Is copper the next big thing? Or is it just another overhyped plaything of Aussie punters who love to bounce from one shiny new narrative to another? Either way, after the strong run up in copper prices over the last few weeks, the red metal is gathering both price momentum and interest from the Australian investment community.
This article will serve as a useful reference guide to the most important copper producers on the ASX.
Why just look at producers? Why not look at explorers (i.e., those kicking over rocks in the desert somewhere), or developers (i.e., the right rocks have been suitably kicked and now they’re working towards securing the financing and logistics required to get into production)?
This is because, as with any next-big-thing-cycle, it’s usually a good idea to focus on those already producing the commodity that's suddenly in short supply. These are the companies best placed to take advantage of higher prices immediately. For copper explorers and developers, who can say what market prices will be when they finally join the party?
History suggests (think of lithium) that when they finally do, expectation of their impending supply has usually balanced the market and prices, and the biggest bummer of all…probably also quashed the unbridled enthusiasm among investors for their shares!
Let’s take a detailed look at each ASX copper producer, investigating what they’re doing, where they’re doing it, how much they’re producing, their cost of production, reserves, recent profitability, and broker consensus metrics. Companies are covered in alphabetical order.
Australia
Golden Grove
Capricorn Copper
Redhill
Production: FY24 guidance: 18kt-22kt*
Costs: FY23: C1 US$3.61/lb; AISC US$4.96/lb
Reserves: Mineral Reserves 591kt; Mineral Resources 2.26Mt
*Provided in 2023 Full Year Results released 23 Feb. On 26 March, 29Metals announced the closure of their Capricorn Copper mine due to flooding. The company did not specify a time that operations will recommence.
Reported a net loss of $440 million in FY23 (to December 31, 2023) due to impairment charges and write-downs totalling $270 million; EBITDA was $21 million loss
Burned $36.5 million cash operating activities in FY23 and had $162 million cash at the end of December 2023
Prior to the Capricorn shutdown announcement, Citi and Morgan Stanley had expected 29Metals to be profitable in FY25, while Macquarie was forecasting profitability in FY27
According to Morgan Stanley, copper contributes 59% of 29Metals revenue (25% comes from zinc, 8% from gold, and 6% from silver)
Average PT $0.435; Upside current price to Average PT -12.6%
Morgan Stanley OVERWEIGHT, PT $0.55 (3 Apr)
Macquarie UNDERPERFORM, PT $0.25 (27 Mar)
Citi NEUTRAL, PT $0.55 (25 Mar)
Jarden NEUTRAL, PT $0.38 (8 Mar)
What/Where
Australia
Tritton
North Queensland (Mt. Colin)
Jaguar
Stockman
Production: FY24 guidance: 27kt-34kt
Costs: Dec Quarter 2023: AISC A$5.37/lb (i.e., US$3.49/lb assuming AUDUSD of 0.65)
Reserves: Mineral Resources 142.8kt
Reported a first half FY24 loss of $18.7 million but a positive EBITDA of $44.5 million, both were substantially improved from the previous corresponding period ($49.8 million loss and $24.2 million, respectively)
Marginally net operating cash flow positive in the first half of FY24, had $22.6 million cash at the end of December 2023
Bell Potter forecasts Aeris to be profitable in FY25 (trading on a FY25 PER of 3.3), while Macquarie also forecasts the company will be profitable in FY26 (trading on a FY26 PER of 4.0)
Based upon December half performance, 66% of the company’s revenue came from copper versus 25.5% from gold.
Average PT $0.19; Upside current price to Average PT +8.5%
Bell Potter BUY, PT $0.23 (27 Mar)
Macquarie NEUTRAL, PT $0.15 (18 Mar)
Australia
Eloise
Marymia (development)
Lamil (50%) (development)
Production: H1 FY24: 7.1kt; FY24 estimate ~15kt
Costs: H1 FY24: AISC A$4.89/lb (i.e., US$3.18/lb assuming AUDUSD of 0.65)
Reserves: Mineral Reserves 85.4kt; Mineral Resources 437kt
Reported a first half FY24 profit of $2.2 million on EBITDA of $24.7 million, both were substantially improved from the previous corresponding period ($5.2 million loss and $16.9 million, respectively)
Net operating cash flow for the period was $24.3 million, with $26.6 million cash at the end of December 2023
Gold production for the period was 3.7koz
Based upon December half performance, approximately 88% of the company’s revenue came from copper versus approximately 12% from gold
The long term goal at Eloise is to get to 20kt p.a. production for a 10 year mine life (plus 7.5koz p.a. gold)
Average PT $0.80; Upside current price to Average PT +115%)
Shaw and Partners BUY, PT $0.90 (2 Apr)
Ord Minnett BUY, PT $0.70 (23 Feb)
What/Where
Asia
Oman: Al Wash-hi – Majaza Mine and copper concentrate plant (51%), Daris Copper-Gold Project (50%), Awtad Copper-Gold Project (10%)
Unavailable, could not find any information regarding production, production costs, or on Mineral Reserves or Mineral Resources for the Al Wash-hi – Majaza Mine
The sale of the company’s first shipment, approximately 1000 dry metric tons of copper concentrate to Trafigura, is expected this month.
