Mining alliances are an important part of building and maintaining a robust mining environment, and creating an environment that complies with the regulations in place. For Newfoundland.Gold, an alliance of companies focused on the advancement of mineral exploration and mining projects in Canada, this is the founding mission. 

The alliance aims to bring awareness to Newfoundland as an exciting and supportive jurisdiction. At the same time, the purpose is to generate shareholder value through responsible and innovative exploration and development. This collective of companies will help ensure that mining, one of Newfoundland and Labrador’s largest and oldest industries, is protected and allowed to thrive. At the same time, compliance with local and federal regulations will be made a pivotal point for the alliance. 

Why Newfoundland?

The province ranks second in iron ore production behind Quebec, third in nickel production behind Ontario and Quebec, and places found in copper production with British Columbia, Ontario, and Quebec coming in first, second, and third, respectively. Now there is a gold rush underway in Newfoundland that seems to promise a resurgence of the mining industry. Staking activities were the first to ramp up, and have increased rapidly in the past few years on the heels of discoveries. With gold prices continuing to rise, revenue and the potential for job creation are critical in this sector. 

The province is also host to a number of strategic ports that would benefit the gold miners operating in the region. Most mining projects would be close enough to a port (within 100 miles) for it to have a low impact on operational costs. The government has seen the cards they are holding and is supportive of mining projects that create jobs as it represents 5.5% of the province’s GDP (as of 2019).

The Latest Addition

Leocor Gold (CSE: LECR) (OTC: LECRF) (Frankfurt: LGO) is the latest in a long line of gold miners joining the alliance to give a boost to their operations. Labrador Gold (TSX.V LAB), Newfound Gold Corp (TSX.V: NFG), Opawica Exploration (TSX.V: OPW), Sky Gold Corp. (TSX.V: SKYG), Exploits Discovery Corp (CSE: NFLD), K9 Gold Corp. (TSX.V: KNC) and C2C Gold Corp (CSE: CTOC) are also on board. All of the companies that join have access to the Newfoundland.Gold service menu including help with marketing, networking, bringing awareness to the companies, and even managing marketing and branding. 

Based in British-Columbia, Leocor has a focus on projects in Atlantic Canada, primarily through outright ownership and earn-in agreements for gold-copper projects. 

Coming Soon…

Leocor Gold is joining a strong list of mining companies expanding the gold mining industry in Newfoundland and Labrador, bringing jobs and economic growth to the entire region. We will be waiting for more information on projects and plans, which the Newfoundland.GOld launch event should provide. Its Virtual Investor Days event to be held from June 1 to June 3 will include corporate presentations, discussions with industry thought-leaders, and daily keynote speakers. 

The event will mark the kickoff of a new era for gold mining in Canada’s Newfoundland.

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above. 

Teck Resources Ltd. posted a $305 million profit for their first quarter, starting 2021 strong and foreshadowing a solid year ahead. Compared to the first quarter last year, the number represents a $600 million swing in the opposite direction from a $312 million loss in 1Q20. The 246.8% jump in first-quarter adjusted profit is a big move to start the year that is expected to be the start of a long, profitable run for the industry. 

Much of that loss came from a $474 million asset impairments charge at its Fort Hills oil sands operation. Still, it is clear that high commodity prices in 2021 are a large part of what is driving the company’s performance and stock price. Revenue for the quarter was also up 7.14% YoY to $2.55 billion from $2.38 billion in the same quarter the year before.

Major Milestones

While analyst consensus had an estimate of 62 cents per share and Teck hit an adjusted 61 cents, this didn’t phase investors, and the 247% profit bump was what investors decided was more important. In a statement, chief executive Don Lindsay said, “Strong first-quarter operational performance, in line with plan, and higher commodity prices contributed to a very solid start to 2021. We achieved major milestones for our priority project, including surpassing the halfway point at our flagship QB2 copper growth project and moving into the commissioning phase of our Neptune steelmaking coal terminal upgrade. 

Supported by Strong Copper Prices

Higher copper prices continue to drive profits and progress for copper miners right now as demand for raw materials increases with economic reopenings and COVID-19 vaccine rollouts. The first quarter of 2021 saw a 54% price increase to US$3.92 per pound, giving a strong boost to copper miners and contributing to a lift in commodity prices across the board. 

With such a strong start to 2021, Teck Resources seems set up for a long run this year as investors continue to pile into copper mining companies to get a piece of the decades-long  supercycle the red metal is entering now. 

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above. 

Private international holding company IG Global Group has created a new subsidiary that will enter mineral-rich Kazakhstan. The company created the wholly-owned subsidiary, IG Copper and Gold, because of the country’s potential to be a major player in the global mining industry. The possibility for project volume and magnitude in the coming years is massive, and IG Global Copper and Gold will now be in the region to capitalize on the realization of that potential. 

IG Global Group is also establishing its first corporate offices in Kazakhstan, as IG Copper and Gold becomes a focus and pivotal asset for the holding company. 

IG Global Group

IGG has interests (direct and indirect) in companies in the mining industry, including mineral exploration, drilling, and mine development. So far, the company’s portfolio is composed of companies with operations, projects, and clients in the United States and the Russian Far East. Founded in 2010, IGG consists of an industry-leading management team well-versed in the latest industry exploration, and mine development techniques and technologies.

This expansion into Kazakhstan marks the beginning of a new chapter in the third country, building on their operations in the United States and Russia. In 2016, the country became a member of the Committee for Mineral Reserves International Standards, implemented simplified mineral licensing procedures in 2017, and pared down the process and procedure for obtaining subsoil use rights. 

The Kazakh Dream

As an extremely mineral-rich country, Kazakhstan is well-positioned to deliver consistent exploration in the coming decades and likely plenty of discovery. The region holds resources such as gold, chrome iron ore deposits, tungsten, molybdenum, uranium, polymetallic, and copper just waiting to be discovered and mined. 

Due to infrastructure, safety, and process complications in the past, it has been under-utilized as a valuable mining area. With recent steps taken to open the country to the mining industry and make the process smoother, Kazakhstan could become a significant area for expansion in the future.

IG Global Copper and Gold is entering a geographical market that has limited competition, and potential for long-term growth, making this new project a strategic and pivotal move to secure the future of IGG. IG Global Group had this to say about their new foray into their third country: “IGG’s team and experience in the Russian Far East and Asia is a strategic advantage in its ability to operate in this region.”

Ecuador’s election on April 11th ushered in a new era for the mining industry. The country’s new president Guillermo Lasso won the runoff with 52.5% of the vote, and opposition leader Andrew Arauz conceded defeat. Both candidates were mining-friendly options for the nation that holds some of the richest copper and gold deposits in the world. 

Mining Heaven

The country has been a supporter and profitable ground for mining companies to operate in, giving mining companies wide latitude for their operations while ensuring that consultation and standards are upheld at every stage. Going forward, the mining industry will need to keep those environmental principles at the forefront of their operations, as countries like Ecuador and their new president Lasso are promoting open policies for boosting investment in the private sector while balancing environmental responsibility. 

The government at both the federal and local levels is consulted regularly for mining projects because of the consultation needed for projects operating with the approval of local communities. The need to protect the land they work in and ensure the safety of the local communities is paramount to a long-term partnership in the modern mining environment. Ecuador has been a solid and reliable partner in this sense, providing mediation between opposition groups and the companies that bring jobs and economic growth to the region. 

Proposals relating to mining within Lasso’s government plan framework include:

• To exploit mining resources with the application of international best practices to protect the environment
• Regulate the sector to promote legal and responsible mining
• Design a plan that maximizes mining benefits while safeguarding environmental well-being
• Appoint a Minister of Environment and Water who is concerned with environmental conservation but who will accompany and support the use of non-renewable natural resources.
• Promote new concessions, as well as compliance with all regulations for the care of the environment and water sources
• Work synergistically between the public and private sectors to develop public policies for economic and environmental development
• To present a legal framework with regulations that:
• Ensure the growth of the mining sector and care for the environment
• Dismantle illegal practices by strengthening border security
• Respect intangible zones
• Establish criminal liability and obligation to repair and compensate for infringement of environmental quality standards

Source: Guillermo Lasso’s government plan

As the pandemic slowed the country’s economic growth, Lasso will look to the mining industry to support the recovery over the coming years. 46% of Ecuador’s Foreign Direct Investment from 2017 to 2020 was generated from the mining industry. A significant portion of GDP comes from the sector, giving Lasso a clear direction for where to focus efforts. 

Responsible Growth

Mining in Ecuador accounts for a large portion of the direct and indirect jobs in the country and is one of the most critical sectors for the country. It was one of the few that grew in 2020, as the pandemic shut down most economic activity. Simultaneously, the president has pledged that the sector must grow responsibly, as he considers illegal mining to be the greatest threat to economic development and environmental protection. Despite the pandemic and rising death toll, mining companies continue to operate unhindered by restrictions as the industry pushes forward on exploration, discovery, and production. 

To accomplish his economic goals while preserving environmental integrity for the miners in the region, Lasso has tried to establish an open dialogue with environmental groups and indigenous Ecuadorans. The goal is for the government and miners to work in tandem with those groups to ensure respect for their culture and their customs. 

