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Canadian copper explorer Wedgemount Resources has confirmed that it is to begin exploration activities at one of its portfolio of three potential copper bearing properties in British Columbia. CEO Mark Vanry told investors his team plans to work on all three of the projects in the course of the summer.

The newly listed company recently picked up its third prospective property (Friendly). It will be leveraging the talents of a multi-discovery technical advisory team led by Chris Leslie, who co-led the discovery of the Blackwater Gold project. It has appointed three highly qualified board members with multi-decade mineral exploration and capital markets experience. It has also engaged Tripoint Exploration Services to conduct field work during 2021.

Wedgemount Resources stock up after successful IPO in May

Wedgemount has roughly 35m shares outstanding in the market with a market cap that stands at around C$26m. It is however tighlty held with a limited free float which is proving further impetus to the shares. The stock price has been on a great run, having listed at 45 cents. It is now trading at 70. The company came onto the market as a buoyant copper price is creating massive interest in copper prospectors.

Focused exploration will be carried out on each of Wedgemount’s Eagle, Cookie and Friendly properties during the course of the rest of the year. Each program will align with the company’s strategy of advancing the highest priority exploration targets with aggressive and systematic exploration.

Explorer will review historic data

Wedgemount said that its objectives will include re-examination and advancement of known mineralised zones and the evaluation of coincident geophysical and geochemical anomalies from previous surveys that are currently untested. Wedgemount will also examine all Phase 1 data and rank and prioritise targets for drill target generation.

Based on findings from Phase 1, Wedgemount will commence autumn and winter drilling programs at the Eagle and Friendly properties. It will also review additional assets as part of its ongoing strategy to de-risk the property portfolio and create optionality for shareholders.

We think Wedgemount is going to be one to watch closely. Activity in the market has been intense. Amarc Resources recently entered a C$35m earn in deal with Freeport McMoRan over Amarc’s Joy porphyry copper-gold project. We have seen Goldman Sachs publish a report which is forecasting a massive shortfall in copper over the course of the next decade.

Spot copper price is off to the races

The spot copper price speaks for itself and looks likely to set a fire under valuations of copper juniors in Canada and indeed elsewhere. Spot copper was under $2.50 / lb in March 2020. That price is now over $4.60 / lb. The big driver here seems to be the increasing demand for copper from industry, especially infrastructure demands underpinned by the need to migrate to clean energy.

On top of this there are now concerns surrounding resource nationalism taking hold in some parts of the world. Both Chile and Peru are known to be pushing for a royalty tax on miners, while in the Congo (DRC) the government has placed a ban on the export of copper and cobalt concentrates. As a consequence CIBC has upgraded its copper price forecast to $5.25/lb. This will be uncharted territory for copper.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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