Alara Resources lost $1.6 million in the first half of FY24, it had $5 million cash at the end of December 2023.
N/a
Australia
Peak (North and South)
Federation (development)
Great Cobar (development)
Production: FY24 guidance 2kt-2.3kt
Costs: H1 FY24: AISC A$5.38/lb (i.e., US$3.50/lb assuming AUDUSD of 0.65)
Reserves: Mineral Reserves 5kt; Mineral Resources 378kt
Reported a first half FY24 loss of $2 million but positive EBITDA of $31 million, both were substantially improved from the previous corresponding period ($20.4 million loss and $12.3 million, respectively)
Net operating cash flow for the period was $34.3 million, with $108 million cash at the end of December 2023
Gold production for the period was 31.7koz at an AISC of A$2,146/oz, the company also produced 7.5kt zinc (FY24 guidance 17.5kt-20kt) and 8kt lead (FY24 guidance 19kt-22kt)
According to Macquarie, in FY24 approximately 58% of revenue exposure is from gold, approximately 42% from base metals; in FY25 this will transition to approximately 30% of revenue exposure to come from gold and approximately 70% from base metals with around 30% from copper
Average PT $0.215; Upside current price to Average PT +22.8%)
Macquarie OUTPERFORM, PT $0.22 (6 Mar)
Ord Minnett BUY, PT $0.21 (8 Feb)
Australia
Olympic Dam, Carrapateena, Prominent Hill
North America
USA: Resolution Copper (45%) (development)
South America
Chile: Escondida (57.5%), Spense, Pampa Norte
Peru: Antamina (33.75%)
Production:
FY23: 1,716.5kt
FY24 guidance: 1,720kt-1,910kt
Costs:
Escondida H1 FY24: C1 US$1.51/lb vs FY24 guidance: C1 US$1.40/lb-$1.70/lb
Spence H1 FY24: C1 US$1.98/lb vs FY24 guidance: C1 US$2.00/lb-$2.30/lb
Reserves:
Total Mineral Reserves 6.1Mt
Escondida – 4Mt
Spense – 710Kt
Olympic Dam – 1.1Mt
Ex-Oz Minerals assets (Carrapateena & Prominent Hill) – 251kt
Antamina – 292kt
Total Mineral Resources 26Mt
Iron ore is still the main game at BHP, but it boasts the largest copper reserves and resources of any ASX copper company, as well as the highest annual production
Fourth largest copper producer in the world (third largest independent producer)
Dividend yield approximately 5.3% fully franked
According to Citi, BHP’s forecast FY24 PER is 14.6 and its forecast FY25 PER is 14.0
According to Morgan Stanley, copper contributes 34% of BHP Group’s revenue (49% comes from iron ore, and 14% from metallurgical coal)
Average PT $46.50; Upside current price to Average PT +5.3%
Macquarie NEUTRAL, PT $42 (4 Apr)
Morgan Stanley EQUAL-WEIGHT, PT $47 (2 Apr)
Morgans ADD, PT $47.60 (26 Mar)
Goldman Sachs BUY, PT $49.40 (25 Mar)
Citi BUY, PT $48 (20 Mar)
UBS NEUTRAL, PT $45 (6 Mar)
BHP Group basic price chart
Ausrtalia
Ernest Henry
Northparkes
Marsden
Production: FY24 guidance: 62.5kt +/-5%
Costs: Unavailable (copper is largely considered a by-product of EVN’s gold production, so costs are stated within their gold production AISC)
Reserves: Mineral Reserves 1.3Mt; Mineral Resources 4.1Mt
Reported a first half FY24 underlying net profit of $158 million, up 54% on the previous corresponding period
Average mine life of assets is approximately 15 years
According to Morgan Stanley, Evolution Mining’s calendar year 2024 forecast PER of 7.6 is superior to Northern Star’s (ASX: NST) forecast PER of 16.2
Dividend yield approximately 1.0% fully franked
According to Morgan Stanley, copper contributes 26% of Evolution Mining’s revenue (74% comes from gold)