The industry has little to worry about in the way of obstruction or barriers, as the president has also said he would like to appoint a Minister of Environment and Water who is open to and will support the use of non-renewable natural resources. The mission to protect Ecuador’s natural beauty and the local communities will be balanced with the mission to maintain and grow a flourishing mining industry. 

A Favoured Project

It seems the new president even has a favourite partner for the sector, touting the Warintza Project in an interview on national television in early April before the election. A visit to the project should be coming imminently, as the potential of the project to be a key production source is massive. 

The company taking the charge for the project is Solaris Resources, a Canadian copper mining company. Solaris has begun exploration at the site and plans to start drilling at Warintza East and South this quarter. The company has follow-up discovery drilling planned at the Warintza West site as well, with maiden drilling at Yawi and the Caya gold anomaly in the second half of the year. 

Three additional holes at Warintza Central are bearing out high-mineralization results, with the highest grades starting at the surface. Solaris’ recent press release highlighted some of the progress made on the project: 

• SLS-17 was collared on the western side of Warintza Central and drilled into an entirely open volume to the south, returning 494m of 0.50% CuEq¹ from the surface, extending the southern limit of mineralization in this direction
• SLS-18 was collared on the western side of Warintza Central and drilled into an open volume to the southeast, returning 797m of 0.83% CuEq¹ from near-surface, including 370m of 0.94% CuEq¹, adding mineralization between the western and eastern drilling at Warintza Central
• SLS-20 was collared on the eastern side of Warintza Central and drilled into an entirely open area to the north, returning 688m of 0.51% CuEq¹ from surface, including 366m of 0.60% CuEq¹, extending the limit of mineralization in this direction
• To date, 28 holes have been drilled at Warintza Central, with results reported for 19 of these; results for SLS-19 were delayed by geotechnical issues during drilling but are expected in the near future

Clear Skies Ahead

Having a new president in office and a willingness to push forward at full speed for the mining industry, Ecuador is sure to be a reliable and robust partner for miners like Solaris over the coming years. 

With the lifting of restrictions on drilling and more discoveries at Warintza, a global economy heating up after the freeze of COVID-19, and a deposit-rich region, the future is looking very bright for miners in Ecuador.

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above. 

The Democratic Republic of Congo (DRC) has had its fair share of scandals and problems. For the mining industry operating in the country, child labour, corruption, bribery, occupational health and safety, and environment and public health impacts have often been neglected. The country has less regulations in place to protect miners and the people that work there, and enforcement is non-existent or lackadaisical at best. 

Better Mining

One organization, Better Mining, is working to improve conditions in the mining industry on and around artisanal and small-scale mine (ASM) sites. By enabling companies to support the improvement of ASM sites and surrounding communities, Better Mining is actively solving the problems that plague the industry at every level and step of the mining process. As more media attention is directed to the industry within the Republic, labour conditions and compliance have come to the forefront and are now being addressed earnestly. 

The organization has worked for a while now in the DRC, and being on the ground monitoring conditions and ensuring that the conditions set are being met is an important role to fill. As ASM sites have less management monitoring and regulation, independent organizations like Better Mining are key to ensuring that conditions are being met responsibly and completely. 

China Moly Lends a Hand

Tech metals producer China Molybdenum and its Swiss-based trading arm IXM have now joined the Better Mining initiative, to help ASM sites become a responsibly-managed and viable source of battery minerals. Those minerals will include cobalt and tungsten, among others. 

Cobalt, a key mineral that is a byproduct of copper or nickel, is used to make the lithium-ion batteries that power everything from batteries in laptops and smartphones to electric cars. This critical mineral is an important resource for the DRC, as the country generates about two-third of the world’s supply of cobalt. 

As the world’ number 2 cobalt producer and largest tungsten producer, China Moly is uniquely positioned to increase the scale and effectiveness of Better Mining, and improve the assurance and impact program to benefit the communities that rely on ASM miners. Julie Liang, director of CMOC’s sustainability executive committee, noted “As a large industrial miner that maintains strict product control and custody procedures, ASM sits outside of our own cobalt supply chain but we recognize that ASM, and those communities reliant on it, should not be neglected.”

ASM

Artisanal miners traditionally sell ore to local cooperatives. This grassroots scale operational strategy allows almost anyone with the land and the workers to extract valuable minerals and get them to market. Those cooperatives sell to local traders, who then sell to international traders or larger operating mines with established transport links. 

As the largest consumer of cobalt, China is the largest consumer of the mineral coming out of the DRC, and so has a significant stake in the country and its mining industry. The success of the country’s mining industry is integral to China’s success and ability to collect enough of the valuable tech mineral. 

Risks

The risks of working artisanal miners are abundant, and Western mining companies have typically distanced themselves from supply coming out of these mines. Child labour continues to be rampant in central Africa, and so the source of the raw materials may be tainted by this unethical and illegal practice. 

Solutions

To try to turn the situation around, pressure has been applied to get the mining industry in the region on track toward ethical and clean mining practices. In 2019, the London Metal Exchange (LME) introduced a responsible-sourcing standard that covers all metals traded on the exchange. 

The LME forced producers to demonstrate compliance with the guidance drawn up by the Organization for Economic Cooperation and Development (OECD). This major step toward stronger and more effective regulation was an inflection point for the country as they were forced to confront a global community that ultimately put its foot down on the issue. 

Tesla, Google, and Apple were even sued in 2018 by a human rights ground over alleged involvement in abusive mining practices in the DRC. The supply chain stretches so far that ultimately it is impossible to know in which conditions the cobalt is mined, and so the companies sourcing their materials have a difficult responsibility to track their suppliers and ensure that they are mining ethically and safely. Amnesty Internation has stated that children as yougn as seven have been found exploring for cobalt in the DRC, and claims to have evidence that some of the biggest brands in the world have sourced cobalt from supply chains tainted by child labour. 

Overwatch

Better Mining has been working to not only watch and monitor companies in the region but police them when possible and report infractions to the appropriate authorities. The DRC is now taking concrete steps toward cleaning its cobalt sector, and Entreprise Generale du Cobalt (EGC), a large company (state-owned) released its own responsible sourcing standards. 

With monopoly rights to the purchase and sale of the country’s hand-mined cobalt, this is a major step in the right direction as the company has significant sway in the DRC’s mining industry. Change is afoot for the cobalt mining industry in the Democratic Republic of Congo, setting the stage for the cobalt boom from the further electrification of the global economy. 

The last four years haven’t been kind to silver production, with four consecutive years of annual decline. 2021 is finally bringing an increase of 8.1% to 918.3 million ounces (Moz), and ultimately silver production should exceed one billion ounces by 2024, according to a report from GlobalData. This notable bump would be a 3.2% compound annual growth rate (CAGR).

Where in the World?

The top contributors to this growth will be Peru, Mexico, and China, with a combined production increase forecast at 393.9Moz in 2021 to 443.9 Moz in 2024. The countries have ramped up their efforts to allow new projects to move forward, and companies have had it easier as these countries either recover from the pandemic (China) or refuse to put more restrictions in place (Mexico and Peru) due to struggling economies.

Hit Hard

2020 saw an estimated global silver mine production decline of 2.4% to 849.7 million ounces, as the lockdown and restrictions in some of the top silver-producing countries hit hard. While those restrictions did crimp growth and production overall, those countries seem to be intent on avoiding any form of lockdown again as fumbling economies in the developing world struggle to regain traction. 

The first nine months of 2020 were the hardest, as eight of the top ten silver producers reported a collective 13.9% YoY decrease in output. This had an outsize effect and resulted in lower global production numbers. 

According to Vinneth Bajaj, associate project manager at GlobalData: “In Mexico, output was estimated to have fallen by 1.8% in 2020, with mining activities suspended for almost two months through to the end of May. Major silver producers in the country temporarily suspended their mining operations during this period, and production losses were registered at Pan American’s La Colorada and Dolores mines, Fortuna Silver’s San Jose mine, Industria Penoles’ Saucito mine, and Hecla Mining Company’s San Sebastian project, among others. However, these COVID-19-related production losses were partially offset by high production from other key mines, including the Penasquito, Guanacevi, Zimapan, and Ocampo projects, as well as from the commencement of projects in 2020 such as the Red de Plata, Capire, and Tahuehueto projects.” 

Depleted Supply

According to the report, depleting ore reserves are also weighing on production and is a major industry concern. As miners work to increase production over the next three years, discovery and exploration will continue to be a prime driver of activity for the sector.

Top Silver Miners 2020

Although 2020 was a challenging year for silver production and the companies mining it, some miners continued to work steadily. The rankings of the top 10 silver producing companies in 2020 based on output reported last year worldwide prove that while production was down globally, some companies could increase production. 

Rank	Company	2020 Ag output, Moz	2019 Ag output, Moz	Change, %
1	Fresnillo	53.1	54.6	-3
2	KGHM	43.4	45.5	-5
3	Glencore	32.8	32	2
4	Newmont	27.8	15.9	75
5	CODELCO	27	17.9	51
6	Vedanta (Hindustan Zinc)	23.7	22.3	6
7	Southern Copper	21.5	20.3	6
8	Polymetal	18.8	21.6	-13
9	Pan American Silver	17.3	25.9	-33
10	Hecla	13.5	12.6	7

Source: Vladimir Basov, Kitco News

The rankings bear out a story that while silver production suffered in 2020, not every company did. Some of them went on to increase production. The most significant gain in production came from Newmont, with a 75% increase YoY from 2019. With the expected production increases of the coming years, these companies will all be maneuvering for market dominance and gains like those seen last year from companies like Newmont.

