Michael Ballanger of GGM Advisory Inc. shares his views on the current state of the copper market and shares some copper holdings in his portfolio.
While I was splashing around in the Li and U3Oh8 professions, I was quietly but steadily accumulating a basket of juniors who were not considered “professionals” but rather long-term positions with excellent projects or discoveries and all are now fully funded and awaiting the start of the programs drilling. in the research or development of the metal used universally throughout the world: copper.
I told my subscribers at the end of 2022 that the two metals of the decade were copper And gold, copper being the global answer to the electrification movement, because whatever happens with the establishment of new energy sources (like the nuclear renaissance), the current global transportation network would have to be expanded to accommodate all this new electricity pumped from all these new modular nuclear reactors.
Then along comes another millennial tale called “artificial intelligence,” and as the madness of the decade grips the investment world, they suddenly realize that all this new computing power brought by “AI” will require a boatload of additional resources. electricity to power all these new computers which will allow kindergarten children to compose opera symphonies with their iPhones animated by the magic of “AI”!
At this stage of the weekly missive, I draw your attention to the previous part where I spoke of a “kind of epiphany” and that I was obliged to “pinch myself” rather than rejoice in the glory of 2024 performances of my two favorites. metals. I would first draw your attention to copper, which has just crossed the June 2022 high at $4.57 while displaying an almost vertical rise over the last month. It now shows an RSI around 75, and while there is still a MACD “buy signal”, a few days of correction could trigger a reversal.
Until mid-February, copper's rise had been gradual, but since then the rise has become vertical. As I have written countless times, “any market whose trend changes from gradual to vertical is approaching a reversal of the previous trend.
So, copper is now overbought and in full vertical hold, meaning it can be like an insect looking for a windshield from a strictly technical perspective.
However, when I make such remarks about a metal that will surely enter a “structural deficit” in the coming quarters, the market seems to dismiss any probability of a global slowdown. I will be cautious in my hunt for the big names in copper. I owned Freeport-McMoRan Inc. (FCX:NYSE) since $38 and will continue to hold it (at $50.50).
Despite the possibility of a correction, I see $75-$100 by the end of 2025. The leviathan of copper and gold, this is a staple stock in any growth portfolio looking for leadership of cyclical names to replace technology as the next craze.
As for the juniors, I hold Fitzroy Minerals Inc. (FTZ:TSX.V; FTZFF:OTCQB) on the strength and promise of good things in their Chilean copper and Argentine gold projects. I have heard that the field results are yielding some very interesting new revelations, and although they will be limited by the South American winter, aggressive marketing of the new drilling targets should set up an interesting drilling program at autumn.
I also own American Eagle Gold Corp., a very interesting little junior with a new discovery of copper-gold porphyry in British Columbia and an enthusiastic partner in Teck Resources Ltd. (TECK:TSX; TECK:NYSE) which, in the final analysis, owns 19.9% of the company.
Their NAK discovery reported last January took the stock from less than a penny to a high of CA$0.74 and is a strong “buy” at around CA$0.60. I also added a brand new junior — Vortex Metals Inc. (VMSSF: OTCMKTS; VMS: TSX; DM8: FSE) thanks to the recently announced (and increased) placement at CA$0.09 (last at CA$0.13).
They are close to receiving regulatory approval for a project located near the town of Illapel in north-central Chile, where there is a very interesting copper deposit. I listened as John Larson, director of VMS and former country director of BHP, described in detail the forward-looking nature of the multiple targets that exist. Also of extreme interest to me are the two Oaxaca (Mexico) prospects considered volcanogenic massive sulfide targets that were described to me by the late, great minefinder David Jones the year before his death.
A world-renowned expert in the exploration and exploitation of collapsed calderas (volcanoes), he discovered the San Jose de Fortuna gold mine using techniques similar to those that attracted him to the two Vortex targets. Chairman Michael Williams brought much success to investors with Underworld Resources (sold for $139 million to Kinross in 2009) and, more recently, Aftermath Silver, which subscribers have become all too familiar with since 2020. I'm told that with the good graces of Due to regulators and driller availability, Larson could drill Illapel by the end of next month.
With AE And VMS about to drill in May and with Free zone busy preparing for an autumn start, 2024 is proving to be an interesting year with many irons in the fire in the hunt for the hottest metal on the planet.
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Important Disclosures:
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their households) own securities of American Eagle Gold Corp. and Vortex Metals Inc.
- Michael Ballanger: I, or members of my immediate family or household, hold titles of: All. I determined which companies would be included in this article based on my research and understanding of the industry.
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Disclosures from Michael Ballanger
This letter makes no warranty as to the accuracy or completeness of the data provided. Nothing contained herein is intended or should be considered as investment advice, implied or otherwise. This letter represents my point of view and reproduces the transactions I make, but nothing more. Always consult your registered advisor to assist you in your investments. I accept no responsibility for any loss arising from reliance on the data contained in this letter. Options and junior mining stocks contain a high level of risk which may result in the loss of part or all of the invested capital and are therefore only suitable for experienced and professional investors and traders. One should be familiar with the risks involved in junior mining and options trading and we recommend that you consult a financial advisor if you feel that you do not understand the risks involved.