CEO: Co. Can Help Reduce World's Copper Deficit Soon

Source: Streetwise Reports 06/17/2024

The world continues to search for more copper sooner rather than later to help the transition to cleaner green energy. World Copper Ltd.’s (WCU:TSX.V;WCUFF:OTCQX; 7LY0:FRA) President, Chief Executive Officer, and Director Gordon Neal thinks his company will be able to contribute to lessening that deficit sooner.

The world continues to search for more copper — sooner rather than later — to help the transition to cleaner green energy. World Copper Ltd. (WCU:TSX.V;WCUFF:OTCQX; 7LY0:FRA) President, Chief Executive Officer, and Director Gordon Neal thinks his company will be able to contribute to lessening that deficit sooner.

Neal told Streetwise Reports the company’s next biggest catalyst is putting its Zonia project in Arizona into production in the next 36 to 48 months, or 30 months for the permits and 18 months to build the site.

About 15 million tonnes of unprocessed copper oxide, containing about 50 million pounds of copper, is already sitting on the site, he said. World Copper can put down a liner for a new leach pad and create a copper solution to sell that ore.

“That allows us to actually create a situation where we could have development or pre-production revenue before we before we turn on the operation,” Neal said. “And if you know anything about mining operations, there is a working capital deficit area between when you finish building your mine and when you actually do your first pour.”

In the near-term, Neal said the company plans to update the resource calculation for the project in the next 60 to 90 days. An updated mineral resource estimate (MRE) filed for Zonia by World Copper increased total resources by about 90% to about 198 million tonnes (Mt) from a 2017 estimate, with contained copper increasing by 55% to about 1.03 billion pounds.

Of that, 77 Mt is in the measured and indicated category and 122 Mt in the inferred. Neal said company advisors believe they can push some of the resource in the inferred category to measured and indicated. The company is also planning a drill program at the project to increase resources, possibly in the third quarter of this year.

Lots of ‘Untapped Potential’

World Copper recently announced it was switching its focus from its Escalones asset in Chile, which is at a permitting standstill, to Zonia. At least one analyst agreed with the decision.

“Given the current robust copper market environment, we believe the company’s focus on developing its smaller-scale Zonia project is prudent and more feasible for a junior mining company to tackle,” wrote Taylor Combaluzier, Red Cloud Securities vice president and mining analyst, in a May 23 corporate update note.

Combaluzier maintained Red Cloud’s Buy rating on the stock with a CA$0.80 per share target price, a more than 240% increase over Friday’s share price.

Combaluzier maintained Red Cloud’s Buy rating on the stock with a CA$0.80 per share target price, a more than 240% increase over Friday’s share price.

“With a new management team and technical committee, along with a current cash balance of about CA$4.9 million, we believe the company is well positioned to execute on its refined U.S. strategy,” wrote Combaluzier.

In the U.S., Combaluzier has noted in the past that Zonia “has lots of untapped potential” for copper. “It could either be rapidly developed for nearer-term production or potentially be expanded through exploration to increase the scale of the project,” he wrote.

America is currently a better choice of jurisdiction in which to pursue a copper project and potentially mergers and acquisitions activity, World Copper has said. The country is home to numerous mining-friendly jurisdictions, offers various governmental funding programs for critical metals, and has a robust domestic demand for the red metal.

The Catalyst: Economics Are Excellent

The Zonia Copper Oxide Project in central Arizona has been held under private ownership for almost 100 years and has undergone extensive historical exploration, metallurgical studies, and mine development planning, World Copper noted

The majority of the mineralized area was pre-stripped during previous open-pit mining operations in 1966, as the millions of tons mined were stacked on heap leach pads, producing cement copper up till 1975.

The property has been drill-tested with almost 700 holes. Neal said 74,000 meters have been drilled 15 meters apart. Copper mineralization is mostly open to the northeast, providing a considerable opportunity to grow the resource, the company said.

“The March 2018 historical Preliminary Economic Assessment (‘PEA’) and 2017 historical mineral resource estimate on the Zonia copper-oxide deposit concluded that the economics of the project are excellent,” World Copper said on its website.

‘We Can Contribute’ to Help Planet

EVs use more than three times as much copper as gas-burning cars. New copper production — and investment in exploration — will be needed to fuel the supply of those vehicles in the long term, analysts have said.

BMI analysts believe copper deficits could grow at an extreme pace over the coming decade as the clean energy revolution takes hold, predicting prices of US$11,500 per ton by 2032.

“In the longer term, we expect the copper market to remain in deficit as the green transition accelerates along with the demand for ‘green’ metals, including copper,” BMI’s analysts said, according to Stockhead. [OWNERSHIP_CHART-10410]

“Based on industry-wide capital intensity data, we calculate that some US$196 billion of investment will be required,” a market analysis issued by RFC Ambrian said.

Neal said his company was prepared to step in to help fill the void — sooner rather than later.

“The one thing I’d like people to walk away with is that we can contribute to reducing the deficit in copper to help this planet,” he said.

Ownership and Share Structure

Wealth Minerals Ltd. (WML:TSX.V; WMLLF:OTCQB) owns about 11.51% of World Copper.

About 27% is owned by management and insiders, including Director Robert Kopple with 8.37% and Board Chairman Hendrik van Alphen with 0.13%. CEO Neal holds about 0.96%. The rest is retail.

Its market cap is CA$41.84 million. It has 178 million shares outstanding, including 127.86 million free-floating. It trades in a 52-week range of CA$0.35 and CA$0.06.

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1. World Copper Ltd. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of World Copper Ltd.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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( Companies Mentioned: WCU:TSX.V;WCUFF:OTCQX; 7LY0:FRA, )