Just as the EV megatrend is set for another round of explosive growth, civil unrest devastates South America’s copper supply, opening the door for North American miners to take the lead in 2020.
A small army of engineers and geologists are racing across a vast swath of North American prairie in an urgent drive to develop what could be one of the world’s richest copper mines.
Generally, a massive new copper mine is not huge news. After all, traditional thinking says copper is so easily recycled there is usually enough to meet demand.
But, 21st century realities have exposed that thinking as outdated.
Headlines are already declaring a huge copper shortage because of the critical new realities that are set to drive copper prices soaring:
The rise of revolutions, coups, and insurrections in copper-rich South America are destroying the flow of its copper supply.
The advent of the age of the electric vehicle, each one powered by batteries that contain 183 pounds of copper at a minimum, is rapidly heightening demand. And with the IEA’s forecast for 125 million EVs on the road by 2030, the world will need at least 35 billion pounds of copper, likely a lot more.
The International Energy Agency forecasts that the world will add more than 350 additional megawatts of wind power in the coming years, which will require at least 2.8 billion pounds of copper.
Tight Supply And Increasing Demand Could Be Lining Up Copper Investors For A Huge Payday
With that stunning amount of demand set to come online, disruptions in top producers Chile and Zambia are cause for great concern over supply.
In Chile, state-run miner Codelco could be facing a strike at its giant Chuquicamata mine, where unions have rejected a final offer of a new contract. Codelco is the world’s largest copper producer, having mined 1.678 million metric tons last year.
In Zambia, which produced 860,000 metric tons of copper last year, changes to mining taxes are expected to slash output by 100,000 metric tons. Power generation, mostly hydroelectric, is also becoming a problem there, as a result of a massive drought.
“This year we’re forecasting a refined metal deficit of about 270,000 metric tons,” BMO Capital Markets analyst Kash Kamal told Reuters. “The tight concentrate market can be seen in treatment charges.”
The potential for a huge critical shortage has copper analysts wary.
Max Layton of Citi is one of them. He told Reuters, “With the bulk of Zambia’s power sourced from hydropower plants, the ongoing drought may lead to imminent load shedding lasting as long as the next six to nine months and potentially impacting copper production.”
There’s no denying that what’s happening now favors North American copper companies.
The Smart Way To Bet on Global Growth:
North American Miners
That’s’ why investors should now focus their attention on one North American copper miner, junior explorer Troubadour Resources (OTC:TROUF / TSXV: TR) and their 13,000 acres in copper’s world-renowned “Ring of Fire”. Historic sampling shows grades 3 times more than typical mines in the area, extremely noteworthy when you consider their neighbors Imperial Metals Corporation and Copper Mountain Mining Corp.
This relatively small miner lies in the shadow of copper giants – saddled on its southern side by an open pit mine owned by Copper Mountain that’s anticipated to produce 1.47 billion pounds of copper (an estimated $4.33 billion at copper’s current price).
Trouble In Far Away Places Is Good News
For North American Copper Companies
Before you examine the other critical factors that are stressing the copper supply, it important to see why North America, in particular Canada’s British Columbia Province, is so vital to supply chains.
Companies such as Copper Mountain and its neighbor Troubadour Resources (OTC:TROUF / TSXV: TR) are mining in what’s known as the Pacific Ring of Fire. It’s an important place on the globe, but it didn’t get its name because of the red metal.
The Ring of Fire was named for all of its – mostly ancient – volcanic activity. Mount St. Helens, in Washington state is one of its most famous, and active volcanoes.
Buried way underground under its long-hardened lava, vast amounts of metals and rare earth are found hiding, which is why copper and gold mines become open pits thousands of feet across and deep. The mines are massive because metals are not found in chunks, they’re spread in small amounts throughout the rock.
That’s why Troubadour’s Amarillo Project raised the eyebrows of so many geologists.
Consider that a typical rock is made up of about 40 parts per million of copper. In contrast, geologists found that big swaths of Troubadour Resources’ Amarillo Project – just west of Peachland B.C. – held between 4,315 ppm and 4,904 ppm of copper.
