Why Copper May Be Becoming One of the Single Most Important Precious Metals

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Mar 08, 2022, 08:55 ET

PALM BEACH, Fla., March 8, 2022 /PRNewswire/ -- FinancialNewsMedia.com News Commentary - Copper is one of the oldest metals ever used and has been one of the important materials in the development of civilization. Because of its properties, singularly or in combination, of high ductility, malleability, and thermal and electrical conductivity, and its resistance to corrosion, copper has become a major industrial metal, ranking third after iron and aluminum in terms of quantities consumed. Due to the COVID-19 pandemic, the global Copper market size is estimated to be worth USD $255,160 million in 2022 and is forecast to a readjusted size of USD $343,900 million by 2028 with a CAGR of 5.1% during the review period according to a recent report from Absolute Reports. Another report from Mining.com added: "Higher supplies and softer demand are expected to cool copper prices next year. Expectations of slower demand growth in China and rising supplies from operations such as Anglo American's Quellaveco mine in Peru are likely to keep prices subdued next year. "Long-term prospects for copper remain bullish, but the market looks set to be on pause next year compared to this year," said Karen Norton, senior base metals analyst at Refinitiv, who expects a modest copper surplus next year. Goldman Sachs sees fears of China's property slowdown as overblown, saying gains from EVs, renewables and electrical network investment outweigh the policy-moderated drag from property and machinery." Active Companies in the markets today include Los Andes Copper Ltd. (OTCQX: LSANF) (TSXV: LA), Southern Copper Corporation (NYSE: SCCO), Freeport-McMoRan Inc. (NYSE: FCX), Vale S.A. (NYSE: VALE), Teck Resources Limited (NYSE: TECK) (TSX: TECK.A).

The article continued: "Mine supply is expected to rise 3.9% to nearly 22 million tonnes next year, according to the International Copper Study Group, which expects a surplus of 328,000 tonnes in the refined market. Bank of America expects demand to hold firm next year and only sees a surplus in 2023. It forecasts prices to average $9,813 a tonne next year and $8,375 a tonne in 2023. Demand for copper from efforts to decarbonise will intensify, with JPMorgan forecasting it will account for more than 40% of overall demand growth next year in the 25-million-tonne market. JPMorgan forecasts total copper demand from energy transition rising from 1.8 million tonnes this year, to more than 3 million tonnes by 2025."

Los Andes Copper Ltd. (TSXV: LA) (OTCQX: LSANF) BREAKING NEWS - Los Andes Copper Announces the full-length intercept for CMV-001B is 1177.15m at 0.50% Copper Equivalent, at Vizcachitas Copper Project, Chile - Los Andes Copper Ltd. ("Los Andes", "LA" or the "Company") reports excellent continued deeper results from Hole CMV-001B and aggregate from 64m to 1265.15 meters the copper equivalent grade is 0.50%, including 0.43% copper and 198 parts per million ("ppm") molybdenum (with 24 meters of lost core not reported). The average grades include, newly reported 0.47% copper equivalent including 0.38% copper and 260 ppm molybdenum from 820m to 1265.15m down the hole. Assay grades for silver for the complete interval reported are still pending.

R. Michael Jones, CEO of Los Andes, commented: "A 1,177-meter intercept of copper mineralization is impressive and the area west of this intersection is open. We plan to systematically look for the limits of the Vizcachitas porphyry copper deposit with our continued drilling. We have completed approximately 6,000 meters of new drilling and, along with the approximately 52,000 meters in previous drilling, our data is increasing. However, we are early in our understanding of this 1.2 billion tonne plus mineralized copper system in one of the best copper belts in the world."

The area to the west of drill hole CMV-001B remains open and two drill rigs are completing holes in this area. As drill results become available, we will be assessing the impact on the resources and potential mine plan. Tetra Tech Engineering has been contracted to enable the implications of new large drill intercepts to be dynamically assessed on the resources and pit plans and this work can direct further drilling. Drilling is continuing with four drill rigs at Vizcachitas with the objectives of expanding the resources within and outside the boundaries of the open pit designed in the Preliminary Economic Assessment, (PEA, 2019). One drill rig is working on the east side of the deposit, and an additional rig is working in the South Breccia zone of the deposit.

