Copper is now in the early stages of what appears to be a long-term, multi-year bull market. With soaring demand for the copper needed in electric vehicles, the power grid, data centers and more there is significant upside potential for those companies bringing copper supplies online, including Troilus Gold Corp. (TSX: TLG) (OTCQX: CHXMF), Glencore (OTC: GLNCY), Freeport-McMoRan (NYSE: FCX), Rio Tinto (NYSE: RIO) and BHP Group (NYSE: BHP).
Helping, Australian miner BHP says it expects the world to consumer another million metric tons of copper per year on average through 2035 thanks too copper-intensive technologies, as noted by Reuters. “BHP said in a report released on Monday that global copper demand has grown at a 3.1% compound annual growth rate over the last 75 years. But this growth rate has been slowing to only 1.9% over the 15 years to 2021,” added BHP. "Looking to 2035, however, we expect this growth rate to jump back to 2.6% annually.”
“As we look towards 2050, we see a 70% surge in global copper demand to 50 million tonnes annually, driven by copper's role in existing and emerging technologies, and in the world's decarbonisation aspirations," added BHP Chief Commercial Officer Rag Udd, as also noted by Reuters.
Look at Troilus Gold Corp. (TSX: TLG) (OTCQX: CHXMF), For Example
Troilus Gold Corp., announced significant advancement in its project financing for the development of the copper and gold Troilus Project, located in north-central Quebec, Canada.
Highlights:
- Troilus has received a Letter of Intent from Euler Hermes Aktiengesellschaft, representing the German Federal Ministry for Economic Affairs and Climate Action as an export credit agency. The LOI confirms in-principle eligibility of an untied loan guarantee of up to US$500 million.
- This potential funding support is based on the signing of a commercial off-take agreement of up to 15 years with Aurubis AG, Germany’s largest copper smelter. Such support is also subject to customary due diligence including but not limited to, economic, technical, environmental and social.
- The LOI from Euler Hermes is a major milestone in establishing a comprehensive financing solution for the Project. This will complement multiple advanced discussions with other smelting partners, export credit agencies, commercial banks and sophisticated global mining finance institutions with further announcements expected in the coming weeks.
Justin Reid, CEO of Troilus, commented, “This LOI is a strong endorsement of the Troilus Project’s significant economic potential and strategic value. Following an extremely active third quarter, we are now in advanced discussions with other export credit agencies, off-takers and financiers, as we work towards securing a comprehensive financing package for the Project’s construction. With rising European demand for copper concentrate and our advantageous proximity to these markets, we are advancing through financing discussions from a solid strategic position. The scale, resilience, and longevity of the Troilus asset has positioned us to move confidently into the financing phase, and we are encouraged by the high level of interest and support from leading global financial institutions. With this first LOI in hand, we look forward to advancing our strategy and unlocking the full potential of this major North American copper-gold project."
Following the positive Feasibility Study published in May 2024, which outlined a 22-year, 50,000 tonne- per-day open-pit operation, Troilus has made significant strides in advancing its project financing efforts. The Feasibility Study projects an average life-of-mine production of 303,000 gold equivalent ounces annually, or 135.4Mlbs copper equivalent annually, peaking at 536,400oz AuEq, or 237.6Mlbs CuEq, positioning Troilus as one of the largest undeveloped copper and gold projects in North America (see May 14, 2024, press release). The project's scale, compelling economic profile, and essential role in supplying copper and gold to global markets have attracted strong institutional interest from financial entities worldwide.
Troilus looks forward to announcing further pieces of its financing framework in short order. Auramet International Inc. continues to assist with the structuring, identification and engagement of potential financing participants.
Other related developments from around the markets include:
Glencore’s Chief Executive Officer, Gary Nagle noted, “Our full-year 2024 production guidance has again been maintained and reflects the additional steelmaking coal volumes that have contributed to our portfolio since closing of the EVR transaction on 11 July 2024. During the current quarter, key anticipated quarterly sequential production improvements have been achieved, notably at African Copper +6kt (+13% Q3/Q2), Antapaccay +9kt (+35% Q3/Q2), Kazzinc +13kt (+27% Q3/Q2), Murrin Murrin +1kt (+7% Q3/Q2) and Australian energy coal +3.6mt (+27% Q3/Q2). Basis Marketing’s performance year to date, we continue to expect full year Marketing Adjusted EBIT in the $3.0-$3.5 billion range, being around the top end of our long-term $2.2-3.2 billion p.a. guidance range.”
Freeport-McMoRan reported third-quarter 2024 net income attributable to common stock of $526 million, $0.36 per share, and adjusted net income attributable to common stock of $556 million, $0.38 per share, after excluding net charges totaling $30 million, $0.02 per share, primarily associated with impairments for legacy oil and gas matters and nonrecurring labor-contract charges at Cerro Verde, partly offset by a reduction in accruals for uncertain U.S. tax positions. Richard Adkerson, Chairman of the Board, and Kathleen Quirk, President and CEO, said, “During the third quarter, our global team generated strong margins and cash flows, achieved our production targets, continued to prioritize productivity and cost control, and advanced initiatives for future growth. We remain focused on strong execution of our plans globally as we work to address damage from a recent fire affecting a portion of our new Indonesia smelter facilities. We are confident in our team’s ability to restore smelter operations and achieve a safe and efficient ramp-up as soon as possible. The outlook for our business is positive, supported by our position as a leading copper producer with a strong financial profile, favorable market fundamentals and value enhancing options for future growth.”
Rio Tinto Chief Executive Jakob Stausholm recently said: “Our operational performance continues to progress. While there are still significant improvements ahead, we are beginning to see a step-change in production, including from our Queensland bauxite business following the roll-out of the Safe Production System. We are growing with discipline in the materials the world needs for the energy transition. Construction of the Simandou high grade iron ore project in Guinea is advancing at pace, the ramp up of the Oyu Tolgoi underground is on track and we are set to achieve first production from the Rincon starter plant by the end of the year We continue to prioritise the decarbonisation of our business, announcing the installation of carbon free aluminium smelting cells using ELYSIS technology at our Arvida smelter in Quebec and an investment in a R&D facility to test our low-carbon ironmaking process, BioIron, in Western Australia. We also signed 20-year electricity arrangements backed by renewable electricity to secure the future of the Tiwai Point aluminium smelter in New Zealand. As we progress against our four objectives and strategy, we have a clear long-term pathway to profitable growth and continued attractive shareholder returns.”
BHP Group says it’s “strengthening our important strategic partnership with global technology company ABB, through the signing of a multi-year Global Framework Agreement. ABB is a leader in industrial automation, electrification and digitalisation, and delivers critical technologies and equipment for BHP’s global operations including Escondida in Chile, our Jansen project in Canada, and various packages across our Australian assets. This new agreement will enable further opportunities for BHP and ABB to collaborate in support of project delivery, operations and maintenance, as well as progressing operational decarbonisation efforts across BHP’s global operations.”
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