Copper behemoth?

Yesterday, one report published on the Mining.com site highlighted the potential consequences of the unrest in Peru on the already challenged copper supply situation.

Here are the relevant extracts from the article:

...An upsurge in the violent protests wracking Peru is crimping copper output in the world’s No. 2 supplier, with about 30% of its production at risk at a time of low global stocks and high prices.

One copper mine is offline after demonstrators stormed the site, another has seen shipments choked by roadblocks, while others have slowed operations as a precaution to manage scarce supplies of fuel and other inputs, according to industry group SNMP.

“The situation of protests and the escalation of violence have affected the industry,” Magaly Bardales, who heads a mining sector committee at the association, said in a telephone interview. “We hope an understanding, a dialog with authorities, can be found to provide a swift solution.”

The disruption coincides with operational setbacks and regulatory headwinds in neighboring Chile and the prospect of a mine shutdown in Panama as the government there seeks a bigger share of profit. Those supply threats have combined with optimism over Chinese demand after the lifting of covid restrictions to send copper futures to seven-month highs.

With global stockpiles of the wiring metal at historically low levels, traders are keeping close watch on events in Peru. The Andean nation accounts for about a 10th of global copper supply and is a major exporter of zinc and silver. About $160 million of production has been lost in 23 days of protests, Bardales said...

It remains to be seen whether the situation in Peru will serve to curtail the supply of copper and of other scarce non-ferrous metals produced by this mineral-rich nation.

That said, the copper supply concerns mooted in the above article invariably calls attention to a question closer to home, one relating to the potential copper prospectivity of IVR's own turf.

This 'copper question' was mooted in a post last week by DonaldFrump, and I thought I'd run with it, given the topic is weighty enough to warrant a separate thread.

I think it would be reasonable to assume that virtually everyone who has invested money into this stock would have done so mostly on account of IVR's silver potential. And not without good reason: the silver grades at and adjacent to Paris are quite impressive.

Having said that, it must be said that the main reason that the company is so fixated with their silver-rich tenements, is simply because that happens to be what the punters are into.

Although the financial media has become habituated to labelling exploration companies such as Investigator as 'silver stocks', in reality, true silver stocks are few and far between. In most argentous mineral deposits, silver tends to be just one of many valuable elements present.

Of course, It would be inaccurate to suggest that there are no real silver stocks. In Mexico and Peru, for example, there are numerous unusual silver-dominant epithermal deposits, and they sometimes crop up elsewhere. I believe the Silvermines Bowden project falls into this category, as does Investigator's Paris project.

However, in general, the silver-dominant type of deposits are more the exception than the norm. Most of the world's silver output is secondary in nature, a byproduct of copper and lead-zinc mines.

As such, most of the exploration companies that are dubbed 'silver stocks' aren't really silver stocks, in the sense that the silver deep in their tenements probably represents just a fraction of the value of the potential mineral wealth deep underground.

A case in point here is Argent minerals. In the middle of last decade, I was interested in investing in companies with silver exposure, however, initially I was split between a couple of stocks, one of them being Argent, the other Investigator.

Argent, at the time, was widely touted as a 'silver stock', and if you look at Argent's announcements ten years ago, they routinely describe their signature Kempfield project as a 'silver' deposit. The company was promoted as a silver-play, and this was likewise reflected in the name of the company.

However, these days, you'll nary hear it described as such. Today, in announcements released by the company, the Kempfield project is simply called a 'polymetallic' deposit. It turned out that there was much more zinc, lead and gold than silver in the deposit than there was silver.

The reason why Argent were so keen to promote the silver story was because they knew that was what caught the attention of investors. For whatever reason, certain metals attract a following: today, lithium and uranium are all the rage, rare earth elements seem to garner some interest, and silver has always had a decent fan-base.

So exploration companies have a strong incentive to latch onto whatever metal happens to be du jour, which in turn explains why over the years Investigator seem to have had such a singular fixation with the Paris project, notwithstanding the fact that they have have projects scattered across South Australia, covering some 7,000km² of ground.

Given the size of their footprint, and the history of the region, I don't doubt that Investigator has got more going for it than the silver at Paris.

What intrigues me about Investigator, and the reason I ultimately decided to back it rather than Argent, was simply down to the sheer size of their footprint in South Australia.

As the locals would know, the first mining boom in Australia wasn't kicked off by the rush for gold in the 1850s, rather, the metal that set it off was copper, and the critical year, 1845. In that same year, a shepherd discovered 'a bubble of copper' on land about 80 miles to the north of Adelaide, which subsequently became the location of a mine, the Burra Burra copper mine.

Promoters floated the Burra Burra mine by selling 2464 shares at 5 pounds each, and such was the copper bonanza that by 1849 the Burra shares were paying lavish dividends, and fetched more than 225 each.

The reason I relate this episode here, is because one of Investigator's tenements, Cartarpo, is sitting right next to the site of the aforementioned Burra copper mine.

This is a close up, taken from the map that is featured in the Investigator announcements, highlighting the tenement in question:




Of course, just because Investigator happen to have a tenement next to a once-lucractive mine, doesn't necessarily mean that the neighbouring ground will prove to be just as fruitful.

Bear in mind, however, that Investigator has numerous other projects across South Australia, even if the company management have directed most of their time and energy on the Paris project, and those nearby.

One project that is far away from Paris, and thus, I suspect, largely overlooked so far is the one at Algebuckina, along the Oodnadatta Track, in the north of the state, due west of Lake Eyre.




This area reminds me somewhat of the arid zone around the Caspian and Aral Seas in Central Asia, in the vicinity of which are found some of the greatest mineral deposits one earth. So, this is another project that I suspect could offer alot of promise for copper.

In summary, given the historical association of South Australia with the red metal, as well as the quantum of territory Investigator control in that state, I would find it quite surprising if they were not sitting atop of a motherlode of copper.

The reason they haven't detected it so far probably boils down to the fact copper has been perceived as being boring by investors, and as such, the management have been worried that if they shift focus from silver to a less glamorous element, some of their investors will walk.

That said, personally, I don't doubt if Investigator were willing to spend some time and money looking for copper, they'd find it in spades.