From Stocked head newsletter. AQD was featured as one of 10 Low...

From Stocked head newsletter. AQD was featured as one of 10 Low Cap Copper stocking stuffers .
Discussion around BHP's forecast for Copper. Not much NEW supply has been found .

• Copper price could hit US$17,000/t by 2025 as demand soars
• Analysts reckon the commodity could outperform this decade
• Here are 10 stocks with a market cap under $15m on the hunt for copper

Demand for copper is going gangbusters. The consensus is that we’ll see big shortages for the red metal due to rising demand for poles and wires to service renewables, electric vehicles, urbanisation and AI.

By 2050, BHP (ASX:BHP) predicts copper demand will rise 70% to 50Mt, with the energy transition accounting for 23% of demand and digital applications making up 6%.

Traditional uses of copper (replacement demand, urbanisation) will account still for 71%, (down from 92% today).

On the pricing front, back in September, the Bank of America’s independent analyst lifted its price target for the metal beyond US$10,000/t for 2025.

And by the time October rolled round, the price had powered past that magical US$10,000/t mark thanks to China’s stimulus announcement in October.

But we could see prices surge even further, since producers Chile and Peru have stagnated and are looking down the barrel of long approval timeframes and the supply side looks set to struggle to catch up to demand.

US$17,000/t is the eye-popping copper price Fitch’s BMI Commodity Insights thinks we’re going to see by 2033.

That would outstrip historical records by around US$6000/t, ushering a new copper-plated age for the mining industry.

At the time of writing the three-month LME copper contract was priced at US$9052.50.

BMI’s latest copper outlook note suggests we could see a seasonal end-of-year rally, but that’s actually nothing to get too excited about, because the copper price has surged on the final five trading days of the year, before falling on the last trading day of the year for the past nine years in a row.

But back to that supply lag, discovery rates have also slowed. According to analysis by S&P Global, just 14 deposits of 500,000t copper or more have been discovered in the past decade, just 3.5% of the total.

4.2Mt alone have been added by significant deposits discovered since 2019, with exploration spending still 34% below its 2012 peak last year – despite the recognised need for new copper discoveries to fuel the energy transition and growth of data centres.

By 2030, ANZ thinks copper demand will hit 38.1Mt, up from usage rates the International Copper Study Group thinks will add up to 27.8Mt in 2025, thanks to expanding wind and solar infrastructure in China.

All of that equates to a bullish copper outlook for a commodity that independent analysis suggests will outperform in the years ahead.

So, now that we’ve established the outlook, let’s have a squiz at some sub-$15m market cap juniors on the hunt for the next big copper discovery.

AusQuest (ASX:AQD)

Market cap: $10.5m

This explorer has been around since 2003, and is in its eighth year as an exploration partner of choice under a strategic alliance agreement (SAA) with S32.

Under the SAA, South32 provides up to $US4.5 million in funding to earn up to a 70% interest in exploration projects (plus 10% on completing a pre-feasibility study) worked up by AusQuest, which receives a 15% fee.

South32 doesn’t take up what’s on offer under the SAA all the time and should it withdraw from a project, AusQuest assumes 100% ownership.

Implicit in all that is that the exploration projects forwarded to South32 to consider must have multi-billion dollar discovery potential.

There are currently five exploration projects managed by AusQuest which sit under the SAA umbrella including the Coober Pedy copper-gold project in South Australia’s iron-oxide copper-gold (IOCG) province – home to BHP’s Olympic Dam, Carrapateena and Prominent Hill mines.

The plan is to conduct a large-scale induced polarisation survey next year to identify possible sulphide mineralisation ahead of drilling the best targets.

The company also holds the Cangallo project in Peru where copper-gold porphyries and manto copper targets will be drilled in the new year, with eight holes for ~2,500m planned.

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