Copper prices are flirting with all-time highs, as supply tightens with demand for deteriorates and short-term copper contracts trading at huge premiums.
Premiums for spot contracts hit record levels last month, in a condition known as backwardation (prompt delivery metal pricier than futures) that signals spot demand is far outpacing supply.
“It is fair to say that there is some sort of storm brewing for the metals,” Malcolm Freeman, a director at brokerage Kingdom Futures, told Bloomberg.
Copper prices are currently trading at US$4.34 per-pound but reached a high of US$4.73 on October 20/21.
Demand for the red metal has also been driven on the backs of the Feds plan to not immediately raise interest rates. The Fed said it would trim its massive bond-buying program starting this month but plans to stay patient and wait for more job growth before raising interest rates.
Copper inventories in LME and ShFE warehouses MCUSTX-TOTAL, CU-STX-SGH remained at multi-years low levels, with the LME cash copper trading at a premium of$190 a tonne over the three-month contract MCU0-3, indicating tightness of nearby supply.
Top copper miner Codelco's output in September fell 16% year-on-year to 133,800 tonnes, while production at BHP's Escondida BLT.L, the world's largest copper mine, dropped 12.2% year-on-year to 82,600 tonnes in the same month, Chilean state copper commission Cochilco said on Wednesday.
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According to Goehring & Rozencwajg, the number of new world-class discoveries coming online this decade “will decline substantially and depletion problems at existing mines will accelerate.”
Investors now will have to look companies that are focused on making new copper discoveries, within safe jurisdictions. Canada is one of the world's major copper producers, with the highest concentration of the metal being sourced in Ontario and B.C.
BIG REDMINING (CSE: RED) has recently completed a public offering of $1.8M at $0.20 and is currently exploring for copper in Ontario - Located in Albanel Township approximately 32Km Northwest of Elliot Lake and 40 Km North of Blind River - approx. 100 km from Sault Ste Marie
The Dobie Lake Property comprises 131 claims totaling 2,630 Hectares (6,500 Acres) with open ground to the southwest and east along extensions of the known copper bearing structures, which would allow the property to be expanded. The Property surrounds and covers Extensions of the Past producing Jentina Mine.
The mineralized structures, having a combined strike length of over 8 kilometres, are considered to represent a class of polymetallic quartz veins and/or Cu-Au-bearing veins and breccia pipes commonly found within the Proterozoic Huronian Basin.
Previous work already indicates high-grade copper mineralization at Dobie Lake, with two identified, east-west trending copper-precious metal structural zones (the No.1and No.2) and one north-easterly trending zone with EM + Copper Soil anomalies(the Canamiska Zone).
The No. l Copper-Precious Metal Structure is delineated over a strike length of 3,500 m (3.5 k) and varies in width from 18m in the west to 45m in the east.
- Massive sulphide horizons In the No. l Structure occur In Pit 1 at the Main Showing in the east. A 2.4m channel sample containing some massive sulphide assayed 6.78% copper and 60 g/t silver. Gold values of up to 0.03 oz per-ton (0.94 g/t) were returned from some samples in this area.
The No. 2 Copper Structure consists of mainly quartz-carbonate veining hosted by sheared and chloritized siltstone and conglomerate. The zone measures at least 1,340 m long (east-west).
- The extension of the zone to the east has recently been confirmed by prospecting. The so-called Southeast Trench in this zone, gave (historical) 1.83% copper over a 1.2 m channel of chalcopyrite-rich quartz veining.
- The Canamiska Zone is a 3,000 m long EM conductor and copper in soil geochemical zone.
Other known copper-precious metal zones on the Dobie Lake Property Include the Canamiska Zone, a 3000m long EM conductor and copper in soil geochemical zone. The best reported historical drill intersection along this zone was 1.44% copper over 3.81m. Some narrower sections contain more than 4% copper.
The team behind Big Red Mining (CSE: RED) collectively hold over 75 years of junior mining experience, ranging from early exploration through to production.
Jag Sandhu, Founder, CEO, Director
Mr. Sandhu has over 18 years of experience in the capital markets in corporate finance and development. Mr. Sandhu has assisted domestic and international mining companies in raising multi million dollars for exploration, development and expansion. He has dealt extensively with strategic planning, mergers and acquisitions, financings and operations for various companies. Mr. Sandhu has held various senior level executive positions in several listed companies. He received his Bachelor of Economics degree from Simon Fraser University in 1990.
James R Atkinson, MSc., P. Geo., Director, Qualified Person (QP) Under 43-101
Mr. Atkinson is an experienced exploration geologist and project manager with over 45 years of experience. Mr. Atkinson has spent his career in both mineral exploration and mining and in the environmental field attaining positions of Vice President, Exploration Manager and Regional Manager with junior and major mining companies such as Newmont Corporation (TSX: NGT), BHP Group Ltd. (NYSE: BHP) and Agnico Eagle Mines Ltd (TSX: AEM). He has reviewed, evaluated and acquired projects around the world and recently has also been part of the team responsible for mergers and acquisitions at Americas Gold and Silver Corp. (TSX: USA) (NYSE: USAS). He has worked with investors to form and run junior exploration companies. In the area of mineral exploration, he has designed and managed multi-million-dollar programs searching for and discovering various commodities including industrial minerals. These programs comprised of up to 100 staff and involved geophysical, geochemical and drilling programs as well as prospecting and geological mapping. He has negotiated option and purchase deals for mineral properties.
Rodney Stevens, CFA, Director
Mr. Stevens is a CFA charterholder with over a decade of experience in the capital markets, first as an investment analyst with Salman Partners Inc., then as a merchant and investment banker. While at Salman Partners, he became a top-rated analyst by StarMine on July 17, 2007. Mr. Stevens was also a Portfolio Manager registered with Wolverton Securities Ltd. and over the course of his career, he has been instrumental in assisting in financings and M&A activity worth over $1 billion in transaction value.
Paul Grewal, CPA and CA, Chief Financial Officer
Mr. Grewal is currently a Partner with HWG Chartered Accountants in Surrey, BC. He received his Bachelor of Commerce from UNBC in 1998, received his CA designation in 1998 and has completed Parts I & II of the CICA In-Depth Tax Course. Mr. Grewal joined Heming, Wyborn & Grewal in 2005 and was promoted to Partner on January 1, 2009. Mr. Grewal has been the CFO of several publicly listed junior mining companies in Canada. He has extensive experience in the financial management of corporations that are doing business in a variety of industries.
Big Red's (CSE: RED) mission is to conduct future drilling campaigns on the Dobie Lake copper property to maximize its minable resource potential.
Disclaimer: We own shares in Big Red Mining Corp.