News
19 February 2025
As copper moves up in price and into the headlines, Australian developer Copper Bay is preparing for a 2025 IPO on the ASX.
As copper moves up in price and into the headlines, Australian developer Copper Bay is preparing for a 2025 IPO on the ASX.
Copper Bay’s Pyramid project in Alaska already has a large 75Mt resource – A$7 billion worth of contained copper.
The company is now raising capital to expand its resources and undertake economic projects targeting a production size which could make it a top 10 US producer, and could also make it one of the larger copper listings on the ASX in the past few years. This does not factor in the possible blue sky porphyry upside which could turn it into a 1Bt+ deposit.
“We are excited to finally show this project to the market, at a valuation we think is significantly below peers. The value we expect to create in 2025 is significant and I wouldn’t be surprised if one of the majors made us an offer we can’t refuse, even before we hit the ASX boards.” – Joe Webb, Chairman Copper Bay Resources
The backdrop for advanced US copper assets is more attractive than ever
Every investor is well aware by now that the world is fast approaching a copper supply shortage.
Less and less supply is coming online. While there were approximately 12 new significant copper discoveries per year in the 1990s, there is only about one per year now. BHP has forecasted that we need 140 new copper mines by 2030 to keep up with demand, which is expected to double between 2022 and 2035 from 25Mt/year to 50Mt.
These are the headlines everyone has read, but discoveries are not really the issue – it’s the progressing of projects through to mining. With risks such as environmental regulation and community opposition becoming increasingly cumbersome to deal with, permitting pathways are trickier than ever – on average it now takes 23 years to open a mine these days.
It’s therefore not surprising that majors prefer “buy over build” leaving early-stage risks to juniors. BHP’s 2024 attempt to take over Anglo American is a case in point, but there is also a lot of activity in the smallcap space. Copper is a main strategic focus in the boardrooms of RIO, BHP et al, and M&A is the way to get there. The deals that majors are looking for are high-quality projects with straightforward development pathways and decent exploration upside.
Additionally, the new US President has already left his mark with two major actions that move the US, particularly the State of Alaska, into focus.
First, Mr Trump recently issued an executive order which was solely focused on progressing resources in Alaska. The directive emphasises Alaska’s “abundant and largely untapped supply of natural resources” and directs policy to “maximiz[ing] the development and production of the natural resources located […] within Alaska.”
And second, Mr Trump threatened 25% tariffs on imports including natural resources. This means that US copper buyers would have to pay a hefty premium on imports, which is why the demand for US-domestic copper (not subject to tariffs) has already spiked, leaving US copper prices trading at multi-year premia to non-US equivalents. In early February, US-delivery copper touched US$10,000/t – while London Metals Exchange prices were still around US$9,200.
Trump’s executive order is giving a major boost to the resources industry in Alaska (source Reuters)
All of this forms the suitable backdrop for advanced copper projects in Alaska that can prove a straight-forward development pathway – which takes us to Copper Bay.
Copper Bay’s Pyramid project – on a pathway to become a top 10 US producer
Located in the Aleutian Islands of Alaska and adjacent to major global shipping routes, lies Copper Bay’s Pyramid project. There are location infrastructure advantages, deals in place with traditional owners through to production, an existing resource that shows the potential of being economic, and extraordinary upside potential.
The project already has an existing Ni-43-101 resource with over $7 billion of contained metal value, with the focus on the high grade of this including 75Mt @ 0.65% CuEq. The resource is mostly built around a near-surface, high-grade which delivered extraordinarily wide assays of up to 261.5m @ 0.57% Cu and a supergene at surface that has not been drilled out which could increase the grade substantially (only 1 hole in the supergene 48m @ 0.94% Cu 0.01% Mo & 0.15g/t Au).
Even based on this existing resource, the project has credentials of being a future mine and defined pathways to production at a targeted rate of 50ktpa – which, according to the company, would put it among the 10 largest copper projects in the US.
Since mineralisation is so close to the surface, the Copper Bay team believe they have a relatively straight-forward, low-capex, low-risk plan that focuses on infill drilling. The goal is to expand the resource to 100Mt @ 0.7% CuEq whilst drilling extension to depth (e.g. extend zones like 40.85m @ 1.17% Cu 0.01% Mo & 0.17g/t Au).
Land ownership in Alaska is mostly regulated via traditional owners who have organised themselves into large and well-managed corporate organisations. When MDF acquired the project, it secured a partnership with the Aleutian community. This partnership paves the way for permitting pathways all the way through to mining.
