Copper Company Touts Potential for Re-Processing at Zonia Project in Arizona

Source: Streetwise Reports 07/03/2024

World Copper Ltd. (WCU:TSX.V; WCUFF:OTCQX; 7LY0:FRA) has released an update on its Zonia copper-oxide project in Arizona, revealing new potential for re-processing mineralized material from historical mine operations. What does this mean for future projects in the region?

World Copper Ltd. (WCU:TSX.V; WCUFF:OTCQX; 7LY0:FRA) has released an update on its Zonia copper-oxide project in Arizona, revealing new potential for re-processing mineralized material from historical mine operations. This material, located on heap leach pads from the 1970s, was originally treated to recover soluble copper.

Recent reviews by the company’s newly formed Technical Advisory Committee indicate that significant quantities of copper remain unrecovered from the site. Historical reports estimate that between 65 million and 96 million pounds of copper could still be present in the heap leach pads and in-situ leach areas.

The data stems from a 1979 mine production summary by McAlester Fuel Company and a 1982 resource evaluation by Mountain States Research & Development. These reports highlight the substantial potential of the material left on-site, prompting World Copper to explore the feasibility of re-processing this material.

Looking At Copper

In a May report on Reuters, it was highlighted that “Copper surged to record highs on Monday as a recent rally triggered by short covering created momentum for speculators and funds to bet on higher prices of the metal.” This surge underscored copper’s critical role in various industries, driven by its high conductivity and broad applications.

The report also noted that “Copper is widely expected to benefit in the future from the green energy transition via additional demand from the electric vehicle sector and new applications, including data centers for artificial intelligence.” As the world moves towards more sustainable energy solutions, copper’s demand is projected to grow significantly.

According to Statista in a June 7 article, “As the most conductive non-precious metal, copper is indispensable for many industries, as demonstrated by the nearly 30 percent increase in global copper consumption in 2022 compared to 2010.” This increase in consumption was mirrored by a growth in global copper reserves, which amounted to one billion metric tons as of 2023.

“Overall, the chart looks strong, so it is viewed as a Buy again in this area,” Technical Analyst Clive Maund wrote.

Statista also reported that “The total global copper production from mines amounted to an estimated 22 million metric tons in 2023, which similarly amounted to an increase of almost 30% since 2010.” Chile, Peru, and the Democratic Republic of Congo remained the largest producers, with Chile producing nearly one-quarter of the world’s copper and holding the largest copper reserves.

In terms of market value, a 2024 Data Bridge Market Research Report detailed that the “Global copper market size was valued at US$320.33 billion in 2023 and is projected to reach US$476.90 billion by 2031, with a CAGR of 5.1% during the forecast period of 2024 to 2031.” This projection was driven by copper’s essential role in power generation and electronics, where its high electrical conductivity ensured efficient energy transmission.

The Data Bridge Market Research Report further elaborated that “The demand for copper in the electrical and electronics industry continues to grow with advancements in technology, driving innovation and efficiency in electrical systems and electronics manufacturing.” As technological advancements continue, the usage of copper in infrastructure, particularly in renewable energy and electric vehicles, was expected to rise, supporting its market growth.

Additionally, the report highlighted that “Copper’s recyclability and long lifespan align with sustainability goals, increasing its attractiveness in environmentally conscious industries.” This aligns with the global trend towards decarbonization and sustainable energy solutions, making copper a pivotal commodity in the transition to a greener economy.

Company Catalysts

World Copper’s CEO, Gord Neal, expressed optimism about the prospects of re-processing the historical material, stating in the official news release, “The prospect of re-processing historically mined mineralized material would add more value and provide additional upside to the Zonia Project, and it is a unique potential value opportunity.” He emphasized that early production opportunities could significantly enhance the project’s economics, increasing its net present value and reducing financial risks.

“Red Cloud reiterated its Buy rating on the resources firm.” Additionally, he noted that “World Copper estimates a production start at Zonia in three to five years.”

The heap leach pads, located on private patented land, are accessible from a permitting perspective. To ensure the quality and potential of the mineralized material for re-processing, the company plans a confirmatory drilling program and metallurgical testing. These efforts will verify the volume, grade, and mineralogical characteristics of the material. Should the results be favorable, World Copper will assess the viability of processing this material before any future mining of the bedrock resources.

The Zonia Project itself has been significantly de-risked with over 50,000 meters of drilling completed to date and a comprehensive Preliminary Economic Assessment (PEA) indicating potential for low-cost open pit mining and heap leach processing. The most recent resource estimates highlight substantial copper resources, both indicated and inferred, totaling over a billion pounds of copper. This positions the project as a promising opportunity for World Copper as it continues to advance its strategic resource development initiatives and maximize shareholder value.

Expert Opinions

According to Technical Analyst Clive Maund on June 2, “World Copper was brought to my attention about two weeks ago as an attractive copper play.” He further noted that “overall, the chart looks strong, so it is viewed as a Buy again in this area.” This positive outlook was reinforced by his observation that “generally speaking, it is viewed as a buy now following the correction for renewed advance.” Maund also mentioned the potential for a significant technical signal, stating that “the strong, broad market recovery on Friday makes a prominent reversal candle on the chart, such as a bull hammer, more likely.”

Equity Research Analyst Taylor Combaluzier from Red Cloud Securities provided further insights on May 23. He emphasized the strategic direction of the company, writing, “Given the current robust copper market environment, we believe the company’s focus on developing its smaller-scale Zonia project is prudent and more feasible for a junior mining company to tackle.” [OWNERSHIP_CHART-10410]

Combaluzier also highlighted the company’s strong management and financial position, stating, “With a new management team and technical committee, along with a current cash balance of about CA$4.9 million, we believe the company is well positioned to execute on its refined U.S. strategy.” Reflecting confidence in the company’s potential, he reported, “Red Cloud reiterated its Buy rating on the resources firm.” Additionally, he noted that “World Copper estimates a production start at Zonia in three to five years.”

Ownership and Share Structure

Wealth Minerals Ltd. (WML:TSX.V; WMLLF:OTCQB) owns about 11.51% of World Copper.

About 27% is owned by management and insiders, including Director Robert Kopple with 8.37% and Board Chairman Hendrik van Alphen with 1.14% or 3.25 million shares. CEO Neal holds about 0.96%. The rest is retail.

As for share structure, the company has 194.5 M outstanding shares and 125 M free-float traded shares, according to Reuters.

As of July 3, it has a market cap of CA$30 M. Its 52-week trading range is CA$0.055–0.35 per share.

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Important Disclosures:

1. World Copper Ltd. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of World Copper Ltd.
3. James Guttman wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
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( Companies Mentioned: WCU:TSX.V;WCUFF:OTCQX; 7LY0:FRA, )