Tuesday, 19 November 2019

Powered By Energy rEVolution: Bank Says China Inc Has Copper Timing Right.

Even the best charts, like the one from Graddhy, must be confirmed by the real money flowing in the beaten-down mining sector. I would like to share with you today Mining Journal report about new deal makers among copper industry insiders and ongoing M&A behind the trade war headlines:

"Investment bank Jefferies says while most equity investors have been unwilling to buy copper-miner shares because of cyclical risk and big diversified miners have also been reluctant to entertain copper M&A due to "a high level of risk aversion and a focus on austerity and capital returns", Chinese groups were doing deals in the space. 
"The timing is brilliant, in our view," Jefferies said."

All the best companies and the best copper projects will be taken care of and very soon. Energy rEVolution is moving forward in the fast lane. Mass media was literally flooded the last couple of months with major electric cars related announcements. This week Tesla Cyber Truck will be unveiled. Germany is going electric. Tesla Gigafactory number 4 will be located near Berlin and Gigafactory number 3 in Shanghai is already producing Tesla Model 3. Volkswagen is chasing Tesla with 60 Billion euro investments in EVs and even good old Ford is charging electric Mustang for the 21st-century race. 

All these great clean energy and electric cars developments require a lot of copper and lithium. The exponentially growing markets for electric cars and renewable energy are meeting our mining industry which was built in the last century. Major copper mines are 75 years old, the head grade is declining for years and new giant discoveries are few and far between. We are discussing it here at length and you can find more detailed research on the links below.

As usual, it is extremely important who is doing what among the real industry insiders. And they are buying and accumulating stakes in the best copper companies and looking at the best projects for future growth.

Barrick Gold made industry headlines a few weeks ago with its search for growth with "Strategic Copper" and we can see that behind the trade war headlines China Inc is moving methodically forward with its 50 years New Energy Plan. This plan requires military discipline and stealth execution in order to build secure supply lines for strategic metals like copper and lithium for the transition to the post-carbon economy. The question remains rhetorical: are we ready in the West for the Energy rEVolution with our fractured and outdated supply lines for critical metals with a total lack of necessary focus in order to build them between of the quarterly reports?


With all our followers we are paying very close attention to this very interesting situation. TNR Gold is holding NSR Royalty on the entire Los Azules Copper in San Juan, Argentina. The "sleeping giant" - as Rob McEwen calls it - is being developed by McEwen Mining. 

Even if not all our dreams will come to materialisation with this Barrick Gold strategic announcement, Los Azules is getting on the radar screens of the major financial players and we have another very important confirmation of our strategy in building green energy metals royalty holdings for TNR Gold. As always, do your own research and you will have to pick up the winners. On the links below you can find a lot of information which can help you with your homework. 

Tesla Energy rEVolution And The Golden Age For Copper: Kirill Klip GEM Royalty TNR Gold Copper Presentation November 2019.

"Always do your own research - I do not honestly know how to prepare to that sad end. In all other potential cases, I can only point out to my personal experience of making the best investments by buying when "blood was almost literally on the streets" like with Tenke Mining starting my acquisitions at CAD 40 cents during the civil war in DRC and following Lukas Lundin with his motto: "politics will change, resources in the best projects will stay". Later, Lukas made a lot of investors of Tenke Mining very happy during his buy out by Lundin Mining at CAD$20 dollars. I have followed him and found TNR Gold many years ago - now we have Los Azules Copper NSR Royalty among our other assets and building The Green Energy Metals Royalty and Gold Company."

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.

Mining Journal:

Bank Says China Inc Has Copper Timing Right.

Jiangxi Copper, which has been in talks with First Quantum about its Zambia copper assets, is a key stakeholder in new major First Quantum shareholder Pangaea Investment Management. PIM has 10.8% of First Quantum and an option to go to more than 16%.
Investment bank Jefferies says while most equity investors have been unwilling to buy copper-miner shares because of cyclical risk and big diversified miners have also been reluctant to entertain copper M&A due to "a high level of risk aversion and a focus on austerity and capital returns", Chinese groups were doing deals in the space.
"The timing is brilliant, in our view," Jefferies said.
"We do not believe Chinese state-backed companies are concerned about near term cyclical risk. Their focus is more likely on the strategic benefit of controlling large-scale copper resources for decades via acquisitions at low prices during a weak point in the cycle.
"Based on its accumulated equity interest in First Quantum, PIM/Jiangxi may be interested in making a move on all of First Quantum, which would include Cobre Panama as well as the Taca Taca project in Argentina and the Haquira project in Peru. While we do not believe a full takeover is likely, time will tell what the end game is, and FM shares should rerate as what had been a perceived disproportionate downside risk due to balance sheet concerns is now a disproportionate upside risk due to M&A potential."
Jefferies said Chinese companies had been very active in the DRC and Zambia, in particular.
In Zambia, First Quantum has 80% of emerging 235,000 tonnes-per-annum copper producer Kansanshi and 100% of Sentinel, ramping up to 250,000tpa.
"These are the largest copper mines in Africa, and an acquisition of a stake in these assets would greatly increase China's presence in the region," the bank said.
It describes copper as a "coiled spring" with a price highly leveraged to a pick-up in global industrial economic activity as new mine supply can't readily respond to stronger demand.
"The mechanism to balance the market will need to be price."

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