Despite a 13.5 per cent drop from its all-time-high of US$5.10 per pound in May, copper remains an attractive long-term investment because of strong demand and an imminent deficit stemming from its roles in renewable energy, artificial intelligence (AI), and a multitude of other industries such as defence and construction. Together these factors make high-quality junior copper stocks a prospective source for returns leveraged beyond the red metal.
An out-of-favour explorer with substantial, data-driven upside well worth your consideration is Geologica Resource (CSE:GRCM), market capitalization C$1.09 million, whose stock has given back 50 per cent since inception in 2022, despite exposure to:
- A management team stacked with mining, executive leadership and corporate finance experience.
- Active development at two attractive polymetallic projects in British Columbia, plus a recently acquired third, including:
- Its flagship Topley project in west central B.C., which is prospective for copper and gold, representing global markets of more than US$300 billion and more than US$5 trillion, respectively.
- The Titan project in northwestern B.C., which is prospective for copper, gold and the critical minerals antimony, tellurium and molybdenum, granting the junior mining stock billions in additional commodity tailwinds beyond copper to work within and generate shareholder value.
- The Lincoln project, Geologica’s newest portfolio addition, which holds ample promise for lode gold mineralization in B.C.’s Atlin mining district, the richest gold mining region in the province.
With Goldman Sachs and Citibank predicting that copper could reach between US$6 and US$7.50 per pound by 2025 – representing at least a 36 per cent increase from the Sept. 24 price of US$4.41 – and prices for all of its target commodities up considerably over the past five years, now is the perfect time to lay out the case for owning Geologica stock, positioning investors to ride positive news flow from upcoming exploration into a share price re-rating.
The Topley project
Geologica’s Topley project, backed by a 100 per cent option, consists of 10 mineral claims spanning 4,216 hectares in the Babine porphyry belt waving numerous green flags for exploration upside, such as:
- Residing near and on trend with some of the Babine porphyry belt’s most notable mineral occurrences and deposits, such as:
- Noranda’s (now Glencore) past-producing Granisle and Bell copper mines, with Bell achieving past production of 570,819 ounces of gold, including 21,349 tons of copper and 29,000 ounces of gold in 1990.
- American Eagle Gold’s (TSXV:AE) NAK project, where assay results have returned up to 1.09 per cent copper equivalent over 302 metres. Mining giant Teck Resources (TSX:TECK.A) took a 19.9 per cent position in American Eagle Gold in August 2023.
- Amarc Resources’ (TSXV:AHR) Joy project, featuring a high-quality pipeline of deposits and deposit targets, and its Duke project, featuring numerous deposit-scale exploration targets and an up to C$90 million earn-in agreement with Boliden Mineral Canada.
- Regional till samples in the area in the 90th+ percentile for arsenic, antimony, lead and zinc, similar to the Eskay Creek mine, which was the highest-grade gold mine in the world when in production between 1994-2008, and boasts a November 2023 definitive feasibility study detailing reserves of 4.6 million ounces of gold equivalent, an after-tax net present value (5 per cent) of C$2 billion and a 1.2-year payback at US$1,800 per ounce of gold and US$23 per ounce of silver.
- A portfolio of seven copper-gold targets aligned with airborne magnetic surveys and spatiotemporal geophysical hydrocarbon (SGH) copper and gold anomalies delineated during 2020 and 2022 exploration, including at least three of kilometre scale.
- A slew of similarities to Centerra Gold’s Mount Milligan mine, which is expected to produce 55 million to 65 million pounds of copper and 180,000-200,000 ounces of gold in 2024.
- Consistent data-driven expansion, as reported in April 2024 and on Feb. 2 and 28, 2023.
- A rock sample on the property from 1992 yielding 6.84 grams per ton (g/t) of gold.
- A lake on Geologica’s claims yielding the highest lake sediment samples for molybdenum in the region.
- Analysis of historic drilling on adjacent claims to the southwest indicating an epithermal system.
- Access to a highway, logging roads, hydro power, and a rail line to an international deep-sea port, minimizing operational costs.
Considering that about 60 per cent of global copper production and the majority of B.C. production stems from porphyry copper deposits – which also account for significant molybdenum and about half of the province’s gold – Geologica is in a prime position to potentially expand mineralization and maximize shareholder value across its target portfolio.
Topley’s next near-term milestone is an upcoming induced polarization (IP) survey consented to by the Lake Babine first Nation and approved by the British Columbia Ministry of Energy, Mines and Low Carbon Innovation.
The Titan project
Geologica Resource strengthens its value proposition with its 100-per-cent-owned Titan project in B.C.’s Atlin mining district. Titan’s claims are adjacent to the Llewellyn fault zone, a more than 150-kilometre structure known to host numerous gold, silver and base metal showings, including the past-producing Engineer and Mount Skukum gold mines.
The property backs up its prospectivity with historical exploration dating back to 1899 from the likes of United Keno Hill Mines, Placer Dome and Eagle Plains Resources, as well as high-grade 2018 grab samples from the Buchans Creek showing in the north-central part of the property, and a high-grade polymetallic vein measuring 1-1.5 m wide enriched with gold, silver, copper, lead, zinc, antimony and tellurium. See select samples below:
Management is currently analyzing more than 1,000 soil samples and 300 rock samples from Titan, as well as historical Skytem, airborne magnetic and EM survey data, to hone its exploration plans for a 2 km anomaly extending from Buchans Creek to the historical Rupert I showing, which yielded grab samples up to 4.1 g/t gold, 237.6 g/t silver, 11.8 per cent lead and 0.60 per cent zinc. At the Hook discovery rock samples assayed up to 62 g/t gold.
