Copper Scarcity Causing Thefts, Violence Worldwide

Source: Streetwise Reports 08/30/2024

The new Green Economy will be fed by electricity that will surge through untold amounts of copper. It has become such a hot commodity worldwide that armed gangs in South Africa are attacking utilities in South Africa and killing security guards and heists are taking millions of dollars' worth of it in Europe and the U.S., according to reports.

On a smaller scale, thieves take the metal from wiring in abandoned buildings, air conditioners, or even manhole covers. In June in Mumbai, India, police said a gang pretending to be working for the local government dug up a road for the telephone lines underneath. It was only noticed when the utility found out hundreds of telephones were non-functioning.

"All around the world, hundreds of millions of dollars' worth of the metal has been stolen — and countless lives have been lost" Vince Beiser wrote for WIRED on August 22. "With the possible exception of gold, no other metal has caused so much death and destruction."

Copper climbed above US$5 per pound in May, based on predictions of tighter supplies and rising consumption for electric vehicles (EVs) and power grids in the transition to green energy. It was US$4.21 per pound on Thursday.

"The cost of fixing the damage often far exceeds the value of the stolen metal" Beiser wrote of thefts. "Ripped-out cables have shut down drinking water supplies in Hawaii, streetlights in Missouri, airport runway lights in Washington, and whole subway lines in New York City. The U.S. Department of Energy has estimated that copper theft causes US$1 billion worth of damage every year to facilities and businesses considered critical infrastructure."

Construction Mafias

Major thefts in the West have included US$200 million worth of the metal stolen from Aurubis, Europe's largest producer, and a ring in the U.S. shut down by police in 2013 that lifted as much as US$80 million worth of copper ingots from an Arizona mine, Beiser reported. An inside job, workers in on the scheme would open the gates for thieves' trucks to drive in and load up.

"My memory of this industry goes back quite a long way, and I can't recall any similar incidents on this kind of scale" Michael Lion, who's been involved in the recycling industry for more than 50 years and is one of its most well-known figures, told Mining.com about the Aiurubis thefts for a 2023 article. "The very substantial sums of money involved suggest that this was an extremely well-organized operation that could well have involved a web of conspiring suppliers."

But most thieves in America are "opportunists" Beiser wrote. "The booty includes fire hydrants, a 3,000-ton bell, a bust of Orville Wright, and at least one urn containing human ashes."

Also in South Africa, mining companies have faced so-called "construction mafias" in which organized crime gangs seek to "extort procurement contracts from mining companies, through threats of violence, or actual violence" Rebecca Campbell wrote in February for Creamer Media's Mining Weekly.

"One of the most shocking experiences was that of Richards Bay Minerals (RBM), where two company GMs have been assassinated since 2016, over procurement contracts" Campbell wrote.

Desperate 'Zama Zamas' Risk Lives Underground

Another problem faced by South African company Anglo American Platinum Ltd. has been copper theft on a micro level. "This has been both a direct problem — the theft of copper cabling from the company's own properties — and an indirect problem (the theft of copper cabling from Transnet's railway lines, immobilizing the trains carrying the miner's output)" Campbell noted.

"Tactics used by these gangs included so-called 'community blockages,' preventing access to, or egress from, mines, thereby disrupting production and delivery" she noted.

Poverty, ineffective policing, and rising metal prices have turned copper theft into a major industry in South Africa, Beiser wrote in WIRED.

"Mines are rich targets, even those that don't extract copper" he wrote. "Their subterranean networks of shafts and tunnels need power to run lights and digging equipment. That power, of course, is carried by miles of electric cable, conveniently left unguarded and out of sight."

He said hundreds of desperate people known as zama zamas—roughly meaning "take a chance" in Zulu, are risking their lives to get the metal.

"These illegal miners clamber down mine shafts on ropes or handmade ladders, then make their way into the tunnels" he wrote. "There, they set up underground camps. Hundreds of zama zamas may be living underground at any given time, some spending weeks or even months down in the tunnels."

