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Copper: Its long-term outlook and the potential for junior explorers

by Greg Klein | June 24, 2014

After iron and aluminum, copper comprises the world’s largest metal market. A newly released report by Derek Hamill, head of research and communications for Zimtu Capital TSXV:ZC, examines the commodity, its short-term and long-term prospects, and its potential “upside for investors in well-managed exploration companies who are willing to be patient.”

Hamill finds that the substantial production growth that began in 2012 should cause a surplus of refined copper over the next several years. But increasing demand, falling grades and the failure of some large-scale projects could reverse the trend by 2019 or 2020.

“Expectations for the copper mining sector suggest there is little value in defining and proving up low-grade, large tonnage copper deposits in the current market, especially where environmental concerns are forefront,” he writes. Hamill suggests that smaller operations emphasizing grade over tonnage and featuring manageable capital costs can help pick up the slack. As an example he points to Pasinex Resources CSE:PSE, a Zimtu core holding that’s pursuing copper, zinc, lead, silver and gold in Turkey, a mining jurisdiction of increasing importance.

Download the 16-page research and opinion report.

Disclaimer: Zimtu Capital Corp is a client of OnPage Media Corp, the publisher of The principals of OnPage Media may hold shares in Zimtu Capital.

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