Copper Surges to 14-Month High on Supply Risks and Economic Recovery Hopes
Vancouver, BC
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April 16, 2024 08:30 AM Eastern Daylight Time
Copper just hit its highest level in 14 months, exceeding $9,300 per ton, driven by mounting supply risks and hopes for a global economic recovery.1
This rally, which began in early February, was bolstered after Fed Chair Jerome Powell pumped the brakes on potential rate cuts.2
At the same time, setbacks at key mining operations have forced smelters to pay unprecedentedly high prices for raw ore. In turn, China’s biggest copper smelters, which are responsible for over half of the global refined copper production, are planning to collectively cut output by 5-10% in response.
Over the next two years, experts see copper prices soaring by more than 75%, driven by disruptions in mining supply and increased demand for the metal, especially in renewable energy.3
Highly-anticipated interest rate cuts later this year are also contributing to the bullish outlook for copper, as a weaker dollar would make greenback-priced copper more attractive to foreign buyers.
Market optimism is further fueled by the recent COP28 conference, where over 60 countries supported tripling global renewable energy capacity by 2030. Citibank views this as "extremely bullish for copper," with forecasts suggesting an additional 4.2 million tons of copper demand by 2030, potentially pushing prices to $15,000 a ton in 2025.
Goldman Sachs predicts copper prices could reach $10,000 per ton within the year due to robust Chinese demand and ongoing supply-side shocks.4
In the midst of surging demand and tightening supply, Abitibi Metals Corp. (CSE:AMQ) (OTCQB:AMQFF) is poised to make a substantial impact with a 400-million-pound (Combined: Ind & Inf) historical high-grade deposit in the heart of the Abitibi Greenstone Belt.
Abitibi Metals just secured the funding to complete a 7-year option agreement in just four months to acquire an 80% stake in the B26 Polymetallic Copper Deposit, an advanced, high-grade development project that was initially funded by the Quebec government.
The deposit currently boasts an historical indicated resource of 6.97 million tonnes at 2.94% copper equivalent (Cu Eq) and 4.41 Mt at 2.97% Cu Eq inferred,5 with significant room for expansion. Abitibi Metals Corp. is currently conducting a fully funded 50,000 metres drill program to explore this potential further.
Abitibi Metals Positioned for Growth in the Copper Market
On April 15, Abitibi Metals Corp. (CSE:AMQ) (OTCQB:AMQFF) announced the expansion of its maiden drill program at the B26 Deposit to approximately 13,500 metres. The company aims to complete this program by the end of April as part of a fully funded 30,000-metre 2024 field season.
The decision to increase its drill plans follows the deployment of a third drill at the project earlier this month to explore the expansion potential down-dip and along strike and the discovery of some of the highest-grade intercepts in the project’s history.
Last month, Abitibi Metals Corp. reported significant drill results at the B26 Deposit including 11.4% CuEq over 10.6 metres beginning at 135 metres depth and 6.3% CuEq over 10.6 metres beginning at 120 metres depth.Deluce noted that upon completion, the company will have a substantial exploration budget of $15.1 million for 2024-2025, effectively fulfilling their 7-year work commitments in just 2 years. This financing will support Abitibi Metals in drilling approximately 50,000 meters at the B26 Deposit, showcasing the company's commitment to advancing this project aggressively.
Backed by heavyweight investors like the Deluce Family, Greg Chamandy, and Frank Giustra and an all-star advisory board with members who have held pivotal roles at major mining companies, including Hecla Mining, Eldorado Gold, Agnico Eagle, Kirkland Lake Gold, and Skeena Resources.
As the competition for copper intensifies, Abitibi Metals Corp. is well-positioned to make significant strides in 2024 and beyond.
The company also recently announced the closing of a non-brokered private placement raising gross proceeds of C$7.1 million. The offering involved the issuance of up to 10,702,627 common shares of the company bringing the total treasury to just over C$19 million today.
Abitibi Metals CEO Jonathon Deluce highlighted that this funding, coupled with the success of their maiden drill program, will enable the company to pursue key strategic objectives and expedite its plan to acquire up to 80% of the B26 Deposit.
Visit this website or explore their investor presentation to learn more about Abitibi Metals Corp. (CSE:AMQ) (OTCQB:AMQFF).
Footnotes:
[1] https://www.mining.com/web/copper-price-jumps-to-new-14-month-high-on-supply-risks-demand-hopes/
[2] https://abcnews.go.com/Business/fed-chair-jerome-powell-pumps-brakes-rate-cuts/story?id=108792470
[3] https://www.cnbc.com/2024/01/03/copper-appears-set-to-rally-more-than-75percent-by-2025-analysts-say.html
[4] https://www.ft.com/content/c3c66359-6bdb-45cb-8ddd-663f10c1d3d9
[5] A qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves. The issuer is not treating the historical estimate as current mineral resources or mineral reserves. Rapport Technique NI 43-101 Estimation des Ressources Projet B26, Québec, For SOQUEM Inc., By SGS Canada Inc., Yann Camus, ing., Olivier Vadnais-Leblanc, géo., SGS Canada – Geostat., Effective Date: April 18, 2018, Date of Report : May 11, 2018
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