At 4,904 ppm, Troubadour’s Samples are over twice the grade of Copper Mountain!
In other words, Troubadour’s copper ore has about 10 to 11 times as much copper as typical rock.
Glencore’s Brenda Mine, just to the north of the Amarillo project, is another example of how copper-rich this earth is, having produced as much as 278M kg of copper over a 20 year span from 1970 – 1990.
Judging by its neighbors, Troubadour Resources (OTC:TROUF / TSXV: TR) could be sitting on 1 billion pounds or more of copper.
Going In For A Deeper Look
Troubadour’s late autumn 2019 field program consisted of four diamond drill holes with three of the holes intersecting large intervals of highly anomalous copper, zinc, molybdenum, silver and gold. This is a significant turn-of-events for the Project and has proved the potential for a new hidden porphyry copper occurrence at Amarillo.
The property is now nine claims and a little over 13,000 acres.
It’s important to note that Troubadour can work this property year-round so the seasonality does not play as big a roll. The low price is due to the lack of drilling to confirm a deposit.
Seasonality, by the way, is what makes British Columbia miners like Copper Mountain Mining Corp, and their neighbor, junior explorer Troubadour Resources (OTC:TROUF / TSXV: TR) such solid buys right now. With winter upon us, most investors have taken their eyes off of the B.C. miners. That means share prices could remain tantalizingly under-valued until just before the spring thaw.
That means there are two ways to play them now. Sit and watch the radar until April or May, or move now to grab more shares for fewer dollars. Either way, all signs point to copper not waiting around for investors who hem and haw.
EV Obsession Is Just Half The Story – Copper Is What Gives Wind Power Life
The International Energy Agency forecasts that the world needs to build more that 350 additional gigawatts of wind power in the coming years, which will require at least 2.8 billion pounds of copper.
Little known fact: wind and solar energy use more copper than conventional forms of energy, such as coal, natural gas, and nuclear power plants.
Conventional power plants require about one ton of copper to produce one megawatt of electricity, whereas wind and solar can require between three to five tons per megawatt.
That’s based on an industry metric that finds every 3MW needs 4.7 tons of copper.
EVs Will Grab All The Natural Resources Attention
Then, there are the EVs.
To put into perspective how unimaginably huge the coming demand could be, last year Chinese electric vehicle maker BYD – by itself –consumed 26 million pounds of copper.
By 2027, copper demand stemming from EVs is expected to increase by 3.4 billion pounds, which is a number just shy of China’s entire copper production in 2017.
Demand for the metals used in electric vehicle batteries could increase six-fold if electric cars can touch 8 percent of road traffic by mid-2020s. Most of the EVs will be powered by batteries that can require 183 pounds or more of copper for cars and somewhere between 300 and 814 pounds of copper for trucks and buses.
That is superb news for the copper supply chain, and copper miners – a drive to put 125 million electric vehicles on the world’s roads could stretch copper supplies to their limit. It’s why under-valued copper explorers such as Troubadour Resources (OTC:TROUF / TSXV: TR) could reward investors with stunning gains for many years to come.
Thank Jeff Bezos When Copper Soars
In truth, while the estimates for demand are massive they may be too low.
Early forecasts didn’t account for Jeff Bezos plans to put 100,000 Amazon.com EV delivery trucks on the road.
The world’s largest e-commerce company ordered the electric delivery vehicles from a U.S. vehicle design and manufacturing startup called Rivian Automotive. Amazon and Ford Motor Co. (NYSE:F) are among the investors in Rivian. Bezos said the first electric delivery vans will be on the road by 2021, and all 100,000 will be deployed by 2024.
Amazon’s trucks will be powered by the same 180 kWh lithium ion battery that powers Rivian’s breakthrough pickup trucks. Rivian’s engineers are cutting edge, so staying on the low end, it’s safe to assume each of Amazon’s trucks could use about 300 pounds of copper.
All in all, Amazon’s entire 100,000 truck project will likely demand at least 150 tons of copper.