What happens when one of the largest iron ore miners misses expectations despite booking a recovery through 2020? For Vale, missing analyst expectations meant becoming the singlehanded most important driver for the iron ore price rally, adding fuel to an already strong upward trend. 

The company was able to squeeze out some growth from its operation YoY, which was attributed to the gradual resumption of its operations in Tembopeba, Fabrica, and Vargem Grande complexes in the Minas Gerais state in 2020. Strong production in Serra Norte in Para state, lower rainfall in January, as well as the restart of operation at Serra Leste in the Northern System had some effect on the output. 

Disappointing Numbers

After Chinese steel output jumped in March, Vale has had an outsized impact on prices in what analysts are calling a tight market. The company’s ramp-up has been a boon for the company, and the missed expectations have propped up the price of iron ore. 

1Q21 output was 68 million tonnes, 14.2% higher than the quarter from the year before, but still 5.5% less than the average analyst estimate of 72 million tonnes. 

While the disappointment isn’t particularly drastic, Vale’s size and outsized influence in a market that seems to be squeezed by lower supply has had an outsized effect on the strength of the iron ore price rally. 

Despite the weaker quarter with 6.3 million tonnes in pellet production for 1Q21, 9.2% YoY due to a lower pellet feed availability from the Itabira and Brucutu sites, Vale expects to gradually increase production in 2021. The company plans to do this using the higher availability of pellet feed from Timbopeba and Vargem Grande. 

Tilting the Scales

According to BloombergNEF, Vale (NYSE:VALE) is expected to account for 83% of global supply growth this year. With a capacity of 327 million tonnes per year, this is certainly possible. Before the Brumadinho dam collapse, the company produced 385 million tonnes in 2018. Vale’s scale and operational stability mean a gradual increase in production during 2021, allowing the miner to maintain its full-year guidance between 315-335 million tonnes of iron ore. 

The company is also the biggest producer of mined nickel and has a significant pull on production and prices for the metal. It produced 4.7% less of it YoY.

When it comes to copper production, the company took a bigger hit. Production was down 19% over the same period due to maintenance that slowed down by pandemic restriction on contractors. With contractor restrictions and mining restrictions lifted, Vale (NYSE:VALE) has nothing standing in its way on the path to expansion. 

The company has also announced its intention to exit the coal business, and as such, has concluded a revamp of two processing plants in Mozambique. While the rumours have been swirling for some time that coal is on its way out the door and is losing favour among miners, the fact that an industry leader like Vale (NYSE:VALE) is moving away from it is a strong signal that the rumours are true. The resulting void waiting to be filled by other miners may not be filled, or if it is, will be filled much slower as the world moves away from coal mining and use during the electrification efforts of the global economy in the coming decades.  

The Paris climate goals and the transition away from fossil fuels toward electrification are set to create an unprecedented surge in copper demand, according to Goldman Sachs’s new report on copper. The global investment bank is forecasting a long-term supply gap of 8.2 million tonnes of the metal by 2030, “twice the size of the gap that triggered the bull market in copper in the early 2000s.” This would be the “highest on record” and would set the tone for the 2020s making this period the strongest phase of volume growth in global copper demand in history. 

Copper’s Importance

The world isn’t just moving away from fossil fuels, but it is actively working on reducing and reversing some of the warming effects of greenhouse gases. The impact of climate change costs the global economy hundreds of billions of dollars. Investing in clean technologies is the antidote. The investment in technologies like carbon capture and storage technology, renewable energy, and electrification of everything from cars to manufacturing means that copper will have a critical role to play in this new economy. 

The centrality of the red metal makes it a critical component for strategic investments both from private businesses and governments. The countries willing to invest in the infrastructure and support for mining companies now will have profits coming in steadily over the next decade. Some have even called copper a national security issue due to its strategic value. 

A Shortage That Threatens National Security

The high value, current under-investment, and lack of tier one mines makes it a potentially destabilizing force as many countries classify certain metals as strategic. For context, one only needs to look at history. 

The wars of the past 50 years have been fought for several reasons, but one of the prime motivators for conflicts in the Middle East was oil. Winning the war meant rebuilding the infrastructure in the region and therefore gaining a foothold in the supply. This was highly valuable to foreign countries and the mining companies extracting these extremely strategic resources.

The countries with abundant copper deposits sitting within their borders may ultimately come to realize that the global demand and urgency of the commodity will drive its importance for the largest economies in the world. As the scramble continues and even accelerates as demand multiplies, those countries may find themselves standing between powerful corporate interests and the governments fighting to secure the supply required for their needs. A shortage of copper would mean a fierce fight for the material that is certain to play a significant role in the large and developed economies accelerating toward net-zero emissions right now. With most countries targeting 2050 for this goal, copper’s demand will likely grow fastest in the first half of the century and continue into the second. By the middle of the century, it will be necessary for a plethora of manufacturing, products, and energy supply and storage. 

Each of these functions could easily fit under the national security blanket, pushing countries to nationalize supply or even move aggressively, as happened during the Iraq wars.  The good news is that copper mining companies are exploring and developing those projects now and are setting themselves up to be right in the middle of this boom, taking advantage of a supercycle that will drive profits for decades. 

Goldman Puts Things Into Perspective

Goldman’s prediction that the copper price would reach $6.80 per pound by 2025 is a significantly bigger statement, demonstrating that the investment bank believes that copper will not need to wait until 2050 to see new peaks in demand spiking regularly. According to their recent report, prices will also spike regularly, breaking highs and setting new records within as little as four years from now. This past February, copper hit a multi-year high, foreshadowing a sliver of what is to come. 

Analysis

The authors of the report, Nicholas Snowdon, Daniel Sharp, and Jeffrey Curries estimate that demand from electrification “will grow nearly 600% to 5.4Mt (million tonnes) in our base case and 900% to 8.7Mt in the case of hyper adoption of green technologies” by 2030. In the conservative base case, copper miners would see a massive demand to be filled surge faster than current production and production plans can accommodate. In the case of “hyper adoption of green technologies,” the world is likely to see a problematic copper shortage that is certain to push the price higher and faster.

The authors continued: “Crucially, the copper market as it currently stands is not prepared for this demanding environment. The market is already tight as pandemic stimulus (particularly in China) has supported a resurgence in demand, set against stagnant supply conditions. Moreover, a decade of poor returns and ESG concerns have curtailed investment in future supply growth, bringing the market the closest it’s ever been to peak supply.”

Steep Trendlines

The report forecasts a copper price of US$15,000 per tonne by 2025, up from today’s price of around $9,000 per tonne today. To get a sense of the trend, the report included estimates of the average price by year: 

1. 2021: US$9,675/t
2. 2022: US$11,875/t
3. 2023: US$12,000/t
4. 2024: US$14,000/t

The culmination in 2025 at $15,000 would mean huge profits for miners as well as a need for new greenfield project approvals. 

Driving Prices

The demand driving the copper price stems from three main drivers of green copper (copper mined cleanly):

• Electric vehicles (EVs)
• Solar power 
• Wind power

Goldman estimates a 2021 sales volume of 5.1 million EVs in 2021, with that number rising to 31.51 million in 2030. Just to meet that demand, current copper production might need to double or triple. Including charging units (of which Goldman estimate 30 million will be installed by 2030), accessories, batteries, and other power storage needs, copper demand seems to be almost incalculable. Conservative estimates make it seem like production is far behind, and the top end of the range requires unprecedented investment in the industry for new projects.

How is it Going?

Right now, the copper market is not prepared for this demand. The massive copper deposits to be found in the Andean Copper Belt, being discovered and explored by miners like Solaris Resources, EcuaCorriente, and SolGold are set to become some of the most valuable projects in a high-value copper region. 

Some analysts disagree with the borderline alarmist analysis in the report, with opinions often coming down on the side of caution where prices are concerned. According to TD Securities, “Commodity demand is being supported by a weakening dollar amid a consolidation in U.S. interest rates and fiery risk appetite. Demand continues to pick up, but as the world exits the pandemic and begins to ramp up production, “…metals supply risk is likely to subside from here, adding some pressure to industrial metals prices.” 

It seems that for now, there is no perfect consensus as to where the copper market might end up. While demand is guaranteed to increase, the scale of supply risks and production worries are still speculative and do not add up to a definitive answer on where the balance lies. There will no doubt be an imbalance as demand outstrips supply for the next decade, but analysts are still split on how big that gap might be. In either of Goldman’s scenarios, the situation seems quite dire, with the price ending up in the stratosphere. TD Securities seems to temper that outlook somewhat, without disputing the key point here that copper prices are set to rise no matter what. 

No matter which side of the spectrum you might fall, the next decade is sure to be a wild ride for everyone with a piece of this cake, and is guaranteed to bring a sugar high for decades to follow. 

