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Sustainable Electrification of Major Industries Thrusts Copper into the Spotlight

Published

1 year ago

June 28, 2023

FinancialBuzz.com News Commentary

NEW YORK, June 28, 2023 /PRNewswire/ — Copper is one of the most versatile and widely-used metals in the world as well as a widely-traded asset in the major commodities market. The metal is often utilized in the construction of structures, solar energy transmission, and high-speed data transmission lines due to its high electrical and thermal conductivity. It is also commonly utilized to build cables and pipelines due to its malleable and soft physical properties in soft state. Geographically, copper producers with the largest volume by country include Chile, Peru and China. Among them, Chile is responsible for more than double the output of the next biggest producer, Peru, with the former producing 5.6 million metric tons in 2021 compared to Peru’s 2.2 million. Vortex Metals Inc. (OTC: VMSSF) (TSX-V: VMS), Hudbay Minerals Inc. (NYSE: HBM) (TSX: HBM), Freeport-McMoRan Inc. (NYSE: FCX), Lundin Mining Corporation (TSX: LUN), Teck Resources Limited (NYSE: TECK) (TSX: TECK)

Electric Vehicles (EVs) are a prime example to illustrate how essential copper is in new growing industries. The batteries for EVs are built using a variety of metals like lithium, nickel, cobalt, manganese, and graphite, all of which are crucial to battery performance, longevity, and energy density. Yet, EVs can contain more than a mile of copper wiring inside the stator to convert electric energy into mechanical energy. Overall, the growing awareness about the amount of carbon emissions released into the environment from automobiles has helped spur the adoption of EVs around the globe. According to data provided by Allied Market Research, the global EV market was valued at USD 162.34 Billion in 2019, and is projected to reach USD 802.81 Billion by 2027, while registering a CAGR of 22.6%.

Vortex Metals Inc. (OTCQB: VMSSF) (TSX-V: VMS) announced yesterday breaking news that, “it has entered into a non-binding Letter of Intent (LOI) for an option to acquire up to an 80% Interest in the Illapel Copper Project, with SCM Ventana Minerals Group, a Santiago, Chile based mining Company. The parties have agreed to a 90-day exclusivity period to negotiate the definitive agreement.

Illapel Copper Project Highlights:

Favorable Geology Extends north and south from the Mineralization at the Rio 27 Mine
Exploration Permits Obtained for Drilling and Exploration
High-Priority Drill-Ready Targets Identified
Access to Paved Roads, Power Grid and Water
8,000 Hectare Prospective Land Package
Adjacent to the Rio 27 Mine and Processing Plant
Year round drilling
Low Elevation- 1500 metres above sea level

“I believe that the Illapel Project combined with our two Mexican copper-gold assets provides Vortex stakeholders with a rare opportunity. Given the geological settings, all three projects possess the potential to be transformative,” said Vortex Chairman and Founder Michael Williams.

Project Overview – The Illapel Copper Gold project is located in the Commune of Illapel, Choapa Province of the Fourth Region of Chile and is 250 km north of Santiago. The nearest town is the mining centre of Illapel located 35 kilometres away. The project has excellent infrastructure connecting paved roads, electricity, and mild climate favourable to year-round exploration. Illapel is fully permitted for exploration, and drilling may potentially commence immediately following the execution of the definitive agreement.

The region surrounding Illapel has seen extensive mining activity, both past and present. Of particular note, the El Espino copper-gold (IOCG) Project (Engineering feasibility complete; awaiting environmental permits. Source: www.pucobre.cl) is located approximately 14km to the north, and is presently planned for development by Pucobre. Several small gold and copper mines also operate in the immediate área.

Rio 27 Mine – The Illapel Project is adjacent to an existing mining operation owned by Ventana Group and known as the Rio 27 mine. The Rio 27 mine has been in production since 2010 with its near-site processing plant. Ventana has advised that to date, approximately 400,000 tonnes of mineralized material with an average grade of 1.39% copper has been processed at site. The LOI provides a right of first refusal (ROFR) on the Rio 27 Mine and processing facility.

Vikas Ranjan, Chief Executive Officer and a Co-Founder of Vortex Metals, stated that Vortex Metals is thrilled to announce the option to acquire a highly prospective exploration project, adjacent to, and extending from, an existing mining operation. Chile is the largest copper producer in the world, accounting for approximately 28% of global copper production. In our view one of the best ways to make a discovery is to explore by an existing mine. We believe that with the Illapel Copper property, we will acquire an extremely prospective project that is drill-ready…

Qualified Person / Quality Control and Quality Assurance – Dr. John E. Larson, Ph.D., is a qualified person (“QP”) as defined by NI 43-101 and has reviewed and approved the technical content of this press release.”

