Demand for copper expected to surpass supply by 2020
Company: Copper North Mining –TSXV: COL
President & CEO: Doug Ramsey
Headquarters: Vancouver, British Columbia, Canada
Number of locations: 1, Carmacks Copper-Gold-Silver Project, Yukon
In current role: Promoted to President and CEO on January 1, 2019, after 7 years as Vice President
Prior job: Manager, Environmental Assessment, Permitting, and Natural Resources – Tetra Tech Canada Inc.
The Carmacks Project in Yukon is a high grade, oxide copper-gold-silver deposit owned by Copper North Mining, formerly held by Western Copper. “At the time it was owned by Western Copper, it was a copper only project,” explains Doug Ramsey, who has been with the company for seven years, and earlier this year, took over the leadership role as President and CEO. “We have taken the project plan through a major transformation in recent years, changing the metallurgical process and improving the value of the project overall.”
Ramsey and the leadership team at Copper North have taken a three-pronged approach to increasing the value and attractiveness of the asset. “The first thing we wanted to do is maximize our metal recovery. Not just copper but also gold, and even silver. Secondly, we wanted to improve the cost of production. Finally, we needed to expand our mineral resource so that we’ve got a longer mine life.”
Copper North has issued approximately 86-million shares. “Of the shares we have issued, management and directors hold about 10%. We have two major shareholders – the first is a family that is in the mining business in Yukon. It owns one third of our shares. Our other shareholder is a high net worth individual who made his money in the renewable energy business in Thailand. He holds about 20% of shares.” In total, 65% of the company’s shares are very closely held.
Ramsey says Copper North’s stock is considerably undervalued at this time. “But that’s not the least bit unique among the base metals. There are several factors that set us apart from the competition making Copper North a unique investment.” For one, Ramsey says the Carmacks Project will be a very low-cost copper producer. “C1 cash cost is estimated at USD $1.08 per pound, after precious metal by-products credits. That puts the project in the lower decile of the cost-curve for new producers over the next 5-7 years.”
Copper North’s location is also an attractive feature. It is road accessible and positioned just 12 kilometres from grid power in Yukon. “We will have the infrastructure to get in easily and connect to grid power. We recognize this will be significant when it comes to attracting partners going forward.”
Ramsey also asserts the time frame it would take to make the project fully operational is another reason for investors to buy the stock while it is undervalued. “The Carmacks project can be built and producing copper within 4 years, and therefore is positioned to take advantage of the widely expected shortfall of copper supply over demand with the accompanying higher copper prices. Very few copper projects can be moved to production that quickly. Larger projects take considerably longer to plan, finance, and build. Carmacks is nimble in comparison and is positioned to take advantage of market forces.”
Ramsey adds, “Our Carmacks Project has been “de-risked” to a much greater degree than most of our peers. The project is already partly permitted, with a Yukon Quartz Mining License in good standing that allows construction of several project components.”
One of the key challenges for Copper North is securing equity investment. “The equity capital market is the primary source of financing for junior base-metal projects at the present stage of the Carmacks project. But we know the future of copper demand and supply fundamentals remains in place, with the widely held view that copper demand will start to outpace supply by around 2020, and that under supply will continue for several years, followed by a period of balanced supply and demand. Investing now is basically a call on the future copper market – waiting substantially erodes the potential upside.”
With so many players within the junior mining space, Ramsey identifies another vital feature – differentiating Copper North from the multitude of other junior companies. “Our Carmacks project is well past the discovery stage and boasts an economically minable and recoverable copper-gold-silver resource in a politically stable and mining-friendly jurisdiction. A project like Carmacks has the upside that is common to the juniors with considerably less risk given its more advanced stage.”
Summary – why investors should purchase Copper North Stock according to the company’s President and CEO:
- The Carmacks project is expected to be low-cost copper producer, with precious metal by-products
- Local infrastructure is already established (including roads and hydro) in a mining-friendly and politically stable jurisdiction
- The Carmacks project is already partly permitted and can be put into production more quickly than other similar mines.