Pyramid Map (source Copper Bay)
The upcoming capital raise will also allow the team to perform further exploration drilling, with the existing area being open in all directions. The team sees potential to demonstrate expansion of the resource to 200-300Mt which (at 0.7% Cu) would bring the contained metal value to over A$20 billion.
Exceptional projects need exceptional people
The key for value creation for a project like Pyramid is the team which is a standout factor in this case.
Copper Bay was sourced by MDF Global, who currently own 64% of the company and have put in a management team of a high pedigree.
Founded by geologists credited with discoveries worth over A$100 billion in planned or executed production who teamed up with proven resources dealmakers, MDF’s mission is to become the largest pure-play exploration company on the planet.
MDF Global – co-founded by Rio Tinto’s ex-head of Americas Operations John Main – made headlines last year when it secured the Critical Metals Alliance in Alaska, which is a fully funded up to A$50 million generative exploration programme for over 10 million acres of land and the largest ever of its kind.
The team has a proven, capital light model to scour through over 1,000 project opportunities, acquiring the best, and then advancing the tier-1 candidates among those, while selling off tier-2.
Over the last 5 years, MDF has built a high quality portfolio of 11 projects including two tier-1 candidates. One of these is the already ASX-listed Felix Gold whose share price increased 4x in the past year on the back of a major antimony discovery.
The second tier-1 candidate is Copper Bay.
MDF acquired the two Copper Bay projects (Pyramid and San Diego Bay) in a tender in 2021, beating major mining companies to the prize. According to MDF MD Joe Webb, the winning factor was the strong relationship with traditional owners which is now proving to be key.
One of the most exciting things about MDF’s model is that it’s commercially agnostic. The team is preparing Copper Bay for an IPO within 12 months but is intending to use the IPO preparation work to entertain a trade sale to a major, should the opportunity arise. In any case, the goal is a liquidity event within a year.
“Copper Bay is a rare opportunity where there is a straightforward low cost process to define the starting economic project whilst testing multiple billion dollar prizes.” – Joe Webb, MD of MDF Global and Chairman of Copper Bay
Bluesky upside to a 1Bt+ copper resource
MDF’s investment thesis is solely based on its existing resource and current plans to define the initial starter project which in its own right could be a top 10 copper producer in the US – whilst drilling to demonstrate potential upside to the existing resource and testing may result in multiple billion dollar prizes.
First, MDF recently discovered features of a significantly altered zone (diatreme breccia system) to the east of the existing resource zone that was missed by previous operators. The finding expands the area affected by the mineral-rich fluids and suggests that the activity creating the minerals is still ongoing – which is why geologists are generally excited to find indications of younger alterations.
This is important because similar systems around the world have shown that younger rock formations and altered zones can add significant new copper resources or create new ore zones below existing ones. Examples include Tujuh Bukit and Wafi-Golpu – although it’s too early to say if the same is true at Pyramid.
Second is the already known blue sky upside around a potassic core which could exist between the two areas where the current resource is located and which remains untested.
Potassic Core (source Copper Bay)
And third, there is Copper Bay’s second project, San Diego Bay, which is a 17km2 area sitting around 10km east of Pyramid.
Field mapping has identified a variety of outcropping felsic intrusions overprinted by extensive alteration zones typical of a lithocap environment. MDF have been mapping zones of higher temperature alteration to vector towards the hydrothermal centers & potential mineralization, and just as at Pyramid, are leveraging geological learnings from well-known porphyry/lithocap deposits around the world to help evaluate this system.
The capital raised in the upcoming pre-IPO raise will partially go into exploring these potential upsides which, if successful, could open up a very different valuation trajectory for the business.
Pre IPO Raise
Copper Bay is intending to list on the ASX within 12 months, and is now raising capital to create value this year that will boost the valuation towards an IPO, unless an attractive trade sale offer emerges from one of the majors beforehand.
“We have priced this at a market cap below $25 million which, given the already existing resource, should provide ample upside potential and safety margin as is. Comparables are trading in the A$80-180 million range and we would hope that we can advance our project beyond theirs within 2025. So even completely ignoring our blue sky potential of a 1Bt+ project, we consider this a highly attractive proposition to the market.” – Joe Webb, Chairman Copper Bay
Reach Markets provide Corporate Advisory Services to MDF Global Limited, including Copper Bay Resources Limited, and will receive fees for its role in managing this offer based on the uptake by investors.
Past performance is not a reliable indicator of future performance.
