The first quarter of 2024 began with copper prices remaining steadfast, staying within the US$8,000 to US$8,500 per metric ton (MT) range.
However, the end of the quarter saw the red metal gain momentum on the LME and surge to a quarterly high of US$8,973 on March 18 before moving to set a two-year high on the London Metal Exchange of US$9,869 on April 30.
With higher copper prices affecting consumers, the effects have started to be felt by copper producers. So which companies have seen the biggest share increases on the TSX? Here are the Top 5.
Year-to-date gain: 73.91 percent; market cap: C$944.77 million; current share price: C$3.20
Taseko Mines is a copper producer and development company and holds a portfolio of assets in British Columbia, Canada and Arizona, US.
In addition to Gibraltar, the company is also working to advance its Florence copper project located near Florence, Arizona. The mine is expected to enter commercial production in 2025, and when fully operational will produce approximately 85 million pounds of copper per year.
Shares in Taseko reached a quarterly high of C$2.99 on March 27.
Year-to-date gain: 57.81 percent; market cap: C$721.14 million; current share price: C$14.96
McEwen Mining is a mining company led by industry veteran Rob McEwen. It is working to advance its Los Azules copper project in San Juan, Argentina as well as the Fox Complex gold mines in Ontario, Canada, the Gold Bar mine in Nevada, United States and the San Jose gold mine in Argentina.
In the announcement, McEwen said it had 22 drills on site and was working toward delivering a feasibility study in Q1 2025. It also reported a 76 percent expected average copper recovery over a 27 year life-of-mine and projected after-tax net present value of US$262 million.
Shares in McEwen Mining reached a quarterly high price of C$13.36 on March 28.
Year-to-date gain: 47.32 percent; market cap: C$12.94 billion; current share price: C$15.94
First Quantum Minerals is a copper mining and development company with a global portfolio of Assets.
Due to the ongoing situation in Panama, the company noted that it has undergone a refinancing program to improve its balance sheet and improve liquidity. This program has included working out a prepayment agreement with Jiangxi Copper for US$500 million, the completion of a US$1.6 billion senior secured second-lien at 9.38 percent due in 2029, and the issuance of 139.93 million common shares to raise proceeds of US$1.15 billion.
In addition to the updates on its mine in Panama, First Quantum reported the production of 100,605 MT of copper through Q1, a 59,595 MT decrease over Q4 of 2023, which were largely attributed to the closure of Cobre Panama. These declines were partially offset at its Sentinel mine in Zambia where a year-over-year increase of 25,993 MT limited the loss to 38,148 MT of copper from the same period a year ago.
However, First Quantum noted that production may be impacted in 2024 as drought conditions in Zambia have led to the government declaring a national emergency. Due to El Nino, there have been reduced water levels in the Kafue and Zambezi Rivers and power generation throughout the country has been impacted.
The company has been working to mitigate these challenges and has entered into offtake agreements with third-party traders for power sourced from the Southern African Power Pool for a total of 80 megawatts. The agreements are expected to cost US$25 million.
Shares of First Quantum reached a quarterly high of C$15.01 on March 15.
Year-to-date gain: 46.01 percent; market cap: C$3.70 billion; current share price: C$10.60
Hudbay Minerals is a copper production and development company with assets in BC and Manitoba, Canada; Arizona, US; and Peru.
In addition to its mining assets, the company is also working to advance its Copper World project in Arizona. In the MD&A, the company indicated it is working on receiving the final state permits for the site and expects to receive them sometime in 2024. The company is also in the process of completing a three prerequisites plan that is required for sanctioning which it expects in 2025.
The company is also working on its greenfield Mason project in Nevada. Hudbay says it is developing the project as a long-term future asset and expects it to have a 27 year lifespan. Resource estimates from the site show measured and indicated average grading of 0.29 percent from 2.22 billion MT of ore, with additional inferred grading of 0.24 percent from 237 million MT.
Shares of Hudbay reached a quarterly high of C$9.48 on March 28.
Year-to-date gain: 43.76 percent; market cap: C$23.03 billion; current share price: C$18.33
Ivanhoe Mines is a copper production and development company that operates the Kamoa-Kakula copper mine, one of the largest in the world.
The company also said that ore was being stockpiled ahead of the anticipated early commissioning of the Phase 3 concentrator, which is now scheduled to come online in May of this year. In addition, Ivanhoe said it is working to upgrade power generation at the site from 58 megawatts to over 200 megawatts ahead of the completion of the phase 3 smelter in Q4 2024.
Once online, annual production at Kamoa-Kakula will increase to 650,000 MT of copper per year.
Shares in Ivanhoe reached a quarterly high of C$16.24 on March 15.
Copper’s price trended downward throughout 2023. Although many experts have a positive long-term outlook for the red metal based on supply concerns and its growing role in the energy transition, recession worries in countries across the globe are creating short-term headwinds for copper, which is heavily used in industry.
Investors who are interested in copper should make sure to perform their due diligence, as the volatility and unpredictability of markets and economies at the moment means that nothing is guaranteed.
Two other growing sectors for copper are the burgeoning electric vehicle and green energy industries. Electric vehicles require a significant amount of the red metal per vehicle.
Investors can get exposure to copper in a variety of ways. Holding physical copper is possible, but plenty of storage would be required to hold any significant value of the metal.
Copper exchange-traded funds (ETFs) can be a good way to diversify an investment portfolio, and they can be a more stable option compared to individual copper miners or explorers. There are multiple options available on the market, and they can usually be purchased in the same way one could purchase stocks through a broker or trading platform.
The copper price is tracked in two ways: COMEX copper and London Metal Exchange (LME) copper. The COMEX and LME are both options and futures metal exchanges, with the former being headquartered in New York and the latter in London. COMEX copper is priced by the pound, while LME copper is priced per MT.
Copper is mined throughout the world, with significant production found on every continent besides Antarctica. Chile was the top producer in 2022, putting out 5.2 million MT of the metal. Rounding out the top five are Peru and the Democratic Republic of Congo with 2.2 million MT each, China with 1.9 million MT and the US with 1.3 million MT.
Once copper is mined, the ore goes through multiple steps to reach a market-ready state. First, the ore is ground to roughly separate the rock from the copper, as copper typically only makes up 1 percent of the mined rock.
The resultant copper is then slurried with water and chemical reagents, after which air is used to float the copper to the top of the mixture. After the copper is removed from this, it is typically at 24 to 40 percent purity.
Article by Dean Belder; FAQs by Lauren Kelly.
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
Securities Disclosure: I, Lauren Kelly, hold no direct investment interest in any company mentioned in this article.
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