Coro Mining positioning for a copper comeback
As the copper price pushes ever-closer to the $3/lb mark amid increasing demand, stricter regulatory measures and the associated supply deficit, Coro Mining Corp. (TSX: COP)(“Coro”) is a junior in an eminent position to benefit. Having one project already producing, one in development and two in exploration means the company can immediately cash-in on the escalating value of one the world’s most-used metals and put the cash-flow straight to work.
Almost a third of the Earth’s copper reserves are in Chile, exactly where Coro focus their efforts. Since it supplies the lion’s share of global copper, the nation is known to be mining-friendly with a defined process for project approval and a long history of foreign investment. Coro’s producing resource in Chile, SCM Berta, is currently undergoing expansion of production capacity from the current 3,000 tonnes per year to 4,800 tonnes per year of copper cathode. Copper cathode, the ‘plates’ of 99.99% pure copper that are output from the plant may be sold-on immediately without further refining, and with average cash operating costs of $1.59/lb Cu, the current price trend is set to provide a serious boon to the company and further the development of its other resources.
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Coro is rapidly developing its Marimarca project, located in a belt of Mesozoic age copper deposits known as the Coastal Copper Belt, 14km from highway and powerline, with its maiden NI43-101 resource estimate and baseline environmental study announced earlier this year. The company then acquired The Ivan SXEW (Solvent Extraction Electrowinning) in June 2017 and have even initiated the Feasibility Study. The Ivan plant has a capacity to produce 10,000 tonnes per year of copper cathode, and will process ore from the Marimarca copper oxide project once in production.
The U.S. Geological Survey (USGS) estimates that every American born in 2008 will use 1,309 pounds of copper during their lifetime for necessities, lifestyles and health. Due to its outstanding thermal and electrical properties and malleability, the metal has been in constant use for over 10,000 years and is now featured in pretty much every electrical device on the planet. In fact, copper is second only to silver in terms of electrical conductivity, and so it occupies a permanent place in the modern home by virtue of its relative abundance.
Copper wiring is an absolute necessity in renewables, too; transformers, motors, batteries, circuit boards and even the most efficient solar panels all depend on copper to function. An electric vehicle requires 2-3 times more copper than a conventional dinosaur-fueled car, and an electric-hybrid bus can consume more than 10 times this figure. Presently, reserves are in decline as demand begins to improve around the world, and China’s recent suggestion that they will ban the import of low-grade scrap metal by the end of 2018 has seen many hedge managers extend their positions on copper futures.
Coro has already achieved a considerable amount, certainly enough for the team to be recognised as more-than-capable of bringing projects to term, and the speed at which their Chilean developments are moving these days is, for me, a major confidence marker in the future of the company. Any kind of construction is guaranteed to create demand for copper, and combined with the booming electric vehicle market, Coro should look forward a rewarding few years indeed.
Lara Smith has spent over a decade covering commodity markets. She started her career as a buyside analyst in South Africa where she covered soft ... <Read more about Lara Smith>