Furthermore, the company recently deepened its conviction in Titan by staking additional claims – totaling 658.15 hectares – where initial survey analysis suggests that mineralization extends to the west of the original land package, including rock samples of up to 1.8 per cent molybdenum.
Titan claims map
The Lincoln project
The Lincoln project, acquired in September, is in B.C.’s Atlin mining district and makes a strong case for hosting lode gold mineralization, as highlighted by:
- The similar geology between it and the producing Otter Creek gold claims 33 km to the southwest, which feature bonanza-grade gold mineralization in bedrock.
- A 2019 SGH survey by the vendor indicating a gold anomaly with a rating of 4 out of 6, substantiating the need for further exploration.
- Select zones with an SGH confidence rating of 4 (±0.5) having been drill tested, successfully intersecting mineralization.
The Lincoln claims and Otter Creek reside where the Surprise Lake Plutonic Suite contacts the Cache Creek Complex, an area that benefits from gold anomalies supported by SGH and Mobile Metal Ion surveys and a thoroughly mapped geological setting.
Investors can expect a magnetic model for Titan in the near future that, together with Topley’s upcoming IP survey and Lincoln’s considerable upside, represent robust catalysts for positive market sentiment above and beyond the commodity tailwinds mentioned above.
A bespoke leadership team
Geologica’s wealth of high-grade targets are in excellent hands thanks to a leadership team that has spent its collective professional lives creating value in public and private markets, with a heavy emphasis on gold and copper. Let’s meet them now:
Management
- Douglas Unwin, president and chief executive officer, has built a three-decade track record in operations, venture capital and corporate finance taking companies in highly regulated industries from start-ups to public listings. He developed a business model for a biotech company that was sold for US$1 billion.
- Robert Charlton, chief financial officer (CFO), is the founder and manager of Charlton and Company, Auditors and Tax Advisors, which serves more than 50 public mining companies.
Board
- Andrew Saltis, director, brings experience in coal mining operations management in the U.K., as well as project management at uranium, diamond and platinum/palladium mines in Canada and the United States. He previously served as operations and mine manager for the Meliadine and Brucejack gold projects in Canada, as well as resident engineering manager at B.C. Hydro’s C$16 billion Site C clean energy project.
- David Mark, director, has worked as a geoscientist for 53 years and has been involved in exploration projects for gold (placer and hard rock), base metals, diamonds, gravel and silica sand spread across Canada, the United States, Mexico, Cuba, Honduras, Mali and Papua New Guinea.
Advisors
- Robert Boyd, advisor, is the president and chief executive officer of Endurance Gold (TSXV:EDG), a precious metals explorer and developer with a history of value-accretive acquisitions and a portfolio of highly prospective projects in B.C., Yukon and Alaska. Boyd’s more than 40 years of experience in exploration, executive-level management, corporate finance and corporate governance includes previous executive roles at Athabasca Potash and Ashton Mining of Canada, in addition to a tenure as vice president of exploration for Homestake Canada.
- Bob McKnight, advisor, is a past executive vice president at Nevada Copper (OTC:NEVDQ), whose Pumpkin Hollow copper project in Nevada houses billions of dollars in mineral reserves and resources including copper, gold and silver. McKnight has participated in more than US$1.5 billion in project debt, equity, stream and M&A transactions and previously served as CFO and executive VP at Nevgold, CFO at Nevada Copper, Director at Endeavour Financial, and VP and CFO at Yukon Zinc.
Guided by market-tested executives and strong leads from past exploration, we can now see that Geologica offers investors ample evidence for conviction in expanding mineralization and tapping into multiple commodity tailwinds, though you wouldn’t be able to tell by the stock performance.
Geologica Resource’s proven upside at a depressed price
Sitting at a 50 per cent loss since inception, Geologica stock has done a poor job of reflecting the long-term opportunity embodied by management’s mining prowess applied to the company’s strategically located portfolio, following an industry-wide trend among junior gold and copper stocks broadly since 2021.
We can explain this divergence through uncertainty about lingering inflation, which is still strongly impacting the consumer because of high grocery, housing and energy prices, despite overall rates coming down from 8.1 per cent in June 2022 to 2 per cent in August 2024. This uncertainty has caused risk-off sentiment, nudging investors away from the higher risk-reward of junior mining stocks, and stocks in general, and towards the comfort of less volatile but lower-returning instruments such as cash and bonds.
But now that the Bank of Canada has begun to cut interest rates amid signs of a cooling economy, a path is emerging for the gap to close between junior miners and their soaring target commodities. Robust operators such as Geologica Resource, at only 24.13 million shares outstanding, are likely first in line for a share-price re-rating, as new results pique the interest of investors and major miners look to B.C. for high-probability chances of expanding their resources and reserves.
The Titan property
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(Top photo of copper sheet metal, generated by AI: Adobe Stock)