, reaching an H2 high of C$2.64 on December 13.
FAQs for investing in copper
Is copper a good investment in 2022?
While the metal is currently trending down in terms of its price, experts see that as a symptom of COVID-19 lockdowns in China, as well as other short-term headwinds. So when will the copper price go back up? Economists are divided, but many believe it will be back up within the next couple of years.
With the volatility and unpredictability of markets and economies at the moment, nothing is guaranteed, but it can be worth getting into a market when prices are depressed if it matches an investors’ portfolio goals.
What is copper used for?
Copper is used in many industries, from construction to electronics to medical equipment. In fact, in 2020, 32 percent of copper globally was used in equipment manufacturing and 28 percent in building construction.
Two other growing sectors for copper are the burgeoning electric vehicle and green energy industries. Electric vehicles require a significant amount of the red metal per vehicle.
How to invest in copper?
Investors can get exposure to copper in a variety of ways. Holding physical copper is possible, but plenty of storage would be required to hold any significant value of the metal.
For investors looking to invest in the metal without physically holding it, there are a few options. Copper stocks such as those on the TSX, TSXV and ASX are worth looking at. Additionally, there are copper exchange-traded funds and the copper options and futures markets on the London Metal Exchange
How to invest in a copper ETF?
Copper exchange-traded funds (ETFs) can be a good way to diversify an investment portfolio, and they can be a more stable option compared to individual copper miners or explorers. There are multiple options available on the market, and they can usually be purchased in the same way one could purchase stocks through a broker or trading platform.
In May 2022, Horizons launched Canada’s first copper equities ETF, the Horizons Copper Producers Index ETF (TSX:COPP), which is focused solely on pure-play and diversified copper-mining companies.
There are two ETFs available on the US ARCA exchange as well. The Global X Copper Miners ETF (ARCA:COPX) tracks the Solactive Global Copper Miners Index, which includes copper miners, as well as copper explorers and developers. The other option is the United States Copper Index Fund (ARCA:CPER), which gives investors exposure to copper futures contracts by tracking the SummerHaven Copper Index Total Return (INDEXNYSEGIS:SCITR).
How much is copper worth?
The copper price is tracked in two ways: COMEX copper and London Metal Exchange (LME) copper. The COMEX and LME are both options and futures metal exchanges, with the former being headquartered in New York and the latter in London. COMEX copper is priced by the pound, while LME copper is priced per MT.
Since the start of 2022, copper has seen historically high prices. In Q1 and most of Q2, copper prices on the COMEX ranged between US$4.10 and US$4.89 — an all-time high. For the same time period on the LME, copper moved between US$9,000 and US$10,730. Q3 has brought lower prices for the metal, which has seen year-to-date lows of US$3.21 and US$6,998, respectively.
Where is copper mined and how is it processed?
Copper is mined throughout the world, with significant production found on every continent besides Antarctica. Chile was the top producer in 2021, putting out 5.6 million MT of the metal. Rounding out the top five are Peru with 2,200 MT, China and the Democratic Republic of Congo with 1,800 MT each and the US with 1,200 MT.
Once copper is mined, the ore goes through multiple steps to reach a market-ready state. First, the ore is ground to roughly separate the rock from the copper, as copper typically only makes up 1 percent of the mined rock.
The resultant copper is then slurried with water and chemical reagents, after which air is used to float the copper to the top of the mixture. After the copper is removed from this, it is typically at 24 to 40 percent purity.
Lastly, the copper is refined at a refining plant or smelter using one of two methods, pyrometallurgy and hydrometallurgy. Pyrometallurgy is employed for copper ore that is sulfide rich, while hydrometallurgy is used when the ore is oxide rich. The Investing News Network’s guide on copper refining goes into further detail about how those processes work. Once these processes are complete, the copper is concentrated to up to 99.99 percent purity.
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Securities Disclosure: I, Lauren Kelly, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Western Copper and Gold is a client of the Investing News Network. This article is not paid-for content.
Top 5 Junior Copper Stocks on the TSXV (Updated December 2022)
Click here to read the previous best junior copper stocks article.
Copper passed its all-time price high in the first quarter of 2022, but has remained lower throughout H2.
In a review of 2022 for copper, the Investing News Network looked at what experts thought about the trends affecting the metal this past year. Going forward, market watchers expect short-term headwinds from lower Chinese demand and recession concerns, but long term the metal will benefit from its role in the green economy, as well as supply shortages.
The top junior copper stocks list below was generated on December 12, 2022, using TradingView’s stock screener, and it shows the TSXV-listed copper companies with the biggest share price gains year-to-date. Only companies with market capitalizations greater than C$10 million at the time data was gathered are included. Read on to find what has been driving these stocks.
1. ATEX Resources (TSXV:ATX)
Year-to-date gain: 133.33 percent; market cap: C$89.07 million; current share price: C$0.84
ATEX Resources is focused on projects in Latin America. The company’s flagship asset is its Valeriano project — located in the Atacama region of Chile — which hosts a copper-gold porphyry deposit, as well as a near-surface oxidized epithermal gold deposit. ATEX is performing further exploration in Chile as well. According to the company, it is using “techniques developed by ATEX’s management team which have proven successful, resulting in a number of significant precious metal deposits discoveries.”
ATEX performed a Phase 2 drilling program at Valeriano in H1; it commenced in late January and concluded on May 11. The company’s share price reached its year-to-date high of C$0.89 on April 6, less than a week before ATEX shared an exploration update on drilling at Valeriano, saying it had been successful so far in expanding the footprint of the porphyry system. Following the conclusion of the drill program, ATEX released highlights, including 1,160 meters grading 0.78 percent copper equivalent.
