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Strategies & Market Trends : The Aristocrats (tm)
OGZPY 9.470+2.8%Dec 2 4:00 PM EST

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To: sense who wrote (2695)8/28/2021 1:25:36 AM
From: sense   of 3028
Part I More to follow...

Time to buy copper stocks on sale ?

Today I loaded up my full list of copper stocks into the computer and did some basic analysis... starting with price performance history and the RRGs... did a quick look at risk factors, performance history, charts, news items and my WAG at near term expectations in performance... and then rank ordered them... which turns out to have the short term charts not really disagreeing much with the rest...

But, don't forget Dr. Copper's future success depends only on the rest of the real economy working well enough that prices are sustained above profitability.. so, the economy. actually working... while the stocks depend on prices being sustained in both the metals markets AND the stock markets. Don't look at a daily chart and leap... without considering the weekly chart AND the monthly chart... while considering your expectations for where the economy and the market goes next... in the time period of your planned trade.

So, my list of timely picks in junior copper exploring/mining stocks... Let's see how well they do from here:

1. GARWF Golden Arrow Resources. They're just getting started on drilling the first holes on the Rosales project in Chile... First, looks to me like the long term Geopolitical Risks have been over-blown... and will settle down into the usual... but, we're looking short term ? They're drilling soon... odds are very good they're going to find what they're looking for and become a copper finder very soon... as they have done their homework properly. But, more critically... chart looks good... historically stable... and, at only $0.14 now, they've got a market cap of only $15 million... but have $17 million cash in the bank and have just issued a normal course issuer bid... A no brainer....

2. WCU.V... World Copper is a copper finder that has been bucking the market trends... very experienced management have "done this before" and succeeded... emerging geopolitical risks well managed with diversification... now at $0.52 having just put out an updated resource on the Escalones Project in Chile... and it is HUGE... Just wrote about it here: Holy Crap... this is gonna be fun... 10X plus potential just to price it at something nearer parity with other comparable explorers.

3. QTA.V Quaterra Resources A fascinating contrast with another miner in the same area I covered recently... Nevada Copper NEVDF with posts here and here... my concerns with it being under-managed and ponderously proceeding without feeling overly well prepared. Geological risks realized in hitting dikes that slowed down development... then turned out to be water-bearing... altering the view of the pace and cost of their development plans... because too much water. QTA instead sold some water rights... then had Nevada refuse to sustain their rights... which looks like a purposeful theft of their rights by the state seeking to redistribute them after the takings... perhaps with some competitive influence ? So, suddenly, a legal battle to retain rights they've sold and other rights critical for the project to succeed ? Opposite problems with water. But QTA seems not to be similarly limited by a weak management as NEVDF was... so a better bet on resolving the water issues. Maybe NEVDF being 50% off... with a management change... will be able to "get it figured out"... but they do have $200 million in debt hanging on them already... which is now far more of an issue. I'll take QTA's recent moves... and chart... as better qualifying.

4. FMC.V Forum Energy Metals. A finder finding. Copper play with a big partner in Rio Tinto funding it... a uranium project with another partner... Other irons in the fire now with self driven exploration getting ready to happen... a nickel PGE project... and, they're doing their homework properly... Thus far, the market hasn't responded to a reboot of the previously failed copper exploration effort... that has succeeded well enough this year in finding what the first effort failed to find last year. Hostage to big company focus and timelines and risk management and budget cycles and evaluation criteria and many choices to make... But the success of the effort has massively de-risked it... and the market is ignoring it. Worth holding patiently... but it might require patience for the copper project to matter. Short term... maybe the nickel PGE project they're drilling on their own now will prove to be the charm.

5. DNT.TO Candente Copper Nice chart. Just raised C$1.1M at $0.125 with half from FSUMF / FSUGY or Fortescue (a screaming buy right now... or falling off a cliff ?) who is an very well managed Aussie iron miner... that is owned by China.. and they have a director on the board. Upon completion of the Private Placement, we will be well financed to complete an updated Preliminary Economic Assessment (“PEA”) which will better define opportunities with potential to lower initial capital expenditures, operational costs and enhance our environmental, social and governance practices as recently identified by Ausenco in their Desk Top Study. The Financing will also allow us to advance our permitting for drilling and our community work The PEA seeks to lower costs and decide between 40, 50 or 60,000 tons per day throughput... before expanding it to 95,000. 9B lbs copper, 2M oz gold and 54M oz silver in: Measured and Indicated Resources of 752.4 million tonnes grading 0.45% copper, 0.07 grams per tonne (“g/t”) gold and 1.9 g/t silver (0.52% Cu equivalent) containing 7.533 B lb Cu, 1.67 M oz Au and 45.24 M oz Ag and Inferred Resources of 157.7 million tonnes grading 0.44% copper, 0.06 g/t gold and 1.8 g/t silver containing 1.434 B lb Cu, 0.3M oz Au and 8.932 M oz Ag.
The Technical Reports, referred to above, are based on a throughput rate of 95,000 tpd producing 260M lb Cu/year which resulted in post-tax NPVs and IRRs of $1.985B and 24.8% at $3.25/lb Cu; and $2.865B and 31.2% at $4.00/lb Cu. The Incentive Price ($2.50/lb Cu) for Cañariaco Norte is in the lowest quartile of top 84 copper projects worldwide named by Goldman Sachs. Cash costs are also in lowest quartile of the copper industry. However, low in cost is not the same thing as low in capital required... as a huge project it will be dependent on long range planning and $$$$... and won't get done based on the strength of a PEA. But, a big payoff if / when it happens...

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