The world needs a lot more copper to go green. According to a recent article by Bloomberg, the demand for refined copper will grow from 25 million metric tonnes today to about 33 million metric tonnes by 2031, a consistent annual growth rate of around 4%. By 2040, demand is expected to be 50% higher than current levels. At the same time, global refined copper inventories are forecast to be in a constant state of deficit from now to 2040. Insufficient supply increases and rapidly growing demand as the globe races towards decarbonization means one thing, higher prices. Simply put, the demand for copper is growing much faster than producers are able to handle, which could send prices higher. In fact, a recent analysis by Fitch Solutions Country Risk and Industry Research predicts that prices will average $8,400 per tonne in 2023 and $11,500 per tonne by 2031, as a long-term structural deficit emerges due to the very strong long-term demand outlook. While producers like Freeport-McMoRan Inc., Teck Resources Limited, Southern Copper Corporation, and Rio Tinto Plc need to ramp up production to meet this increased demand, Gama Explorations (CSE:GAMA) aims to reduce the base metals supply-demand gap through the strategic acquisition and exploration of high-quality projects.
Gama Explorations Inc (CSE:GAMA) is a mineral exploration firm that focuses on the acquisition and exploration of battery metals, namely copper and nickel . The company now has the option to acquire a 100% interest in the Big Onion Project, which is located about a 20-minute drive from the town of Smithers in northern British Columbia. The Big Onion claims are characterized by 45,000 meters of historical drilling, and also some very prospective geophysical anomalies that have never been drilled before that are located within the current project’s borders.
In an effort to expand their portfolio of battery metal projects, on September 20, Gama Explorations announced that it had completed the acquisition of Tyee Nickel Corp. The Company purchased all of Tyee’s issued and outstanding common shares from the Shareholders in return for 9,000,000 common shares of the company under the terms of the agreement.
Tyee Nickel holds the Tyee Nickel-Copper Project, which is 130 kilometers (km) north of Havre St. Pierre, Quebec, and about 12 km north of the Romaine IV Hydroelectric Dam. The single claim block of 81.46 square km has potential for nickel, copper, and platinum group elements.
Gama’s Tyee project covers the Havre St. Pierre anorthosite complex, which contains known nickel, copper and PGE occurrences. The Tyee claims cover some of the most anomalous sediment samples in the complex and has geophysical features similar to Go Metal’s adjacent HSP Nickel-Copper discovery.
Then on October 4, Gama Explorations strengthened its team through the appointment of Dr. Mick Carew as its Chief Executive Officer. Carew is a PhD geologist with over 25 years of mining industry experience that has worked for several big and junior mining/exploration firms on regional and near-mine mineral exploration. He has worked on uranium, base, and precious metal ore resources across three continents, including Australia, North America, and Asia.
“I am excited to join Gama’s management team to help develop exploration strategies for both the Big Onion copper-porphyry project and the newly-acquired Tyee claims. Based on the work done thus far, I believe that there is significant value to be unlocked by taking a new approach to exploration to unlock higher-grade zones to complement the Big Onion’s historical resource,” said Carew. “Additionally, I believe our Tyee nickel claims are in a highly prospective area where a disciplined approach to defining targets could lead to considerable upside in the asset.”
Gama Explorations also recently announced a proposed private placement of up to 8,333,333 common shares at $0.30 per share for aggregate proceeds up to $2.5 million. The proceeds of the offering will be utilized for exploration activities on the company’s holdings in British Columbia and Quebec, corporate expenses, and working capital.
Copper Mining Operations Are Progressing
On September 26, Freeport-McMoRan Inc. announced the release of its updated Climate Report, which details the Company’s ongoing initiatives to reduce GHG emissions, improve energy efficiency, evaluate and integrate the use of lower carbon and renewable energy sources, and strengthen its resilience to future climate-related risks. Freeport-McMoran is continuing to develop its GHG emissions reduction programs across its global operations and has set 2030 GHG reduction targets that cover approximately 100% of its Scope 1 and 2 GHG emissions. The Company intends to submit its 2030 GHG emission reduction targets for validation to the Science Based Target initiative. Freeport-McMoran is making significant progress in its efforts to decarbonize its electricity supply, including the advancement of a study at PT-FI to investigate the viability of replacing its coal-fired power plant in the future.
Teck Resources Limited and Agnico Eagle Mines Limited announced on September 16 that Agnico Eagle has agreed to subscribe to a 50% interest in Minas de San Nicolás, S.A.P.I. de C.V., a wholly-owned Teck subsidiary that owns the San Nicolás copper-zinc development project in Zacatecas, Mexico’s largest mining state. San Nicolás has substantial geological potential and several polymetallic and precious metals prospects. Furthermore, Zacatecas has easy access to infrastructure and competent labour. Teck Resources and Agnico Eagle will become 50/50 joint venture partners at San Nicolás as a result of the transaction. Agnico Eagle will purchase $580 million in MSN shares, giving it a 50% stake in the company.
Southern Copper Corporation reported for the second quarter net sales of $2.3 billion, 20.4% million lower than in Q2 2021 due to decreased market metal prices for copper (-1.8%, LME) and silver (-15.4%). Net income for 2Q22 was $432.3 million, a 53.7% reduction from the $932.7 million recorded in the prior-year quarter. Some unforeseen events have had an impact on Southern Copper’s quarterly financial results. Inflationary increases in fuel, power, and various other working materials have exacerbated this problem. Quarterly earnings were also impacted by a 25,624-tonne decline in copper production at the Company’s Peruvian operations, mostly due to the Cuajone halt and lower ore grades. To avoid a force majeure event, temporary production losses were countered by copper obtained from third parties, although at a greater cost. Copper production fell 12.1% in 2Q22 to 208,428 tonnes, a fall of 12.1% from the previous quarter.
Rio Tinto Plc has approved a $55 million investment in development capital to start underground mining and increase production at its Kennecott copper operations in Utah, United States. Underground mining will initially focus on an area known as the Lower Commercial Skarn (LCS), which will yield a total of roughly 30kt of additional high-quality mined copper across the period to 2027 alongside open-cut operations. The first ore will be produced in early 2023, with full production beginning in the second half of the year. It will be processed at Kennecott, which is one of only two copper smelters in the United States that are still running. Feasibility studies are also being progressed to extend open pit mining at Kennecott beyond 2032.
Gama Explorations has recently granted 3,100,000 options to its directors, officers, and consultants. The options are exercisable for 5 years at a price of $0.30 per share and vest in four equal payments over two years.
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