Copper Price, page-147

Dear Sammon

I wanted to share another report here related to China and the control of supply chains (but it's too long and no one would read it). This is a plan that China has been pursuing, refining and advancing for many years. I don't know what the end goal is but I suspect it's about control of critical commodities and ultimately a kind of "trade war" against the West. China and Russia will intensify their co-operation. That will create a huge "Asian bloc". Other Bric countries will join in.

This makes it all the more important for the rest of the world - above all the USA, Europe but also Japan - to secure access to these raw materials.

Unfortunately, far too little attention has been paid to this aspect in recent years. This will take its toll and cost a lot of money.

Just as the Arab countries "influenced" the world's economies for decades through their oil supplies, in the coming years/decades the countries (or companies) that can supply the corresponding commodities will influence the economies. Copper is one of them. Copper is therefore the new oil. I think that's what Friedland means.

In the last 100 years, no economic growth or progress would have been possible without oil. In the next 100 years, no progress will be possible without the corresponding materials. No energy transition, no AI, no decarbonisation. Where will progress come from?

This is where China wants to take control. Am I a friend of China? No. But if the CU/AU price continues to rise because of this, then my commodities bets are the hedge for this risk.

Australia could play a big role in this whole geopolitical game - Australia is outside the Asian bloc and has all the critical and necessary metals.

Friedland also believes that mining companies could start investing in new projects from around USD/tonne 12000. Goldman Sachs is talking about USD 15,000.

To put this into context: At such prices, many "projects" in the HMX portfolio would become profitable (e.g. Overlander, Blackrock).

With regard to Kalman, around 40% of the revenue would come from the moly/rhenium part. There are few projects worldwide that can offer such moly grades. With the remaining 60% of the revenue coming from the CU/AU side, it is easy to imagine that Kalman could probably be one of the most attractive projects worldwide in an overall context - especially if the CU/gold prices continue to rise - and of course the prices for moly as well. It could therefore be that this project, which is currently still "in hibernation", could be woken up. A strong JV partner would certainly be welcome (Sumitomo, Glencore?) - who knows. What would such a thing be worth if it were "developed"? 200m? 300m? Certainly a multiple of the current market capitalization.

Sumitomo: A good sign that the JV has been continued. It would be nice if Sumitomo were interested in other Mt Isa Valley inlyers or even Bullrush. As Friedland says: in Japan the price of copper has doubled (!) - and Japan is not exactly an irrelevant economy - from a global perspective.

You may also re-read Dan's comment (from 14 February) in this context (see below).

As mentioned, I bought a few more shares today. This is probably a bit "courageous" as there are no buy signals to be seen. On the other hand, I continue to trust Dan and the team. Hard work, a systematic approach and a little courage almost always pay off. In most cases, luck also kicks in sooner or later.

Now that one of the biggest problems - namely the perpetual cash shortage - is off the table - and in view of the market developments (CU/AU etc) and the geopolitical situation - it can only be a matter of time before luck strikes like a Hammer. Nomen est omen.

Until then, you have to grit your teeth - or get out and forget this story....