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Gold/Mining/Energy : Copper Fox -- Ignore unavailable to you. Want to Upgrade?

To: Hog Head who wrote (9934)	3/12/2016 7:19:48 AM
From: mudguy	5 Recommendations Recommended By dsikorsk Hog Head louel Theotokos Underhill69 Read Replies (1) \| Respond to of 10654

Pounds in the ground is a bit of a mining myth, much like the notional concept of oil reserves. The latter is determined economically and varies with recovery economics. In the case of SC, the copper is not going away, but as Hoghead points out, companies come an go and SC has already seen several phases of development interest that faded after a few years, dating back to the original resource numbers. So for most people, these deposits are only pounds in the ground if a particular company and set of circumstances allow them to be mined. The question is: will global copper demand drive the need to exploit this deposit? We know it is low-grade and remote, and in a jurisdiction where environmental sensitivity and First Nations issues are growing. So by one line of rational analysis, the social risk of development may actually be increasing with time. As far as global copper deposits, SC is basically insignificant and does not even register in the top quartile of M+I tonnage. For example, IVN has a copper deposit with 44 Billion pounds of copper at grade cut off of about 2.5%. You may say, well there is a lot of risk in the DRC. True, political risk there is not trivial, but look at that region on Google Earth and you will see almost every town is based around a copper mine. It is a global leader in copper production and will continue to be into the future. That particular deposit attracted a nearly $500M investment from a Chinese company in the depths of a historic commodity bear market. Few other development properties sold or obtained external funding during this past year. The ones that did should be on the radar as they have met really tough scrutiny by investors. By comparison, SC has been effectively put on C+M by the JV. The controlling partner has other projects that are stated first priorities and have been for years. At the very least, Teck is focusing capital on Fort Hills and keeping their debt managed during this downturn. The pounds in the ground at SC could easily be the source of speculation and hope in a future commodity cycle. History with this deposit indicates that decades of inactivity and disinterest are the norm.