Will Copper Shine Brighter with Sprott's IPO?

Source: Michael Ballanger 05/14/2024

Michael Ballanger of GGM Advisory Inc. comments on Sprott Asset Management’s filing of a preliminary prospectus for an IPO for a “Physical Copper Trust.” He also shares a few copper stocks that may benefit from this.

The PPI number came in hotter at 0.5% versus the expected 0.3%, and the core PPI was double the 0.2% consensus coming in at 0.4%.

Stocks have largely ignored the negative implications, but the 10-year and 30-year bond yields are rising as they definitely did not like the inflationary implication of spiraling wholesale prices.

This always gets passed down to retail or “consumer” prices, suggesting that the CPI number might also come in hot.

I will be watching Jerome Powell’s speech this afternoon to detect any hint of a hawkish overtone, which would not be appreciated by the stockroaches.

The metals initially backed off but are now responding properly to the PPI, with gold and silver now up 0.37% and 0.54%, with the hero of the day being copper, up 1.50%.

The big news this morning is the filing by Sprott Asset Management of a preliminary prospectus for an IPO for a “Physical Copper Trust” in the same manner in which they filed a “Physical Uranium Trust” back in 2021 with U3O8 under US$30.

With copper supply already considered “tight” and mine production dropping, this could not have come at a better time for copper bulls like us.

If this trust has anywhere near the impact on copper that it did on U3O8, then copper prices could easily double, considering of course that U3O8 tripled after the Sprott Physical Trust got involved from 2021 until late 2023.

For the boys over at Sprott to come charging, in fact, LEAPING, onto the copper bandwagon is extremely positive for holders of Freeport-McMoRan Inc. (FCX:NYSE), Fitzroy Minerals Inc. (FTZ:TSX.V; FTZFF:OTCQB), American Eagle Gold Corp. (AE:TSXV), and Vortex Metals Inc. (VMSSF:OTCMKTS;VMS:TSX;DM8:FSE).

There is, of course, also Sprott Copper Miners ETF (COPP:NASDAQ) and Sprott Junior Copper Miners ETF (COPJ:NASDAQ).

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Important Disclosures:

1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of American Eagle Gold Corp. and Vortex Metals Inc.
2. Michael Ballanger: I, or members of my immediate household or family, own securities of: All. My company has a financial relationship with Fitzroy Minerals. I determined which companies would be included in this article based on my research and understanding of the sector.
3. Statements and opinions expressed are the opinions of the author and not of Streetwise Reports, Street Smart, or their officers. The author is wholly responsible for the accuracy of the statements. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Any disclosures from the author can be found below. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

For additional disclosures, please click here.

Michael Ballanger Disclosures

This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.