The Catalyst: 'Electrify Everything'

Why is this metal so important? According to Beiser, the "battle cry of the energy transition is 'Electrify everything.'" That translates into a lot of copper, which is the best natural conductor of electricity outside of the much rarer silver. It's needed for everything from batteries to solar panels. Electric vehicles contain as much as 175 pounds of copper. Power-hungry artificial intelligence (AI) is also expected to put a squeeze on electricity demand.

"We need it to massively expand and upgrade the countless miles of power cables that undergird the energy grid in practically every country" the author wrote. "In the United States, the capacity of the electric grid will have to grow as much as threefold to meet the expected demand."

According to Credendo, demand for copper could double by 2035. New copper production — and investment in exploration — will be needed to fuel the supply of those vehicles in the long term, analysts have said.

The hunt for copper "has been accelerating, as companies involved in all parts of the copper supply chain realize the structural supply deficit facing the copper market" wrote Rick Mills, author of the newsletter Ahead of the Herd.*

"They understand the need to find sources — existing mines, expansions, brownfield projects, greenfield projects, etc. — and are making deals to acquire the base metal, which is not only essential to electrification and decarbonization but industry in general" Mills wrote.

Michael Ballanger of GGM Advisory Inc. wrote for Streetwise Reports last month that "the technical picture for copper could not get any more bullish."

"More importantly, the Twitterverse is now silent, absent the incessant cheerleading so characteristic of a top as sentiment has become subdued once again and conditions ripe for the turn" he wrote in July.

If you are looking to get some exposure to the industry and be in line for that upside, here are some copper exploration companies that experts are recommending.

Giant Mining Corp.

Canadian explorer Giant Mining Corp.'s BFGFF flagship project — the Majuba Hill copper, silver, and gold district — is about 150 miles outside of Reno, Nevada.

The company is undergoing a drilling program aimed at delineating a substantial copper resource there, with a target of 50 to 100 million tonnes, as previously outlined in its NI 43-101-compliant report.

The recent drilling intersected magmatic-hydrothermal breccia bodies, which contained high-grade copper mineralization in previous drill holes. The company's chief executive officer, David Greenway, expressed optimism about the progress of the drilling program recently, noting that drill hole MHB-31 was terminated with visible oxide copper mineralization still being noted in the core. The company noted that this suggests the potential for further expansion of the deposit beyond the current drilling depth.

Leo Hathaway, an advisor to Giant Mining, highlighted the encouraging nature of the recent drill results, noting that the breccia intervals intersected were wider than initially predicted.

Technical analyst Clive Maund shared an update on the company in a May report, emphasizing a bright outlook for the stock, he stated that "with a strong bull market getting underway in copper, Giant Mining is expected to continue to advance" with no significant resistance until the CA$2.75 area is reached.

He maintained his "Strong Buy" rating, particularly on any minor dips.

In an August 7 report, Struthers said he anticipated drilling results would be available around late September, suggesting that there was still time to buy into the stock. In a subsequent report on August 20, Struthers highlighted the successful completion of hole MHB-31, drilled to a depth of 1,086 feet (331 meters), further underscoring the company's progress in its exploration efforts.

According to Giant Mining Corp., approximately 18.6% of its shares are held by insiders. The remaining shares are held by retail investors.

Giant Mining Corp. has a market capitalization of approximately CA$39.65 million.

The company's shares are traded on the Canadian Securities Exchange (CSE) under the ticker BFG, on the Deutsche Boerse AG (DB) under the ticker YW5, and on the OTC Pink Sheets in the U.S. under the ticker BFGFF, with these listings active since December 2017.

World Copper Ltd.

World Copper Ltd. WCUFF is working to bring its Zonia copper-oxide project in Arizona to production.

It recently announced a grade-confirmation program to add value to the project by testing millions of tons of run-of-mine material placed on leach pads at the site in the 1970s.

