Interra Copper Enters Chilean Mining Belt To Seize Opportunity In Copper Supply Crunch

While the copper price has been buffeted in the last year due to interest rate increases by the Fed, the long-term outlook for copper is bright.

That’s because the world is going to need a lot more of the red metal in the years ahead as the global economy moves to address climate change through electrification.

According to S&P Global Intelligence, copper demand is expected to double by 2035, driven by the increased copper demand of electric vehicles and the accompanying electrification infrastructure.

On the supply side, years of underinvestment and ongoing problems getting new copper mines into production have created a big gap that will somehow need to get filled. Current projections suggest the world will need 9.7 million tonnes of new copper supply in the next 10 years.

Interra Copper Corp. IMCX IMIMF 3MX CEO Chris Buncic notes that, “Getting to the targets set by the climate change agreement is going to require a new Escondida every year for the next 20 years, and there’s nothing like that in the pipeline.” Located in Chile, Escondida is the world’s largest copper mine and produced 1.19 million tonnes of copper in 2019.

Thanks to a recent acquisition, Interra Copper has a presence in Chile along the Central Mining Belt that hosts the world’s most productive copper mining region.

With three copper projects in the country acquired from Freeport McMoRan — one of them drill-ready — Interra Copper is a copper play made for these times.

Exploring for copper in the heart of elephant country 

Interra’s Chilean copper projects came to the company through its recent acquisition of Alto Verde Copper.

Interra already owned two copper projects in British Columbia, but the addition of the Chilean projects gave it a foothold in elephant country for copper deposits. 

The management team that came with Alto Verde has strong relationships with Freeport McMoRan. Buncic notes that, “Our Board of Advisors has three former Freeport executives.” This relationship gives Interra the option to go back to Freeport should it decide to seek out new greenfields and development projects.

The drill-ready project among its Chilean projects is Tres Marias, which is located in the Central Mining Belt 30 kilometers north of BHP’s Spence mine. Interra has been following up on geological and geophysical anomalies outlined by prior work by Freeport on the project.

Photo: Interra Copper sets its sights on copper riches with strategic acquisition in Chile's Central Mining Belt.

This early data gives Interra confidence that Tres Marias may host the type of copper porphyry mineralization that tends to host the big copper deposits in Chile. The company has planned a 10,500-meter drill program to test the project for large deposits of copper.

Promising junior explorer checks all the boxes

When evaluating a junior mining explorer like Interra Copper for potential investment, it’s important to assess the company’s management team, its projects and its ability to raise capital and finance its operations.

Interra checks the management box with a team that includes past Freeport geologists and operators of producing gold mines in British Columbia and Chile. This is a team with the geology chops to make headway at Tres Marias (and Interra’s other projects) and to raise the money needed to explore them effectively.

In terms of projects, in addition to Tres Marias, Interra also owns the earlier-stage Pitbull and Zenaida projects, both of which are near to Anglo American/Glencore’s massive Collahuasi mine in Chile. Interra also owns the Thane and Chuck Creek projects in British Columbia, both of which are prospective for copper porphyry deposits.

Thanks to a recent financing, the company has the money to do what it wants to do on Tres Marias. As Buncic notes, “There are three things that make a strong junior: management, projects and cash in the bank. We have all three.”

With these advantages, Interra Copper has the potential to grow organically and through other opportunities, which include acquiring other new projects from Freeport McMoRan.

The environment for exploration in Chile is bright, as the country is both the world’s largest copper producer and the source of much of its copper reserves. Political issues may cloud the short-term picture for producers, but explorers like Interra Copper should find the country hospitable to their efforts.

Given copper’s looming supply-demand imbalance, success with the drilling at Tres Marias could have a positive impact on Interra Copper’s valuation.

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