Copper Junior Advancing Yukon Project to Feasibility Study

Granite Creek Copper Ltd. (GCX:TSX.V; GCXXF:OTCQB) announced a non-brokered private placement of up to CA$1.5 million as the company looks for new opportunities in a strengthening market.

On March 7, the date of the company's release, copper future prices hit a five-week high of about US$3.92 per pound after sinking to US$3.68 per pound on February 9.

“Granite Creek has been actively reviewing several North American base and precious metals opportunities and, with recent strength returning to the market, recognizes this is an excellent time to make key additions to the Company's critical minerals portfolio,” President and Chief Executive Officer Tim Johnson said.

Driving the trend are low copper inventories and supply constraints worldwide, Trading Economics noted.

"Mine disruptions since December have aggravated stock declines, impacting Chinese smelters' profits and potentially reducing output," the site reported.

Production from Codelco, the Chilean state-owned copper mining company, has dropped by nearly 16% year-on-year in January, while output from other producers in the country has increased.

On the demand side, China has seen a 2.6% rise in unwrought copper imports and a 0.6% increase in copper concentrate imports in the first two months of 2024, setting a new record high for the period, Trading Economics' site said.

"Despite a slowdown in China's property market, high hopes are pinned on green energy sectors like electric vehicles and renewables to drive demand," it said.

The Catalyst: Advancing Toward a Feasibility Study

Vancouver-based Granite Creek is a member of the Metallic Group of Companies. Its flagship copper-gold-silver project, Carmacks, spans 176 square kilometers in the Yukon's Minto copper district. It also owns the Lucky Ship molybdenum project, which it acquired last year, and the Star copper-nickel-platinum group metals project, both in B.C.

The Carmacks project is located approximately 40 kilometers south of the high-grade Minto copper-gold mine where operations were ceased in 2023, and the company, Minto Metals, was put into receivership in a process being handled by PricewaterhouseCoopers.

As that process plays out and a potential purchaser steps in to assume ownership of Granite Creek's neighboring property and mining infrastructure, the company continues to advance Carmacks toward a feasibility study. In January, it announced that instead of yielding only 39.8% of copper from oxide via initial flotation alone, the company may recover another 48.2% through a subsequent process of leaching plus chemical precipitation for a total recovery from oxide of 88%.

The base case for copper recovery in the 2023 Carmacks preliminary economic assessment (PEA) was 93.7% for the sulfide material but just 39.8% in oxide, with the total recovery target being 77%. The additional oxide recovery will now likely take total recoveries, sulfide plus oxide, well beyond the company's 77% target.

For an idea of how the greater recovery will impact economics, just boosting the life-of-mine average recovery to 77% from 64% would have added another US$180 million (US$180M) to the NPV5%.

The economics of Carmacks outlined in the PEA already were robust, Couloir Capital wrote in a January 2023 research report.

"The PEA demonstrates attractive project economics with significant opportunities for additional mine life expansion, reinforcing the potential of Carmacks to become a top-tier global copper project," wrote Couloir.

Copper on the Rise?

Electric vehicles (EVs), their charging infrastructure, solar panels, wind, and batteries all require much more copper than fossil fuel-based technology. EVs themselves use more than three times as much copper as gas-burning cars.

Despite some cooling due to slower-than-expected EV sales, the global copper market was worth US$304.1 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 5.1% from 2023 to 2032 to US$496.8 billion, Acumen Research and Consulting reported.

"The increasing demand for copper could be met through developments in mining technology, well-organized designs for ore processing, and the discovery of new copper reserves," Acumen's report noted. "According to the United States Geological Survey (USGS), international copper reserves rose by approximately 720 million tons in 2017, and undiscovered copper reserves are estimated to be approximately 3,500 million tons."

Haywood Securities noted in a January 2024 report that based on the long time it takes for new copper supply to come online, the market for the metal "will be tightening for the foreseeable future [and] that could eventually lead to a new copper cycle." Haywood noted predictions are for a copper deficit this year, marked by supply shortfall of about 500,000 tons.

CNBC reported in January that copper supply is low, and the world's ongoing transition to renewable energy will continue to drive high demand for the metal.

"Some of the major factors driving the growth of this market include the upgrading of living standards and the growing purchasing power of people, especially in developing economies. This will propel the copper market," Acumen's report said. "The incredible growth in the number of electronic gadgets such as laptops, cell phones, smart devices, and television sets across the globe is increasing the demand for the product." 

Ownership and Share Structure

According to Reuters, insiders own 5.74% or 9.23 million shares of Granite Creek Copper. One of the five insiders is Chairman of the Board, President and CEO Timothy Johnson, with 2.54% or 4.08 million shares. The other four, all directors, are Robert Sennott with 1.87% or 3.01 million shares, Michael Rowley with 1.06% or 1.71 million shares, John Cumming with 0.26% or 0.42 million shares, and Loy Chunpongtong with 0% or 0.01 million shares.

The company does not have any institutional investors.

Retail investors own the remaining 94.26%.

Granite Creek has 161 million shares outstanding and 151.77 million free-float traded shares. The company's market cap is CA$7.23 million, and it trades in a 52-week range of CA$0.03 to CA$0.08 per share.

Important Disclosures:

1. Granite Creek Copper Ltd. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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