Copper Explorer Starts 2025 Work

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Kobrea Exploration Corp. (KBX:TSX; KBXFF:OTCQB; F31:FSE) mobilized field crews to start 2025 exploration work at multiple porphyry prospects at the Western Malargüe Copper Projects in Argentina, seven assets in which the company has the right to earn a 100% interest, a news release noted.

The government of the Mendoza province, home to this prospective 73,334-hectare (73,334-ha) land position, just opened the area in April 2024 to exploration and mining through creation of the Western Malargüe Mining District (WMMD) and subsequent legislative work. The goal is to facilitate development of a modern and sustainable mining industry there.

"We are first movers into the newly established WMMD," Kobrea Chief Executive Officer James Hedalen said in the release. "We have an opportunity to make discoveries by drilling for the first time in this part of a world-class porphyry copper belt."

Kobrea's exploration work will encompass geophysical surveys, including a property-wide airborne ZTEM survey and ground magnetic surveys; geological surveys, including alteration and geological mapping; and geochemical surveys, including rock chip and talus sampling. The first ever drill campaign at these projects will follow.

In November 2024, the Mendoza government greenlighted exploration at two of Kobrea's projects, El Perdido and Elena. Approval for the other five is expected in the next few months, the release noted.

As for El Perdido, it is a 6,878-ha prospect, where historical exploration outlined a 2x3 kilometer (2x3 km) porphyry copper-gold-molybdenum target at surface, explained the release. Ground magnetometer data from 2013 was interpreted to show a subsurface magnetic anomaly, spanning about 1,000 meters across and extending 1,000 meters to depth, surrounded by a decreased magnetic signature.

Regarding Elena, it is a larger, 11,440-ha property featuring multiple porphyry targets.

In other recent news, Kobrea extended its marketing agreement with the firm, MIC Market Information & Content Publishing GmbH, for another 12 months at a total cost of €200,000.

'Excellent Opportunity for Investors'

Based in British Columbia, Kobrea Exploration Corp. acquires and explores base metal projects in North and South America.

Last August, Kobrea entered a five-year option agreement to earn 100% of a highly prospective portfolio of seven adjacent properties in Argentina called the Western Malargüe Copper Projects. Along with El Perdido and Elena, they are Cuprum, Veronica, Sofi, El Destino and Mantos de Cobre. The owners retain a 1.5% nonsmelter return royalty (NSR) on the properties, according to Kobrea's corporate presentation. The NSR is divided into five entities, which Kobrea could purchase for US$1.5 million apiece.

*Together, this collection of projects is "a massive district-scale property," described Technical Analyst Clive Maund in an October 2024 report. "The potential of the Western Malargüe projects becomes clearer when we consider that the seven main targets are not merely targets but are projects in their own right that each cover[s] a very substantial land area."

Previous operators, including Vale S.A. (VALE:NYSE) and Rio Tinto Plc (RIO:NYSE; RIO:ASX; RIO:LSE; RTPPF:OTCPK), did some exploration work, but no drilling, at the projects, where they outlined numerous porphyry copper targets, and even mapped and sampled some. According to Kobrea, these targets "exhibited multi-kilometer hydrothermal alteration footprints, anomalous copper-plus-gold-plus-molybdenum geochemistry, quartz stockwork veining, localized hydrothermal breccias and Miocene-aged dacitic to dioritic porphyry intrusions."

"Kobrea Exploration is a very interesting story at this time and is viewed as an excellent opportunity for investors," Maund wrote. "There are two very big reasons for this, which can be simply stated as 'right place, right time.'"

The analyst's mention of Kobrea operating in the "right place" refers to the projects' standout jurisdiction in the prolific, world-class Neogene Porphyry Belt in Argentina on the country's western border with Central Chile. The area boasts significant geological potential for copper porphyry deposits.

Kobrea's projects are in the most southerly of three districts of "behemoth copper deposits in the Andes," which hosts many Tier 1 porphyry copper deposits, including the world's second and third largest, Rio Blanco-Los Bronces and El Teniente, respectively, both in Chile.

The Northern Chile district is home to Chuquicamata, Escondida, and Collahuasi. The Southern Peru district includes Cuajone, Quellaveco, and Toquepala.

The Western Malargüe Copper Projects are accessible by road, and infrastructure is nearby, the company said.

Maund highlighted Kobrea advancing its copper projects at the "right time," for two reasons. One, the Mendoza province, where they are located, recently has become more mining friendly and "is actively promoting" the company's property, he wrote. Two, the red metal is in high and growing demand for use in the worldwide green energy transition, thus its price is likely to rise.

"Recognizing the pivotal role of copper in decarbonization efforts, Kobrea is dedicated to unlocking the true value of this commodity by ensuring a domestic supply within superior mining jurisdictions," noted the company's Corporate Presentation.

