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Top 5 Copper Stocks on the TSX in 2023

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Copper started the year strong, but dipped toward the US$8,000 per metric ton (MT) mark through Q2 and Q3. As the year draws to a close, it’s gained a little ground and was changing hands at US$8,471 on December 15.

Weaker demand from China hampered the copper price through the year, although the red metal is seeing growing support as countries around the world transition toward a greener future. Copper’s high electrical conductivity makes it ideal for use in the production of electric vehicles and in the production of wind turbines in electricity generation.

Against that backdrop, which TSX-listed copper companies performed the best in 2023? Read on to find out about the top gainers — data for this top copper stocks list was gathered on December 14, 2023, using TradingView’s stock screener, and all companies had market caps above C$50 million at that time. Here’s a look at their activities this past year.

1. Sierra Metals (TSX:SMT)

Company Profile

Year-to-date gain: 196 percent; market cap: C$151.62 million; current share price: C$0.74

Sierra Metals is a mining company that produces copper, as well as additional base and precious metals as by-products. Its primary operations are the Bolivar copper mine in Mexico and the Yauricocha polymetallic mine in Peru. It also owns the Cusi silver mine in Mexico, but as of September 20 the mine was on maintenance and the company had entered into discussions for its sale as it transitions into a primary copper producer.

Sierra saw gains early in the year, stabilizing after a period that saw its share price decline nearly 90 percent since May 2021. The company announced in October 2022 that it would undergo a strategic review process to evaluate financial and liquidity positions, along with operational challenges and financing and restructuring alternatives.

This marked the second strategic review by the company following one initiated at the end of 2021; the result was that the company decided to move away from silver and focus on its base metals business. Soon after the second strategic review was announced, Compañia Minera Kolpa, controlled by Alberto Arias, Arias Capital Resources’ (ARC) founder and Sierra’s former board chair, sent a letter of intent for a merger with Sierra. Sierra decided to continue to pursue its restructuring.

2023 saw the company better its financial position as it began to shift its operations away from silver and focus on copper. Sierra achieved year-on-year performance improvements in both the second and third quarters.

Despite improved production during those periods, investor interest remained flat, and ARC, Sierra’s largest shareholder, announced on May 1 its intention to replace the board’s leadership. On June 12, ahead of the company’s annual general meeting, ARC released a dissident proxy circular encouraging investors to vote for the ARC selections. Sierra, through proxy advisor Glass Lewis, countered with its own press release on June 14, encouraging investors to maintain the current board. Shareholders ultimately voted in favor of keeping the existing board as reported on June 28.

Sierra surged following the November 1 release of Q3 financial results from its Peruvian subsidiary, Sociedad Minera Corona, which operates Yauricocha. The statement indicates an improving financial position for the company. Two weeks later, Sierra released its own Q3 report on November 13, reporting a 62 percent year-on-year increase in revenue, a 27 percent increase in copper production and a net loss decrease from US$38.1 million to US$2.8 million.

Shares of the company jumped following Sierra’s listing on the OTCQX Best Market on November 16, ultimately climbing to a year-to-date high of C$0.84 on November 27.

2. Collective Mining (TSX:CNL)

Company Profile

Year-to-date gain: 61.3 percent; market cap: C$223.91 million; current share price: C$4.21

Collective Mining is a gold, copper and silver exploration company with interests in Caldas, Columbia. Its two projects, Guayabales and San Antonio, are within a region with 10 operating mines, and consolidate large portions of a mineral belt that surrounds Aris Mining’s (TSX:ARIS,NYSE:ARMN) Marmato mine.

Q1 saw Collective make significant gains on the back of exploration results at Guayabales’ Apollo target. The first of these results came on February 15, with four step-out holes extending the main breccia system to a width of 395 meters and a depth of 915 meters. Results from the last of these holes, APC-31, were released on February 23 and revealed high grades at Apollo, including a 384.7 meter intercept with 1.17 grams per metric ton (g/t) gold, 43 g/t silver and 0.37 percent copper.

The company’s share price climbed steeply to reach a year-to-date high of C$7 on May 9 following a pair of press releases on March 30 and April 11; they also focused on drill results from Apollo, with Executive Chairman Ari Sussman saying he was “impressed with the sheer quantity and quality of mineralization’ at the target.

