Investing in a copper project in the USA today is no doubt as strategic as staking a claim to mine gold at Little Meadow Creek in North Carolina in the early 1800s. Gold was discovered there in 1803 and the discovery resulted in the first gold rush in America.
Even if the gold rush at Little Meadow Creek didn’t last that long, investors in gold would have been rewarded generously for the next 200-odd years if they stuck to their guns. Throughout the centuries, the allure of gold has never waned. And it appears that the long-term demand for copper will follow the same trajectory, even if the drivers of demand are fundamentally different.
Idaho Copper’s CuMo copper-molybdenum-silver project is a major copper asset complemented by significant amounts of co-products molybdenum and silver. The company and its predecessors have spent more than USD 50 million on exploration programs since the 1970s to elevate the project to a level where it can be regarded as an advanced exploration play today.
Currently, Idaho Copper (OTC: COPR) has four billion pounds of copper, one and a half billion pounds of molybdenum, and close to 180 million ounces of silver in the Measured and Indicated Resources category.
Being located in the state of Idaho – a stable mining jurisdiction in the USA – immediately adds value to any project. With many pundits referring to copper as the new gold, the CuMo Project could become a very strategic asset in the long term, despite the current volatility in the market.
Importantly, the long-term outlook for copper remains as strong as ever. “Strategic” and “critical” are words that have become synonymous with copper and are being used in the same breath as copper by captains of the mining industry.
Copper most strategic in the world
Mark Bristow, CEO of Barrick Gold Corporation, the second-largest gold mining company in the world, recently said that copper was the most strategic metal in the world. “As gold is the most precious metal, copper is the most strategic of all metals,” said Bristow in an interview with CNBC. It is no secret that Bristow has been on the hunt for significant copper deposits to add to Barrick’s impressive gold portfolio. Earlier this year, the company attempted a friendly takeover of Canadian-based copper producer First Quantum but was rebuffed. Nonetheless, Bristow has not given up on diversifying Barrick’s portfolio and increasing its current copper output.
Bristow said that the fundamentals for copper are solid and that there are strong indications that the market will be in short supply “very, very soon”. “All signs point to a better copper price in the future. Mining is a long-term game, and you cannot manage your business based on short-term events,” said Bristow.
As the market heads towards an imminent supply crunch, it is critical that new copper projects are brought into production as soon as possible. But the world might have been asleep at the wheel. Despite copper now being recognized as a critical and strategic mineral by various bodies across the globe, including the Canadian government, and the US Department of Energy, there might not be enough new projects in the pipeline to ensure sufficient supply through the end of this decade.
Idaho Copper advantages
CuMo is advanced, with significant drilling and evaluation completed to date, and the most recent technical report – a Preliminary Economic Assessment (PEA) prepared by SRK Canada – was filed in May 2020. Idaho Copper aims to complete an updated PEA over the next 6 months, and then move towards a Preliminary Feasibility Study for CuMo within the next year and a half. Pending additional drilling and metallurgical studies, other technical work, permitting, and a Bankable Feasibility Study, CuMo could potentially be in production before the end of the decade.
This puts the company at a distinct advantage compared to similar greenfield projects in other parts of the world, less favorable towards mining, where it might take up to 10 years or more to bring a new mine into production.
Starting a new copper project is tough and doesn’t happen overnight. According to Peter Rockandel, President and CEO of Canadian head-quartered Lundin Mining, factors such as long waits for permits, environmental, social, and governance (ESG) standards, a decline in ore grades, and low global copper supply often hamper the development of new copper mining projects.
“It’s getting more challenging bringing new projects online, whether because of the financial costs or ESG permitting. So, I think the major challenge is on the supply side. It will be very difficult in two to three years from now,” says Rockandel.
Copper is the backbone of the new green economy and is a necessary component of renewable energy sources like solar panels, wind turbines, and batteries. However, Bristow says that the major driver of demand in the future will be what he refers to as “greening the grid.” There is a need to distribute renewable energy from its source over long distances to large industrial areas of the world. To do this we need large cables though and the only way to conduct electricity is with copper.
Copper now critical
Earlier this year, Robert Friedland, CEO and President of Ivanhoe, said that the mining of copper is absolutely critical. Billionaire Friedland, the copper industry, and a bipartisan coalition of federal Senators and US Representatives have called upon the US Department of the Interior to include copper as a critical mineral material. NYSE American and TSX-listed Ivanhoe and Ivanhoe Electric own significant copper projects around the world. Ivanhoe Electric recently acquired 2511 ha of surface title and associated water rights at the Santa Cruz copper project in Arizona.
Ivanhoe Electric also operates the Unity copper mine in Oregon, Hog Heaven in Montana (copper, gold, silver), Tintic in Utah (copper, gold silver), White Hill in Nevada (copper), Lincoln in Utah (copper, gold, lead, zinc and silver), Bitter Creek in Arizona (copper, gold) and Carolina in North Carolina (copper).
Friedland, who’s behind the discovery of some of the world’s biggest copper deposits, said in a Bloomberg TV interview that copper must be a critical metal and that it is time that America develops a new copper mine. “America hasn’t developed a mine of consequence for 40 years,” he said. Friedland has long championed the importance of the metal used in everything from wires and pipes to missiles and tanks.
Not long after Friedland’s interview, the US Department of Energy (DOE) officially added copper to its critical materials list, marking the first time a US government agency has included copper on one of its official “critical” lists, following the examples of the European Union, Japan, India, Canada, and China.
According to Alejandro Moreno, acting assistant secretary for DOE’s Office of Energy Efficiency and Renewable Energy copper is a major contributor to US economic and national security. Moreno says that copper demand projections will double by 2035, primarily due to plans for the clean energy transition, electrification, and clean water infrastructure. “The nation would be defenseless without electricity and copper’s vital role in its generation, transmission, and distribution,” adds Moreno.
Could CuMo become the USA’s next producing copper mine? America has a long history of copper production. Copper was mined in Michigan, even before Europeans arrived. Huge deposits in places like Butte, Montana, Bingham, Utah, Yerington, Nevada (which is reopening) and Morenci, Arizona helped drive the electrification of the country. Many of these mines have since closed, but the American Southwest still produces a lot of copper. However, there are not many new projects earmarked to open their doors soon.
Northern Dynasty Minerals’ Pebble Project and Rio Tinto/BHP’s Resolution mine, two of the largest copper deposits in the world, and located in the USA, are both still on ice and tied up in litigation.
Northern Dynasty’s Pebble project, near Bristol Bay in Alaska, hosts a monstrous 37.18 million tonnes of contained copper. Pebble has been hampered by delays and environmental concerns over the years regarding the potential destruction of salmon spawning grounds and habitat and has faced opposition from NGOs, communities, and governments. In fact, Pebble’s fate hangs in the balance following the Biden administration’s proposed ban on waste disposal in the project area.
Similarly, Rio Tinto and BHP’s jointly owned Resolution copper project in Arizona has been hamstrung by controversy and faces continued push-back from local communities, Indian tribes, and environmentalists. Resolution sits on a resource of more than 27.27 million tonnes of copper, but for 26 years the world’s top mining giants have spent more than USD2-billion to get the project up and running. So, as things stand at the moment, Idaho Copper (OTC: COPR) could well be the first mover for a major US copper deposit.