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Copper Market to Grow as Demand for EVs are on the Rise

V.EVX, T.HBM, T.ARG, T.GCU

FinancialBuzz.com News Commentary

PR Newswire

NEW YORK, May 24, 2018 /PRNewswire/ --

According to data by Transparency Market Research the global copper market is anticipated to reach US$ 171.96 Bn by 2023, expanding at a CAGR of 4.9%. Copper is a soft metal with excellent ductile and malleable properties. It has high electrical and thermal conductivity. Copper is used extensively in various industrial application due to its conductivity and antibacterial properties. Copper's malleability and ease of usage in machines during the fabrication process facilitates high production rate of accurate copper shapes at relatively lower cost than its substitutes. The demand for copper is also tied to the growing popularity of electric vehicles (EVs) around the world. Electric vehicles use a significant amount of copper in their rechargeable batteries and rotors used in electric motors. European Electric Metals Inc. (OTC: EVXXF), Hudbay Minerals Inc. (NYSE: HBM), Tahoe Resources Inc. (NYSE: TAHO), Amerigo Resources Ltd. (OTC: ARREF), Excelsior Mining Corp. (OTC: EXMGF)

According to data published by BIS Research, the global electric vehicles battery market is estimated to reach $93.94 billion by 2026. In a Reuters, IDTechEx Senior Technology Analyst Franco Gonzalez said, "Demand for electric vehicles is forecast to increase significantly over the next ten years as technology improves, the price gap with petrol cars is closed and more electric chargers are deployed… Our research predicts this increase will raise copper demand for electric cars and buses from 185,000 tonnes in 2017 to 1.74 million tonnes in 2027."

European Electric Metals Inc. (OTC: EVXXF) is also listed on the TSX Venture Exchange under the ticker (TSX-V: EVX). Yesterday the company announced that, "it has signed an agreement to acquire an exploration application in Portugal for an advanced stage copper asset with historic production.

The application for the 329 sqkm (3,290 ha) Borba 2 ("Borba 2") license is now well advanced after the completion of the public announcement period with no objections or competition. Borba 2 is located 160 road km to the east of Lisbon. The remaining licensing process will involve preparation of definitive terms of the contract with the government. Once this phase is completed the State Secretary of Energy will set the date of signing.

The Borba 2 has two main copper (with associated metals) exploration targets: Miguel Vacas and Bugalho along with several other potential (less advanced) prospects both for copper and gold.

Under the terms of the agreement with ePower Metals Inc. ("EPWR"), EVX will pay EPWR US$20,000 on approval of the license while EPWR will retain a 1% NSR which can be acquired by EVX at any time for payment of US$ 1 million.

Miguel Vacas is a former operating open pit mine which operated intermittently between 1925 and 1986 producing an estimated amount of 464,000 tons of oxide and sulphide mineralized materials grading 2.1% Cu prior to its closure (Reference Portuguese Mines Department file). Mining included a sulphuric acid heap leach operation of the shallower oxidised ore material.

Mineralization consists of secondary copper minerals (malachite, chrysocolla, covellite, atacamite, libethenite) near surface and primarily chalcopyrite in the sulfide zone below 80m. The mineralization is associated with a 13m wide steeply dipping vein system and breccia zone within a 20-30m wide shear zone trending north-south. Mineralization has been traced on surface and in drill holes over a 2km length of the shear zone.

Sampling by Rio Narcea Gold Mines Ltd., in 2006, in the pit identified a 13m mineralized zone grading 1.6% Cu with a high-grade zone of 2m grading 4.9% Cu. Rio Narcea completed a resource estimate based on 100m x 100m drilling campaign (20 drill holes in total) within 1 km of the 2km recognized shear zone and estimated (non-NI 43-101 compliant) 5.5 Mt of combined oxide and sulfide mineralization grading 1.2% Cu (see Note 1 below with regards to this resource).

The Company believes there is potential for significant mineralization to continue below the historic pit and along the 2km mineralized shear zone both in the remaining near surface oxidised part and the sulphide material below. As no systematic assays for other metals were done in the past, the Company believes there is the potential for finding other valuable metals such as cobalt, gold and/or silver associated with copper.

