Global Copper Mining Production Could See Steady Growth Over Next Few Years

Financialnewsmedia.com News Commentary

PALM BEACH, Fla., July 29, 2020 /PRNewswire/ -- Although the effects of mine closures as a result of Covid-19 have had an extensive impact on the possible production volumes of many copper mining companies worldwide, the coming years, revenues are still projected to continue to grow through 2029. Global copper mine production will see steady growth over the next few years, as a number of new projects and expansions come online, supported by rising copper prices and demand, Fitch Solutions forecasts in a new report.  The Fitch analysts in Mining.com predict: "global copper mine production to increase by an average annual rate of 3.1% over 2020-2029, with total output rising from 20.3 to 26.8 million tonnes over the same period. In 2020, Fitch forecasts Chile to increase production modestly by 0.5% to 5.89 million tonnes… Downside risks to production will stem from declining ore grades across the country, unfavourable climate, protests that hamper supply chain operations and union strikes, analysts predict."     Active mining stocks mentioned in today's commentary include:  Ridgestone Mining Inc. (TSX-V: RMI) (OTCQB: RIGMF), Southern Copper Corporation (NYSE: SCCO), B2Gold Corp. (NYSE: BTG) (TSX: BTO), Alamos Gold Inc. (NYSE: AGI) (TSX: AGI), Kinross Gold Corporation (NYSE: KGC) (TSX: K).

The Fitch report continues: "Fitch forecasts Chinese copper mine production to increase at an average clip of 1.8% per year over 2019-2028, compared with an average growth rate of 6.9% over the past 10-year period. This slowdown in production growth will be driven by closures of low-grade copper mines in China and delayed planned capacity expansions. Growth in domestic production will still be positive as new projects come online. A weaker Chinese yuan against the US dollar will help reduce costs for domestic Chinese mines, says Fitch. China, being the world's largest consumer of refined copper and third-largest producer of mined copper, will look to develop foreign assets to improve its resource security. Chinese copper miners will remain committed to investing in copper deposits abroad to secure access to high-grade, low-cost material. US copper miners are better positioned financially than operators in other markets, having worked to cut operating costs and increase profitability over recent years. In the longer term, Fitch believes copper outlook in the country will recover, driven by a rise in copper prices and continued foreign investment which will be lured by the country's high-grade reserves."

Ridgestone Mining Inc. (TSX-V: RMI) (OTCQB: RIGMF) (FSE: 4U5) BREAKING NEWS - Ridgestone Secures Mill Ahead of Bulk Sample at Rebeico - Ridgestone Mining ("Ridgestone") is pleased to announce it has entered into a toll milling agreement with a nearby mill to process bulk samples from historic dumps of the Alaska vein. Additionally, the Company has also received bids from mining contractors to rehabilitate historical underground workings along the Alaska vein to facilitate underground and bulk sampling.

Highlights:

• Fixed-price toll milling agreement with nearby (~40km) Real Viejo flotation mill for up to 300 tonnes per day;
• Bulk samples planned to process historical surface dump material grading up to 16.85 g/t gold and 2.70% copper;
• Rehabilitation of historical underground workings on the Alaska Vein to map and sample zones in the vicinity of drill-hole intervals that assayed 36.1g Au/t and 1.22% Cu over 1.5 meters, and 8.31g Au/t and 2.41% Cu over 3.25 meters in 2018.

Mr. Jonathan George, CEO, commented "Entering into this toll milling agreement for the Real Viejo mill, which is only 40 kilometres from our high-grade Alaska vein, provides an opportunity to capitalize on today's strong gold and copper prices.  Using a phased approach, we will look to reprocess the historical dumps and to begin rehabilitation of the historical workings which will provide safe access for extensive underground mapping and sampling."

A toll milling agreement has been established with Exploracíon Y Desarrollo Desierto S.A. de C.V. ("EDDSA") for the nearby Real Viejo mill for up to 300 tonnes per day.  The Real Viejo mill is a recently-refurbished flotation mill with crushing and grinding circuits capable of producing a gold-copper-silver concentrate.  The agreement outlines a fixed price ("tolling price") for up to 300 tonnes per day at the Company's discretion.