Copper miners are always looking for more. More ore, more mines, and more copper to refine and get to the market. The demand for copper is growing at such a fast clip that companies can’t keep up, so ‘more’ is the only word that matters now. For that, they need to go to the regions they are most likely to find the valuable red metal. One location is promising to deliver the copper necessary to meet the incredible demand over the coming decades.

The Andean Copper Belt

Northwestern South America, including Colombia, Ecuador, Peru, and Northern Chile is host to some of the richest copper deposits in the world. The area’s geology is among the earth’s most richly mineralized, making it an exciting area choice for the companies that are just testing the surface of hugely prospective sedimentary copper basins in those countries. This mineral-rich piece of prime mining real estate is referred to as the Andean Copper Belt. 

The 2500-kilometre mineralized arc formed during the Lower Paleozoic eric around 300 million years ago. This mineral-rich multi-country zone has been sitting dormant for millions of years, and now copper miners are able to benefit from this region to help meet the current and coming copper boom.

Tip of the Iceberg

What’s impressive is that initial exploration of sedimentary basins in Colombia, Ecuador, and Peru might be the tip of giant icebergs of sediment-hosted copper-silver deposits sitting underneath. If the theory is proved, it would mean billions of pounds of copper and hundreds of millions of ounces of silver lay hidden just beneath the land in the Andean Copper Belt. Copper miners could be working on and extracting copper from the region for hundreds of years, and the work still wouldn’t be finished. 

Exploration efforts are expanding quickly in countries like Ecuador at mines like Warintza, and while the pandemic may have slowed progress in 2020 a little, copper demand hasn’t. Mining companies in the area like Solaris Resources will be in a position to fill that demand as it increases over the next few years and into the coming decades.

Sedimentary Copper

Ocean basins composed of porous materials such as sandstone, limestone, and black shale area where copper deposits are formed. The copper and other minerals travel up and become trapped in the rock layers. This mineral deposition is different from a copper porphyry deposit, which is ultimately formed when a block of molten-rock magma cools. The magma might come from underground or aboveground volcanoes, or simply the earth’s crust as it is pushed upward over time. 

The cooling then leads to a separation of dissolved metals into distinct zones of copper, molybdenum, gold, tin, zinc, and lead. By the time humans are ready to mine it, it has been sitting in the earth for millions of years, waiting for a capable miner prepared to put it to good use. 

Copper porphyries are often visualized as a bag of flour, with millions of grains of rice (copper and other minerals). They are spread across a large area. Sedimentary copper deposits are much more concentrated, sitting underground on top of each other like a stack of books.

Ecuador First

For miners operating in the Andean Copper Belt, both types present a wealth of minerals. The exploration and production efforts of the companies in the region are exciting and lucrative. Anyone paying attention to the area and the metal that is fast becoming one of the most valuable should pay attention to any and all progress on this front. 

Ecuador in particular is positioning itself as a mining-friendly partner to Western mining companies. According to government officials, the mining industry could represent up to 4% of the country’s GDP this year, up from 1.6% in 2018. 

Who Are the Players?

To accomplish this, Ecuador has opened the market to more business-friendly regulations in order to attract foreign capital. This has brought strong development partners in the private sector from countries like Canada, China, and the United States.

Lundin Gold (LUG.TO)

Lundin Gold is in the basin but does not expect to encroach on copper miner’s territory as their work is focused on the Fruta Del Norte gold mine in Ecuador. The company sent off its first industrial-scale exports of gold from the mine in December 2019, and despite a slight slowdown in 2020, is still producing regularly. The project and the company also have the support of a mining-friendly government that is ensuring Ecuador is a substantial mining partner. 

EcuaCorriente

EcuaCorriente owns the Mirador copper mine. The company is a subsidiary of Tongling Nonferrous Metals Group and China Railway Construction. The mine has estimated reserves of 3.2 million tons of copper, 3.4 million ounces of gold, and 27.1 million ounces of silver. The first copper exports from the company left the country in July 2019. EcuaCorriente has been a great test case for how profitable exploration and discovery efforts can be in the region. 

Solaris Resources (SLS.TO)

Fulfilling the abundant promise of the Andean Copper Belt, Solaris Resources has made a significant new discovery at its Warintza copper project in southeast Ecuador. A geophysical study revealed a much more extensive porphyry system than anticipated, sparking a drill rig expansion that saw the rig count double from 6 to 12. Early results are promising, and the company will have its hands full in 2021, expanding the project and starting production soon after. 

Solaris will have a grid for Warintza that includes clean, low-cost electric power and the ability to get supplies in and out of the site easily due to well-developed infrastructure. Ecuador’s abundant supply of freshwater eases the company’s work significantly as well. As a result, capital costs for the project will be much lower than average. 

As drill results continue to come in and the company moves from discovery to production, their flagship Warintza project in this piece of prime copper real estate is set to be the launchpad for years and decades of significant results. 

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above. 

Shares of Teck Resources (NYSE:TECK) had a great session today, surging more than 9%. While the past few weeks have been tough from a PR perspective, the company’s operations and future plans are set to propel it forward at warp speed if plans are approved. Teck Resources is Canada’s largest metallurgical coal producer, and as such has a significant carbon profile.

The company put together a sustainability report in 2019 assessing its mining operations across Canada, the U.S., and Chile. In a world increasingly concerned with the environmental impact of mining, Teck has pledged to reduce carbon intensity over the next nine years and has a goal of being completely carbon neutral by 2050.

Joining the Pact

This matches a lot of the goals being put forward by governments (including Canada’s) and seems to be the standard expectation for rich countries now. If the company can hit those targets, it will mean a lot to the environment, but also investors who increasingly put environmental, social, and governmental (ESG) principles at the forefront of stock selection for their portfolios. 

The cost of an ambitious goal like this is sure to cut into the company’s balance sheet, but it is a necessary one if the company hopes to continue being the biggest coal producer in the country. On top of their difficult goals, they also have to contend with a world that needs and wants less coal overall. However, this is primarily a perception problem as the industry and metallurgical coal are necessary to the production of steel. The steelmaking process wouldn’t work without it (and the world needs a lot of steel).

Whether environmental activists and local communities agree or not, coal mining will still be necessary for the foreseeable future. Teck’s plans ensure that this necessary and extremely valuable resource – British Columbia’s government forecast production to be worth almost $4 billion in 2020 – is mined with controls in place to protect the environment and wildlife. 

Setback

The company will first need to deal with its management of selenium pollution in southeastern British Columbia. Environment Canada investigators found Teck guilty of not having “a comprehensive plan to address the deposit of coal mine waste.” The element selenium is actually necessary for life in small doses. Unfortunately in the large amounts found (as much as 90 micrograms per litre in the Fording River and as much as 177 micrograms in settling ponds at the mines), it can cause fish deformities and reproductive failures.

The $60 million fine levied on Teck Coal, a subsidiary of Teck Resources is the largest fine ever imposed under the Fisheries Act. This setback should be a minor one, and a lesson going forward on the ESG side of their business that will be a necessary priority going forward, particularly if the company wants to hit its targets for decarbonization on the scheduled timelines. 

Teck plans to build additional water treatment plans to bring down the selenium pollution from existing mines first. Then it will develop a plan to control the impacts on water quality from the extension project. This would be a huge step toward their ESG goals and a signal to investors that they are ready for the future. 

Future-First Perspective

Once the company is able to put this fine behind it, it can look forward to the future with a proposed mine that is poised to log the highest annual coal production. Their Castle Mountain proposal includes mining metallurgical coal just south of the company’s existing Fording River operations. 

The expected 10 million tonnes per year to come from the Castle Mountain mine by 2030 would extend the life of the Fording River operations by several decades. The company is now waiting for project approval and is in the early engagement stage of a coordinated provincial and federal assessment process. The company will likely be on the hook for preparing a detailed strategy to combat emissions and the selenium pollution issue. 

If they can address the issues of selenium and nitrate contamination, impacts on First Nations’ use of the land, preserving biodiversity and greenhouse gas emissions, the project is set to be a positive silver lining for the future of the company and metallurgical coal mining.

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.

First Majestic Silver, based in Canada, has signed an agreement with Sprott Mining to acquire the Jerritt Canyon Gold Mine in Nevada. This significant acquisition will First Majestic solidify its position as a premier silver and gold producer in North America. 

The Mine

Jerritt comprises a large, underexplored land package that will give the company the opportunity to expand exploration and focus on discoveries. The 30,821-hectare property has one permitted gold processing plant with a capacity of 4500 tonnes per day (tpd). That processing plant is only operating at an average rate of approximately 2200 tpd due to the limited ore production from the two current underground mines. 

The mine is already a proven producer, with 112,749 ounces of gold at a cash cost of $1289/oz produced in 2020. The company’s plan to “enhance both the cost and production profile” will allow them to maximize the potential of this large project, and expand it to other sites in the future with more exploration. 

The Plan

First Majestic’s plans include increasing production capacity to maximize the processing output and make this project a profitable one for their bottom line. According to a press release: “First Majestic has identified several opportunities to enhance both the cost and production profile of Jerritt Canyon as well as near-term brownfield potential between the SSX and Smith mines and long-term property-wide exploration potential.” 

