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Sell-Side Research Started On Copper Mining Co.
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The Quick Take

  • Zacks Small-Cap Research has a $2.03 per share target price on World Copper.
  • Zacks SCR initiated coverage on World Copper in light of its 2022 work plans to increase its overall resource base, the impending closing of its acquisition of Cardero Resource/the Zonia project and upcoming catalysts, reported analyst Steven Ralston in a Jan. 12 research note.
  • World Copper has three assets:
    • The Escalones copper-gold porphyry-skarn project in Chile, the Main zone of which has an updated Inferred mineral resource of about 426,200,000 tons of copper oxide ore, grading 0.367% copper.
    • The Zonia copper-oxide project in Arizona (pending the imminent acquisition closing), for which a preliminary economic assessment (PEA) was done in 2018 but now is obsolete.
    • A 100% earn-in option on the Cristal copper porphyry property in Chile.
  • To grow its overall resources, World Copper plans to do the following work, which could result in share price increases as it is completed:
    • Fast track a PEA on the Main zone at Escalones.
    • Conduct a small initial drill program at the Mancha Amarilla target, south of the Main zone, once permits are received, to grow the Escalones resource.
    • Explore three prospective targets north of the Main zone at Escalones: Rio Negro (priority No. 1), Argüelles East and Argüelles.
    • Commission an updated PEA on the newly acquired Zonia project.
    • Explore the prospective northeast copper porphyry target at Zonia.
    • Drill two holes at Cristal in the areas of anomalies identified on geophysical surveys.

World Copper Ltd. (WCU:TSX.V; WCUFF:OTCQB) aims to increase shareholder value by acquiring and advancing copper projects, and it is doing just that, according to Zacks Small-Cap Research analyst Steven Ralston.

For one, the copper explorer is advancing its Escalones project and doing so "in a novel direction," the analyst wrote. Rather than pursuing it as a precious metals project focusing on the sulphide mineralization like historical owner-operators have done, World Copper is approaching it as an oxide copper project given that the copper oxide overlies the sulphide mineralization.

This approach is more economical and environment friendly, Ralston pointed out. Mining shallow copper-oxide ore, via open pit with a lower strip ratio, is more cost effective than mining deeper copper sulfide ore. Also, heap leaching can be used to process oxidized ore, and it is less expensive and greener than the alternative.

As for the Zonia project, Copper World's he acquisition of it is slated to close soon. Once it does, the new owner plans to focus on advancing it as well.

Though Escalones and Zonia are the company's main focus now, management plans to carry out some exploration work at Cristal this year, too. As for its earn-in option on this project, once World Copper pays the requisite tranches through January 2025, it will grant a 30% stake of Cristal to New Energy Metals and hold the remaining 70% interest.

1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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