Copper Mining Discussion

Introduction

• Speaker: Ahad
• Discussing copper mining industry
• Shoutouts to Access Mining Technology and others
• you can’t recycle your way to growth.

Importance of Copper

• Copper is a highly valued commodity
• Tied to infrastructure development
• Debates on demand projections and copper scarcity

Copper Demand and Supply

• Copper has the highest premium among commodities for new deposits
• Demand driven by infrastructure needs
• Challenges in meeting projections due to slow infrastructure development
• Existing mines meeting current copper demand - IMARC (Richard WA exploration - discussion on Cu: research shows that if you look at existing assets the resource growth on them meet the copper demand he have has since 2010 till now. Which has added twice as much as copper as new discoveries have in past 2 decades.
• resources expansion has been key:

Cut off grade = anything less than that and you’re not making enough money.

Contrarian Views

• Not enough copper deposits found compared to past
• Resource growth on existing mines meeting demand
• Study by Richard Shi and Petro G on upcoming copper resources IMARC

Challenges in Copper Mining

• Long timelines for new copper projects
• Environmental and community issues
• Example projects: Pebble (Alaska), Lost Bonces, Resolution
• Geographical challenges in Latin America and Africa. But we must be willing to have exposure in these places.

Jurisdictional Risks

• Mining in countries like DR Congo, Zambia, involves risks
• Companies hesitant to explore in risky areas
• Example: Ivanhoe's partnerships with Chinese companies

Copper Deposit Types

• Porphyry deposits: big low is grade.. and most sought-after by majors (not alot of other elements in (“copper and moly “ and “copper gold”)
• Sediment hosted: Copper belt in Africa “Copper cobalt” (PGEs) usually. Can also big and small. Also not a lot of different elements. Capex intensive. Lower - mid grade.
• Volcanogenic Massive Sulfide (VMS): Smaller, much high-grade deposits. Usually copper lead, zinc, silver etc. involved. Smallest usually - $ harder to find and more smaller mid tier companies and smaller capex to build.

Exploration Strategies

• Majors focus on large-scale, long-life deposits
• Small and mid-tier companies explore smaller, high-grade deposits
• Exploration upside: Resource expansion through drilling

Commodity Price Forecasting

• Generally poor long-term predictions
• Price is speculative, influenced by futures market
• Companies often buy existing assets to mitigate risk

Mergers and Acquisitions

• Preference for buying existing, producing assets
• Examples: BHP's acquisition of Oz Minerals
• Expansion through existing operations preferable

Regional Focus and Expansion

• Sandfire's acquisition of Matsa in Spain
• Consolidation opportunities exist in regions with multiple small deposits

Copper Recycling

• Limited impact due to increasing demand
• Cannot replace mining but can supplement supply

Junior vs Major Companies

• Juniors take higher risks exploring remote areas
• Majors prefer buying or partnering with juniors after discoveries
• Example: Exploration in Mongolia

Funding and Investment Models

• Need for new funding models to support exploration
• Comparison to tech industry VC models
• Potential for private funding to reduce costs and risks
• ability to predict the future is terrible see consensus forecast vs copper price yoy. Usually off by a factor of 5x

Conclusion

• Complexities in the mining industry
• Importance of long-term strategies and careful jurisdictional considerations