Consistent results in Q2 and Q3 helped Collective’s share price stay around the C$6 mark. However, it began trending down at the start of September. This fall came despite continued good results from Guayabales, including news on October 11 of a new precious metals discovery, the Plutus target. Exploration at the site has been limited to one drill, but the company said one hole encountered a large intercept of 0.97 g/t gold, 20 g/t silver and 0.04 percent copper over 136.45 meters.

On October 30, Collective reported its best hole to date from a subzone at Apollo. It expanded the system to the north, west and at depth, with an intercept with 2.12 g/t gold, 36 g/t silver and 0.1 percent copper over 519.1 meters.

Shortly after, on November 7, the company discovered a high-grade zone of tungsten mineralization in the shallow portion of Apollo. Collective’s most recent update from Apollo came on December 11, when the company announced results from its first four directional drill holes. The assays expanded the target envelope’s depth from 915 to 935 meters, with mineralization being open for further expansion. Sussman said in a release that visual observations of two other holes indicate that both contain intercepts of 500 meters, “indicating that a potential material size increase to the envelope of the system will be forthcoming upon receipt of assays in early Q1, 2024.”

3. St. Augustine Gold and Copper (TSX:SAU)

Company Profile

Year-to-date gain: 50 percent; market cap: C$96.08 million; current share price: C$0.09

St. Augustine Gold and Copper is focused on its King-king project in the Mindanao province of the Philippines. Its annual production target for the site is 62,595 MT of copper, 236,169 ounces of gold and 506,504 ounces of silver.

Shares of St. Augustine rose sharply in June, when it secured funding through a private placement with Queensberry Mining and Development. Queensberry was to receive 91,778,683 common shares for C$3,785,741.63, increasing its ownership of St. Augustine to 49.48 percent. St. Augustine reached its year-to-date high on August 2, closing at C$1.

On August 14, St. Augustine filed its interim financial statements for the three and six months ended on June 30. Its cash on hand grew from US$150,000 to US$998,090 between December 31, 2022, and June 30, 2023.

The company’s most recent news came on November 14, when it released its interim financial statement for the quarter ended on September 30. In the release, the company notes that it has earned no revenue since its recapitalization in 2011 and has incurred a deficit of US$29,023,934. The release also states, “The ability of the company to continue as a going concern is dependent upon obtaining necessary financing to complete permitting activities, engineering design, construction and placement of the mineral property into commercial production.”

4. Foran Mining (TSX:FOM)

Company Profile

Year-to-date gain: 37.79 percent; market cap: C$1.16 billion; current share price: C$4.12

Foran Mining is an exploration and development company focused on copper, zinc, silver and gold. It has eight properties across 140,000 hectares in the Hanson Lake district, which is located west of Creighton, Saskatchewan. Its primary project, McIlvenna Bay, is a mineral-rich deposit and part of the Flin Flon Greenstone Belt.

Initial drill results announced on February 16 from the Tesla target at McIlvenna Bay were positive, with a highlight interval of 10.1 meters grading 3.1 percent copper, 3 percent zinc, 32 g/t silver and 0.25 g/t gold, respectively. The company’s winter 2022 program tested six holes over a 300 meter by 300 meter zone.

Foran has continued drilling at its Tesla target throughout the year. Results released on October 5 expanded the target zone to 750 meters, and the assays indicated substantial zinc, copper and precious metals mineralization. Foran also identified a mineralized zone, dubbed the Bridge zone, that connects the main McIlvenna Bay deposit with Tesla; according to the company, the new zone represents a significant area for growth.

Foran continued to build on these results through Q4, and announced on December 14 another significant expansion with a 200 meter down-dip extension of the Tesla target. The company said it plans to conduct the largest winter exploration program in its history in 2024, with seven rigs and up to 22,000 meters of drilling.

In addition to exploration at the McIlvenna Bay project, Foran has secured significant financing in 2023, with a C$100 million private placement closing on March 27 and a C$67 million equipment financing deal arranged on September 7. Most recently, the company secured C$200 million in funding when it closed a previously announced private placement on December 12. The funds will be used to develop Foran’s projects in Saskatchewan.

Foran shares reached a year-to-date high of C$4.39 on October 31.

5. Northern Dynasty Minerals (TSX:NDM)

Company Profile

Year-to-date gain: 32.79 percent; market cap: C$209.32 million; current share price: C$0.405

Northern Dynasty Minerals is an exploration and development company focused on the Pebble project, a copper-molybdenum-gold-silver project located 200 miles southwest of Anchorage in the Bristol Bay region of Alaska.

