World Copper Ltd. (WCU:TSX.V; WCUFF:OTCQB) has released an updated mineral resource estimate (MRE) for its 100%-owned Zonia copper project in Arizona.
The total resources have increased by about 90% to about 198 million tons from a 2017 estimate, with contained metal increasing by 55% to about 1.03 billion pounds of copper.
The updated MRE includes indicated resources of 75.7 million short tons grading 0.30% total-copper containing 450.5 million pounds of copper and inferred resources of 122 million short tons grading 0.24% total-copper, containing 575.4 million pounds of copper.
While indicated resources dropped by about 12% in the estimate, inferred resources increased by 272%, Red Cloud Securities analyst Taylor Combaluzier wrote in a Feb. 24 research note.
"We view this update positively, as we believe there is further room to upgrade and grow the resource with future drilling," wrote Combaluzier.
"We view this update positively, as we believe there is further room to upgrade and grow the resource with future drilling," wrote Combaluzier.
"Management plans to focus exploration efforts at the Zonia Norte porphyry target, a large, 2.5 kilometer by 1.5-kilometer Cu-Mo-Mn anomaly, located in the vicinity of the Zonia deposit, which we believe could potentially help increase the size and scale of the project."
Combaluzier maintained his Buy rating and increased his target price to CA$2.20 a share from CA$2.15 a share.
"The updated resource estimate for Zonia is a critical first milestone since World Copper’s acquisition of the project, representing our best understanding of the resource as it is and an expansion over past resources," World Copper Chief Executive Office Nolan Peterson said. "As we advance the project on the engineering front, we will simultaneously aim to expand the resource even further by targeting the high potential Zonia Norte target northeast of the main resource deposit."
The company had a "very positive chart with a fine strong uptrend clearly still in force," newsletter writer Clive Maund of CliveMaund.com wrote on Feb. 11.
"Right now, it appears to be beginning a new upleg," he wrote. "The Accumulation line is already close to making new highs and we can expect the price to do likewise and by a comfortable margin if copper breaks out and takes off higher again."
World Copper also announced that it has closed on a share sale announced in January. The company sold 2 million common shares in the capital of Electric Royalties Ltd. (ELECF:OTCMKTS) to World Copper stakeholder Wealth Minerals Ltd. (WML:TSX.V; WMLLF:OTCQB) for CA$0.25 per share for a total of CA$500,000.
"Copper is a critical element used in the global economy that is becoming harder and harder to find and mine profitably," Peterson has said. "We have two assets that are relatively easy to put into production and that we think are poised to benefit from a rush of investment to come."
Peterson was referring to the company's Escalones project in Chile. That project's Preliminary Economic Assessment (PEA) released last year estimated an inferred resource of 426 million tons of 0.367% copper, containing 3,447 pounds of copper.
The Catalyst: Expansion Potential
World Copper acquired Zonia, about 100 miles from Phoenix, about a year ago when it combined with Cardero Resource Corp.
The mine produced 33.2 million pounds of cement copper from 1966 to 1975. A PEA for that site released in 2018 estimated measured and indicated resources of 77 million short tons grading 0.33% copper, containing 510 million pounds of copper, and an inferred resource of 27 million short tons grading 0.28% copper, containing 154.6 million pounds of copper.
Zonia offers potential for expansion, the company reported. An updated PEA is expected in the first half of 2023.
As a result of the tonnage increase in the new MRE, Combaluzier with Red Cloud wrote that he expected Zonia's life of mine (LOM) to increase from 10 to 16 years.
World Copper is also targeting a new porphyry target nearby, Zonia Norte, with an 18-hole, 5,000-meter drilling campaign.
EVs Won't Drive Without Copper
The electric vehicles (EVs) of the new green economy wouldn't even get out of the garage without copper. EVs use at least three times as much of it as their fossil-fuel counterparts because of the metal's electrical conductivity.
The company had a "very positive chart with a fine strong uptrend clearly still in force," newsletter writer Clive Maund of CliveMaund.com wrote on Feb. 11.
However, according to a report last summer by S&P Global, there is a "looming mismatch, on a global basis, between available copper supply and future copper demand resulting from the energy transition."
The demand is expected to double from about 25 million metric tons (Mmt) in 2021 to about 50 Mmt by 2035, according to the report. Electric vehicles (EVs), their charging infrastructure, solar panels, wind, and batteries all require much more copper than fossil fuel-based technology.
Streetwise Ownership Overview*
World Copper Ltd. (WCU:TSX.V; WCUFF:OTCQB)
"Copper is critical to the green economy, and in general is just critical overall," Peterson said. "It has been above US$4 for most of the last two years, and there’s no stopping it."
Ownership and Share Structure
Wealth Minerals owns about 18% of the company or about 19.2 million shares. About 27% is owned by management and insiders, including Director Robert Kopple with 13.08% or 14.9 million shares, Board Chairman Hendrik van Alphen with 1.87% or 2.13 million shares, and the CEO Peterson with 0.47% OR 540,000 shares. The rest is retail.
Its market cap is CA$18.76 million. It has 114 million shares outstanding, including 77.3 million of them free-floating. It trades in a 52-week range of CA$0.70 and CA$0.165.
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