Copper prices could run as high as $5 per pound in 2024, says Ellis Martin

Kito mining special coverage of resourcing Tomorrow is brought to you by ays [Music] mining is gold breaking out this is Paul Harris with Kito Mining and resourcing tomorrow in London joining me to discuss this is Ellis Martin host of the Ellis Martin report Ellis welcome to Kito good to see you again Paul thanks for having me now let's start off our conversation I've very much been looking forward to this what are some of let's talk about some of the main macro trends that invas that are shaping the resource investment situation at the moment well for one thing there's a lot of activity in the battery metal sector critical minerals if you will and I see that entire end of the sector overwhelmingly pushing into building more factories funds are pouring into the space the energy transition if you will the electrification the contined electrification of the planet is is Full Speed Ahead the inflation reduction act call it what you will whatever name it has it's generating a lot of uh extra conversion into the sector and and that's pretty big uh at the same time we have we have uh gold breaking out it might be a reaction to the US Treasury bonds sort of tanking more or less I I understand that they haven't seen this sort of decline since the US Civil War which is almost 200 years ago if you will and but we've been expecting that to happen for a very long time you know the price of gold has been suppressed I don't know if it's intentionally or or just the the way it's been uh done organically and at some point that suppression has to end and and gold has to break out sometimes it needs a reason sometimes it doesn't but it hasn't matched the in the incredible inflation we've seen in the US and and all over the world actually you know whether or not I think you know in many places in the world we've absorbed that inflation we're paying double for for Commodities we're paying double at the supermarket we just don't really some of us don't notice and and and many people do but the fact of the matter it does exist and uh I think the dollar is finally sort of sort of caving just a bit never has in the past but it's caving sort of bit a little bit and at the end of the year as of this broadcast goal is as about the 2045 us and that's at the end of this year who knows what we'll do next year well yes inflation in the US debt load seems to be finally taking its toll on the US dollar a lot of people suspect that the Central Bank uh interest rate increases that that move is coming to an end and people are now expecting rates to start coming off next year which presumably again would be strong for gold very very strong for gold at the same time I think we're going to see something we've never really seen uh before or at least in a sustained fashion we're going to see a rise of the copper Market usually they they they're opposed to one another but I think this time we will see we will see copper which is remain somewhere around the 360 3 380 range it head up well over $4 perhaps at $5 next year which is going to be very very very good for the equities and and and I believe you'll see more of a consolidation between the the majors the mid- tiers and the Juniors okay I want to talk a little bit more about copper in a moment but with gold breaking out above that $2,000 per ounce um why is that significant for the resource companies well they haven't been able to raise money for a very long time and and I I think anything in the $1,800 range $1,900 range and near it it it it wasn't enough to sort of move the market the funds have been wory of it investors have have stayed away from gold because the equities have tanked you know uh the the spot price of gold hasn't tanked as much as the equities have so I think that that figure of 2000 itself if it's sustainable and I believe it will be this time is enough of a driver to to drive the market people don't like to buy low they like to buy High even though you should buy ho Buy Low and and and sell High the excitement's now there and everyone's going to to to pretty much Pile in and those of us who invested in Gold last year the year before even a month ago are going to really benefit from that okay now you mentioned that the copper price has been around $360 $370 historically that's a very good level but it's very much um this year has been a story of the copper story is stuttered or stagnated or plateaued what would be the sort of equivalent price point you think for go for copper to experience some of the excitement that's now starting to come into the gold space I think I think just over $4 $4 4 410 somewhere in that area you'll see that kind of excitement at the exact same time that you'll see gold and you'll see more consolidation as well as I said with companies like Rio Tinto investing more which they've done they've done Rec they they put another $7 million I think into Western copper and gold a company with two large resources in in in in both metal spaces uh you'll see more of that and and that again is going to drive the the Junior market it's going to drive the price of copper itself now that investment was announced yesterday I believe riotinto another 6 OR7 million into Western copper and gold there there's a scarcity of copper projects out there Copper's very necessary for the energy transition but as you say there hasn't been a lot of investment in in Exploration or buying companies in the copper space uh what are the big guys waiting for do you think well the big guys are they've had their eyeballs on everything for a long time they've never taken their their eyes off they're I I can't say I know the answer to that but uh I don't think they're going to be waiting any longer I think everybody just you know this side of the world likes to they like to feel the buzz about it they like to know that that that there's no more downside and and some signal that this uh energy transition is going to hold and people will continue to build and and manufacture batteries and electric vehicles and and also there's some sort of turn in the general economy of the world which we haven't really seen yet uh you know uh building more homes that sort of thing the housing Market's been down uh housing requires copper I mean there's so many directions I can go with this Paul I I I don't know that I have the exact answer well let me Lead You In A Direction what one company that seems to be telegraphing serious intent in the copper bace is Barrett gold with a couple of recent investments in a in a very much an unheard of Junior called Hercules which has a Coba project in Idaho is bar looking to steal a march on some of the more established copper companies well you know