The Canadian explorer has another asset, which it owns outright, in British Columbia called Upland. Spanning 5,300 ha, it is about 20 km south of Taseko Mines Ltd.'s (TKO:TSX; TGB:NYSE.MKT) Yellowhead project. Upland hosts " a copper-dominant, remobilized polymetallic volcanogenic massive sulphide deposit that is open for expansion laterally and to depth," according to Kobrea.

About 50 holes were drilled at Upland between 1969 and 2010. One highlight intercept was 74 meters of 0.32% copper from surface. Several targets warranting follow-up were identified via an airborne survey.

Global Copper Demand Rising

Copper's many applications in various industries make it one of the most used metals in the world, noted Investing News Network in November 2024. The red metal is used in building construction, electronics, including for supercomputers and data centers, and electrification, such as in battery energy storage systems. In transportation, copper is used in the manufacturing of electric vehicles, ships, railways, and planes. Industrial machinery and equipment, such as wind turbines, solar energy systems, and oil and gas drilling platforms, also require copper. It is also found in the medical sector, in surgical robots, MRI machines, and medical implants, for example.

"Other than being used in its primary form, copper is also among the most recycled materials, owing to which the market for secondary copper has been posting considerable growth," wrote Research and Markets in its recent Copper Market Report.

Copper markets are expected to remain well supplied this year, according to BMO Capital Markets analysts, Mining.com reported on Dec. 13, 2024. About 2.8% growth is expected, which would be higher than in recent history. This and estimated 2024 data suggest the pipeline down the line may be more robust than previously thought.

On the demand side, the favorable outlook for copper in light of the green energy transition remains, Mining.com wrote, but day to day it is still all about China as evidenced by the immediate response of fiscal or monetary stimulus on markets." The Asian country consumes about 56%, or 15,000,000 tons, of global copper, so the expected roughly 50% decline in Chinese construction activity would offset most of the demand coming from electrification.

RBC Capital Markets told Mining.com it expects about a 1% increase in copper demand out of China this year versus 1.9% from the rest of the world. BMO, however, forecasts Chinese copper demand to grow 2.2% this year in light of the country's 2025 grid budget.

Red Cloud Securities commented in a January 7 report, "It remains to be seen whether there will be a fresh round of stimulus in China in 2025 to bolster portions of its economy and help counteract potential U.S. tariffs."

By 2030, global copper demand is projected to expand at a 5.4% compound annual growth rate, according to Research and Markets, reaching US$368.8 billion (US$368.8B) in value, up from US$269B in 2024.

"Economic growth as a result of urbanization and industrialization is a major factor driving the demand for copper," the report said. "The role played by copper in construction, manufacturing, and infrastructure development makes it a critical component of development."

As for the copper price going forward, Red Cloud is keeping its estimate at US$4 per pound, or US$8,000 per ton (US$8,000/ton) for now, its analysts wrote in their Q1/25 Commodity Price Update. Longer term, though, Red Cloud expects copper demand and prices to rise "given the dearth of new discoveries (no major deposits discovered since 2021) and long lead times (averaging 23 years) required to bring new mines into production."

Others' 2025 copper price forecasts, reported by Mining.com, are: US$10,160/ton from Goldman Sachs; US$9,500/ton from Morgan Stanley; US$9,260–$9,920/ton from the Chilean mining association; US$8,800 from RBC and BMO; and US$8,750/ton from CitiGroup.

The Catalysts

Once Kobrea's 2025 exploration campaign at the Western Malargüe Copper Projects kicks off, investors should expect related updates and results, any of which could boost its share price.

Strong Buy Rating

Kobrea's stock charts since public trading of the company began in December 2023 show bullish indicators and suggest an upleg is coming soon, according to Technical Analyst Maund.

The favorable signs include the accumulation line rising in August when the share price plummeted, implying heavy buying, as opposed to selling, happened following the lows. Also, the symmetrical triangle, which formed on the chart due to diminishing fluctuations, now is closing.

This "suggests that a larger move is to be expected soon, although we should be aware that there is some chance that the pattern could open out into a somewhat longer range where it morphs into, say, a rectangle before the expected advance gains traction," Maund explained.

However, he added, the dragonfly candle, formed on Oct. 3, 2024, is bullish and increases the likelihood of an upside breakout in the short term.

"Kobrea Exploration is therefore rated an Immediate Strong Buy for all time horizons," Maund wrote.

Ownership and Share Structure

According to Refinitiv, two insiders own 8.49%, or 3 million (3M) shares, of Kobrea. They are CEO and Director James Hedalen and Vice President of Exploration and Director Rory Ritchie, each with 4.24% or 1.5M shares.

The rest is in retail. There is no institutional ownership at this time.

The Canadian explorer has 35.35M outstanding shares and 32.35M free float traded shares. Its market cap is CA$13.04 million. Its 52-week high and low share prices are CA$0.80 and CA$0.25, respectively.