Copper Concern Commences Chilean Drilling Program

Interra Copper Corp. (IMCX:CSE; IMIMF:OTCQB; 3MX:FRA) is a Canada-based junior exploration and development company that has traditionally engaged in acquiring, exploring, and evaluating mineral properties in British Columbia, Canada, prospective for copper and other metals.

It has two mineral exploration properties in that province, the Thane and Chuck Creek properties in the Quesnel Terrane of north-central British Columbia, but in March 2023, Interra Copper completed its acquisition of Alto Verde Copper, which owns three copper projects located in the Central Volcanic Zone within the prolific Chilean Copper belt: Tres Marias and Zenaida in the Antofagasta region and Pitbull in the Tarapaca region.

This Chilean package covers 200 square kilometers of concessions in a region that hosts several of the world's largest mines owned by the largest global mining companies, including Glencore, Anglo-American, Teck Resources, and BHP.

The Catalyst: Chilean Drilling Program

On May 24, the company announced the mobilization of its upcoming drilling program at the Tres Marias site, located some 40 kilometers southwest of Calama in the Antofagasta region of Chile.

Drilling there makes sense, as it's an area replete with easy access to infrastructure: Codelco's Chuquicamata mine and BHP's Spence mine are right next door.

Writing for CNBC in July of last year, Pippa Stevens reported, "An all-electric future depends heavily on copper, and looming supply shortfalls could hamper nations' goals of reaching net-zero emissions by 2050."

Interra Copper has hired Sociedad Perforaciones E Inginieria Chile Limitada ("PerfoChile"), a local business and experienced drilling contractor serving many of the large producing mines in Chile, to perform the first phase of the reverse-circulation drilling campaign and test several high priority geological and geophysical anomalies.

According to Chris Buncic, Interra Copper's President and CEO, "With drill pad construction complete and contractors now on site, we look forward to seeing the results of our efforts thus far at Tres Marias. Drill hole evidence, coupled with our geophysical and geological interpretations, suggest a potential copper porphyry system to the west-southwest of historical work."

"Our geological team theorizes," he explains, "that the Guacate East and Guacate West faults may have allowed for the transfer of mineralizing fluids from a deeper intrusive target, and the location of geophysical anomalies and surface alteration support this idea."

Why This Sector? Strategic Demand for Copper Exceeds Supply

Writing for CNBC in July of last year, Pippa Stevens reported, "An all-electric future depends heavily on copper, and looming supply shortfalls could hamper nations' goals of reaching net-zero emissions by 2050."

"The energy transition is going to be dependent much more on copper than our current energy system," S&P Global vice chairman Daniel Yergin said in the piece. "There's just been the assumption that copper and other minerals will be there."

"Copper is the metal of electrification," he explains, "and electrification is much of what the energy transition is all about."

The report also forecasts copper needed for electric vehicles, wind, solar, and batteries tripling over the next ten years. Meanwhile, according to the International Energy Agency, a new copper mine takes an average of 16 years to launch.

S&P forecasts that demand will double to 50 million metric tons by 2035 and reach more than 53 million metric tons by 2050 – more than all the copper consumed worldwide between 1900 and 2021.

The report also forecasts copper needed for electric vehicles, wind, solar, and batteries tripling over the next ten years. Meanwhile, according to the International Energy Agency, a new copper mine takes an average of 16 years to launch.

According to Stevens, "Demand for metals and minerals that fuel our future will ultimately create new world orders, as countries rush to secure supplies of copper, lithium, nickel, and other vital raw materials."

"There will be a new geopolitical order around minerals like copper," Yergin concurs. "China has been more focused on creating a primary position in the supply chains for minerals that will be necessary for net-zero carbon, and copper is a prime example for what a key position they're in."

Why This Company? Undervalued China-Free Copper

Access to copper resources outside China's sphere of influence will be an important part of well-balanced portfolios going forward. Interra Copper CEO Buncic explains, "Fundamentally, there is a large gap in supply that will start affecting the market within the next six to twelve months and thus the copper price. Investors should have exposure to the copper market, and juniors provide a high torque exposure to this coming price surge."

Technical analyst Clive Maund agrees that the stock price is ready for reevaluation by the market. "Interra Copper is another small speculative copper stock that looks poised to advance soon," he wrote in February. 

"Interra Copper has three projects that were selected out of a portfolio of 32 that Freeport McMoRan had in Chile, where they have reduced their exploration operations significantly to focus elsewhere on larger investments. These projects are large and prospective for copper porphyry mineralization."

"Tres Marias has three large target areas to be followed up on through drilling. Our team has a unique relationship at the highest levels of FCX and Glencore as well as elsewhere that we will leverage as we grow the company."

"Our valuation is low as we come out of the gate, and the share structure is tight with AVC shareholders under a rolling 18-month escrow. We anticipate starting our drilling campaign shortly and are working on other initiatives that will add value for Interra Copper shareholders."

Why Now? Undervalued Stock, Undervalued Commodity

Technical analyst Clive Maund agrees that the stock price is ready for reevaluation by the market. "Interra Copper is another small speculative copper stock that looks poised to advance soon," he wrote in February. "After a spike, it went into a severe bear market from April 2020 that took it down to a very low level where a base pattern built out last year."

"The 2-year chart opens out last year's base pattern and enables us to see more clearly what has been going on. On this chart, we can see that a fine Double Bottom formed beneath the resistance level shown, with the price advancing out of the second low of the Double Bottom late in the year in readiness for a breakout from the entire base pattern, which, from the look of it, looks set to occur soon."

"On the shorter-term 6-month chart, we can see that the stock has been draining off overhanging supply from last October — November so that now, with the rising 50-day moving average coming into play just beneath, it is well-placed to break higher soon, a development made more likely by the bullish look of other copper stocks, and of copper itself, whose correction within an ongoing uptrend looks done." 

"Interra Copper . . .  an immediate Speculative Buy here," Maund declared, "Interra trades in light but acceptable volumes on the US OTC market where limit orders should always be employed — volume on this market can be expected to expand significantly if it breaks higher as expected."

Ownership and Share Structure

According to Reuters, 10.87% of the stock is held by management and insiders. Director, President & CEO Chris Buncic has the most at 3.55%, with 0.79 million shares. Special Advisor Mike Ciricillo and Director Rick Gittleman both have 2.38%, with 0.53 million each.

Interra notes that 0.4% is with institutions, and the rest is held by retail investors.

Interra Copper has a market cap of CA$17.5 million, with 22.5 million shares in circulation, alongside 5.0 million warrants (CA$0.75 - CA$2.70 strike) and 554,000 options (CA$0.77 - CA$2.47 strike).

2.5 million 3-year warrants at CA$0.75 that came with the firm's recent financing and are subject to an accelerator at CA$1.25 on a 10d VWAP. Another 2.5 million warrants are way out of the money with a CA$2.66 strike price.

The company has roughly CA$2.8 million in cash with a monthly burn rate of CA$60,000. Its drill costs are calculated per campaign, with the first phase of the incipient drilling in Chile projected to cost some CA$500,000.

Important Disclosures:

1) Interra Copper Corp. is an affiliate of and has a consulting relationship with Streetwise Reports and has paid a consulting fee between US$8,000 and US$20,000. 

2) As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of  Interra Copper Corp. 

3) Owen Ferguson wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.

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