Copper (Cu) has been used by humans for at least the last 10,000 years, but more than 95% of all the copper ever mined and smelted has only been extracted since 1900 with more than half that extracted during the last 24 years. Much of that copper first went into the electricity infrastructure we now take for granted and more recently to feed China’s insatiable appetite for raw materials (as well as into all the new consumer electronic devices we now take for granite).
However, demand for copper is set to skyrocket yet again as Electric Vehicle (EV) manufacturing and the coming EV infrastructure revolution ramps up. And while the earth’s copper resources are potentially vast, only a tiny fraction of the mineral is actually economically viable to extract at present-day prices and technologies – presenting opportunities even for small cap miners to develop new copper mines.
Investment Snapshot
Electric cars typically contain as much as three-to-four times the amount of copper in today's gasoline fueled vehicles plus more than 40 million charging ports consuming an extra 100,000 tonnes of copper will be needed over the next decade.
The price of copper ended 2017 near a four-year high of US$7,260 per tonne – up 70% since hitting multi-year lows at the beginning of 2016
There won’t be any shale oil type of surprise for copper miners as supply can’t be turned on quickly. The risk to the market (and to miners or investors) mainly comes from Chinese demand falling(as China consumes around half of the world’s copper).
Small cap Tasca Resources Ltd (TAC: TSX-V) is a Canadian-based mineral exploration company with an experienced management team focused on the acquisition, exploration and development of gold, copper and silver mineral properties. The Company’s Poplar Property contains a copper deposit with significant upside potential while the Princeton Project is located near existing copper mines.
Copper Could Actually Benefit the Most from the EV Revolution
Although lithium andcobalt have caught the attention of investors looking for exposure to EVs and EV infrastructure, copper may actually be the mineral commodity that benefits the most. Electric cars typically containas much as three-to-four times the amount of copper in today's gasoline fueled vehicles (between 40 and 83 kg of copper versus an average of 23 kg) as its used in the batteries, windings (a pure EV can contain more than a mile of copper wiring in its stator windings) and copper rotors used inelectric motors, wiring, busbars and charging infrastructure.
According to the International Copper Association (ICA), copper usage for each type of EV is the following:
Internal combustion engine: 23 kg of copper.
Hybrid electric vehicle (HEV): 40 kg of copper.
Plug-in hybrid electric vehicle (PHEV): 60 kg of copper.
Battery electric vehicle (BEV): 83 kg of copper.
Hybrid electric bus (Ebus HEV): 89 kg of copper.
Battery-powered electric bus (Ebus BEV): 224–369 kg of copper (depending on the size of the battery)
In addition, ICA estimates that more than 40 million charging ports will be needed over the next decade with each one needing 0.7 kgs of copper while faster charging ports will use up to 8 kgs. All together these ports will consume an extra 100,000 tonnes of copper per year by 2027 plus even more copper could be needed to modify and upgrade existing electric grids (but there are no estimates yet as to just how much could actually be needed).
One caveat to remember: Demand for EVs will ONLY grow significantly once there are enough charging stations in place. Today, less than 1% of the world’s vehicles are electric, but by 2040 more than half of all new cars could be EVs thanks to government policies and if there are enough charging stations to fuel that level of demand.
Copper Prices Have Risen and Supplies are Already Constrained
Copper pricesare often regarded as a barometer of the world economy given that the mineral is used just about everywhere from inside people’s homes to industrial factories, to electronics and power generation and transmission.
The price of copper ended 2017 near a four-year high of US$7,260 per tonne (extending a bull run for a second year). In fact and as measured from multi-year lows struck at the beginning of 2016, copper has gained more than 70% in value with Goldman Sachs recently upgrading its price forecast to reach US$8,000 by the end of the year (up from US$7,050 previously).
BMO Capital Markets expects the copper market to slip into a deficit this year that could rise to more than 900,000 tonnes in 2021 and 2022 as supply growth slows due to deteriorating ore grades in countries such as Chile and the lack of investment in new projects. And while global copper stocks along with scrap and aluminium substitutes offer a buffer, the lack of new projects could mean larger deficits over a much longer term leading to even higher prices.
Moreover, Freeport-McMoran (NYSE: FCX)CEO Richard Adkersonrecently told the FT Commodities Global Summit in Lausanne that:
“…there’s no shale oil for copper - it can’t be turned on quickly… There’s not going to be any huge major upside surprises for copper. The risk to the market … has to do with China which consumes half the world’s copper… The risk is on the demand side, not the supply side.”
