Notes From a Copper Frontier

Very interesting this week to see copper producer First Quantum going to Serbia.

The company announced Tuesday it will earn up to 80% in the Djavolja Varos exploration project in that country. First Quantum will spend $5 million and then carry the owner, Columbus Copper, to production in order to earn the interest.

This is a significant property deal, in a completely new area for First Quantum. The closest mines the company currently operates are in Turkey and Spain. The Serbia move thus represents an aggressive step in expansion.

And it's not just First Quantum making such strides in the copper world. Copper is one of the few metals where activity amongst major and mid-tier producers seeking new mines is still high.

I've just returned from northern British Columbia after field-witnessing such work. Yesterday I helicoptered over the Red Chris copper-gold mine that's in full construction under Imperial Metals, not far from the Alaska border. To the southeast, the Mount Milligan mine has almost been readied for production by Thompson Creek Metals.

Major base metal miner Teck Resources is active in this region--at its Schaft Creek copper-gold project, 75% owned with junior Copper Fox. Chilean copper heavyweights Antofagasta are exploring not far from here.

Even further-afield copper firms are joining this rush. I spent time yesterday on the ROK-Coyote project owned by a Firesteel Resources, a company where I've recently joined the board. As with the First Quantum project above, Firesteel has joint-ventured this ground to Australian producer OZ Minerals, who can earn 80% by spending $14.5 million.

The really interesting thing about this emerging copper district is the grades big miners are targeting. The Red Chris mine's reserves run only 0.36% copper (along with 0.27 g/t gold). The Mount Milligan mine is 0.2% copper, with a 0.39 g/t gold kicker.

These are hardly jaw-dropping numbers. And yet this is one of the most active development and exploration areas on the planet.

Seems that copper miners still believe in their metal. Enough they don't need flashy numbers to attract them to development projects. Solid looks like it works.

Here's to copper moving forward,

By. Dave Forest