Copper Is Having a Resurgence Thanks To Renewable Energy And EV Push, And World Copper Is Positioning Itself To Benefit
Detroit, Michigan
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August 01, 2024 08:30 AM Eastern Daylight Time
By Meg Flippin, Benzinga
There’s been a lot of excitement lately around the new highs gold has been achieving, but another metal also seems to be witnessing a resurgence – copper. So much so that, by some estimates, 2035 demand is forecast to outstrip supply to the tune of 22 billion pounds per year. Driving a lot of that demand are the renewable energy and electric vehicles sectors, and the general global push toward electrification. The world is moving toward a greener future and copper is helping get it there. Over the next decade, copper consumption is forecast to increase by a minimum of ten million metric tons. It's already in a tight supply environment, which drove copper prices to a two-year high earlier this year.
All of it is good news for World Copper Ltd. (OTC: WCUFF), the Vancouver-based miner that happens to have a copper mining project in Arizona, a state rich in the “eternal metal.” In the early 20th century, Arizona was the world’s copper mining capital. Today it is responsible for about 74% of the country’s copper. It is home to some of the world’s largest copper mines including Morenci Mine, owned by Freeport-McMoRan Inc. (NYSE: FCX). All told, there are ten major copper mines in the state.
World Copper’s proximity to these mines should bode well for the company’s position and future growth. “Copper's essential role in electrification, renewable energy infrastructure and electric vehicles underscores its strategic importance,” wrote StockResearch Today in a recent report looking at World Copper’s prospects. “Copper prices are projected to remain strong due to supply constraints and increasing demand, which can drive up copper prices and, consequently, the company's profitability.
Strategically Located Mine
World Copper’s Zonia project, which is in the Walnut Grove Mining District, Yavapai County, Arizona, consists of 96 patented and 185 unpatented mineral claims, 566.85 acres of surface rights acquired from the state of Arizona and 376 acres purchased from a private estate – all totaling 4,373 acres.
Zonia is a near-surface, copper-oxide resource and a brownfield site having already been pre-stripped and mined in the late 1960s and '70s. The project has been significantly de-risked with over 50,000 meters of drilling completed to date and with substantial amounts of detailed engineering completed. The Zonia project's most recent mineral resource estimate includes 75.7 million short tons grading 0.30% total copper (Indicated Resources) containing 450.5 million pounds of copper and 122 million short tons grading 0.24% total copper (Inferred Resources) containing 575.4 million pounds of copper. With a favorable NPV of $192 million at $3.00/lb copper and resource expansion potential, Zonia represents a low-risk, high-reward investment, World Copper says.
Furthermore, World Copper recently identified a new opportunity at the mine, finding what could amount to over 14 million tons of historically mined material available for re-processing.
"The prospect of re-processing historically mined mineralized material would add more value and provide additional upside to the Zonia Project, and it is a unique potential value opportunity,” said Gord Neal, CEO of World Copper. “In mining projects, any opportunity to start production early and to generate revenue right from the start of the operations, can greatly improve the economics of the project, increasing the net present value (NPV) and reducing the financing needs, making the project more robust, and lowering the execution risk."
A Green Edge
The Zonia mine boasts several infrastructure advantages including on-site power and water, road and rail access, close proximity to major cities and existing mining operations, which brings down production and transportation costs. Arizona is also a mining-friendly state making it easier to obtain permits.
Proximity and infrastructure aren’t the only advantages World Copper can boast of – the company also has an environmentally friendly and cost-effective mining process. As it stands, World Copper estimates that 85% of global refined copper production comes from sulphide concentration and smelting. It's expensive, slow to develop and harmful to the environment. Only 15% of global refined copper production comes from oxide deposits, which are cheaper, faster and greener. World Copper is among the handful of miners using oxide deposits.
But that’s not all. Its SX-EW (solvent extraction-electrowinning) process eliminates the need for smelting, lowering emissions. All told, World Copper is cutting costs and curbing emissions by 38%. The goal is to achieve net zero CO2 emissions. Mining companies are being put under increasing pressure to adopt sustainable mining practices, and embracing them increases the company’s appeal to ESG-focused investors.
Seasoned Management Team
It shouldn’t be too surprising that World Copper says the Zonia project is moving along hiccup-free – the company is run by a seasoned team of professionals led by CEO Neal. Neal has extensive experience in the metals and mining sector, as well as in capital markets, corporate governance, corporate finance and investor relations. Board members Derek White, who has over 35 years of experience in senior management and mine building, and Myron Smith, who has successfully permitted multiple mining projects in Arizona, round out the pedigree, which includes several other C-suite players. World Copper says its experienced team enables it to efficiently navigate project development, regulatory challenges and market dynamics, increasing the likelihood of project success and value creation for investors.
Copper is playing an important role in the world’s transition to green energy and World Copper is positioning itself to be a major supplier of the eternal metal. With a mine strategically located in Arizona, a green and low-cost approach and a deep management bench, World Copper may prove to be an ESG holding that’s around for the long haul.
Featured photo by Karim Ghantous on Unsplash.
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