Newmont Boosts Stake in Metallic Minerals, Eyes La Plata Copper Project

Key Takeaway

• Newmont Corporation increased its stake in Metallic Minerals Corp. to 9.5% by purchasing 342,750 shares at CA$0.33 each.
• The La Plata project in Colorado shows promising results with continuous mineralization from 500 to 900 meters and high-grade copper values.
• Global copper market expected to grow at a CAGR of 5.1%, reaching US$496.8 billion by 2032, driven by renewable energy and electronic gadgets demand.

Newmont Increases Stake in Metallic Minerals

Newmont Corporation has increased its stake in Metallic Minerals Corp. by purchasing an additional 342,750 common shares at CA$0.33 per share. This transaction allows Newmont to maintain its 9.5% ownership in the company. The purchase was made to adjust for certain non-cash transactions completed by Metallic Minerals in the last six months. "We are very pleased with the ongoing collaboration and support from Newmont on the La Plata project," said Scott Petsel, President of Metallic Minerals.

The La Plata project, located in southwestern Colorado, has shown promising results. The latest drill results indicate the potential for a district-scale, precious-metal-rich porphyry system. Multiple drill holes have returned continuous mineralization from 500 to 900 meters, starting from the surface. These results include some of the highest grade-times-thickness values for copper drill holes in the U.S. over the past year. Exploration at La Plata was initially funded by Newmont's CA$6.3 million investment, which also included technical support and expertise through a joint committee with Metallic Minerals.

2024 Exploration Campaign

The main Allard deposit at La Plata remains open for expansion at depth and along trend. More than 20 new surface targets have been identified, which may represent additional porphyry centers. "Final planning is in progress for the 2024 exploration campaign, which is anticipated to include resource expansion drilling with a focus on the higher-grade porphyry units at the Allard deposit and first drill testing of new priority targets outside of the Allard resource area," Petsel noted.

In 2023, Metallic Minerals completed a 4,530-meter drilling program at La Plata, with all four holes intersecting porphyry-style mineralization from the surface over their entire lengths. Three of the four holes intercepted continuous mineralization over 500 meters in width at 0.3% Cu, including significant intervals exceeding 0.5% to 0.7% Cu Eq. Drill hole LAP23-05 intersected 909 meters of continuous mineralization from the surface, grading 0.26% Cu Eq over the entire hole length with a 550-meter-wide higher-grade zone.

The company announced an expanded NI 43-101 resource in July 2023 for La Plata, which includes 1.2 billion pounds of copper and 17.6 million ounces of silver at an average grade of 0.41% Cu Eq. The U.S. Geological Survey has identified the La Plata mining district as a potential critical minerals resource area under the Earth Mapping Resources Initiative program.

Copper Market Dynamics

The global copper market was valued at US$304.1 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 5.1% from 2023 to 2032, reaching US$496.8 billion. Despite some cooling due to slower-than-expected electric vehicle (EV) sales, the demand for copper remains strong. "The increasing demand for copper could be met through developments in mining technology, well-organized designs for ore processing, and the discovery of new copper reserves," noted Acumen Research and Consulting.

Haywood Securities reported in January 2024 that the market for copper "will be tightening for the foreseeable future," predicting a supply shortfall of about 500,000 tons this year. CNBC also reported that copper supply is low, and the transition to renewable energy will continue to drive high demand for the metal. "The incredible growth in the number of electronic gadgets such as laptops, cell phones, smart devices, and television sets across the globe is increasing the demand for the product," Acumen's report added.

Street Views

• Haywood Securities (Bullish on the copper market):

  "Based on the long time it takes for new copper supply to come online, the market for the metal will be tightening for the foreseeable future [and] that could eventually lead to a new copper cycle."

Management Quotes

• Scott Petsel, President of Metallic Minerals:

  "We are very pleased with the ongoing collaboration and support from Newmont on the La Plata project. Our latest drill results demonstrate the potential of the La Plata project to be a district-scale, precious-metal-rich porphyry system with multiple holes returning from 500 to 900 meters of continuous mineralization starting from surface and including some of the highest grade-times-thickness values for copper drill holes in the U.S. over last year."
  "These contributions are expected to continue in 2024 and may include Newmont providing experienced personnel to enhance surface data acquisition, geologic mapping, and geophysics."
  "Final planning is in progress for the 2024 exploration campaign, which is anticipated to include resource expansion drilling with a focus on higher-grade porphyry units at Allard deposit and first drill testing of new priority targets outside Allard resource area."
  "Our emerging vision for La Plata project is that we have potential for a district-scale system with multiple porphyry centers in addition to Allard resource area."