Chart by @Schuldensuehner
Dr Copper is driving up the hill in "ludicrous mode" after doing donuts in his brand new Tesla. Anyone can get really excited after reading all headlines about new EVs and
"Infrastructure Stimulus Plan". If Robinhood traders can spell Copper one day, it can go totally nuts and start chasing the performance of its shiny brother Gold.
Can you imagine how many Copper doorknobs we need to fight this CoronaVirus? Copper becomes Gold during the electrification of $12 Trillion industries of Energy and Transportation. Very respectable people are talking about Golden Cross Long Term Buy Signal for the red metal which is going green during Energy rEVolution.
Chart by @sentimentrader
Anna Golubova from Kitco provides us with BMO observations about the recent state of the Copper industry and confirms our brave investment thesis. We will need Copper. We will need a lot of it.
China is coming back online and driving prices up already on the demand spike while restocking its supply chain. "China sees a surge in Copper imports," according to Bloomberg.
Major producing mines are more than 70 years old. Industry head grades are going down and, in general, the Copper industry was build by our great-grandfathers. After the Perfect Storm in Gold, the QE tsunami is coming to the Copper market.
Two major megatrends are colliding and will produce real fireworks for strategic commodities. Energy Transition with the electrification of $12 Trillion Energy and Transportation Industries meets Copper industry which was built in the last century.
Now you can better appreciate the magnitude of the potential investment opportunity with the giant Los Azules Copper project development by McEwen Mining. TNR Gold holds NSR Royalty on the entire Los Azules Project and below you can find a lot of information for your further research.
Please always read legal disclaimer. There is NO investment advice on any Kirill Klip feeds and blog. Always consult a qualified financial adviser before any investment decisions.
Do Your Own Research.
"TNR also holds a 0.36% NSR on the Los Azules Copper Project, located in San Juan Province of Argentina. The Los Azules Project is owned 100% by () and is expected to be the 26th largest copper mine in the world once it reaches production.
A PEA at the project completed in September 2017, demonstrated a post-tax NPV8 of US$2.2bn with a post-tax IRR of 20.1%. Based on the PEA figures the mine is expected to generate average revenue per annum of U$953mln, which could generate around US$3.5mln a year to TNR over 37 years."
Now investors can do their own research and start putting the different pieces into their own valuation puzzle. Rob McEwen has prepared Los Azules to the potential major JV deal in the copper space.
Agreements between Argentina and Chile are signed in order to advance the Los Azules project and the new road is being under feasibility study. The new approach by Rob McEwen which he has articulated in order to jump-start the development is making a huge difference for any potential partners:
Happy to. We had past discussions with a senior base metal producer. What we were looking for was recovering part of the cash we put in. We were looking for $100 million upfront that the partner would advance the project to feasibility and then into production and we would continue with an interest of 20% or 25% of the property going forward."
Needless to say that any potential deal will bring the new valuation drivers for all parties involved: McEwen Mining and TNR Gold, as the project will be moving into the feasibility and construction stage. Development of Los Azules will provide enormous economic benefits for San Juan, which is ready to support this kind of responsible mining business for the benefit of proud people of Argentina. I have been calling Argentina the potential Energy Power House for many years, it can finally coming all together now."
Kitco:
"(Kitco News) Copper concentrate market looks to tighten further this year, according to BMO. “With [Chile] now having one of the worst COVID-19 infection rates in the world and thousands of cases across the domestic mining industry, pressure from mining unions and politicians alike for mining companies to curtail operations is rising. The construction of a number of key projects has already being suspended, while the risks of further curtailments to operating mines is rising, increasing the potential for medium-term disappointment in Chilean output levels in our view,” writes BMO Capital Markets head of commodities research Colin Hamilton. Plus, with additional disruptions in Peru, Zambia and Mexico already making an impact, “the copper concentrate market looks set to tighten further as evidenced by falling TCRCs, while we now estimate the refined copper market in to be near balanced this year, with the risk of a deficit growing,” Hamilton says. At the same time, demand is picking up. “Further evidence of the strength in Chinese copper demand came from SMM’s latest survey of wire and cable fabricators, which showed operating rates at 103.3%. This is another new record level … We see Chinese copper demand in Q2 as having risen ~4% y/y,” Hamilton points out."