The company has now begun a Phase 3 drill program at Valeriano following the completion of its third option payment for the project. It will consist of an initial 10,000 meters, and another 10,000 may be added afterwards. Although ATEX did not release any news in late November, since November 21 its share price has climbed from C$0.44 to C$0.84 on December 8.
2. Barksdale Resources (TSXV:BRO)
Year-to-date gain: 87.88 percent; market cap: C$39.5 million; current share price: C$0.62
Barksdale Resources used to be focused on both precious and base metals, but has pivoted to only base metals, in particular the Sunnyside copper-zinc–lead–silver and San Antonio copper projects in Arizona, and the San Javier copper-gold project in Mexico.
The majority of Barksdale’s exploration work has been focused on San Javier in 2022. In late April, the company released drill results from the project that expanded the footprint of the Cerro Verde copper zone. Barksdale’s share price reached a year-to-date high of C$0.70 on May 27, the day after the company engaged Independent Mining Consultants to review drilling data and technical information from San Javier to create a resource estimate and NI 43-101 technical report for the project’s Cerro Verde zone. The firm received positive results from metallurgical test work on drill cores from San Javier in June.
In late October, Barksdale completed a non-brokered private placement with Teck Resources (TSX:TECK.A,TSX:TECK.B,NYSE:TECK) in which Teck subscribed for 550,000 units, or C$264,000. Teck holds about 9.9 percent of Barksdale’s equity.
Most recently, Barksdale released an initial resource estimate for Cerro Verde at the San Javier project. Its measured and indicated resource stands at 419 million pounds of copper, and its inferred resource is 31 million pounds.
3. NGEx Minerals (TSXV:NGEX)
Year-to-date gain: 76.8 percent; market cap: C$502.11 million; current share price: C$3.20
NGEx Minerals is focused on copper and gold. Its primary asset is the Los Helados copper-gold project in Chile, and the company also has a portfolio of exploration properties in Argentina, including the Valle Ancho copper-gold project. NGEx owns 64 percent of Los Helados, sharing ownership with Nippon Caserones Resources. The project is close to the Caserones mine operated by Nippon Caserones, allowing Los Helados access to that mining infrastructure.
NGEx’s share price hit a year-to-date high of C$4.09 on April 12, the day before the company shared its 2021 results and an exploration update. Throughout the year, it has been focused on exploration at both its Valle Ancho and Los Helados projects. In May, NGEx announced the discovery of a new copper-gold porphyry at Valle Ancho, and the company has shared multiple exploration updates for Los Helados, including the discovery of a new high-grade copper-gold mineralization zone.
Although NGEx’s share price fell in the middle of the year, it has been climbing steadily in Q4. In October, the company closed a C$30 million private placement, some of which will be used towards its exploration efforts. NGEx commenced a new 15,000 meter diamond drill program at Los Helados in early November that will be focused on the Fenix and Alicanto high-grade zones at the project. On November 25, the company released its Q3 results and went into detail on recent updates.
4. Los Andes Copper (TSXV:LA)
Year-to-date gain: 24.64 percent; market cap: C$378.27 million; current share price: C$13.96
Chile-focused Los Andes Copper describes its Vizcachitas open-pit copper-molybdenum project as “one of the most advanced copper deposits in the Americas.” The project has a measured and indicated resource of 1,284 million metric tons at a copper grade of 0.4 percent, including 13 billion pounds of copper equivalent. A prefeasibility study for the project is in progress and is expected in Q4.
Los Andes’ share price opened 2022 at C$11.60, but by March 11 it had climbed to C$17.49. While it hasn’t reached those heights again, its share price has remained elevated throughout the year; that said, the company did hit a road bump in Q1, when it had its drilling permit suspended during a program on March 18, news that saw shares plummet by C$2.20 overnight. The drilling that had been completed by that point showed the “largest 1% copper intercept” found at the project thus far, and according to the company pointed to potential for large-scale expansion at the project. In July, the government reinstated Los Andes’ drilling permit.
A late September project update shows that a prefeasibility study is still on track for the fourth quarter, and will incorporate 2022’s exploration. On November 2, the company announced the appointment of Interim CEO Santiago Montt following outgoing CEO and President Michael Jones’ resignation.
5. Amarc Resources (TSXV:AHR)
Year-to-date gain: 18.18 percent; market cap: C$24.26 million; current share price: C$0.13
Amarc Resources is an exploration company focused on its portfolio of copper-gold porphyry projects in BC. Amarc has 100 percent ownership of three copper-gold districts — IKE, JOY and DUKE — that together host four copper-gold deposits and 10 copper-gold targets. The JOY district has an earn-in agreement with Freeport McMoran (NYSE:FCX), which is contributing to exploration costs.
The company’s president and CEO released a message on September 22 discussing the path Amarc has been on and where its projects stand. In the days following the statement, the company’s share price climbed from C$0.13 to C$0.17, a year-to-date high.
“Amarc’s expansive, 100%-owned JOY, DUKE and IKE Districts have been diligently assembled and advanced over a period of years,” President and CEO Dr. Diane Nicolson said. “Perhaps more importantly, these Districts host the type of copper mineralization that major producers seek, with potential for low-cost, bulk tonnage, long-life production.”
In October, Amarc shared an update on exploration at JOY, which Freeport contributed C$14 million to in 2022. Additionally, in November Amarc announced that Boliden Group (STO:BOL) subsidiary Boliden Mineral Canada had entered into an earn-in agreement for the DUKE district that could see the latter company earn a 70 percent interest in DUKE. Amarc’s most recent news came on December 8; it has commenced a drill program at DUKE that will be funded by Boliden.
Don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Lauren Kelly, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Barksdale Resources and Los Andes Copper are clients of the Investing News Network. This article is not paid-for content.
