In the short term, Mickey Fulp, the editor of the Mercenary Geologist newsletter, says he isn’t expecting any big moves up in copper.
“In the short term, it’s been flat, very range-bound and we don’t expect that to change this year, but mid-to long term the fundamentals of copper are compelling,” he said in an interview with TNM TV at the recent Prospectors and Developers Association of Canada (PDAC) conference in Toronto.
That’s because demand for the red metal continues to grow while new discoveries wane and large copper porphyry mines age.
“Copper is a problem and that’s why I’m so bullish on the mid- to long-term fundamentals,” he said. “We add something on the order of 80 million more people to the planet every year, 25% of the people in the world don’t have electricity and you need copper to transmit electricity.”
Meanwhile, the timeline from discovery to production for a large copper porphyry mine, where much of the copper supply comes from – is 17 years compared to 10 years for gold.
“We’re not finding nearly as much copper as we’re using on a yearly basis, so we need to find more big copper deposits. It’s increasingly difficult to do that. But the real hope will lie around those aging mines – brownfield discoveries historically are what have met the copper demand, so we expect that to continue.”
Fulp, who’s also bullish on tungsten and uranium, noted that the mood at this year’s PDAC conference was better than it has been for the past two years because of this year’s rebound in the S&P/TSX Venture Composite Index.
But he noted that not all juniors are benefiting from the market rally.
“This is not a broad-brush rally at all. The struggling companies for the most part are continuing to struggle, and they should continue to struggle until they just dry up and blow away because we have too many companies in this sector and we don’t have that many good projects,” he said. “But I am encouraged by the fact that there is money for the good juniors.
Watch the full TNM TV interview with Mickey Fulp here.