The first global copper outlook from energy research group BloombergNEF was recently released, taking into account demand from the technological shifts required to wean the industry off fossil fuels. The main conclusion is startling: Between now and 2040, demand for copper will rise by more than 50%. This growth trajectory is confronting a hurdle. However, it is more existential than acute. By 2040, primary copper production may rise by around 16%. It goes without saying that the increase falls short of the demand. Demand for copper may exceed supply by more than 6 million tonnes annually by the early 2030s. Further exploration and findings should be encouraged by copper’s relatively predictable demand trajectory. Companies exploring for copper, like Torq Resources Inc. (TSXV:TORQ) (OTCQX:TRBMF), need to make new copper discoveries to maintain the supply for the largest miners, while companies mining copper like Barrick Gold (NYSE:GOLD) (TSX:ABX), Southern Copper Corporation (NYSE:SCCO), Taseko Mines Limited (TSX:TKO) (NYSE:TGB), and Vale S.A. (NYSE:VALE) need to increase production to fulfill the spike in demand.
Torq Resources Inc. (TSXV:TORQ) (OTCQX:TRBMF) is a Vancouver-based copper and gold exploration company. It is one of the few that can claim to have just discovered a brand-new copper-gold system. The Santa Cecilia gold-copper project and the Margarita iron-oxide-copper-gold (IOCG) project are two of Torq’s (TSXV:TORQ) (OTCQX:TRBMF) prime assets in Chile.
On September 13, Torq Resources (TSXV:TORQ) (OTCQX:TRBMF) announced that it has expanded its initial discovery at the Margarita Iron-oxide Copper Gold (IOCG) project in northern Chile, 65 kilometers north of Copiapo. Following up on the initial discovery hole 22MAR-013R, which intersected 90 of 0.94% copper and 0.84 g/t gold, about 190 meters to the north, drill hole 22MAR-014R successfully intercepted 98 m of 0.94 g/t gold and 0.68% copper. Results from the phase II drill program, which included 11 drill holes totaling over 4,000 m, will be available in the upcoming weeks.
The company aims to conduct an additional geochemical survey to assay for gold and a multi-element package to seek immobile trace elements linked with mineralization in light of the considerable surface leaching of copper that has been seen and is now verified in drill hole 22MAR-014R. The technical team at Torq (TSXV:TORQ) (OTCQX:TRBMF) is confident that this exploration step will produce new targets for the project in the future because gold rock chips are present in several areas around the project. In addition, Torq (TSXV:TORQ) (OTCQX:TRBMF) will examine all outcomes in the upcoming months and prepare a phase III drill program, which is anticipated to consist of between 8,000 and 12,000 meters.
On September 6, Torq Resources (TSXV:TORQ) (OTCQX:TRBMF) announced a non-brokered C$15 million private placement with Gold Fields Limited, a global gold mining firm listed on the NYSE, at a C$1.00 per share. The funds will be used to advance Torq‘s (TSXV:TORQ) (OTCQX:TRBMF) Chilean project portfolio, particularly its Santa Cecilia gold-copper project, where the company recently signed a 7-year social access agreement that covers the duration of the underlying option agreement. Most importantly, the funds will permit the start of drilling and other exploration activities. The company will issue a total of 15,000,000 common shares of Torq (TSXV:TORQ) (OTCQX:TRBMF) at a price of $1, which is 23% higher than the stock’s 20-day average trading price on the TSX Venture Exchange for the period ended September 2, 2022. If the private placement is successful, Gold Fields will hold roughly 15.05% of Torq’s (TSXV:TORQ) (OTCQX:TRBMF) issued and outstanding shares (undiluted).
Shawn Wallace, Torq (TSXV:TORQ) (OTCQX:TRBMF) CEO & Chair said: “We are very pleased to have attracted Gold Fields as a strategic investor in Torq (TSXV:TORQ) (OTCQX:TRBMF). An investment of this size at this early stage of exploration represents tremendous confidence in our projects, our approach and our team. This capital will primarily finance the highly anticipated maiden drill program at our flagship Santa Cecilia gold-copper project, as well as additional drilling at Margarita, where we have been working to expand upon our exciting new discovery.”
Copper Miners Enter Into Agreements
Barrick Gold (NYSE:GOLD) (TSX:ABX) stated on September 1 that it had signed a legal contract to sell Maverix Metals Inc., a portfolio of royalties, for a possible purchase price of $60 million. In total, 22 royalties on the production of minerals from mines in North America, South America, Australia, and Africa make up the portfolio. The $60 million total consideration comprises a $50 million cash payment due at the close of the portfolio sale, subject to the counterparties exercising any first refusal or buy-down rights under royalties, and three contingent payments. Following the fulfillment of customary closing conditions, the transaction is anticipated to close at the end of the third quarter of this year.
On July 26, Southern Copper Corporation (NYSE:SCCO) reported for Q2 2022 net sales of $2,306.99 million, 20.4%, or $590.0 million lower than in Q2 2021 as a result of reduced copper market metal prices and silver. In addition, net sales declined due to a $173.5 million accounting change for a pricing variation for completed sales that have not yet been paid for. Q2 2022 net income was $432.3 million, a 53.7% decline from the $932.7 million reported in the prior quarter. Some unforeseen events have had an impact on Southern Copper quarterly financial results. This scenario was compounded by rising costs for fuel, electricity and some other operating materials due to inflation. In a context impacted by lower copper prices, the company recorded a significant market value adjustment at open sales. Quarterly results were also impacted by a 25,624-tonne decline in copper production from Southern’s Peruvian operations, mainly due to the Cuajone outage and lower grades. To avoid an event of force majeure, the production losses were temporarily offset by copper purchased from third parties, albeit at a higher cost.
Taseko Mines Limited (TSX:TKO) (NYSE:TGB) announced on August 15 that the U.S. Environmental Protection Agency (EPA) has made a draft Underground Injection Control (UIC) permit available to the public for the Florence Copper Project. According to the EPA, the 45-day public comment period for the proposed federal permit will end on September 29. On September 15, a virtual public hearing will be placed. With Florence Copper, the United States will be less dependent on foreign suppliers for a metal that is thought to be essential for the shift to a low-carbon economy. Florence Copper is anticipated to have the lowest energy and greenhouse gas intensity (GHG) of any copper producer in North America.
On July 28, Vale S.A. (NYSE:VALE) announced that it has entered into, together with its partners Posco Holding Inc. and Dongkuk Steel Mill Co., Ltd, into a binding agreement with ArcelorMittal to sell their respective interests in Companhia Siderúrgica do Pecém (CSP). Under the agreed terms, the transaction’s enterprise value is approximately US$2.2 billion, which will be used to prepay outstanding net debt of approximately US$2.3 billion. The closure of the transaction is subject to customary corporate and regulatory approvals. Located in Ceará, Brazil and founded in 2008, CSP is a joint venture between Vale (50%), Dongkuk (30%) and Posco (20%). It has an installed capacity of 3 million tons of steel slabs/year. This transaction reinforces Vale‘s portfolio simplification strategy, focusing on its core businesses and growth opportunities, guided by disciplined capital allocation.
Torq Resources’ (TSXV:TORQ) (OTCQX:TRBMF) technical team includes geologists based in Chile with invaluable local expertise and an outstanding track record of significant discoveries in the country.