Red Metal set to Shine in 2023

13 January 2023 08:32

After a year of ups and downs in 2022, copper has started out 2023 strong, having just hit its highest price since June of last year.

The red metal looks to maintain its newfound strength through the rest of the year owing to a supply deficit as the often underappreciated future metal becomes more and more pivotal to the zero-emission ambitions of governments worldwide.

Used in the creation of wind turbines and a critical component in electric vehicles, copper has seen a new life on the market as governments worldwide tackle their net zero carbon emission targets, with mining giant Glencore estimating a global refined copper deficit of over 50 Mt Cu by 2030, based on the international energy agency’s Net Zero Emissions pathway.

This is a sentiment echoed by market stalwart Goldman Sachs, who have predicted a 178 thousand tonne deficit next year alone and have raised its price estimate for the red metal to US$11,000 per tonne, exceeding its record high.

With such a supply quickly outpacing demand, eyes will be on the explorers trying to fill the widening gap.

Castillo Copper (ASX: CCZ) will be a copper stock to watch as 2023 unfolds, who have a number of copper-focused projects across Australia and Africa including Cangai, one of Australia’s highest-grade copper resources, coming in with a JORC-compliant inferred resource of 3.2mt @ 3% Cu.

Castillo also holds licences in Queensland’s renowned Mt Isa Copper district, including the historical Big One deposit which returned a maiden mineral resource estimate of 2.1mt @1.1 per cent CU and the Arya prospect which contains a sizable massive sulphide anomaly with IOCG potential.

Raiden Resources (ASX: RDN) flagship Mt Sholl project in Western Australia is another copper project investors should keep their eyes on, targeting a wide battery suite including nickel and platinum group element sulphides in the renowned Pilbara region.

Located just 11 kilometres from the historical Radio Hill mine, exploration at Mt Sholl has been ramping up, with resource modelling now underway after an extensive drilling campaign showed broad zones of high-grade Ni-Cu-PGE sulphide mineralisation including grades up to 2.22 per cent copper.

Also holding ground on the Mt Isa belt is New Horizon Metals, a merger of London-listed Power Metal Resources, which has five copper-focused projects surrounding Mt Isa in a region home to a number of large and historic copper mines, including 29 Metal’s Capricorn copper project, which hit a production rate of 1.84 Metric tonnes per annum in 2021.

New Horizon also holds the Wilan project which comes with a four by six kilometre magnetic and gravity geophysical anomaly Iron-Oxide-Copper-Gold target that has never been tested and lies just 150km from the fourth largest copper deposit in the world, Olympic Dam.

While there is a lot of excitement in Australia about the next big copper find, it could also come from outside the lucky country with the copper scene in Africa also gaining momentum.

One explorer hoping to crack it big in Africa is London-Listed Kavango Resources (LSE: KAV) who have been hard at work putting the drill to its over 5 thousand square kilometres of holding on the Kalahari Copper belt.

In October, the company fired up the rig for over 37 thousand metres of drilling hitting 14 priority copper targets, including a well-defined 27km copper anomaly that contains multiple targets prospective for copper-silver mineralisation.

Things are also heating up at the company’s Ditau project, having confirmed an IOCG system beneath the Botswanan project, with the company believing this to be the first IOCG system uncovered in the mining-friendly country.

With growing demand and dwindling supply, Investors are looking for the next big copper find, and with such a wide berth of projects across the world, it will be exciting to see what 2023 holds for the red metal.

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