Hudbay Minerals Inc. (NYSE: HBM) (TSX: HBM) announced on June 20^th, that it has closed its previously announced court-approved plan of arrangement with Copper Mountain Mining Corporation (“Copper Mountain”), pursuant to which Hudbay has acquired all of the issued and outstanding common shares of Copper Mountain effective as of today’s date (the “Transaction”). Copper Mountain is now a wholly-owned subsidiary of Hudbay and, in accordance with the terms of the Transaction, former Copper Mountain shareholders received 0.381 of a Hudbay share for each Copper Mountain share previously held. Peter Kukielski, Hudbay’s President and Chief Executive Officer, commented, “We look forward to the formal integration of Copper Mountain into our complementary portfolio of operating assets. By applying our technical expertise, we expect to unlock significant annual operating efficiencies and synergies at the mine to drive further value for shareholders. This transaction creates a larger, more resilient operating platform that enhances our copper exposure, accelerates our deleveraging efforts, and positions us to more efficiently allocate capital to prudently advance our enviable organic growth pipeline.”

Freeport-McMoRan Inc. (NYSE: FCX) announced on February 15^th, the Copper Mark has been awarded to PT Freeport Indonesia (PT-FI).With this award, FCX has achieved the Copper Mark at all 12 of its eligible copper producing sites globally. FCX also is pleased to announce that its primary molybdenum mines, Climax and Henderson, have been awarded the Molybdenum Mark, making FCX the first primary molybdenum miner to achieve this distinction. Richard C. Adkerson, Chairman and Chief Executive Officer, said, ” I am pleased to report today that all of our copper operating sites have now been validated by the Copper Mark. As the operator of 9% of the world’s copper production, we have a long-standing commitment to safe and responsible production practices and are dedicated to continuous improvement. We recognize the critical role our products play in the global economy and in advancing and accelerating decarbonization. I am proud of our team for their accomplishments and ongoing commitment to responsible production practices.”

Lundin Mining Corporation (TSX: LUN) announced on March 27^th, it has entered into a binding purchase agreement with JX Nippon Mining & Metals Corporation and certain of its subsidiaries (collectively, “JX”), to acquire fifty-one percent (51%) of the issued and outstanding equity of SCM Minera Lumina Copper Chile (“Lumina Copper”), a wholly owned subsidiary of JX which operates the Caserones copper-molybdenum mine (“Caserones”) located in Chile (the “Acquisition”). JX will receive upfront cash consideration from Lundin Mining of $800 million, and in addition, $150 million in deferred cash consideration will be payable by Lundin Mining in installments over a six-year period following the closing date. Lundin Mining will also have the right to acquire up to an additional 19% interest in Caserones for $350 million over a five-year period commencing on the first anniversary of the date of closing. Additional details are provided below. Commenting on the transaction, Peter Rockandel, CEO, said, “Upon closing of the Acquisition of Caserones, we add another long-life copper mine of material size and with significant growth potential to our portfolio, in a region in which we have considerable knowledge and experience. The Caserones team has achieved meaningful operational improvements in recent years, and we will work to unlock additional upside through our strong technical resources and existing presence in the region. The initial controlling interest increases our exposure to what we believe is a growing top-tier copper mining district. We retain the option to further increase our ownership over the next few years at an attractive price. The Acquisition further solidifies Lundin Mining’s position as a growing global producer of copper as the world shifts to a lower carbon future.”

Teck Resources Limited (NYSE: TECK) (TSX: TECK) and Agnico Eagle Mines Limited announced today that the previously announced on April 6th, a joint venture transaction between Teck and Agnico Eagle to advance the San Nicolás copper-zinc development project has closed. Teck and Agnico Eagle have entered into a joint venture shareholders agreement whereby Agnico Eagle, through a wholly-owned Mexican subsidiary, has agreed to subscribe for a 50% interest in Minas de San Nicolás, S.A.P.I. de C.V. (“MSN”) for US$580 million, to be contributed as study and development costs are incurred by MSN. For governance purposes, Agnico Eagle is deemed to be a 50% shareholder of MSN from closing, regardless of the number of shares that have been issued to Agnico Eagle or its subsidiary.

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