The Deal

The deal has First Majestic purchase issued and outstanding common shares of Jerritt Canyon Canada from Sprott Mining. In turn, Sprott will receive $470 million in shares of First Majestic as well as five million First Majestic share purchase warrants.

Keith Neumeyer, CEO of First Majestic had this to say about the deal: “The acquisition of Jerritt Canyon is a highly compelling transaction that further enhances First Majestic’s operating platform, adding a producing asset in a world-class jurisdiction. While we remain focused on maintaining our peer-leading exposure to silver, Jerritt Canyon is a unique opportunity to create value for First Majestic’s shareholders and provides a new geographic operating platform while preserving our pristine balance sheet.”

First Majestic Takes First

The company has had a string of success so far this year, also winning the 2021 Socially Responsible Business Distinction Award for all three of its mines in Mexico. The award was given in a year and an era when socially and environmentally responsible mining companies are being prioritized in some of the largest institutional portfolios. 

Considering the company’s track record with positive environmental, social, and governmental principles at the forefront of its operations, Jerritt Canyon is sure to join their portfolio of award-winning mines. While investors have rewarded First Majestic in the past for their commitment to growth while balancing social responsibility, making this significant new acquisition is likely to get the capital inflows running once again. 

It is difficult to know how much, but the stock is poised for a run on the recognition of this deal and the potential it brings. 

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above. 

Ambition is a difficult thing to balance with expectations, and luck changes so quickly. After a blockbuster year in 2020 for lithium shares on the ASX, 2021 got off to a rocky start. The January blues kicked in and shares looked a little directionless. It seems that there was plenty to be optimistic about, and investors were waiting for the catalyst. 

Spring Forward

A few things have made April a great month for ASX lithium shares, with prices about 5% to 10% higher and within 20% of all-time highs. The beginning of 2021 was a little dull for lithium miners, but between Joe Biden’s new position on climate change, higher lithium prices, and even a surging Tesla share price, there was enough messaging that lithium miners will be chugging along in the coming months. 

Most of the excitement comes from the electrification trend that is being accelerated by electric vehicles and battery makers, but the ASX lithium listings have a second tailwind going for them. The Australian government’s new roadmap lays out a special place in the plan for energy and resources, making sure that miners have the capital and regulatory support to expand and advance. 

The March announcement was welcome news for the whole industry, but miners like Galaxy Resources have done particularly well since this announcement and a few of their own. 

Winning

Since their March 25th news that piloting and testwork at their Sal de Vida Project in Argentina have improved its flowsheet for producing battery-grade lithium carbonate through the addition of a simple process, shares have risen 28%. Recent test results that incorporated those minor enhancements to the flowsheet have returned 99.83% purity, and the company is pushing for more positive test results on all of its projects. 

This outstanding development achievement is unique to conventional evaporation processes. Galaxy CEO Simon Hay had some confident words about the combination of tailwinds pushing the company and share price along: “Galaxy remains on track to execute and deliver a highly competitive, low-cost project to the market in time for the forecast lithium demand surge.”

Favourable Conditions

Lithium companies have been buoyed by a strong lithium price that has continued to push higher in March driven by a general demand increase. According to Fastmarkets:

• Asian seaborne lithium prices were steady against a backdrop of tight availability and firm demand.  Meanwhile, Chinese suppliers have made aggressive offers for battery-grade lithium carbonate. 
• Spot trades in domestic Chinese market remained slow with consumers conducting “hand-to-mouth” purchases, but supply continued to be tight. 
• Europe, US battery-grade lithium spot prices continued to trend higher with deals reported at higher levels.

As long as this trend continues, there will be good support for further buying and investment in the space for some time. It’s unclear whether and when this trend will run out, although price stabilization is eventually inevitable in the distant future.

Losers and Winners

Galaxy Resources and other Australian lithium miners on the ASX like Pilbara Minerals and Orocobre Limited will continue to benefit from the positive mining and industry environment, but headwinds remain. The Global X Lithium and Battery ETF fell more than 25% between February 17th and March 25th. The ETF invests in companies along the complete lithium cycle from mining to refining, and even battery production. 

The broad exposure of the ETF and its recent drop has shown that although future trends have put all the companies in the fund in the right position, not everyone will win at the same time. The competition to grab as much market share as possible will produce more losers than winners and choosing the right miners and producers that partner with them in battery production or energy storage will be the key to a strong lithium portfolio. 

For now, lithium mining companies on the ASX can expect to find strong support from both the government and investors, as favourable regulatory, financial, and broader economic conditions push capital into the mining and resources sector this year. 

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above. 

Canada’s share of the global metals and mining industry mergers and acquisitions deal value was totalled at 23.7% in February 2021. While the COVID-19 pandemic slowed some of the dealmaking over the past 12 months, (February marked a drop of 22.81% over the 12-month average), 2021 is proving to be a strong start for the industry on the road back to normal.

Heading in the Right Direction

Total M&A deal value was marked at $743.23 million for February, with the top five deals accounting for 93.2% of the overall value, or $164.08 million. The high concentration of these high-value strategic deals demonstrates the continued power of the major miners and their ability to expand portfolios and vacuum up market share.

Who’s Dealing?

The top five metals & mining industry M&A deals of February 2021 tracked by GlobalData were:

1. American Lithium’s $125.38m acquisition of Plateau Energy Metals

2. The $12.64m acquisition of 2333382 Ontario by Avalon Advanced Materials

3. P2 Gold’s $10m asset transaction with Borealis Mining.

4. The $8.41m acquisition of Garibaldi Resources by Eskay Mining

5. Fancamp Exploration’s acquisition of ScoZinc Mining for $7.64m.

Source: Mining Technology

American Lithium and Plateau Energy Metals

American Lithium took the significant step of acquiring Plateau Energy Metals to consolidate two “significant and strategic” undeveloped lithium assets in the Americas. This deal is poised to take advantage of the rapidly growing demand for lithium as the electrification of the global economy continues to accelerate with vehicles and battery production. 

Avalon Advanced Materials Acquisition

Avalon signed the letter of intent paving the way for their ownership of 2333382 Ontario Inc., a private company that owns four industrial minerals properties and a demonstration-scale processing plant located in Matheson, Ontario. The total purchase price will be marked at $16 million, payable over two years in a combination of cash and common shares of Avalon. 

FanCamp Acquires ScoZinc Mining

The $7.64 million deal will allow Fancamp to indirectly acquire all of the issued and outstanding securities of ScoZinc Mining. Shareholders of ScoZinc will receive 6 common shares of Fancamp for every ScoZinc share held. The deal will give former ScoZinc shareholders a 33.7% stake in the outstanding Fancamp common shares.

Fancamp will get the benefit of ScoZinc’s Scotia Mine, a near-term cash-flow-generating asset. It will also allow the company to continue to advance its exploration and titanium technology strategies. The deal aims to bring the Scotia Mine to production using Fancamp’s strong balance sheet, accelerating the project’s timeline. 

A Rising Tide Lifts All Boats

The continued acceleration of M&A activity this year would be a boon for the industry overall, as numbers dropped across the board around the world in 2020. While domestic deals are still popular, large-scale cross-border deals have the biggest potential to drive larger M&A value over the coming months. The improving overall economy will also help the deal-making environment.

As companies continue to acquire, consolidate, and shore up operations, the sector will find itself concentrating capital in fewer winners every quarter. The companies holding a strong balance sheet now with a forward-looking strategy will be the ones lifting the tide for all the miners out on the choppy waters this year.   

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above. 

There is a lot of fast money to be made investing in junior mining companies, but those wins can slide into losses just as fast if the stock is a pump and dump scheme. Before investing in any company, thorough research and due diligence should be conducted to protect your portfolio. Start with a thorough screening of management, media coverage, articles, reports, and any red flags. Here are five things you can use to spot a potential mining stock pump and dump:

1. Founders, executives, and other insiders are selling and gradually liquidating their positions. 

This is the most important thing to watch for. The behavior of the people who have inside information and follow the company closely is highly indicative of whether the company is a scammy promotion or a company that is going to realize substantial value. You can check this by searching their names on the SEDI website and seeing whether they are accumulating or selling shares. The worst sign is if founders or people with very cheap stock are unloading it into uptrends in the stock.

2. Media and coverage of the company are all paid. 

Companies like Agoracom and newsletter writers will take a large position in the company with cheap stock and also be paid cash to write anything that promotes the company. Their opinion is usually highly biased because they just want the value of their cheap stock to go up a little bit and they don’t care about the long-term value of the company. 

3. Articles about the company have the ticker bolded. 

Some legitimate stories about stocks that will actually go up in value may also use this promotional technique, but it is generally a pretty dodgy signal. The purpose is to remind retail brokers and other bag holders to go to Robinhood or E-Trade, enter in that ticker, and buy it without doing any research. They show the ticker and repeat it a bunch of times to make it obvious and plant it in your mind, hoping you won’t do any more research.

4. Googling the founders, major shareholders, directors or CEO turns up scam reports.

Thanks to the internet, when you Google someone and their name, plus ‘scam’ or their name plus ‘fraud’, you can find other people who have been ripped off by them in the past. While not guaranteed, past habits may be useful information for predicting their future behavior. Most of the scammy promoters basically lather, rinse, and repeat with that technique over and over as a way of generating profits. You should look for any investors in the past who have been left holding the bag and lost their whole investment when the scammer dumped their stock. They will likely be complaining on boards, social media, and other websites.

