News

News – USA – Goldman Sachs raises 12-month copper price target to 10500 USD / t

22 February 2021

With a poor recent record of major new discoveries linked to the explosion in electric vehicle manufacturing and other electricity uses of copper, the metal is in the box seat

This was evidenced by the price hitting a 10-year high last Friday, and forecasts indicated that there is still a long spike to come as buyers hunt for supplies

At the close of trading on Friday, the metal was up another 4% to just one whisker below 9$ 000 per ton to finish

The metal came under heavy buying pressure last week when Chinese traders returned to their desks after the New Year celebrations

To put this in perspective: Copper’s record on the London Metal Exchange was 10 in 2011190 USD / t achieved

Goldman is also seeing 9 in three months200 USD / t, in six months 9800 USD / t – but in the current boom, these numbers can be presented as conservative projections (assuming, of course, that there won’t be a major global economic collapse)

The interest in physical delivery is reflected in the fact that the cash price continues to be slightly above the three-month price of 8$ 946 is 75 / t on Friday through three month close at 8$ 90950 / t

There aren’t too many primary copper stocks listed on the ASX, however, which means a significant rush of investors on the red metal will result in large amounts flowing into a small number of companies – unlike the gold sector

These have a built-in resilience caused by recent high gold prices (which are now wearing off as investors twist their way out of the yellow metal)

But just like with gold in the final months of 2020, it now seems like the time for copper hopefuls to strike while the happy times last

A recent presentation by Hot Chili (ASX: HCH) graphically showed that copper discoveries have plummeted

In fact, 2011 was the last good year for large copper finds when there were six discoveries

Hot Chili claims its Chilean project has the largest copper resource on the ASX outside of the majors at 1.66 million tons of contained copper, along with 191 million ounces of gold, 986 ounces of silver, and 27300 t molybdenum

On Monday, KGL Resources (ASX: KGL) announced it had raised $ 2377 million for its Jervois copper project in the Northern Territory

One institutional placement raised approximately $ 12 million, followed by a one-in-13 shareholder claim that should raise an additional $ 11.77 million

Jervois has a resource of 426200 t of copper contained at 203%, together with silver on average 319 g / t

The new funds will be used for mine planning and completion of the full feasibility study

Also on Monday, the Western Australian copper game Caravel Minerals (ASX: CVV) called for a trade freeze and said the company was in the process of raising capital

For his project of the same name, Caravel expects the pre-feasibility study to be completed by the end of 2021 Drilling, energy, environmental, water, geotechnical, and metallurgical studies are now underway

The Caravel copper occurrences are part of a regional porphyry style copper-molybdenum-gold mineral belt discovered in a previously unexplored portion of the Yilgarn Craton

Caravel claims the project is suitable for a low-cost, low-waste, wide-ore-zone open pit mine

Redbank Copper (ASX: RCP) is also on hold before a capital increase is announced

The company has 13000 square kilometers of exploration site in the McArthur Basin of the Northern Territory and wants to revive its copper operations there under new management

In 2020, with a market cap of $ 7 billion, the company produced 97620 tons of copper in its three mines: Prominent Hill, Carrapateena and Carajas

This was down $ 035 per pound – an improvement made by the 257987 ounces of gold by-product is made possible, with high gold prices more than covering copper production costs

In other copper news, Aeris Resources (ASX: AIS) hedged copper with Macquarie Bank last week, bringing the company up to $ 11 on the price of copper100 USD / t, 430 USD above the then current spot price in Australian dollars with a downside protection of 10000 USD / t

Aeris has the Tritton copper operation in NSW and a 70% interest in the Torrens copper exploration project in NSW (along with the Krakow Queensland Gold Project)