As we head into 2022.....The Nevada Copper story will only get better for s/h. Most of the big obstacles & critical problems are pretty much resolved and the heavy baggage it carried for many years is in the past. In addition and most importantly, significant production of raw material is finally here after many years of constant delays. For those that are not aware, this story was a multi decade project in the making going back 20 years. And now, it's finally a reality. I don't expect everyone do be onboard with this or be too happy that this project is finally taking off after such a long period and so many problems. It's had it's share of issues, both financial & technical over the years and many unfortunate victims in the form of retail/institutional holders who've lost a lot financially. Not to mention the multitude of credibility issues that have plagued the project that has led to many delays. But as in all things, even with all its losses & problems, there will be some who will profit greatly from this one day and there will finally be a pot of gold at the end of this rainbow for those who decide to stick around and be part of it.
For disclosure purposes, even though i've followed this closely for over a decade, as i do many other potential mining projects, i was never an actual s/h until recently. Why? You may ask. For many reasons i don't have the time nor will to discuss here now. Let's just say the timing wasn't exactly right and leave it at there. Now don't misinterpret what i've said as everything being rosy, this project as all others will still have it's issues going forward. BUT if the company comes through with what they've recently stated & copper prices are maintained around $4/lbs, things are definitely looking great for the company going into 2022-2023.
For some perpsective & comparison purposes, i want investors to take a look at the follow so you can fully understand the situation & also the potential. As i've said, i follow many projects in the mining space. One in particular was Filo mining, with it's copper/gold project in Chile. I've chosen this specific project because it has many things in common with Nevada copper. Sure there are some things that are quite different, but on the whole, these projects are similar. It's a single mine with a similar geology & resource. Filo with its Chilean project, has a potential mine which is far behind NCU in terms development but a similar resource nonetheless. The Filo copper/Au/Ag deposit is a low grade open pit bulk mine with a resource estimate of 270Mt grading about .40% copper. In addtion, it has about 3M &125M ounces of gold & silver respectively. Contrary to Nevada Copper though, the Filo resource estimates are not in the Proven category just yet but just a probable contained mineral estimation.
As i speak, Filo Mining has a market cap of about $1,5B CDN. For resource comparisons, Filo has a tonnage of 270MT at .40% or about 2.5B lbs of copper whereas Nevada Copper has about 375MT at 0.50% or about 3.5B lbs of copper. I'm only comparing the copper values for now and just the open deposit for NCU. If we were to calculate & remove the significant Ag/Ag resource from Filo's deposit, which i would estimate to be worth about $3B CDN if they were in the proven reserve category, we can make some interesting comparisons here. Since the resource is indicated as "Probable" only at this time, we cannot give full value of even close to that. By my experience in this sector over the years and by following certain set standards in the industry, we can at least give this resource 50% of full value or $1,5BCDN. Since the Filo deposit is quite remote and will incurr siginificant initial Capex to kick off, i've estimated aobut 1.5B in costs to get the project off the ground. Therefore, the CapEx of $1,5B deducted from $1.5B in Au/Ag credits gives us a valuation of $0 for Filo. Yet the stock still trades at significant market cap valuation.
This interesting on two levels, the current market cap of Filo & the fact that NCU has a copper deposit much larger than Filo's ......by 1B pounds larger as of this date. We can attribute this to two factors, either the market is pricing a higher valuation for Filo's Au/AG resource OR this is the value being placed on the copper portion of Filo's deposit. It's possible that it could be a mix of these two factors also. Not to keep repeating myself and mentioning again that Filo is still in the late exploratory stage and in a very remote area whereas NCU is currently in production, not that far away from infrastructure/roads & consumers. If we were to give at the very least half of Filo's current MC of $1.5B to NCU, this would mean that Ncu should be realistically trading at $1.50 now.
Anyway, just some food for thought for y'all for 2022. will be back to comment in the New year, unless something material happens before year end.
Good luck & God speed