5. The company is all talk.

Companies love to talk about their big plans and how far they’re going to go. If they don’t have evidence to back it up or a concrete timeline for their projects and plans, this is a serious red flag. No timeline means no accountability (for their work, or their shareholders). If the company story is all about their ambitions and dreams, but not how the potential of their exploration efforts or plans will be unlocked, it might be wise to steer clear. Letters of intent as well as boots on the ground and steady progress for ongoing projects should be presented and explained clearly. 

Pump and dump schemes are nothing new, and while the scam methods and deception strategies continue to evolve with technology, a fraud will always be a fraud. The scam artists starting and marketing these companies often have patterns to their behaviour and language. Keeping a keen eye out for some of the red flags that have your intuition sounding the alarm can save you a lot of headaches and money. 

While not a rulebook, these red flags should make you slow down and take a second or third look. If the stock is a pump and dump scheme, you don’t want to be holding the bag when everyone else has dumped their holdings.

The Copper Boom Has Only Just Begun

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The coming supercycle means getting in on this junior miner now is like being a founding investor in Google, Apple, or Amazon.

Key Takeaways

• The boom and bust of mining is about to turn into the longest boom ever for copper stocks.
• Rapidly rising demand is set to overwhelm miners and bring supply shortages.
• Copper is one of the few investments performing well in a global economy recovering in the intensive-care unit.
• Investing analysts and expert copper mining executives are on the same page – this is just the right moment for copper mining stocks.
• Only the best-prepared will win – one junior copper miner in particular is already set for success.
• This is not a pump and dump: > $1B Market Cap, A-List Management, Full Year Growth Trajectory.
• Solaris Resources (OTCMKTS: SLSSF) is that Copper exploration company!

Copper Is The Hottest Sector of 2021! The Price Is Up 83.79% This Year [source]

The Top 10 Reasons To Invest in Solaris Resources (SLSSF)

Why Solaris Resources Deserves to Be In Your 2021 Portfolio

1. Experienced Management Team
   Solaris Resources (SLSSF) has an exceptional management team with a proven track record in taking large mining projects into full production or sale, working across numerous projects and companies which went on to be acquired for hundreds of millions, and even billions of dollars.
2. Acquisition Track Record
   A growing list of success stories from management:
   • $1.6B Buyout of Ventana Gold
   • $667 M Sale of Augusta Resource Corporation
   • $2.1B Sale of Arizona Mining

   …is Solaris Resources the next major buyout target?

3. Global Demand is Growing
   Analysts at StoneX forecast copper demand in 2021 will rise by about 5% year-on-year, outstripping supply, which they expect to grow by 2.3% year-on-year.
4. Rare Triple-Threat
   Having multiple deposits to work with gives Solaris Resources (SLSSF) an advantage by being able to combine resources and smooth out peaks and valleys in production.
5. Location, Location, Location
   Solaris Resources is situated in southeastern Ecuador, in the same belt as the Fruta del Norte and Mirador mines, adjacent to the +1Bt San Carlos-Panantza copper deposits.
6. 461.6 Million Reasons
   For the development-stages of Solaris Resources’ Warintza and La Verde properties there are an estimated 461,598,200 Tonnes of minerals in the ground, according to the NI 43-101 Technical Report. All with very high grading and added Gold (Au) deposits to boot.
7. A Key Metal: Copper
   1. Copper has the best electrical conductivity of any non-precious metal and is critical for building the new green revolution.
   2. Supplies are not readily available.
8. Treasury is Fully Funded
   Solaris Resources has sold out all of its financings and is fully funded to fully explore these amazing resources.
9. Insiders Holding Shares Tightly
   The number of shares held closely by direct insiders at Solaris Resources speaks volumes to the situation here, with over 70% of the shares directly and indirectly held by its board of directors and senior executive team. This includes a recent $52.5M purchase by Richard Warke to increase his stake even more. Given the facts laid out above, it’s no surprise why insiders are holding so much stock in Solaris Resources
10. Growing Momentum and Extremely Limited Share Supply
    Very tightly held capital structure at only ~105M shares outstanding with company insiders holding significant long-term positions, there is little left in the public market.‍ This is no doubt contributing to the growing momentum in Solaris Resources (SLSSF) over the past year, already up over +1,000% since IPO and counting.

A Team of Experts and Industry Veterans is at the Helm, Steering Solaris Straight Toward a Future of Limitless Potential and Success

Richard Warke: Executive Chairman

Richard Warke is a Vancouver-based Canadian billionaire business executive with more than 35 years of experience in the international resource sector. Warke owns 100s of millions of dollars in Solaris stock and just recently added $57.5M in shares at $8.25 demonstrating his confidence.

In 2005, Mr. Warke founded the Augusta Group of Companies which has an unrivaled track record of value creation in the mining sector. Currently, Augusta Group comprises private businesses and public companies that currently includes Titan Mining Corporation, Augusta Gold Corp., and Solaris Resources (OTCMKTS: SLSSF) which is advancing a portfolio of copper and gold assets in the Americas, including a high-grade, world-class resource at its copper and gold project Warintza in Ecuador.

Daniel Earle: President and CEO

Daniel Earle has over 17 years of experience in the mining sector and capital markets, covering projects ranging from early-stage exploration through feasibility and engineering to production. Mr. Earle is currently the President and CEO of Solaris Resources and also serves on its Board of Directors.

Before joining Solaris in November 2019, he was a Vice President and Director at TD Securities where he covered the mining sector for over 12 years and established himself as a thought leader in the space. Prior to joining TD Securities in 2007, Mr. Earle was a senior executive with several Canadian and U.S. public mineral exploration and mining companies.

Mr. Earle sits on the Board of Directors of Augusta Gold Corp.

Linda Chang: Chief Financial Officer

Linda Chang has over 15 years of financial professional experience and joined Solaris in November 2019. Ms. Chang is the Chief Financial Officer for Armor Minerals Inc. since her appointment in October 2015. Ms. Chang has previously worked with the Augusta Group since June 2010 where she served as Corporate Controller for Arizona Mining and Director of Finance for Titan Mining.

 

The People Behind Solaris Have Multiple Proven Returns

Solaris Resources comes from a long line of incredible successes by the Augusta Group as evidenced by the returns for both their companies’ stocks and their buyout successes:

Recent Successes

Solaris Resources: 1,000% return so far.

Titan: 171% FY 2020 return

Augusta Gold Corp: 170% FY2020 return.

Ventana Gold Corp: Sold for $1.6 billion in 2011. (12,960% return)

Augusta Resource Corporation: Sold for $667 million in 2014. (3,300% return)

Arizona Mining: Sold for $2.1 billion in 2018. (6,100% return)

Equinox Gold: Co-Founded in 2017. $2.5 billion Market Cap. (1,300% return)

Public Market Growth History

After listing as a spin-out of Equinox Gold, Solaris’ mission began to explore and develop the Warintza Project in Ecuador. Once results started to come in, a pattern began to emerge:

1. July 18, 2020: Solaris lists at $1.50.
2. August 10, 2020: SLS-01 returned 567m @ 1.0% Cu-Eq effectively extending mineralization to depth below historical drilling, averaging 200m and improved upon the estimated resource grade of 0.56% Cu. Price: $2.43.
3. September 28, 2020: SLS-02 returned 660m @ 0.97% Cu-Eq which confirmed further extension of higher-grade mineralization relative to historical drilling. SLS-03 returned 1,010m @ 0.71% Cu-Eq and collared 426m east of the first two holes, and further improved upon depth-extent of known mineralization. Price: $4.30.
4. November 23, 2020: Three drill assays (including the first campaign at Warintza West) included SLS-04 returning 1,004m @ 0.71% Cu-Eq, SLS-05 returning 918m @ 0.5% Cu-Eq, SLS-06 returning 884m of 0.50% Cu, further extended mineralization relative to historical depth. Price: $5.72.
5. January 14, 2021: SLS-07 returned 1,067m @ 0.60% Cu-Eq, bottoming in mineralization beyond the 150m depth of the corresponding historical hole, and SLS08 returned 454m @ 0.62% Cu-Eq both effectively extending mineralization to the north and northeast. Price: $6.59.
6. February 16, 2021: SLSW-01, the first hole drilled at Warintza West, returned 798m @ 0.31% CuEq (0.25% Cu, 0.02% Mo, and 0.02g/t Au), extending mineralization to Warintza West. Price: $6.90.
7. February 22, 2021: SLS-10 returned 600m @1.00% Cu-Eq, SLS-11 returning 668m @ 0.57% Cu-Eq), SLS-12 returning 736m @ 0.74% Cu-Eq, and SLS-13 returning 462m @ 1.00% Cu-Eq. Price: $7.27.
8. March 22, 2021: SLS-14 returned 922m @ 0.94% CuEq, SLS-15 returned 1,002m of 0.60% CuEq from near surface, SLS-16 returned 958m of 0.77% CuEq from near surface, extending mineralization between east & west. Price: $8.70.

