Nevada Copper Corp NEVDQ

Metals & Mining Copper

Nevada Copper Corp is a Canada-based mining company. The Company is engaged in the development, operation, and exploration of its copper project (the Project) at its Pumpkin Hollow Property (the Property) in Western Nevada, United States of America. Its two fully permitted projects include the high-grade Underground Mine and processing facility, which is undergoing a restart of operations, and a large-scale open pit PFS stage project. The Property is located in northwestern Nevada and consists of approximately 24,300 acres of contiguous mineral rights including approximately 10,800 acres of owned private land and leased patented claims. Pumpkin Hollow is located approximately 8 miles southeast of the small town of Yerington, Nevada in Lyon County, one- and one-half hours drive southeast of Reno. The Company’s wholly owned subsidiary is Nevada Copper, Inc.

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Nevada Copper Corp > Using the bullish case for copper >>>>>>

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Comment by Notgnuon Oct 11, 2021 2:13pm

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RE:Using the bullish case for copper >>>>>>

Another thing is that a lot of copper mines today rely on diesel to generate power and to run heavy equipment. As the price of oil goes up, so to does the cost of copper production.

N

Notgnu wrote: If we see $5.00 copper, and for a variety of reasons including the spike in oil prices (itself likely due to climate policy induced reduction in oil production investment) it is a sustainable price in the longer term, then NCU could really benefit.

In this scenario governments and influential international bodies have two policy directions to take. 1) back off on climate initiatives to encourage more oil production again and thereby allow for thing like refridgeration in Lebenon etc. or 2) lean in on the switch to new electricty based tech by providing indirect and direct subsidies to encourage the switch to happen faster.

Politically I am not taking a position here but if door #2 is chosen then Goldman's target of $5.00 copper by the end of 2021...

https://www.mining.com/goldman-recapitulates-5-a-pound-copper-price-by-end-2021/

... may not only become reality, it may translate into a long term reality, with mine capacity increases being increasingly difficult to actualize.

What does this mean for NCU?

Well, (long-term, with the open pit) 280 million pounds per year at about $3.00 profit ($5.00 minus $2.00 cost) is $840 million per year in cash-flow. It would cost about one billion dollars to get there but at that metric, and say a 10 X cash flow multiple (at that scale) then you are looking at about a $7 billion dollar company (even after deducting $1.4 billion for the pit if it were debt financed.)

$7 billion in that imaginary scenario, divided by say 240 million diluted share base is $29.17 per share... Not bad (work?) if you can hang on to it a few years.

Cheers,
N