Copper explorer competes for ‘favourite child' status as global shortage looms

Copper has come a long way from its first uses as coins and ornaments, in tools humans used to break away from the Stone Age and as a stepping stone into the Bronze Age. Here in the present, copper continues to do humankind a solid, helping usher in a carbon-free future and explorers like NGEx Minerals are critical to the global decarbonisation drive.

As a metal, copper’s pliability, corrosion resistance and efficient conduction of heat and electricity makes it a key component to electrification and the overall global transition to renewable energy – which is touted to progress as much over the next five years as it has over the past 20 years.

However, an impending copper shortage is threatening to pull the plug on the transition – a shortage that reportedly could sustain for the next seven years. While China is the world’s biggest consumer of refined copper (56% consumed) in 2022, and a leader in renewable energy, the country was able to produce only 9% of the world’s copper during the same year.

Speaking on Reach Markets’ The Insider: Meet the Fund Manager in May 2023, Jeremy Bond, Chief Investment Manager at Terra Capital selected Canada-based NGEx Minerals Ltd (TSXV: NGEX) as one of his favourite stocks and discussed mining’s changing landscape, ESG as a critical drawcard and the world’s need for new copper mines. Watch the full The Insider: Meet the Fund Manager session.

“To find where copper supply is going to come from..large meaningful copper supply, it is hard to go past South America,” Mr Bond said.

Mining for copper in Chile is one of the many things NGEx minerals is doing right at the moment. Chile is the world’s top producer supplying 28% (5.2 million tonnes) of the world’s copper in 2022 and home to the two largest mines (both copper) on the planet by tonnes of ore mined – Escondida and Collahuasi.

“The Vicuna district which straddles Chile and Argentina is effectively controlled by the Lundin family,” Mr Bond said, noting that the region has the potential to be a large-scale source of copper ‘akin to Escondida’. Lundin Group’s two other businesses Lundin Mining and Filo Mining, which Mr Bond also touts as ‘fantastic buys’ also operate in Vicuna.

NGEx piqued Terra Capital’s and Jeremy Bond’s interest for its ownership of Los Helados, a 2 billion tonne copper-porphyry resource with a high-grade component of 250Mt at 0.8% copper equivalent, and what the asset could mean to parent company Lundin.

According to Mr Bond, the significance of Los Helados lies in Lundin Mining’s purchase of the Caserones mine 10km to the north which is currently producing at a grade lower than Los Helados’ and slated to ‘run out’.

“It makes an awful lot of sense, potentially at some point, for the ore from Los Helados to be processed through that Caserones mine,” he said, observing that both NGEx and Lundin Mining were 30% owned by the same JV partner, JX Nippon. “So, all of a sudden it brings [Los Helados] from the back of the queue to near the front of the queue in terms of production.”

Adding to that is NGEx’s recent ‘world-class’ discovery at Potro Cliffs in Argentina, located midway between the Los Helados and Filo Mining’s gold-copper-silver epithermal porphyry deposit. “Filo sits there at a $3 billion market cap,” Mr Bond said, adding that Lundin and BHP had recently funnelled more capital into the company.

“60m at 7.52% of CuEq, 10m at 18% CuEq. You don’t really get these numbers anywhere but [in] South America,” Mr Bond commented on the latest drill program results likening them to Filo Mining’s deposit. The results were also reported to include the highest copper grades drilled (as at 5th April 2023) in the Vicuna district and among the highest copper grades intersected globally in the last few years.

“We think Porto Cliffs is a mini Filo in the making so you’re getting the best of both worlds – you’ve got a nice production story on one hand and you have the sexy exploration story on the other,” Mr Bond said. “This is a great copper play for us.”

On 18th July 2023, NGEx announced the completion of 2023’s drill program which has helped define the Fenix and Alicanto Zones and generated new exploration targets in and around Los Helados. The company is currently undertaking a CA$40 million private placement with the largest shareholders, including the Lundin Family Trusts indicating their intention to participate.

Click here to view more videos from Jeremy Bond’s The Insider: Meet the Fund Manager session.

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