Keep in mind that China is pushing EVs for environmental reasons and will need at least 3 million charging ports alone. China is also reducing copper scrap imports in an effort to clean up its environment with the ban expected to boost copper prices by 5% this year.
Tasca Resources Ltd Has Two Potentially BIG Copper Mining Opportunities
All of the above trends in copper present opportunities even for small cap mining stocks like Tasca Resources Ltd (TAC: TSX-V) - a Canadian-based mineral exploration company focused on the acquisition, exploration and development of gold, copper and silver mineral properties with two potentially big mining projects containing copper in mine friendly and politically stable British Columbia:
1) The Poplar Project is a copper porphyry project located in a historic mining area approximately 35 KMs from the Huckleberry Mine and 42 KMs from Equity Silver. It’s also just 88 KMs from a rail head in Houston and 400 KMs by rail to the port at Prince Rupert.
Even more importantly, the property consists of 65,817 hectares that is road accessible with a logging road system providing access throughout most of property plus a 138 Kva power line crosses property. The area typical receives snowfall of 150 cm / 59 inches on an annual basis – meaning year round work is possible (unlike in other areas of Canada).
Various historic exploration and survey efforts have already been made on the property (1974 to 1982, 1992, 2005 and 2009 to 2013) with a 2004 metallurgical study calculating 93% copper recovery and 81% molybdenum(Mo) recovery.
The proposed $2.0 million exploration work program for this year will include the evaluation and testing of property wide targets.
2) The Princeton Project is a recently discovered gold (Au) vein deposit in a known metallogenic camp that already has a permit in place, but has yet to be drilled. Theproject is located 184 km east of Vancouver and consists of 13 claims covering 4,013 hectares near the following existing mines
Copper Mountain is 7 km to the northwest with production of 176M tons and 1.4B lbs of Cu plus reserves of 359M tonnes at 0.37% Cu.
Brenda Mine is 70 km to the northeast with production of 608M lbs of Cu and 149M lbs of Mo.
Elk Mine is 60 km to the north with similar geology and mineralization with production of 16,570 tonnes at 91.6 gpt Au (2.95 oz/tonne). Measured and indicated resources are 1.57 million tonnes at 5.9 gpt Au and inferred resources of 1.86 million tonnes at 6 gpt Au
Quartz was discoveredat the Princeton Projectsite in the fall of 2010 with over $484,000 in expenditures already completed out of a planned exploration expenditure budget of $1,200,000.
Experienced Team of Mining Professionals or Advisors
Tasca Resources Ltd has hired an experienced team of mining professionals or advisors to help bring these mining projects into production:
President, CEO and DirectorClive H. Massey has held directorships and senior management positions with various TSX Venture Exchange listed companies, including as CEO of Redhill Resources, Windfire Capital, Aldever Resources, Prescient Mining and Universal Uranium.
CFO & DirectorAlexander Helmel, B.Sc, CISA is an Independent Management Consultant with specific expertise working with early stage venture companies within the Canadian Capital Markets. Mr. Helmel focuses on private to public market transitions, corporate governance, the development of senior management teams and corporate growth strategies plus he has served as a director or officer for numerous private, CSE and TSX-V listed corporations.
DirectorWesley Pomeroy, P. Geo., MBA has served as a director of several junior mining companies for over 30 years.He is also currently a consulting geologist with Vortex Petroleum out of California and has been associated since 1977 with various other oil and gas exploration companies
DirectorJames Hyland, B.Commhas more than 25 years of experience in the public markets to the board as a financial and marketing consultant, a corporate founder and manager of numerous early stage public and private businesses.
Technical AdvisorR. Timothy Henneberry, BSc, P.Geois a Professional Geoscientist registered in British Columbia with over 37 years of experience in both exploration and production and public company senior management. He has worked in western and northern Canada, southwestern United States, Africa and South America. Mr. Henneberrywas also the founding Director, President and Chief Executive Officer of Appleton Exploration from 2006 to 2011 and founding Director, President and Chief Executive Officer of Indigo Exploration from 2009 to 2011, raising in excess of $11 million dollars for the two companies.
TheSmallCap Network will be following small cap Tasca Resources Ltd over the coming months and continually update its members on the company’s progress towards bringing both the Princeton and Poplar projects into production.