"It presents a significant opportunity to add value to the project and could potentially become an additional early revenue source, having a positive effect on Zonia's future economics and NPV (net present value)" the company said in a release.

The program will include surface studies, drilling, and metallurgical testing to confirm the acid-soluble copper grade of the material and will involve up to 1,100 meters of reverse circulation drilling, World Copper said. It will be followed by metallurgical testing and additional in-fill drilling if required.

"Confirmation of existing copper metal sitting on our leach pads is a real opportunity to generate pre-production revenue" said World Copper Chief Executive Officer Gord Neal.

World Copper also has its Escalones Project in Chile. In May, management announced a decision to prioritize its U.S.-based assets, concentrating on advancing Zonia and targeting a production start there in three to five years. It is executing its plan for moving forward, for taking Zonia to a feasibility study and then to construction.

The Zonia Project itself has been significantly de-risked with over 50,000 meters of drilling completed to date and a comprehensive Preliminary Economic Assessment (PEA) indicating potential for low-cost open pit mining and heap leach processing. The most recent resource estimates highlight substantial copper resources, both indicated and inferred, totaling over 1 billion pounds of copper.

On July 23, Fundamental Research Corp. noted the company's stock was up 23.8% week-over-week and was one of the top performers it was following.

Wealth Minerals Ltd. WMLLF owns about 10.44% of World Copper, according to Reuters.

About 18.64% is owned by management and insiders, including Director Robert Kopple with 15.6% and Board Chairman Hendrik van Alphen with 1.08%. CEO Neal holds about 0.87%, Reuters said. The rest is retail.

As for share structure, the company has 196.3 million outstanding shares and 110.66 million free-float traded shares, according to Reuters.

It has a market cap of CA$12.65 million. Its 52-week trading range is CA$0.06–0.35 per share.

Granite Creek Copper Ltd.

Granite Creek Copper Ltd. GCXXF recently announced it had initiated an 1,800-meter drilling campaign at its Carmacks copper-gold-silver project in Yukon, Canada.

In a news release, Timothy Johnson, president and chief executive officer, highlighted the underexplored nature of the Carmacks project despite its long history. He noted the potential for new discoveries and resource expansion, citing the 2021 drill campaign that resulted in a 40% increase in contained copper resources.

According to a July 9 research report by Couloir Capital, Granite Creek Copper Ltd. noted the company was a promising base metals explorer with a near-term objective of expanding Carmacks to 1 billion pounds of copper equivalent.

The firm's analyst maintained a Buy rating on the stock with a target price of CA$0.22 per share, a projected upside of over 520%. Couloir Capital's analysis underscores the significant potential for value creation at Carmacks, which is driven by continued exploration, resource expansion, and optimization of the mine plan.

According to Refinitiv, insiders own 6.03% of Granite Creek Copper.

One of the five insiders is the Chairman of the Board, President and CEO Timothy Johnson, with 2.56% or 5.08 million shares. The next top two, both directors, are Robert Sennott with 1.74% or 3.45 million shares, Michael Rowley with 1.37% or 2.71 million shares.

The company does not have any institutional investors. Retail investors own the remaining 93.97%.

Granite Creek has 198.27 million shares outstanding and 186.32 million free-float traded shares.

The company's market cap is CA$3.97 million, and it trades in a 52-week range of CA$0.02 to CA$0.06 per share.

Interra Copper Corp.

Early-stage exploration company Interra Copper Corp. IMIMF has two promising prospects, one copper-gold and one copper-molybdenum, in British Columbia, including its flagship Thane Project being in the prolific Quesnel Terrane. It's also fully funded for its upcoming drilling and exploration programs after successful financings.

In its investors deck, the company said Thane is a large copper-gold system spanning 15 to 20 kilometers with multiple porphyry targets.

The Quesnel Terrane is 1,500 kilometers long and 30 to 50 kilometers wide and spans British Columbia, the company noted.