Northern Dynasty describes the site as “one of the greatest stores of mineral wealth ever discovered.” The project has measured and indicated resources of 6.5 billion MT of copper and inferred resources of 4.5 billion MT. For gold, it contains 53.82 million measured and indicated ounces and 28.1 million inferred ounces, and silver resources for the site stand at 249.3 million ounces measured and indicated with 121.7 million ounces inferred. Lastly, Pebble holds molybdenum resources of 1.26 million MT in the measured and indicated category with an additional 821,000 MT inferred.

The project stalled in 2020 during the permitting phase following a US Environmental Protection Agency veto that suggested the proposed mine would damage the Bristol Bay watershed. Shares of the company surged following Northern Dynasty’s July 26 announcement that Alaska had appealed to the Supreme Court of the US to reverse the veto.

The case has yet to make its way before the court, and Northern Dynasty reported on September 27 that the federal government had asked for an extension until November to file its brief with the court. The court is expected to make a decision on hearing the case by the end of the year. As of December 18, it had yet to do so.

Northern Dynasty’s share reached a year-to-date high of C$0.54 on September 17 and November 16.

FAQs for investing in copper

Is copper a good investment in 2023?

Copper’s price trended downward throughout 2023. Although many experts have a positive long-term outlook for the red metal based on supply concerns and its growing role in the energy transition, recession worries in countries across the globe are creating short-term headwinds for copper, which is heavily used in industry.

Investors who are interested in copper should make sure to perform their due diligence, as the volatility and unpredictability of markets and economies at the moment means that nothing is guaranteed.

What is copper used for?

Copper is used in many industries, from construction to electronics to medical equipment. In fact, in 2020, 32 percent of copper globally was used in equipment manufacturing and 28 percent in building construction.

Two other growing sectors for copper are the burgeoning electric vehicle and green energy industries. Electric vehicles require a significant amount of the red metal per vehicle.

How to invest in copper?

Investors can get exposure to copper in a variety of ways. Holding physical copper is possible, but plenty of storage would be required to hold any significant value of the metal.

For investors looking to invest in the metal without physically holding it, there are a few options. Copper stocks such as those on the TSX, TSXV and ASX are worth looking at. Additionally, there are copper exchange-traded funds and the copper options and futures markets on the London Metal Exchange.

How to invest in a copper ETF?

Copper exchange-traded funds (ETFs) can be a good way to diversify an investment portfolio, and they can be a more stable option compared to individual copper miners or explorers. There are multiple options available on the market, and they can usually be purchased in the same way one could purchase stocks through a broker or trading platform.

In May 2022, Horizons launched Canada’s first copper equities ETF, the Horizons Copper Producers Index ETF (TSX:COPP), which is focused solely on pure-play and diversified copper-mining companies.

There are two ETFs available on the US ARCA exchange as well. The Global X Copper Miners ETF (ARCA:COPX) tracks the Solactive Global Copper Miners Index, which includes copper miners, as well as copper explorers and developers. The other option is the United States Copper Index Fund (ARCA:CPER), which gives investors exposure to copper futures contracts by tracking the SummerHaven Copper Index Total Return (INDEXNYSEGIS:SCITR).

How much is copper worth?

The copper price is tracked in two ways: COMEX copper and London Metal Exchange (LME) copper. The COMEX and LME are both options and futures metal exchanges, with the former being headquartered in New York and the latter in London. COMEX copper is priced by the pound, while LME copper is priced per MT.

Where is copper mined and how is it processed?

Copper is mined throughout the world, with significant production found on every continent besides Antarctica. Chile was the top producer in 2022, putting out 5.2 million MT of the metal. Rounding out the top five are Peru and the Democratic Republic of Congo with 2.2 million MT each, China with 1.9 million MT and the US with 1.3 million MT.

Once copper is mined, the ore goes through multiple steps to reach a market-ready state. First, the ore is ground to roughly separate the rock from the copper, as copper typically only makes up 1 percent of the mined rock.

The resultant copper is then slurried with water and chemical reagents, after which air is used to float the copper to the top of the mixture. After the copper is removed from this, it is typically at 24 to 40 percent purity.

Article by Dean Belder; FAQs by Lauren Kelly.

Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.

Securities Disclosure: I, Lauren Kelly, hold no direct investment interest in any company mentioned in this article.

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