Weekly Nugget

Barrick No Longer Eyeing Neighbor’s Lawn as Copper Prices Improve its own Lot

In an interview with Bloomberg, Bristow revealed that the grass on the other side is expensive and ignores the company’s own copper projects’ green potential.

On Feb 18, Barrick Gold (TSX: ABX, NYSE: GOLD) publicly ended its flirting with Freeport-McMoRan’s (NYSE: FCX), as the recent copper price rally has raised the prospects of its own copper assets.

Barrick had engaged in conversations with Freeport in an effort to boost its exposure to copper, Bristow said. Talks were “both remote and direct,” he said, without indicating when they took place or if they focused on potential corporate tie-up or asset deals.

For now, Barrick is focused on boosting its exposure to copper by developing its own assets. The company plans on copper being a “strategic” commodity underpinned by electrification and compatibility with its own gold production.

Barrick can build its own gold-copper mines and the run-up in prices has strengthened its existing copper portfolio, Bristow said.

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Rio Tinto Hunts for Copper in Canada

Rio Tinto Exploration Canada (RTEC), a subsidiary of the global miner Rio Tinto, has begun drilling on Forum Energy Metal’s (TSX-V: FMC) Janice Lake copper-silver project in northern Saskatchewan. 

Forum Energy states that historical drilling neither went deep enough, nor wide enough to evaluate the possibility of multiple layers of shallow copper mineralisation amenable to open-pit mining.

Two drill rigs are initially testing the Rafuse target on the property, a 2.8-kilometer long target of surface copper mineralization that was developed during RTEC’s 2020 summer mapping, prospecting, and geophysical program.

Nine drill holes at Rafuse in 1969 to a depth of 62 metres returned up to 17 metres of 0.68% copper and two holes drilled in 1993 by Noranda to a maximum depth of 128 metres returned 21.7 m of 0.19% copper.

Rio can earn a further 29-per-cent interest, which would bring its total interest to 80 per cent, by spending a further $20 million on exploration over three years.

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Investors Hear the Tin Cry as Supply Squeezes

Demand for tin has been rising due its use in the soldering of electronics used in the technology for the new era of working from home. This demand has placed pressure on mine supply and created shipping disruptions, leaving European and US manufacturers scrambling for the metal.

Futures prices have risen nearly 25% on the London Metal Exchange to trade at nine-year highs with a price above $25,000 per ton. Further production shortfalls concern miners and manufacturers, raising the question where fresh tin will come from to ease the strain on the LME.

Charles Swindon, Managing Director of London-based RJH Trading quoted from a Bloomberg article: 

“We’ve had a lot of enquiries from non-traditional sources looking to buy from us, but there’s just very little metal around..It’s difficult to predict how this will be resolved, but if prices move much higher than this then we could see some metal coming out of China...It will take a while to resolve, and we’re going to need to wait for some new production to arrive.”

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Nickel’s Fortunes Tied to Electric Vehicle Adoption

A report by Adamas Intelligence highlights that over 60% of all passenger EV battery capacity deployed in 2020 was high-nickel cells, such as lithium-nickel-cobalt-aluminum oxide batteries (NCA) or lithium-nickel-manganese-cobalt oxide or NCM 6- to 8-series cells. 

Europe led the world with the highest deployment of high-nickel cells in 2020, with NCM 6- and 7-series dominating the market. Europe was followed by China, where NCM 8-series was the most commonly used chemistry, while the US took the third spot, with high-nickel NCA batteries.

In another report from Roskill, nickel demand from the EV sector is expected to grow globally by 2.6Mt Ni in 2040, up from 92kt Ni in 2020, and by 543kt Ni from 17kt Ni in 2020 within the European Union.

According to the paper, automotive electrification could represent the single-largest growth sector for nickel demand over the next 20 years.

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