The current Phase 1 drill program will continue with four diamond drill rigs and one reverse circulation drill rig. Approximately 6,000 meters of drilling have been completed. The full Phase 1 drill program consists of 30,000m of drilling with potential for further expansion. CONTINUED… Read this full release for Los Andes Copper at: https://www.losandescopper.com/news/2022/

Other recent developments in the markets include:

Southern Copper Corporation (NYSE: SCCO) recently reported third-quarter 2021 earnings of $1.12 per share, which matched the Zacks Consensus Estimate. The bottom line improved 72% from the prior-year quarter, primarily driven by higher sales on upbeat prices for its main metals and the company's efforts to improve cost efficiency and productivity.

Net sales were $2,681 million, up 26% year over year. The top line beat the Zacks Consensus Estimate of $2,672 million. Revenues were mainly driven by higher metal prices for copper (43.6%), molybdenum (143.5%) and zinc (28.3%). Gold and silver prices were down 6.4% and 1.3%, respectively. Operating cash cost per pound of copper, including by-product revenue credits, was 58 cents in the quarter under review, up 10% from the year-ago quarter. Total operating costs dipped 1% year over year to $1,173 million.

Vale S.A. (NYSE: VALE) The Canadian Institution of Mining, Metallurgy and Petroleum (CIM) Newfoundland & Labrador (NL) branch has recently awarded Vale the designation of "Miner of the Year". The award was announced at the annual Mineral Resources Review.

Vale's Voisey's Bay Mine has been working on the simultaneous development of two underground mines, while continuing operations of mining from the Ovoid. The mine expansion in Voisey's Bay will extend the life of mine until at least 2035 and provides for continuity of operations at the Long Harbour Processing Plant. June 2021 saw the site achieve the milestone of safely delivering first ore from the Reid Brook Mine while continuing to develop access, levels, and infrastructure at both mines. Production from Eastern Deeps is expected in 2022.

Teck Resources Limited (TSX: TECK.A) (NYSE: TECK) recently announced its unaudited annual and fourth quarter results for 2021. "We closed out 2021 by setting a number of financial performance records, including our highest-ever quarterly and annual adjusted EBITDA and adjusted profit attributable to shareholders," said Don Lindsay, President and CEO. "Teck's record-setting performance was driven by the ongoing positive commodity price environment and made possible by the tremendous resilience of our people, who persevered through heatwaves, wildfires, floods, freezing temperatures and the global pandemic to continue safely and sustainably producing the essential resources the world needs."

Highlights Were: Adjusted profit attributable to shareholders¹ was a record $1.4 billion or $2.58 per share in Q4 2021, more than five times higher than the same period last year, and $3.1 billion or $5.74 per share for the year; Profit attributable to shareholders of $1.5 billion or $2.79 per share in Q4 2021 was a quarterly record. Profit attributable to shareholders was $2.9 billion or $5.39 per share for the year; Adjusted EBITDA¹ was a record $2.5 billion in Q4 2021, more than 3 times higher than the same period last year, and $6.6 billion for the year. Profit before tax was a record $2.2 billion in Q4 2021 and $4.5 billion for the year; We generated cash flows from operations of $4.7 billion in the year, ending the year with a cash balance of $1.4 billion and no amounts drawn on our US$4 billion committed credit facility. Our liquidity as at February 23, 2022 is $7.0 billion; On February 23, 2022, we declared a $0.625 per share dividend, increased our annual base dividend to $0.50 per share and authorized up to $100 million share buyback; Overall progress on our QB2 project has reached 77% completion.

Freeport-McMoRan Inc. (NYSE: FCX) recently announced that it has posted its fourth-quarter and year ended 2021 financial and operating results press release on the Investor Relations page of its website. FCX is a leading international mining company with headquarters in Phoenix, Arizona. FCX operates large, long-lived, geographically diverse assets with significant proven and probable reserves of copper, gold and molybdenum. FCX is one of the world's largest publicly traded copper producers.

FCX's portfolio of assets includes the Grasberg minerals district in Indonesia, one of the world's largest copper and gold deposits; and significant mining operations in North America and South America, including the large-scale Morenci minerals district in Arizona and the Cerro Verde operation in Peru.

By supplying responsibly produced copper, FCX is proud to be a positive contributor to the world well beyond its operational boundaries. Additional information about FCX is available on FCX's website at fcx.com.

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