Average PT $3.68; Upside current price to Average PT -5.8%
Morgan Stanley OVERWEIGHT, PT $3.90 (4 Apr)
Citi BUY, PT $3.90 (26 Mar)
BS BUY, PT $3.65 (21 Mar)
Macquarie OUTPERFORM, PT $3.80
Jarden UNDERWEIGHT, PT $3.10 (14 Feb)
CLSA BUY, PT $3.75 (15 Feb)
What/Where
Australia
Kanmantoo
Production: Guidance ~11kt p.a. for a mine life of 4-years in Stage 1
Costs: Life of mine AISC A$8,051/t (i.e., US$2.37/lb assuming AUDUSD of 0.65)
Reserves: Mineral Resources 75.9kt (Measured 9.9kt, Indicated 48kt, Inferred 15kt)
Mining has commenced (239t in February and 589t in March), and first copper sales occurred in Q1 2024
Also expects to produce 11koz of gold each year for 4 years mine life in Stage 1
Kanmantoo open pit produced 137kt of copper and 55koz of gold between 2011 and 2020
A February 2023 Economic Assessment proposed a net present value (NPV) for Kanmantoo of $165 million assuming a copper price of US$9,450/t (currently US$9,300/t) and a gold price of US$1,750/oz (currently US$2,350/oz)
Reported a net loss of $16.3 million in FY23 (to December 31, 2023)
Burned $9.5 million cash from operating activities in FY23 and had $10.2 million cash at the end of December 2023
N/a
What/Where
Australia
CSA Copper Mine
Production: FY23: 20kt
Costs: FY23: C1 US$1.99/lb
Reserves: Mineral Reserves 314kt; Mineral Resources 707kt
Acquired 100% of CSA Copper Mine located in NSW from Glencore in June 2023
Claims the CSA Copper Mine is the “Highest-grade copper mine in Australia with an Ore Reserve grade of 4.0% Cu and a Mineral Resource grade of 5.32%” and that it has a “Large and open resource with a strong track record of resource replacement”
Reported a net loss of $144.5 million in FY23 (to December 31, 2023) but had an underlying EBITDA of $58.7 million
Burned $11.7 million cash from operating activities in FY23 and had $32.3 million cash at the end of December 2023
N/a
Australia
Cadia
Boddington
North America
Canada: Galore Creek (50%), Red Chris
USA: NGM
Oceania
Papua New Guinea: Wafi-Golpu
South America
Chile: Nueva Unión (50%), Norte Abierto (50%)
Peru: Yanacocha
Production: FY24 guidance: 152kt
Costs: FY24 guidance: C1 US$2.30/lb; AISC US$3.35/lb
Reserves: Mineral Reserves 30.1 billion pounds ~13.6Mt, Mineral Resources ~26Mt
Is the world’s largest gold producer
According to Macquarie, NEM is trading on a forecast FY24 PER of 15.2
Dividend yield approximately 1.2% unfranked
Copper accounts for approximately 15% of Newmont’s revenue
Average PT $68.25; Upside current price to Average PT +13.3%
Citi BUY, PT $69 (4 Apr)
UBS NEUTRAL, PT $60 (18 Mar)
Macquarie OUTPERFORM, PT $68 (18 Mar)
Ord Minnett BUY, PT $76 (27 Feb)
What/Where:
Asia
Mongolia: Oyu Tolgoi
North America
USA: Kennecott, Resolution Copper 55% (development)
South America
Chile: Escondida (30%), Nuevo Cobre (development)
Production:
FY23: 620kt
FY24 guidance: 660kt-720kt
Costs: FY24 guidance: C1 US$1.90/lb-$2.00/lb
Reserves:
Total Mineral Reserves 5.3Mt; Total Mineral Resources N/a
Kennecott – Mineral Reserves 334kt
Oyu Tolgoi – Mineral Reserves 1Mt
Escondida – Mineral Reserves 3.94Mt
The Oyu Tolgoi ramp-up is expected to result in production of around 500kt of copper per year on average from 2028 to 2036, compared to 130kt tonnes in 2022. By 2030, Oyu Tolgoi is expected to be the fourth-largest copper mine in the world.