Corporate and insider ownership now accounts for almost 70% of its share structure, giving shareholders and future investors confidence that the people running the show have solid plans for the present and future of the company. Recent insider buying and the high insider ownership have resulted in the current tight float.

Strong Mining Fundamentals Are Already In Place

• SLS is currently being valued at $8.70 based on inferred resources in drill holes from the year 2000 – 124M tonnes: does not include any of the recent drilling.
• Updated resource model shows potential growth from 124M – 1B tonnes as a result of recent drilling – valuation jumps to 2.4B USD to 3.2 B USD – this would mean a Market Cap of $4.1B CAD and share price of $43.69.
• This is just at Warintza Central – it does not include West, South, and other owned properties.

SINCE BECOMING A PUBLIC COMPANY JUST 8 MONTHS AGO, SOLARIS STOCK HAS GAINED OVER 1,000%. INSIDER BUYING, AS WELL AS PUBLIC MARKET TRANSACTIONS, SHOW THAT THE COMPANY HAS HIT THE GROUND SPRINTING.

This Is Just The Tip Of The Iceberg

Investors looking for maximum potential in this sector need to be looking in the direction of Solaris Resources (OTCMKTS: SLSSF). This copper miner, in discovery phases at its Warintza Project in Ecuador, is in the middle of large-scale, high-yield discoveries at a mine that promises huge rewards.

In our view, Warintza Central continues to demonstrate the potential to become a large, high-grade open-pit copper porphyry deposit, at a time when the global diversified mining houses (BHP and Rio Tinto) have all indicated that new copper discoveries are required to meet the upcoming estimated supply gap.
– Arun Lamba, TD Securities, Feb 17, 2021

Copper analysts are forecasting sky-high enthusiasm for copper that will serve as the foundation for a decades-long run, sustaining high prices and high demand throughout the 21st century.

EVs

The electric vehicle revolution has been a long time coming, but there is no doubt it is in full swing now. Elon Musk’s Tesla kicked us off with the Model S and now the more affordable Model 3, and established automakers have finally joined the party.

The demand from their high-tech cars powered by batteries that require high-demand metals like copper is driving massive increases in production around the world, and Musk himself has even called for clean miners to bring him supplies for the coming decades.

De-Carbonization

The de-carbonization of everything from transportation to manufacturing gives the miners producing the metals necessary to power this green revolution the ultimate advantage.

Solaris Resources is on the verge of discoveries that should place the Warintza Project at the center of attention for investors wanting to profit from this revolution. Their commitment to environmental standards and ethical mining is also perfectly in line with the de-carbonization of the industry.

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Soaring prices show no sign of abating as a result of unprecedented demand for copper in the global market.

We see a significant deficit, possibly in the region of 10 million tonnes of additional copper is required to balance the market by 2030
– Jeremy Weir, CEO – Trafigura, March 12, 2021

Solaris is ready to capitalize on that demand by exploring and ultimately discovering some of the largest copper deposits in the world. At a site where many have tried but failed, Solaris Resources (OTCMKTS: SLSSF) is finally ready to realize the gains of years of legwork.

The company’s flagship Waritnza Project is advancing rapidly, and the story is pretty incredible:

• In 2000, legendary mining explorer David Lowell made a world-class discovery, but the site lay largely dormant since 2001 due to resistance from local communities.
• The project wasn’t done responsibly, and the right partner needed to come along and put things in order.
• After extensive dialogue, CSR program moved forward as the underlying issues were resolved mid-2019.
• Solaris was the company that made the project viable, and possible after 18 years of stalling and frustration.
• Solaris is being valued ($9 sp) at inferred resource based on drill holes from year 2000 (124 million tonnes). This does not include any the recent drilling!
• Updated resource model shows growth from 124M – 1B tonnes. With those numbers, the valuation would jump to approximately US$2.4 billion-US$3.2 billion: A Market Cap of CA$4.1 billion.
• This only includes Warintza Central – does not include West, South, and other owned properties in the Solaris portfolio.
• This property is now positioned as the top open pit high-grade porphyry project in the world.
• With low risk and high reward, Warntiza is Solaris’ flagship project for some very good reasons.

We believe development of Warintza as a potentially large-scale, open-pit operation positions SLS ideally in the context of our forecasted startup in late-2026, and the backdrop of increasing copper market deficits beginning in 2023. We forecast relatively balanced copper markets during 2020-2022, as the post-COVID-19 demand recovery is largely offset by slower-to-recover ex-China demand and mine production recovery and growth; however, looking ahead into 2023, we forecast a copper market deficit of 95Kt driven by demand growth of 2.1% comprised of China growth of 2.5% and ex-China growth of 1.6%. We further estimate at 2024 and 2025, copper market deficits of 320Kt and 234Kt, respectively, which reinforces our LT copper price of $3.50/lb.
– Ralph Profiti – Eight Capital, Feb 26, 2021

What’s the Rush?

• Experts and industry executives unanimously agree that copper is on the cusp of entering what could be at least a 30-year supercycle.
• The carbon-based climate crisis has delivered the urgency needed for clean technologies.
• Conservative estimates put copper rising more than 50% from its current level.
• Junior miners without results and no concrete plans have seen their shares soar – Solaris has both and is poised to surpass them all.
• The Solaris Resources team and track record, and the commitments of industry veterans like Richard Warke and Daniel Earle speak for themselves.
• Investing in a miner like Solaris allows for MASSIVE exposure to the copper super-boom and extreme leverage in any future buyout.
• Shares in Solaris Resources are already up more than 1000% PERCENT.
• Warintza Project potential is already in progress with explosive profits on the horizon when exploration turns to discovery.
• Interest in Solaris Resources (OTCMKTS: SLSSF) is at an all-time high. Once the word goes wide, it could be too late to get the benefits of the huge returns from all of that attention.

THE COPPER SECTOR IS ALL SET TO BE THE HOTTEST AND MOST PROFITABLE IN 2021, AND IT’S JUST THE BEGINNING. SOLARIS RESOURCES IS THE FIRST STOP ON A DECADES-LONG TRIP UP TO GARGANTUAN PROFITS.

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The future of copper is so bright there is no way to know how high it can go. As the price continues to multiply many times over, Solaris Resources stock will follow suit. Anyone getting in now should see their portfolio grow exponentially in the coming years and decades.

With huge buyout potential and the Augusta Group’s track record, the billions in potential coming down the pipeline have investors chomping at the bit to own as much of the stock as possible.

The Green Deal Boost

China has a five-year plan, Europe has a Green Deal, and the US has an economic stimulus plan that puts all the rest to shame. All that money going into infrastructure and new projects means more growth and employment.

Green projects like electric vehicle charging networks, wind farms, solar installations, and battery storage all mean unbelievable demand for the metals required to create those products – like copper.

We have increased our copper price deck to reflect a much stronger start to 2021 than what we had expected. The sharp rally in base-metal prices as a whole has been driven, in our view, by investors chasing reflation, inflation-hedging, energy transition, and super-cycle narratives. We have raised our copper price forecast over the next several years — we have increased our 2021 price forecast to US$3.76/lb (from US$3.50/lb) and our 2022 price forecast to US$3.50/lb (from US$3.35/lb). We have also increased our long-term copper price forecast (starting in 2025) to US$3.25/lb from US$3.15/lb. We continue to believe that the pipeline of greenfield development projects is very shallow and stocked with projects that face permitting, social, and technical risks. Versus 10 years ago, the project pipeline contains 50% less potential new production capacity, highlighting the challenge facing copper supply beyond 2025.
– TD Equity Research Industry Note, March 24, 2021

The large amount of iron ore, copper, cobalt, and lithium needed are pushing prices and demand along swifter than ever before. Solaris Resources (OTCMKTS: SLSSF) is in the perfect position to capitalize on this revolution.

The Proof Is in The Pudding

Mining industry experts, company insiders, and investors who know what’s coming are already there holding the shares that will pad their portfolios for years to come. If you would like more information on the company and its projects, take a look here.

The company is ready for anything and everything and stays current on news and press releases. Investors that want a real-time feed of ongoing work and developments should stay tuned to the Solaris Resources Press Releases and Twitter account to make sure they don’t miss a beat.

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Learn More About Solaris Resources (OTCMKTS: SLSSF) at your brokerage today!

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An IPO is the process of offering shares of a private corporation to the public in a new issuance or “offering”. This allows companies to raise significant sums of capital from the public market and takes a private company to a public company accountable to shareholders beyond founders and initial investors.

It is also a time for those initial investors to realize the gains from their investment. An IPO often includes a share premium for current private investors. This is a great way for mining companies that meet listing requirements and that have a plan for their public debut in place to raise capital and use it for operations or expansion. 

Public Miners

For miners, this is an important step in any expansion and allows founders and shareholders of the private company to get a public valuation of their shares on the open market. Unfortunately, the IPO process is quite closed and exclusive, and for most investors, pre-IPO options are off the table. 

The Process

Companies start with a round of fundraising in which they pitch to investment banks, market makers, and brokers serving high net-worth clients. This allows them to privately price their IPO ahead of the public offering and allows exclusive access to the shares before they start trading. This can be extremely profitable for this lucky bunch as according to Dealogic, “The average first-day trading pop on U.S. listings of businesses in 2020 was 36%.”

