Energy Metals News Commentary
Issued
on behalf of Usha Resources Ltd.
VANCOUVER, BC, July 26,
2024 /PRNewswire/ -- Despite recent setbacks in the
price of copper (falling 20% in just two months), analysts at big
banks and funds such as BMO, Citi, and Goldman
Sachs believe that factors such as a recent Chinese smelter
supply shortage and constrained mine supply will
push the red metal's price back up. According to a report from
Financial Times, the world's largest copper miners are
predicting closer collaboration with their end users as copper
shortages are set to flare up in the years ahead. A new
study from the International Energy Forum, is already
warning that the world needs 55% more copper mines to meet its
EV transition goals. The mining sector is doing what it can to
prepare for this surge in demand, with recent developments made by
Usha Resources Ltd. (TSXV:USHA) (OTC:USHAF),
Freeport-McMoRan Inc. (NYSE: FCX), Rio Tinto Group
(NYSE: RIO), BHP Group Limited (NYSE: BHP), and Lundin
Mining Corporation (TSX: LUN) (OTCPK: LUNMF).
In a strategic deal that saw it work to divest up to 90%
interest in its Jackpot Lake lithium asset, Usha Resources
Ltd. (TSXV: USHA) (OTC: USHAF) took the opportunity at roughly
the same time to execute an option for the right to purchase an
undivided 100% interest in the Southern Arm copper property
from Abitibi Metals. Building upon its reputation for
acquiring and growing out value for its mineral assets, the Jackpot
Lake sale for US$26,025,000 once
completed would see Usha having successfully generated a
return-on-investment of over 1,300%—after only spent approximately
US$1.835 million on acquiring and
developing Jackpot Lake since 2022.
"Our strategic vision at Usha has always been to acquire and
monetize undervalued assets," said Deepak
Varshney, CEO of Usha. "With the recent acquisition
of the Southern Arm Copper-Gold VMS Project from Abitibi
Metals, our focus will now shift towards copper and other
critical metals. With working capital of approximately $1.2M, Usha is in a strong financial
position to execute over the coming year and we look forward to our
maiden drill program at Southern Arm, particularly at "Hollywood", which has a ~1.8 km footprint that
is open along strike."
Now with the potential upcoming addition of the Southern Arm
asset, USHA is making a timely move into the copper sector.
The asset hosts a ~7.3km copper-gold trend along the regional-scale
Bapst fault within the same volcanic rocks group that hosts the
nearby Selbaie Mine, and B26 Deposit of Abitibi
Metals which is owned by the seller of the Southern Arm
project, and who will be acting in an advisory role for the project
with Usha as it progresses on the proposed exploration
strategy.
"We are very excited to partner with Abitibi
Metals on Southern Arm, which establishes
Usha as a diversified metals company in North America with an opportunity to develop a
company-making asset in the best mining province in Canada," said Varshney. "We look forward to
working with the Abitibi team to advance Southern Arm and
plan on completing a fully funded maiden drill program this coming
Fall."
Down in Chile, US miner
Freeport-McMoRan Inc. (NYSE: FCX) is moving forward with an
expansion to its El Abra copper mine, an investment that's
projected to be around $7.5 billion.
The project is expected to take seven to eight years to develop due
to permitting requirements, as Freeport is planned to submit an
environmental impact statement by the end of next year.
Freeport owns 51% of El
Abra, with state-owned Codelco holding the remainder.
"We're going to continue to review the economics in the context
of market conditions, but believe this is a project that will be
required in the future to support long-term copper demand trends,"
said Kathleen Quirk, CEO of
Freeport.
According to data from state agency Cochilco, the mine
produced 98,400 metric tons of copper last year. Quirk has said
Freeport was hopeful that
the Chilean government would carry out its aim to streamline
permitting for mining projects, as the expansion's benefits would
yield 750 million pounds of copper and 9 million pounders of
molybdenum per year.
After seeing its iron output rise, Rio Tinto Group (NYSE:
RIO) recently warned that its full-year copper output would be
at the lower end of its guidance range. This is despite gaining a
23% increase in output at the Oyu Tolgoi underground mine in
Mongolia. Higher grades of ore
from Escondida in Chile also
contributed to overall output of copper, rising 18% to 171,000
tons.
"Our Group full year mined copper production guidance is
therefore expected to be around the bottom end of the 660 to 720
thousand tonne range," said Rio Tinto in its Q2 2024
production results.
"We see good long-term value in Rio shares, although we
are concerned about downside risk to iron ore prices," said
Christopher LaFemina, analyst for
Jefferies LLC in a note, as reported by
Bloomberg. "Growth in copper and higher prices for copper
and aluminum should partially offset the negative impact of lower
iron ore prices."
At the Chile-Argentina border, a potential large
conglomeration is brewing between Lundin Mining Corporation
(TSX: LUN) (OTCPK: LUNMF) and BHP Group Limited (NYSE: BHP),
to acquire copper miner Filo Corp. According to a
report from Bloomberg, Lundin Mining has
approached BHP Group to consider the joint bid for
Filo. This move could potentially address the fundraising
requirements for a nearby project Lundin aims to
develop.
According to the report, Lundin plans to buy out other
Filo shareholders and merge Filo's Filo del Sol copper mining
project, located on the Chilean-Argentine border, with Lundin's
nearby Josemaria project. The Lundin family, which founded the
company, currently holds a 32% stake in Filo, while
BHP holds a 6% stake.
Through a source cited by Reuters, it was revealed that
integrating the infrastructure between the Filo del Sol and
Josemaria mines could cost between $5
billion and $8 billion. The
sources requested anonymity due to the confidential nature of the
discussions.
Article Source:
https://energymetalnews.com/2023/02/28/charging-along-the-highway-towards-domestic-lithium-dominance/
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SOURCE USA News Group; Energy
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