According to Citi, Rio Tinto’s forecast FY24 PER is 9.1 and its forecast FY25 PER is 9.2; Morgan Stanely’s forecasts are 8.7 and FY25 PER respectively
Dividend yield approximately 5.4% fully franked
According to Morgan Stanley, copper contributes 12% of Rio Tinto’s revenue (57% comes from iron ore, and 22% from aluminium). In terms of group EBITDA, copper’s contribution is 9%, and this is expected to grow to around 27% by 2025
Average PT $132.66; Upside current price to Average PT +9.1%
Macquarie NEUTRAL, PT $121 (4 Apr)
Morgan Stanley OVERWEIGHT, PT $140 (4 Apr)
Citi BUY, PT $137 (2 Apr)
Goldman Sachs BUY, PT $138.30 (25 Mar)
UBS NEUTRAL, PT $127 (6 Mar)
What/Where
Africa
Botswana: Motheo
Europe
Spain: MATSA
North America
USA: Black Butte (development)
Production:
FY23: 92kt
H1 FY24: 63.2kt
FY24 guidance: 135kt
Costs: (no AISC provided)
MATSA H1 FY24: C1 US$1.93/lb & FY24 guidance: US$1.99/lb
Motheo H1 FY24: C1 US$1.68/lb & FY24 guidance: US$1.81/lb
Reserves:
Total Mineral Reserves 1.265Mt; Total Mineral Resources 2.434Mt
MATSA – Mineral Reserves 565kt; Mineral Resources 2.1Mt
Motheo – Mineral Reserves 474kt (T3) & Mineral Resources 134kt (A4)
Black Butte – Mineral Reserves 226kt (Johnny Lee) & Mineral Resources 200kt (Lowry)
DeGrussa phase out is complete and MATSA and Motheo ramp-ups are in progress (this explains the company’s substantial losses in H1 FY24)
Reported a net loss of $36.6 million in the first half of FY24 (to December 31, 2023); EBITDA was $136.5 million profit
Net operating cash flow in the first half of FY24 was $110 million and had $105 million cash at the end of December 2023
Goldman Sachs forecasts the company to return to profitability in FY25, and it is trading on a PER of 21.8 for that period; Macquarie also forecasts FY25 is the year the company returns to profitability, and it is trading on a PER of 23.8 for that period
According to Morgan Stanley, copper contributes 77% of Sandfire Resources’ revenue (15% comes from zinc, 6% comes from silver, and 2% comes from lead)
Average PT $7.71; Upside current price to Average PT -15.0%
UBS NEUTRAL, PT $9.35 (8 Apr)
Morgan Stanley EQUAL-WEIGHT, PT $7.65 (2 Apr)
Citi SELL, PT $7.30 (26 Mar)
Macquarie OUTPERFORM, PT $9.00 (18 Mar)
Jarden NEUTRAL, PT $6.50 (8 Mar)
Goldman Sachs NEUTRAL, PT $7.20 (26 Feb)
Ord Minnett ACCUMULATE, PT $7.50 (26 Feb)
Argonaut Securities HOLD, PT $7.20 (20 Feb)
South America
Chile: Sierra Gorda (45%)
Production: FY23: 79kt (S32 share)
Costs: No recent information could be found as S32 reports costs as Underlying revenue less Underlying EBITDA divided by ore processed, but it was stated as US$1.29/lb at the time of acquisition of S32’s stake in October 2021
Reserves: Mineral Reserves 3.5Mt; Mineral Resources 4Mt
According to CIti, S32 is trading on a forecast FY24 PER of 32.1, but this falls substantially in FY25 to 10.7; Macqaurie’s forecasts are 25.1 and 10.4, respectively; Morgan Stanley’s forecasts are 17.0 and 7.7 respectively
Dividend yield approximately 1.7% fully franked
According to Morgan Stanley, copper contributes 6% of South32’s revenue (53% comes from aluminium and alumina, 14% from metallurgical coal, 6% from Nickel, 3% from silver, 3% from lead, 2% from zinc and 1% from thermal coal)
Average PT $3.63; Upside current price to Average PT +13.4%
Macquarie OUTPERFORM, PT $3.80 (4 Apr)
Morgan Stanley OVERWEIGHT, PT $3.35 (4 Apr)
Citi BUY, PT $3.50 (20 Mar)
UBS BUY, PT $4.00 (6 Mar)
Ord Minnett ACCUMULATE, PT $3.50 (1 Mar)
Want to know more about mining company jargon like NPV, as well as the difference between what constitutes "Mineral Reserves" and "Mineral Resources"?
Check out this comprehensive guide to the stages of mining company development
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