The Bugalho Mine Area contains a historic underground mine on a separate mineralized trend from the Miguel Vacas zone. Mineralization is associated with a 1km long section of a fault zone that trends generally north-south which includes three veins that were mined in the past. Vein 1 (main vein) is up to 1.2 m thick and was mined 800 m along strike, Vein 2 averaged 1.3 m thick (no strike length reported) and thickness and length of Vein 3 is not known.

The primary copper mineralization consists of chalcopyrite and pyrite within quartz-carbonate matrix. Supergene copper mineralization consists of malachite, hematite and scorodite. The mine operated intermittently from 1800 to 1900. There are 9 underground levels known down to a depth of 200m."

Hudbay Minerals Inc. (NYSE: HBM) is an integrated mining company primarily producing copper concentrate (containing copper, gold and silver), zinc concentrate and zinc metal. With assets in North and South America, the company is focused on the discovery, production and marketing of base and precious metals. Earlier this month, the company released its first quarter 2018 financial results. Net profit and earnings per share in the first quarter of 2018 were $41.4 million and $0.16, respectively, compared to a net loss and loss per share of $10.0 million (restated) and $0.04 (restated), respectively, in the first quarter of 2017. During the first quarter of 2018, Hudbay recognized an obligation to deliver additional precious metal credits to Wheaton Precious Metals as a result of the company's expectation that mining at the Pampacancha deposit will not begin until 2019. Compared to the first quarter of 2017, production of copper, gold and silver in concentrate in the first quarter of 2018 increased as a result of higher milled throughput at all of Hudbay's operations together with higher grades for precious metals in Manitoba. Zinc production decreased by 6% as Lalor zinc grades have declined in line with the mine plan.

Tahoe Resources Inc. (NYSE: TAHO) is a publicly traded company (NYSE: TAHO) led by experienced mining professionals who are dedicated to the responsible production of precious metals in the Americas. On February 20, 2018, the company announced the results of its preliminary economic assessment for La Arena II, a copper-gold porphyry project in Peru. Tahoe expects to continue its evaluation of La Arena II with the intent of advancing it to the prefeasibility or feasibility stage. The timeline and estimated capital required to advance the project to the next stage are under review. The project will be evaluated in the context of existing operations and pipeline opportunities with the intention of progressing it responsibly in order to maximize value for Tahoe's shareholders. Total Measured and Indicated Mineral Resources of 5.6 million ounces of gold and 5.8 billion pounds of copper and Inferred Mineral Resources total 683 thousand ounces of gold and 349 million pounds of copper.

Amerigo Resources Ltd. (OTCQX: ARREF) produces copper concentrates at its 100% owned MVC operation in Chile by processing fresh and historic tailings from Codelco's El Teniente mine, the world's largest underground copper mine. Amerigo achieved record annual copper production in 2017 following completion of the first phase of the Cauquenes historic tailings project. The Phase Two expansion project is scheduled to be complete in Q3 2018 and Amerigo is well-positioned to generate further record copper production, decrease cash costs and improve cash flow from operations. On May 9, 2018, the company announced financial results for the three months ended March 31, 2018. Revenue was $33.9 million (Q1-2017: $29.8 million), including copper revenue of $29.5 million (Q1-2017: $25.3 million) and molybdenum and other revenue of $4.4 million. Q1-2018 production was 14.2 million pounds of copper, 6% lower than the 15.1 million pounds produced in Q1-2017, which included 0.9 million pounds of copper produced pursuant to a tolling contract with Minera Maricunga. The Company continues to expect full year production of 65.0 to 70.0 million pounds of copper at a cash cost of $1.45 to $1.60/lb and annual molybdenum production of 1.5 million pounds.

Excelsior Mining Corp. (OTCQX: EXMGF) is developing the Gunnison Copper Project, a low cost in-situ recovery copper project located within the copper porphyry belt of Arizona. The Gunnison Copper Project consists of 9,560 acres located 65 miles southeast of Tucson Arizona within the copper porphyry belt.  The towns of Benson and Wilcox are located nearby and can provide skilled labour for the Gunnison Copper Project.  The property is ideally located with access to electrical power on the property, previously developed infrastructure, and supported by an abundant water supply. Recently, the company announced that it remains on-track to become the next new copper producer in the United States. The Environmental Protection Agency ('EPA") is expected to grant an Underground Injection Control (UIC) permit prior to the end of the second quarter; this is the last permit required prior to the commencement of production.

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