And that’s why Troubadour Resources (OTC:TROUF / TSXV: TR), along with copper sector stalwarts like its neighbor, Copper Mountain, are now commanding strong attention.
Multiply 125 Million EVs, Cars, Trucks, And Buses By 300 Pounds of Copper (A Conservative Average) And You Get The Investment Trend Of A Lifetime
That is, of course, just a drop in the bucket.
China and India, with nearly 4.5 billion citizens combined, will drive demand for EVs.
Tesla, though a big name in EV’s, will be a small player compared to General Motors, Volkswagen, Mercedes, and Ford – all of which see China and India as massive market opportunities.
GM needs to be the one of the most aggressive because it currently only has one EV, the Bolt. The company recently restructured its management in order to play catch up.
GM plans to introduce 20 EV models in China during the next 14 years. Estimates are that it will be making 1 million EVs a year by 2020 or 2021.
Ford plans to invest $11 billion over the next three years with a goal of making 16 fully electric vehicles by 2023. Of course, Ford’s investment pales when compared to Volkswagen, which is dedicating $50 billion over the next five years to its EV line of vehicles.
VW’s massive investment should yield 50 all-battery EV models, which it will crank out at a rate of 2 million to 3 million vehicles a year, by 2025. The world’s largest automaker has started to introduce its first wave of electric cars, including next year’s Porsche Taycan.
The rollout across its stable of 12 automotive brands is forecast to comprise about 15 million vehicles over the next five years as VW transforms into a maker of self-driving, electric cars.
It all adds up to a stunning demand for 37.5 billion pounds of copper.
And the biggest winners could be very low-priced companies such as Troubadour Resources.
9 Reasons The Sudden Copper Shortage Could Make Troubadour Resources (OTC:TROUF / TSXV: TR) One Of The Year’s Best Mining Plays
1. Investable Now – USA Today implied that investors need to pounce when it reported… “We’ve gone electric, and there’s no going back at this point… and that’s what investors can take to the bank.”
2. Legendary – Troubadour outright owns over 9,000 acres in the world-renowned “Pacific Ring of Fire.” It’s where the majority of world-class copper miners are located.
3. The Neighborhood – Troubadour’s big-time neighbors include Imperial Metals Corporation (OTC:IPMLF), and Copper Mountain Mining Corp. (OTC:CPPMF), which is said to be sitting on 1.47 billion pounds of copper
4. The Grade – At 4,315 parts per million and 4,904 ppm, and a historic trench returning over 8900 ppm over 125 meters, Troubadour’s copper ore exceeds or favorably compares to neighboring mines
5. Hot Targets – Right now, a small army of geologists and engineers is marching across Troubadour’s British Columbia property planning next spring’s work.
6. Demand Set To Spike –125 million EVs are set to flood the world, and 350 gigawatts of wind-turbine generated power is set to come online, and the copper sector isn’t ready.
7. North America Is Stable – Civil unrest and labor strife in Chile, and lack of hydroelectric power in Zambia could cut the world’s already dwindling copper supply by 200,000 metric tons, or more.
8. Big Crisis Investing Profits – Supply and demand crises are the investor’s best friend. The troubled supply chain could be a boon to copper investors because of EVs and wind turbines the world could soon need as much as 40 billion pounds of copper.
9. Juniors Explore, Majors Buy – Troubadour has done the exploration and is surrounded by greedy major players. A buyout is actually cheaper than developing and exploring. A major could buyout Troubadour and amply reward TROUF’s early investors, the ones who got in at the lowest prices.
The Smart Play Is To Get Into Troubadour Resources (OTC:TROUF / TSXV: TR) Now Before The Looming Demand Crisis Starts
Most people think copper miners are ready for all the new EVs and wind turbines that are forecast to hit the market for the next few years, but 125 million new EVs, and 350GW could create massive and unprecedented demand. This is why the most conservative forecasts calls for copper demand to increase 6 times over the next 10 years.
Taking a position now in Troubadour Resources (OTC:TROUF / TSXV: TR) could put today’s investors among the earliest and biggest winners. Take the next step now. Go to the company website and sign up to be the first to receive important updates and press releases.