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Transatlantic Mining to fare well as copper prices advance

Wednesday, January 4, 2017 3:49
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Emerging metals explorer Transatlantic Mining Corp. (CVE:TCO) had a stellar year of activity in 2016 and much bodes well in the year ahead too as US President-elect Donald Trump could signal huge demand for resources such as copper.

Shares have stabilised at around 2012 levels and the company is in the confluence of copper, gold and silver, where the outlook for these commodities is pretty good.

The base case for base metals

According to the Bloomberg Commodity Index, which last year had its first gain since 2010, industrial metals made a surprise jump in the last quarter of 2016, with copper posting a gain of 13% — the biggest such vault since 2010.

The gains were propelled by a drop in London Metal Exchange-monitored inventories and speculation that Trump’s pledges on infrastructure building will increase demand. Money managers have more than trebled their copper net-bullish position since early November.

While it is true that Trump’s election victory was great news for copper prices, the immediate aftermath was bad for haven asset gold; however, bullion still had its best annual gain since 2011.

Gold is covered too

One of the issues which resource analysts have identified is that an uncertain outlook for the Trump administration could still lead to a double-digit rally in gold prices in 2017.

Either way, Transatlantic Mining is in the right place to benefit from the tailwinds.

Its most recent news was just last month when it reported a more than 270% internal rate of return on its gold-silver US Grant mine interest and the Alder Mountain project and an exploration target of half a million ounces of gold equivalent.

In November, the company also reported a three-fold increase in assets with its third quarter earnings and said that on Sept 30 it signed a binding agreement with the owners of a neighbouring claim (Cabin claim) that allows the company access to recommission the Cornucopia shaft for use in ventilating the deepest reaches of US Grant No. 3 level.

In August, the company said it raised exploration investment dramatically, and well it might given the direction of commodity prices into 2017.

The big test for the company will be reaching its exploration targets as sites such as the US Grant mine and Alder Mountain project. At least unit prices are headed the right way and will offer an extra boost.

Story by ProactiveInvestors


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