that's a real audity uh I was in Boise Idaho a few weeks ago for the Idaho mining Association event over there and it was there the day that they had news about that one hole over there the it was a silver Discovery I believe and I thought they Carper I I I was speaking to the CEO of the company uh that particular day and my impression was they were they were going to possibly just focus on silver and spin out that copper but that's not the case I've learned and they they've only had they've only drilled the one hole so I I I I believe that that baric along with riotinto are just so involved everywhere in the world where it matters that they're not going to wait anymore that's probably an indication you you've probably indicated what's going to happen to the Cofer Market as a whole right now it takes what it takes one action like that to to Really Drive the sector and then the fear of missing out maybe kicks in absolutely the F Factory okay but despite that it's it's still a very tough market for juniors it's tough for them to raise money um a lot of the conversation here people are thinking that next year a lot of companies either going to go out business just you know give up the ghost we're starting to see more merges of equals or at Market mergers um basically to preserve Treasury and make treasury go a lot further um people have been asking for this sort of consolidation for quite some time um but with no with investors we to invest in the junior space you know how how is this going to play out is this is the tough market for them going to continue you know um I'm just going to take a a stab at it because I I don't think that any one of us have have the exact right answer and you know we as journalists should know the answer to the to these questions but I I again I think it's probably going to be driven by the by the by the majors and Juniors that have done a fair share their Fair a fair bit of of exploration and development and got lucky more or less they will they'll find some love and the ones that really haven't uh they're going to either lose their projects or they'll be they'll be acquired by uh like companies with slightly more money uh perhaps better management team and those projects will will be absorbed by somebody can that can that can handle uh developing of the of the projects one of the things that we we see in the sector Paul is a lot of uh projects get flipped companies run out of money they've done some work on it so whoever picks it up again at a discount has the benefit of all the work that's done before that by perhaps two or three or four different companies so they just keep they just keep develop them at the same time I think you'll see some investment by the majors and the mid tears to help some of the smaller companies along they like the projects they like the management teams they're they're willing to invest to develop these properties they don't that's the business model of the majri is to is to invest in juniors that know what they're doing as I mentioned though there's been some interesting m&a activity in recent weeks um I'm thinking of calibri mining taking over marath and gold this just this week yesterday Moneta gold and nigh HW gold have announced they're going to merge or fuse together what do you see in these kind of merges what was your takeaway I think it's a a bit of a uh I think there cost cutting moves that make sense I I come from the radio business uh commercial radio and and years ago there there were many many many many independent radio groups radio stations what have you and over time the the radio conglomerates grew they were able to to do the the work of um five individuals which is two or three so I think it's it's really about about uh uh time management personnel management and just just cutting a lot of expenses across the board you you don't need sometimes you don't need as many people on on the teams to develop these projects so I just think it's it's basically corporate culture okay now what do you think is a a healthy investment strategy for people during these times right now and this has always been a good strategy is to if you can afford to lose the money if if instead of maybe buying a a el luur car for $200 or $300,000 or or 50 Grand take a fair amount of money you can do it take a fair amount of money and and buy these cheap stocks right now great management teams great assets uh a plan for the next year or five years and and throw money into uh maybe a dozen companies or as much as you can afford and a good deal of it and look away and look away could now is the time it's not going to there won't be a better time to buy than now I'm not mentioning any names of any companies but but you know if if this is the time where you can hit that five Banger 10 Banger and maybe 20 Banger if you're patient you can wait one to two to 5 years Now's the Time okay now we're on the verge of 2024 beginning what are some of the things you think will happen next year what are some of the things you would like to see next year okay without really making any predictions the these are just thoughts we all have thoughts I think that we're going to see uh we're not going to see a recession in the US because that's not that's not something that will be positive for an election uh when you when you have a uh Administration like we have in office the economy is going to is going to uh be pervade of something that looks very good so everything will be done to keep it that way through the election if we had a republican in office the the reverse would be true so I I think that's going to be good for uh continued expansion in the something I discussed at the beginning of this interview in the critical mineral sector I think we'll see a lot of development I think it's going to be very very strong for copper I'd like to I'd like to believe I like to say I don't think we're going to have uh U uh a growing Global crisis with regard to War I think that's going to be managed so to speak uh uh the dollar is going to be under assault from every angle it always has been I but I think this year will take some effect and you're going to see Resurgence in Gold uh interest a new interest a generalist interest that we've never seen before well I look forward to some of those predictions is hopefully coming true Ellis thank you very much for joining us today fin my pleasure Paul good to see you again and this is Paul Harris for Kito mining at resourcing tomorrow and if you like what you see don't forget to subscribe Kitco mining special coverage of resourcing Tomorrow is brought to you by ays [Music] mining

Channel: Kitco Mining

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Length: 14min 30sec (870 seconds)

Published: Fri Dec 15 2023