Revolution

Now, Robinhood, the popular trading app, is looking to allow its users to buy directly into initial public offerings (including its own) before the first day of trading, alongside those institutional investors and high net-worth clients that are usually the only ones to have access. This ‘democratization’ of the IPO could be huge for companies that want to sell as much as possible, and for the Robinhood users that stand to benefit from that first-day pop instead of having to wait for the opening price on the day the stock begins trading. 

There are quite a few steps to go until the app can provide this service and implement it with the help of brokers, the companies they represent, and regulators. However, if it does, it will open a significant window for mining companies to access a huge share of the retail investors before they go public, raising capital beforehand and allowing everyone to benefit. 

A Funding Boom

The typical mining company goes public for a few reasons, one of them to allow for expansion of operations whether that be discovery, mining, or refining. By having access to capital sooner, it will help them deploy it faster, and initial investors can benefit from the first-day pop alongside everyone else. The second is to give original investors and founders the opportunity to sell some of their shares and realize the gains of their work while the company was private. 

This democratization of the process potentially coming down the pipeline may be the first step in an expansion of the mining industry’s public offerings, as more capital is available for pre-IPO pricing. More access to the industry’s IPOs would mean more money in mining stocks, and an overall boost for the sector where financing is concerned.

Reddit Traders Gain Momentum

The recent events surrounding the GameStop stock and the group on Reddit ‘wallstreetbets’ have shown that the democratization of trading and investing isn’t going anywhere. As technology continues to ramp up its offerings for retail investors, the online communities driving investment and trading ideas will have the tools at their disposal to contribute significantly to pre-IPO investing and allow mining companies to benefit from the added attention and funding. 

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above. 

Peru is one of the prime copper mining destinations for miners from every corner of the globe. Some of the largest deposits of the red metal are sitting in the ground in this mining-friendly country. For Anglo American, the Quellaveco Mine presents an opportunity to add another world-class cost-efficient mining operation to their diversified portfolio. 

A Hotbed

Anglo American is part of a group of miners that contributed 58% of mining investment in Peru in January. While mining investment in Peru slumped because of the pandemic and remains below pre-pandemic levels, investment in infrastructure and planning has restarted in earnest now. The Quellaveco Mine is a significant focus of capital expenditure for the company, and it’s pretty easy to see why.

A Hot Commodity

According to Bloomberg, “Within a decade, the world may face a massive shortfall of what’s arguably the most critical metal for global economies: copper.

The copper industry needs to spend upwards of $100 billion to close what could be an annual supply deficit of 4.7 million metric tons by 2030 as the clean power and transport sectors take off, according to estimates from CRU Group. The potential shortfall could reach 10 million tons if no mines get built, according to commodities trader Trafigura Group. Closing such a gap would require building the equivalent of eight projects the size of BHP Group’s giant Escondida in Chile, the world’s largest copper mine.”

Copper miners are scrambling to keep up with demand, and for the time being, prices continue to climb due to the supply shortfall. In the coming years, companies will need to manage their projects to avoid overproduction and a glut of the valuable metal, but for now, there are plenty of opportunities to ramp up production and get more copper into the market. 

This is great news for companies that are developing and investing in new projects right now, 

Quellaveco Mine

The mine is one of the largest copper deposits in the world and is located in Peru’s most established copper-producing region. Due to the skilled workers and established infrastructure, the project is likely to be a big winner for the company when it begins. 

Anglo American expects the mine to be ready for 2022, at which time the first copper production will begin. This project seems to be coming at just the right time to take advantage of a confluence of events and circumstances in the global economy and the process of electrification worldwide. For now, investors will be watching for any sign of the Quellaveco Mine proceeding according to plan, and Anglo American will need to deliver on many of their promises to deliver this project on time and on budget. 

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above. 

Prime Minister Scott Morrison has been dealing with attacks on all fronts lately, with tense diplomatic relations with China, a standoff with tech companies over privacy and news data, and even domestic issues like the economy and social conflict. With everything going a little haywire for the island nation, there is still a spot of calm in the storm when it comes to the mining industry.

The government has a world-leading critical mineral and resources sector that has buoyed the economy for decades. Jobs and economic opportunities are the two things Morrison needs to balance the scales of minor chaos in Australia, and the mining industry is prepared to deliver both. 

Proclamations

On March 4th, the Prime Minister’s office announced a 10-year plan to capitalise on Australia’s access to resources, particularly metals like lithium, which will be needed to manufacture many new technologies. Battery manufacturers, electric vehicles, and every device being made around the world require these metals to be mined and processed for use in their products. 

The countries and companies that best take advantage of this opportunity are the ones that will see revenues from mining activities soar over the coming decades as demand only continues to accelerate. With this plan, Morrison is planning to make humble and often unassuming, but ever-important Australia a key player in the fight for resource dominance in the industry. 

The Plan

It’s called The Resources Technology and Critical Minerals Processing road map, which probably could have been shortened for a cool acronym (Americans do that best: CARES Act). The plan lays out how businesses will be an important piece in rebuilding the economy post-pandemic, and that manufacturing should play a key role in that process. 

Making Things

This plan is important because it will create jobs, and make things. Countries the world over are trying to figure out how they might jumpstart their economies the right way, and quickly, pumping stimulus into the economy and even handing out cash. That works for some time, but at some point, someone has to make something. 

One of the misconceptions about the modern economy in the developed world is that everything runs smoothly even if we just make software and consult. Services are important, but in the words of Elon Musk: “If you don’t make stuff, there is no stuff.” The mining industry makes a LOT of stuff, and it is extremely valuable for all of the key products shaping the future of the world, particularly the technologies enabling us to work from home, drive around without emitting greenhouse gases, and storing the energy needed to power our homes, offices, and everything else. 

Central Tenets

The plan highlights that manufacturing businesses and jobs will be central to Australia’s National Economic Recovery Plan as the country builds it back from the COVID-19 recession. Australia wants to make a lot of lithium and other technology metals, and they’re prepared to back any miner willing to step up to the plate. 

The government is making it clear that the mining industry is a particular priority: Minister for Resources, Water and Northern Australia Keith Pitt said it also complements the Government’s Critical Minerals Strategy.

“The Government is committed to bringing on new supplies of critical minerals and developing this emerging sector to meet growing global demand,” he said.

“Developing our critical minerals processing capability will ensure Australian companies can move down the value chain, getting greater value out of the products they produce.”

The Roadmap also identifies how we can develop our resources technology to maximize efficiencies in our high-performing resources sector.

“Our focus on resource technology will also support the development of new ideas to improve mine productivity, process efficiency, and safety. As the sector’s productivity grows so does the Australian economy, benefiting all Australians,” Minister Pitt said.

Two-Pronged Approach

On top of this 10-year roadmap for resources that will boost the mining industry, the $1.3 billion Modern Manufacturing Initiative will be providing funding for manufacturers to scale up production, commercialise products, and tap into global supply chains. Lithium miners like Galaxy Resources will be able to tap into the funding if needed, and with the taps turned on in this way, the important mineral will be available for export and use in the high-technology and electrification industries.

Changing Tides

With the electrification of the global economy picking up, lithium is of particular interest for its use in batteries (lithium-ion), and other electricity-conducting needs. Companies like Tesla have called for increased clean and socially responsible mining of nickel, copper, and lithium, putting Australia and the companies operating in the country in a great position. All of the lithium mining companies preparing or ramping up their operations will surely see the benefits trickle down to every part of their company for stakeholders at every level. Now they just have to start. 

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above. 

It sure looks good when public companies have a lot of volume from individual investors, institutions, and large funds on the open market. It proves that the company has something of interest to many groups and that they see their investment as a source of profit or return in the future. Confidence is key here, and that’s a good thing.

What happens if an insider at the company is a significant buyer and insiders control a majority of the shares? Any news of insiders buying up more shares of the company they manage or own is a signal that not only are current operations delivering good value, but that future plans will equate to more.

Taking Control

The recent news that Equinox Gold, the company from which Solaris Resources was born, sold Solaris shares and Warrants to Augusta Investments and another strategic shareholder for up to C$132.5 million was one of those signals. Corporate and insider ownership now accounts for almost 70% of its share structure, giving shareholders and future investors confidence that the people running the show have solid plans for the present and future of the company. Of particular note is the potential for significant porphyry discoveries at the Warintza Project in the coming year and years ahead. 

A Strong Belief

TD Securities sent out a research note about the buying noting that Augusta founder and chairman Richard Warke purchased 7 million units of Solaris from Equinox at C$8.25, a stake totalling C$57.5 million. According to Bloomberg, this makes Solaris the leader by amount when it comes to insider buying in the materials sector (past 12 months). On top of that, Mr. Warke has purchased approximately C$57 million in open market transactions. Looking at the chart since the company went public 8 months ago will give you a clear picture of why. 

Looking Into The Crystal Ball

Since becoming a public company, it has only risen every month, and it seems poised to keep going. TD’s 12-month target price is C$13, but based on the trend since becoming a public company, this seems conservative. Mr. Warke’s buying spree comes on the heels of a 1000% return since the IPO last year, and it’s no wonder management and other insiders love owning the stock. Clearly, they see that the future has the potential to build on the success of the past.

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.