The copper price boom

By Glenn Dyer | More Articles by Glenn Dyer

Nothing compares to a copper price boom for catalyzing a surge in exploration efforts, proposed expansion projects, and fundraising.

Global copper prices are currently at or near all-time highs, sitting at $US5.08 a pound on the Comex futures market in New York, marking an increase of more than 30% so far this year.

Based on the outlook, there doesn’t seem to be any quick end to the price surge. The only potential negative would be if the Panamanian government and Canadian miner, First Quantum, struck a deal over First Quantum’s massive Cobre Panama copper mine, but that scenario doesn’t seem likely at the moment.

Consequently, there’s a significant shortage of copper concentrates at a time when demand is beginning to rise due to the renewable energy transition.

This helps elucidate why AIC Mines is seeking $57 million from investors to finance an expansion of its North Queensland copper operations.

The company initiated a trading halt on Wednesday to facilitate the raising of $57.2 million to fund a three-kilometer underground drive to its Jericho lease from the existing Eloise mine decline.

AIC will issue around 110 million shares at 52 cents each, representing a slight discount compared to the last sale on Tuesday of 59 cents.

With $25.7 million already on hand, the total cost of the drive amounts to $50 million for the excavation work ($35 million) and air vents along the shaft ($15 million).

Additionally, there’s an estimated bill of $60 million for the expansion of the Eloise mine’s processing plant to 1.1 million tonnes a year (including a crusher and electric power system upgrade), but AIC states that it "is expected to be funded through debt and cash flow."

In March, AIC revealed a significant upgrade to reserves at Jericho, with the company increasing those figures by 86% to 3.2 million tonnes grading 1.9% copper and 0.4 grams per tonne gold.

This equates to 61,100 tonnes of copper and 37,000 ounces of gold, representing about 22% of the total Jericho mineral resource estimate of 14.1 million tonnes grading 2.0% copper and 0.4g/t gold.

In its statement on Wednesday, AIC noted that the long shaft would also enhance its ability to access a couple of nearby areas of mineralization.

AIC stated that the Jericho development will elevate the significance of the Eloise operation and production to "over 20,000 tonnes of copper a year and 7,500 ounces of gold in concentrate."

The combined Eloise and Jericho Mineral Resources will amount to 22.9 million tonnes grading 2.1% copper and 0.5g/t gold, yielding 471,950 tonnes of copper and 353,950 ounces of gold.

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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