Copper Price Hangs Tough Despite Lower 2024 Forecast

• ICSG forecasts a copper surplus of 467,000 tons in 2024 due to new mine expansions. However, they have been wrong before.
• Double View Gold reports strong mineralization but their use of copper equivalents is questionable before a resource estimate. More clarity is needed.
• DLP Resources intersects high grades but should not use copper equivalents before a resource estimate. This is misleading.
• Hercules Silver makes a great high-grade copper discovery in Idaho. An excellent example of exploration success.
• C3 Metals and smaller companies like Aston Bay and Turmalina Resources have early exploration successes but need to prove continuity.

Excellent Juniors Unearth Encouraging Exploration Results

The price of copper has held steady at around $3.60 per pound in recent weeks, despite a gloomy new forecast from the International Copper Study Group (ICSG) predicting a 467,000 ton surplus in 2024. This is due to major new mines like Kamoa-Kakula ramping up production. However, as the ICSG admits, their predictions are often inaccurate. While a potential glut could weigh on prices eventually, today’s healthy copper price presents opportunities for investors in junior explorers who are logging promising early drilling results around the world.

Double View Gold: Questionable Reporting Muddies Exploration Success

Vancouver-based Double View Gold Corp has attracted significant investor interest in recent months, with its share price tripling since mid-2020 on the back of mineral discoveries at its Hat gold-copper porphyry project in British Columbia. While the latest results from the property's L Deposit look encouraging at first glance, a closer examination raises some yellow flags.

The company reported broad intercepts of 1.09% copper equivalent over 552 metres, signalling a potential world-class deposit. However, the actual copper grades are far lower, averaging just 0.32%. Double View derives its inflated copper-equivalent figure by adding low-grade gold (0.43 g/t), silver and scandium discoveries. This runs counter to Toronto Stock Exchange guidelines, which prohibit copper-equivalent reporting by explorers before a resource estimate is published.

Without established resources and metallurgical testing, it is unclear what percentage of the metals reported will actually be recovered and sold. While the Hat project’s polymetallic nature adds an upside, investors should view the reported copper-equivalent grades with skepticism until more research is completed.

Double View plans to issue its initial resource estimate in Q1 2024. However, with drilling still underway, it appears unlikely the company will meet this timeline. Investors would benefit from greater clarity around the resource estimation process, as well as more details on projected scandium recoveries and markets, before assigning too much value to Hat’s impressive reported copper grades.

DLP Resources: Copper Equivalents Again Prove Problematic

Fellow Vancouver junior DLP Resources fell into the same reporting trap with its latest results from the Aurora copper project in Peru. DLP touted a spectacular 366-metre intercept grading 0.81% “copper equivalent”, implying a world-class discovery. In fact, the actual copper grade was just 0.7%. The company boosted the figure by factoring in modest byproduct molybdenum and silver content.

As with Double View Gold, this copper-equivalent reporting violates TSX guidelines, given the early stage of exploration. While Peru’s Aurora project shows intriguing initial grades, DLP should avoid misleading comparisons on equivalency until it has established resources and metallurgical recoveries. Copper-equivalent reporting has become an unfortunate trend amongst explorers. When reviewing early drilling results, investors should focus on the actual grades and intervals for each metal.

Hercules Silver: A Model for Responsible Exploration Reporting

While some juniors push the envelope on copper-equivalent reporting, Hercules Silver sets a positive example. Recently rebranded from Bald Eagle Gold, Hercules intersected a remarkable 185 metres of high-grade copper at its Golden Boy project in Idaho.

Rather than inflate the results with copper-equivalent figures, Hercules simply reported the impressive intercept accurately: 1.9% copper, 111 g/t silver and 0.11 g/t gold. This transparent disclosure builds credibility and gives investors an accurate picture of Hercules’ discovery. Combined with exceptional visual core photos released by the company, the market has justifiably rewarded Hercules with a doubling of its share price in recent months.

The results point to a possible porphyry system underlying Hercules’ epithermal silver veins. Further drilling will be needed to determine the full extent of the copper mineralization. But with an expanded 2023 drill campaign now underway, Golden Boy has emerged as one of the most exciting new copper plays in the junior mining sector.

C3 Metals: Drilling Difficulties Fail to Diminish Potential

Fellow copper explorer C3 Metals registered more modest but still encouraging results from its Bellas Gate project in Jamaica. C3 intersected 112 metres of 0.35% copper and 0.13 g/t gold, extending the mineralized strike length substantially.

C3 President Dan Symons highlighted the discovery of a large, multiphase porphyry system with strong copper-gold-silver potential. However, Symons also acknowledged the company failed to reach target drilling depths in certain areas due to technical difficulties. The challenges of early-stage drilling are common, but C3’s transparency is laudable and gives investors a balanced perspective.

While grades at Bellas Gate to date are modest, the scale of the system is impressive and holds much room for growth. C3 Metals represents an intriguing speculative play if it can successfully map out and target higher-grade sections of this emerging porphyry district. With limited exploration in Jamaica historically, the upside for new discoveries is substantial. Investors should monitor drilling progress closely for a potential breakout should C3 zero in on richer zones.

Aston Bay: Impressive Grades No Match for Tough Geography

An age-old truth for mineral explorers is that an impressive discovery may still struggle to attract investment if the surrounding infrastructure is lacking.

Aston Bay Holdings, partnered with American West Metals, has logged extraordinary high-grade copper and zinc intercepts at its Storm Project in Nunavut, Canada. However, Nunavut’s remote Arctic location, 900km north of Yellowknife, presents formidable obstacles to potential mine development.

In these conditions, only a deposit of exceptional size and grade has a chance of being economic. While early results at Storm are encouraging, Aston Bay must dramatically expand the scale of mineralization for the market to take notice. Investors should view this as a long-shot speculation until further resource definition drilling is complete.

Turmalina Resources: Argentine High Grades Need Continuity

Fellow explorer Turmalina Resources faces its own challenges advancing an intriguing portfolio of Argentine copper and gold projects. Turmalina recently reported high-grade intercepts from breccia pipe structures at its Concordia project, including 34 metres at 6.3% copper and 7.9 g/t gold.

However, previous drilling has been sporadic, with mineralization open in multiple directions. As with any narrow vein structure, continuity of grade along strike and at depth will be crucial to defining an economic resource. Turmalina requires significant exploration investment to prove up a deposit, but its fragile share price may limit financing options.

Concordia holds appeal as a speculative drill play for risk-tolerant investors, contingent on Turmalina expanding its gold and copper anomalies into contiguous, mineable zones. Argentina’s improving investment climate adds an encouraging macro tailwind.

In summary, while industry analysts forecast a mounting copper surplus in 2024, today's healthy copper price provides a positive backdrop for investors seeking value in junior explorers. Early drilling results demonstrate significant discovery potential across multiple emerging copper regions worldwide. Investors should focus on juniors taking a disciplined, transparent approach, both financially and in their exploration reporting. Companies that build stakeholder trust stand the best chance of attracting the capital needed to delineate the next generation of copper resources.