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New York, NY – November 22, 2021 – Copper prices rose on Tuesday following positive developments in talks between US President Joe Biden and Chinese leader Xi Jinping. Following the virtual talks, the dollar weakened, improving risk sentiments among investors. With copper prices rising, and the two governments seeming to be on an amicable start investors are taking these developments as a sign that copper could be on the rebound from last month’s drop. Copper mining companies such as Kutcho Copper (TSXV:KC) (OTCQX:KCCFF), Teck Resources Limited (NYSE: TECK.A) (TSX:TECK.B), Southern Copper Corporation (NYSE: SCCO), Capstone Mining Corp. (TSX:CS), and Turquoise Hill Resources Limited (NYSE: TRQ) stand to benefit from the rising copper prices.
On November 8, Canadian resource development company Kutcho Copper (TSXV:KC) (OTCQX:KCCFF) announced the results of its feasibility study for its Kutcho copper and zinc project in Northern British Columbia, which revealed robust project economics driven by high base metal prices and low-cost production.
The Kutcho Project, which has an open-pit and underground mine life of 11 years, includes a significant high-grade mineral resource of 22.8 million tonnes grading 2.3% copper equivalent, and 1,096 Mlbs of zinc. The resource also includes silver and gold credits. Kutcho will mine the main deposit using a conventional open-pit operation, followed by an underground longitudinal longhole open stoping with cemented rock fill for the deeper deposit and the Esso Deposit.
The project, which has the financial support of precious metals streaming giant Wheaton Precious Metals, is looking at a production of 533 million pounds of copper, 841 million pounds of zinc, and 10.6 million ounces of silver, and approximately 130,000 ounces of gold during the mine life. The company expects a production capacity of 4,500 tons per day within the first year of production.
Some of the highlights of the feasibility study include an After-tax NPV (discounted at 7 per cent) of C$931-million and IRR of 41 per cent based on spot metal prices of $4.50 per pound copper and $1.57 per pound zinc, and a payback period after the production start of just 3.4 years. The initial capital cost was also estimated to be low, at only C$483
“The Feasibility Study represents a major milestone for Kutcho Copper as we continue to advance the high-grade Kutcho copper-zinc project towards a development decision,” said President & CEO of Kutcho Copper Vince Sorace.
“The results of the Feasibility Study highlight the attractive economics of the Kutcho project which are resilient at lower metal prices, very attractive at base case prices and exhibit significant leverage to rising prices as reflected in spot metal prices with a C$931 million after-tax NPV of 7% and a 41% IRR. We believe that the results of the Feasibility Study mean that Kutcho Copper is now one of the most undervalued copper investment opportunities in North America,” he added.
In addition to the mining operation, Kutcho has an extensive reclamation program involving backfilling the open pits and water treatment initiatives. The company also aims to reduce carbon emissions related to the project by using natural gas in place of diesel for power generation.
In October, Kutcho also outlined potential open pit and underground resource expansion targets for 2022 that reach beyond those included in the feasibility study. The company is currently assessing plans to aggressively test these priority targets in 2022, which have the potential to enhance the size and scale of the project.
For more information on Kutcho Copper (TSXV:KC) (OTCQX:KCCFF), click here.
Significant Revenues and Growth for Copper Mining Companies
For the twelfth consecutive year, Teck Resources Limited (TSX:TECK) (TSX:TECK.B) has once again been ranked first in the Metals and Mining industry by the S&P Dow Jones Sustainability World Index. The company continues to emphasize its commitment to environmental sustainability and social responsibility. Following the announcement, the company has made a $250,000 donation to the Canadian Red Cross, and the British Columbia Society for the Prevention of Cruelty to Animals to support the evacuation and support of people and livestock in the flood-affected areas in BC.
Southern Copper Corporation (NYSE: SCCO) saw a 25.9% increase in revenue in Q3 2021 compared to Q3 2020 following the rise in metal prices. The company generated $2,680.9 million in net sales. While Southern Copper saw a slight decrease in copper production, it still expects to produce 957,000 tons of copper in 2021.
Capstone Mining Corp. (TSX:CS) received the final approvals from the US Forest Service, extending the life of its Pinto Valley mine to the year 2039. With the extension plan for the mine, the company expects to produce 2.5 billion pounds of copper and preserve about 700 jobs in Gila County, Arizona. The plan to extend the mine was approved by the Tonto National Forest after a detailed evaluation of technical information and consultations with stakeholders.
Turquoise Hill Resources Limited (NYSE: TRQ) saw a 16% year-over-year increase in copper production in Q3 2021 from its Oyu Tolgoi mine. The mine generated 41,935 tons of copper placing the company well on track to achieving its production guidance for 2021. In addition to copper, the company produced 130,799 ounces of gold, generating a total revenue of $622.8 million for the quarter. The company has a production guideline for 150,000 to 180,000 tons of copper.
Copper will play an important role as the world moves towards clean energy and prices have started to reflect the growing demand for copper. With these developments, copper plays like Kutcho Copper stand to benefit investors.
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