"The Canadian Cordillera contains the largest concentration of alkalic Cu-Au porphyry deposits and prospects in the world" the company said in its presentation. "The Quesnel Terrane hosts the majority of the copper deposits in British Columbia."

"New discoveries and new investments in (the) region are driving an exploration renaissance" the company said.

Technical Analyst Clive Maund said the company's stock was "extremely undervalued on both fundamental and technical grounds" and is "rated an Immediate Strong Buy."*

"We have a rare and unusual situation where there is huge upside potential, especially in percentage terms. ... The risk/reward ratio is massively skewed in favor of buyers of the stock here" Maund wrote on August 13.

Maund noted that "when we consider the now favorable outlook both for the company following successful financings and the prices of the metals it is looking to produce, primarily copper and gold, it quickly becomes clear that there is a whole lot of upside for the stock."

Interra has 42.6 million shares outstanding, according to the company. It said about 25% of the company is owned by management, directors, insiders, and other closely affiliated parties, leaving about 75% to retail.

Top shareholders, according to Reuters, include Raymond Christopher Buncic with 1.86%, Richard Mark Gittleman with 1.69%, Director Jason A. Nickel with 1.48%, Director Mike Ciricillo with 1.27%, and Director Mark Daniel Cruse with 0.59%.

The company has a market cap of CA$3.55 million and trades in a 52-week range of CA$0.32 and CA$0.09.

Important Disclosures:

1. Giant Mining Corp., Granite Creek Copper Ltd., and World Copper Ltd. are billboard sponsors of Streetwise Reports and pay SWR a monthly sponsorship fee between US$4,000 and US$5,000. In addition, Giant Mining Corp. and Interra Copper Corp. have consulting relationships with Street Smart an affiliate of Streetwise Reports. Street Smart Clients pay a monthly consulting fee between US$8,000 and US$20,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Giant Mining Corp., Interra Copper Corp., and World Copper Ltd.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
4. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

* Disclosures for the quotes from the Clive Maund article published on August 13, 2024

1. For the quoted article (published on August 13, 2024), the Company has paid Street Smart, an affiliate of Streetwise Reports, US$2,500 in addition to the monthly consulting fee.
2. Author Certification and Compensation: [Clive Maund] is being compensated as an independent contractor by Street Smart, an affiliate of Streetwise Reports, for writing the article quoted. Maund received his UK Technical Analysts' Diploma in 1989. The recommendations and opinions expressed in the article accurately reflect the personal, independent, and objective views of the author regarding any and all of the designated securities discussed. No part of the compensation received by the author was, is, or will be directly or indirectly related to the specific recommendations or views expressed

Clivemaund .com Disclosures

The quoted article represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks cannot be only be construed as a recommendation or solicitation to buy and sell securities.

* Disclosures for the quotes from the Ron Struthers newsletter published on August 7, 2024

1. Giant Mining Corp. is a paid advertiser at Playstocks.net
2. All forecasts and recommendations are based on opinion. Markets change direction with consensus beliefs, which may change at any time and without notice. The author/publisher of this publication has taken every precaution to provide the most accurate information possible. The information & data were obtained from sources believed to be reliable, but because the information & data source are beyond the author's control, no representation or guarantee is made that it is complete or accurate. The reader accepts information on the condition that errors or omissions shall not be made the basis for any claim, demand or cause for action. Because of the ever-changing nature of information & statistics the author/publisher strongly encourages the reader to communicate directly with the company and/or with their personal investment adviser to obtain up to date information. Past results are not necessarily indicative of future results. Any statements non-factual in nature constitute only current opinions, which are subject to change. The author/publisher may or may not have a position in the securities and/or options relating thereto, & may make purchases and/or sales of these securities relating thereto from time to time in the open market or otherwise. Neither the information, nor opinions expressed, shall be construed as a solicitation to buy or sell any stock, futures or options contract mentioned herein. The author/publisher of this letter is not a qualified financial adviser & is not acting as such in this publication.