Expert Says This Copper Stock Has Big Upside at a Very Favorable Entry Point
Contributed Opinion

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Although Interra Copper Corp. (IMCX:CSE; IMIMF:OTCQB; 3MX:FRA) is almost unchanged from when we last looked at it on October 7; its fundamental situation has improved greatly in a relatively short space of time. At the time of the last update, the company had entered into a purchase agreement for the Stars Copper Project.

The difference that this will make to the company was summed up by President and CEO of Interra Brian Thurston, who commented, "Acquiring the Stars Property is transformative for Interra. The company changes from a junior exploring to make a discovery to a junior with a discovery that is looking to define a resource. The Stars Property has two complementary exploration upsides, with an established zone of higher-grade mineralization that Interra can grow and define and a much broader under-explored area with high potential for new discovery."

This development is therefore viewed as a big "move to the right" on a chart showing the steps from exploring to being a producer. If only for this reason, the company is viewed as a candidate for revaluation, especially given its current very low valuation and, more generally, the rapidly improving outlook for the copper price. The transaction contemplated by the Purchase Agreement is expected to close on or before December 15, 2024, and is subject to customary closing conditions and approvals, including the approval of Aurwest shareholders as it relates to the sale of the Property.

The big positive news that came out following the last update is that Intera increased its Stars property land package by 5,932 hectares. Brian Thurston, president and chief executive officer of Interra, commented: "We are pleased to have more than doubled the size of the Stars property by staking. Staking in British Columbia is the most economical way to acquire mineral tenures, in this case, adding shareholder value at a very minimal cost. With the expanded land package, we see an increased exploration upside, with the inclusion of an additional copper mineral showing, geophysical anomaly, and strategic ground accessible via logging roads." The potential additional value of this expansion of the Stars Property is self-evident.

Then, just last Friday, the company came out with the news that Interra Copper sampled up to 7.15% Cu at Thane. Again, this is self-evidently very positive, and it appears some investors thought so too, as the stock price started to advance on heavy volume.

When we look at the following slide from the company's investor deck showing its 2024 Priorities, we see that it is definitely living up to Item 3.

The slide showing the priorities for 2025 reveals that there are now 10 large high-priority copper-gold mineralized targets, up from six last year.

The company's two main properties prior to the impending acquisition of Stars are Thane and Rip, whose locations in British Columbia are shown on this slide below.

This slide highlights the attributes of the Thane copper-gold project.

This one highlights the attributes of the Rip property.

Two copper–molybdenum targets have been identified at Rip thanks to an aerial survey undertaken this year, whose most important findings are shown on the following slide.

After the August news was published, a new copper zone was discovered at Thane, which is called the Bananas Showing, it, along with the previously known Gail showing, is ranked the highest priority with strong copper-gold mineralized alteration systems in favorable host rocks.

This last slide from the investor deck shows the capital structure of the company, with the most important point to note being that of the 42.6 million shares in issue, an estimated 44% are in the float.

Turning to the charts, we see on the long-term 7-year chart that Interra Copper stock is at the tail end of a seemingly relentless, brutal bear market that has erased 99% of its value at its 2020 peak. According to all normal metrics, it is extremely undervalued here.

Yet despite the horrendous decline in the stock price, its Accumulation line has continued to advance, and we can see on the 29-month (2-year 5-month) chart that its rate of climb has been accelerating over the past year.

By itself, this is bullish and indicates clandestine accumulation even as the stock price has fallen, and the longer it goes on, the greater is the chance that a reversal to the upside will occur, and now, with the planned acquisition of the Stars Project, due to be finalized in the middle of December, the announcement of the major expansion of the Stars project by means of the staking of a large area of adjacent land and Friday's news of that the company has sampled over 7% copper at its Thane property</A> we, at last, have the necessary catalysts to make this happen.

Even though the price is still technically in a downtrend with the price below bearishly aligned moving averages there are other bullish factors to observe on this chart that point to a reversal soon and these include the increasing bunching of price and moving averages such as typically precedes a reversal, the predominance of upside volume in recent months and downside momentum having dropped out as shown by the MACD indicator.

The 6-month chart shows recent action in much more detail. In the original article on Interra posted in August, it was not expected to drop any further, but it did, although it was not by much, and in the October update, it was thought to be at a very favorable entry point as it was suspected to be at the second low of a potential small Double Bottom.

In the event it has just dipped back to about this level, making it the third low of a potential small Triple Bottom, and it just started to get moving on good volume on Friday on news of the rich copper sampled at Thane. 

Lastly, it is worth pointing out that it looks like the volume on Friday may have been much higher, which would be correspondingly more bullish, for on the following Stockwatch 6-month chart, the volume appears to have exploded on Friday, and in this situation with a discrepancy between the two chart services, the Stockwatch data is thought to be more reliable on this occasion (it may include late trade volume).

We, therefore, stay long, and Interra Copper is rated an Immediate Strong Buy.

Interra Copper's website. 

Interra Copper Corp. (IMCX:CSE; IMIMF:OTCQB; 3MX:FRA) closed for trading at CA$0.085, US$0.06925 on November 25, 2024.