Copper and gold explorer Vortex Metals Inc. believes 2024 will be a “key year” for the company. Find out why two experts agree the stock is attractive as the red metal begins to surge.
Copper and gold explorer Vortex Metals Inc. (VMSSF: OTCMKTS; VMS: TSX; DM8: FSE) believes 2024 will be a “key year” for the company as it works to secure permits for two projects in Mexico and advance the highly promising Illapel brownfield project in Chile, and two experts agree that the title is attractive as the red metal breaks out.
Since the start of the year, the metal important for the energy transition has jumped more than 16%, reaching $4.53 on Tuesday.
“Copper has traded in a range of US$3.13 to US$3.90 for most of the past two years, with the lowest coming in 2022, shortly after the Fed embarked on a monetary tightening in July of the same year.” wrote Michael Ballanger of GGM Advisory Inc. “Recently, however, compelling fundamentals brought about by the looming structural supply deficit have propelled copper to new recovery highs above US$4.00.”
Vortex Metals owns a 100% interest in two high-potential, drill-ready volcanogenic massive sulfide (VMS) copper properties (Riqueza Marina and Zaachila) in the state of Oaxaca, and a third high-potential gold property ( El Rescate) in the state of Puebla.
The Oaxaca projects integrate the most prospective areas of high-grade copper mineralized surface exposures and significant gravity anomalies along a
emerging copper VMS belt that includes Minaurum Gold's (TSXV: MGG) Santa Marta project, Vortex said.
In an alert published Thursday, Ballanger said he added 250,000 shares of VMS to his trading account “as a surprising amount of supply came into the market.” Total volume for the day was 3,162,123 shares, he noted, with the next most active session for the company being May 17, 2023, at 423,235.
“Based on the principle that “volume precedes price”, I added an additional trading position in order to have liquidity, which I did not have with the 1,000,000 units I purchased under the C$0.09/US$0.065 offer,” Ballanger wrote.
Electric vehicles (EVs), their charging infrastructure, solar panels, wind power and batteries all require significantly more copper than fossil fuel-based technologies. Electric vehicles themselves use more than three times as much copper as gasoline cars.
The Catalyst: Metals Markets Enter a “Major Bull Market”
Technical analyst Clive Maund noted Metals markets “as a whole are entering a major bull market, with strong gains already seen in copper, gold and silver over the past two months.”
But “copper is a special case with a huge supply gap due to the combination of an explosion in demand from the growing use of copper in electric vehicle batteries and energy storage etc. coupled with a supply deficit due to the shortage of major new coppers. discoveries in recent years,” Maund wrote. “Vortex happens to be exploring for copper (and) gold in very prospective areas.”
Despite some slowdown due to slower-than-expected electric vehicle 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%. 2023 to 2032 to reach 496.8 billion US dollars. Acumen Research and Consulting reported.
“The growing demand for copper could be met through the development of mining technology, well-organized designs for ore processing and the discovery of new copper reserves,” notes the Acumen report. “According to the United States Geological Survey (USGS), international copper reserves increased by approximately 720 million tons in 2017, and undiscovered copper reserves are estimated at approximately 3,500 million tons.”
Haywood Securities noted in a January 2024 report that given the time it takes for new copper supply to come online, the market for the metal “will tighten for the foreseeable future (and) this could eventually lead to a new copper cycle. ” Haywood noted that forecasts call for a copper deficit this year, marked by a supply shortfall of around 500,000 tonnes.
CNBC reported copper supply is low in January and the ongoing global transition to renewable energy will continue to generate strong demand for the metal.
“Some of the major factors driving the growth of this market include improving living standards and increasing purchasing power of people, especially in developing economies. This will propel the copper market” , says the Acumen report. “The incredible growth in the number of electronic gadgets such as laptops, mobile phones, smart devices and televisions across the world is increasing the demand for this product.”
Co. about to start a major bull market?
Vortex's catalysts this year will include continued exploration with a drilling program at Illapel in Chile and progress toward permitting projects in Mexico.
The first came closer to fruition in March when the company announced that the Santiago Astata agrarian community in Oaxaca, Mexico, had granted Vortex permission to conduct mineral exploration activities, including drilling holes on their land.
“The company is committed to forming an environmental monitoring committee with active community participation to oversee activities and ensure environmental protection throughout the exploration program,” Vortex said in a statement.
“We are grateful for the trust placed in us by the agrarian community of Santiago Astata,” Vortex co-founder and CEO Vikas Ranjan said at the time. “This authorization reflects our commitment to transparent communication, environmental stewardship and the promotion of mutually beneficial relationships with local communities.”
Maund noted that the company investor presentation “almost justifies the purchase of the stock on a single page” which highlights the expected imbalance between supply and demand for copper.
“This combination of rising demand and stable supply has reinforced current deficit conditions and portends large, unrestricted deficits beginning mid-decade,” according to a quote from Goldman Sachs included on the page. “We now estimate a long-term supply gap of 8.2 Mt (million tonnes) by 2030, twice the size of the gap that sparked the copper bull market in the early 2000s. ”
Maund said Vortex is still “at a very good entry point,” and there are strong signs that a major new bull market is incubating for the company.
“With Vortex Metals about to embark on a major bull market, it is considered a strong buy for all time frames here, knowing that it could dip a little further in the near term towards the funding price at 9 cents, which would provide an excuse to buy more,” he wrote.
Shareholding and sharing structure
The company said founders and insiders own about 46% of the company. Reuters said about 1.25% came from institutional investors. The rest is retail.
Major shareholders include Paradex Inc. with 15.89%, co-founder, chairman and director Michael J. Williams with 3.51%; CEO Ranjan with 3.33%; AIPM Azure International Portfolio Managers with 1.25%; and Director John E. Larson with 0.73%.
Vortex has approximately 60 million shares outstanding and its market capitalization is 6.01 million Canadian dollars. It trades in a 52-week range of CA$0.18 to CA$0.07.
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Contributing Author Disclosures:
Certification and remuneration of authors: (Clive Maund of clivemaund.com) is compensated as an independent contractor by Street Smart, a subsidiary of Streetwise Reports, for the writing of this article. Maund qualified as a British Technical Analyst in 1989. The recommendations and opinions expressed in this content fairly reflect the personal, independent and objective views of the author regarding all designated securities discussed. No part of the compensation received by the aut
Clivemaund.com Disclosures
The above represents the opinion and analysis of Mr. Maund, based on data available to him at the time of writing. Mr. Maund's opinions are his own and do not constitute a recommendation or offer to buy or sell any security. Because trading and investing in any financial market may involve significant risk of loss, Mr. Maund recommends that you consult a qualified investment advisor, licensed by the appropriate regulatory bodies in your jurisdiction, and make your own due diligence and your own research when making any kind of transactions. of a transaction with financial consequences. Although qualified and experienced securities analyst, Clive Maund is not a registered securities advisor. Therefore, Mr. Maund's opinions on the market and stocks should not be construed solely as a recommendation or solicitation to buy and sell securities.