In conjunction with the toll milling agreement, the Company is planning to process one or more bulk samples from historical surface waste-rock dumps of material previously extracted from the Alaska vein. The Company intends to process the higher-grade material first, such as that from the Veta Grande dump, samples of which assayed up to 16.85g Au/t and 2.70% Cu as summarized in Ridgestone's June 13, 2019 press release.  Processing of the bulk samples will provide metallurgical response information which will assist in the evaluation of the recovery characteristics of oxide and transitional material in the upper zones of the Alaska vein, and will be used for internal assessments of potential contract mining scenarios.  Ridgestone has all the requisite permits required for the processing of the bulk sample which is expected to commence in the coming months.  Read this full release more news for Ridgestone Mining by visiting:  https://www.ridgestonemining.com/news-releases/2020/       

In other mining news of note:

Southern Copper Corporation (NYSE: SCCO) recently reported its 2nd Quarter and Six Months 2020 Reports, saying, 2Q20 net sales were $1,785.4 million. Sales volumes increased for copper (+11.0%), molybdenum (+15.4%) and silver (+28.1%). However, due to lower metal prices for copper (-12.6% LME), molybdenum (-32.1%) and zinc (-28.8%), net sales fell 1.8% when compared to 2Q19. On a QoQ basis, net sales were 3.8% higher than in 1Q20.

2Q20 net income was $259.5 million, which represented a 35.5% decrease with regard to the $402.4 million registered in 2Q19. The net income margin in 2Q20 was situated at 14.5%, versus 22.1% in 2Q19. These decreases were mainly attributable to lower sales and an increase in operating costs (+9.4%). Costs increased due to growth in: sales volumes, leachable material costs, and third parties copper purchases. Higher costs were partially offset by a decrease in fuel costs and by the effect of exchange rate depreciation on local currency costs. On a QoQ basis, net income was 20.8% higher than in 1Q20.   Copper production decreased slightly, falling 1.3% YoY to situate at 253,097 tons. This drop was attributable to lower production at our Buenavista mine (-6.8%) due to a decrease in ore grades. This was partially offset by higher production at our Cuajone mine (+9.9%) due to higher ore grades and recoveries.

Alamos Gold Inc. (TSX: AGI) (NYSE: AGI) recently reported results of the positive Phase III Expansion Study conducted on its Island Gold mine, located in Ontario, Canada. Based on the results of the study, the Company is proceeding with an expansion of the operation to 2,000 tonnes per day ("tpd") ("Shaft Expansion"). This follows a detailed evaluation of several scenarios which demonstrated the Shaft Expansion as the best option, having the strongest economics, being the most efficient and productive scenario, and the best positioned to capitalize on further growth in Mineral Reserves and Resources. All amounts are in United States dollars, unless otherwise stated. 

"Island Gold has been a tremendous acquisition for Alamos Gold. We acquired Island Gold in 2017 at a cost of approximately $600 million when it had 1.8 million ounces of Mineral Reserves and Resources. This high-grade deposit has more than doubled to 3.7 million ounces and we expect further growth yet. The Phase III Expansion Study showcases the growing value of Island Gold. Already one of the most profitable mines in Canada, the expansion will increase production, lower costs, and make this operation even more profitable. The expansion will also best position the operation to benefit from additional exploration success," said John A. McCluskey, President and Chief Executive Officer. 

B2Gold Corp. (NYSE: BTG) (TSX: BTO) recently announced the launch of its Namibian Rhino Gold Bar campaign in North America to help support the conservation and protection of the critically endangered black rhinos, and the community-based rhino rangers and trackers who protect the rhinos, in Namibia, Southern Africa. This announcement coincides with the International Ranger Federation's ("IRF") World Ranger Day, which takes place annually on July 31.

World Ranger Day was established on the 15^th anniversary of the founding of the IRF and has been observed globally since 2007. The day, which is promoted through the IRF's Thin Green Line Foundation and sanctioned and supported by global members of the International Union for Conservation of Nature, recognizes and celebrates rangers who are at the forefront of conservation efforts around the world by protecting natural and cultural resources. It also commemorates rangers that are injured or killed in the line of duty.

Kinross Gold Corporation (TSX: K) (NYSE: KGC) recently announced the results of a pre-feasibility study ("PFS") for its Lobo-Marte project in Chile.  Lobo-Marte offers the potential of a cornerstone asset with attractive all-in sustaining costs^{1, 2} to enhance Kinross' long-term production profile. The project adds a significant 6.4 million gold ounces, representing an approximately 25% increase, to the Company's 2019 year-end mineral reserve estimates in a favourable mining jurisdiction. The reserve addition also increases Kinross' reserve life index³ by approximately 2.5 years.

The PFS contemplates an open pit, heap leach and SART (Sulphidization, Acidification, Recycling and Thickening) plant operation using rope conveyors and mining the Marte and Lobo deposits in succession. Kinross has previously used SART technology successfully in the region. Subject to a positive development decision, the PFS estimates Lobo-Marte project construction beginning in 2025, with first production expected in 2027. Production would commence after the conclusion of mining at the Company's La Coipa project, which is located approximately 50 kilometres northwest of Lobo-Marte, and where the Company is continuing to explore opportunities to extend mine life.

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