Everything you need to know about every ASX copper producer

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 is suddenly in short supply. These are the ones 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, expectations of their impending supply have usually balanced the market and prices, and the biggest bummer of all…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.

29Metals (ASX: 29M)

What/Where

• Australia

  • Golden Grove
  • Capricorn Copper
  • Redhill

How much

• 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

Notes

• *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)

Broker consensus

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)

Price history

Aeris Resources (ASX: AIS)

What/Where

• Australia

• Tritton
• North Queensland (Mt. Colin)
• Jaguar
• Stockman

How much

• 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

Notes

• 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.

Broker consensus

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)

Price history

AIC Mines (ASX: A1M)

What/Where

• Australia
  • Eloise
  • Marymia (development)
  • Lamil (50%) (development)

How much

• 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

Notes

• 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)

Broker consensus

• Shaw and Partners BUY, PT $0.90 (2 Apr)
• Ord Minnett BUY, PT $0.70 (23 Feb)

Price history

Alara Resources (ASX: AUQ)

What/Where

• Asia

• Oman: Al Wash-hi – Majaza Mine and copper concentrate plant (51%), Daris Copper-Gold Project (50%), Awtad Copper-Gold Project (10%)

How much

• Unavailable, could not find any information regarding production, production costs, or on Mineral Reserves or Mineral Resources for the Al Wash-hi – Majaza Mine

Notes

• 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.

Broker consensus

• N/a

Price history

Aurelia Metals (ASX: AMI)

What/Where

• Australia

• Peak (North and South)
• Federation (development)
• Great Cobar (development)

How much

• 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

Notes

• 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

Broker consensus

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)

Price history

BHP Group (ASX: BHP)

What/Where

How much

Broker consensus

• 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)

Price history

Evolution Mining (ASX: EVN)

What/Where

How much

• 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

Notes

• 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)

Broker consensus

• 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)

Price history

Hillgrove Resources (ASX: HGO)

What/Where

• Australia
• Kanmantoo

How much

• Production: Guidance ~11kt p.a. for a mine life of 4-years in Stage 1
• Costs: Unavailable, could not find any information on cost of production at the Kanmantoo mine
• Reserves: Mineral Resources 75.9kt (Measured 9.9kt, Indicated 48kt, Inferred 15kt)

Notes

• 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
• 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

Brokers

• N/a

Price history

Metals Acquisition (ASX: MAC)

What/Where

• Australia
  • CSA Copper Mine

How much

• Production: FY23: 20kt
• Costs: FY23: C1 US$1.99/lb
• Reserves: Mineral Reserves 314kt; Mineral Resources 707kt

Notes

• 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

Brokers

• N/a

Price history

Newmont Corporation (ASX: NEM)

What/Where

• 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

How much

• 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

Notes

• 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

Broker consensus

• 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)

Price history

Rio Tinto (ASX: RIO)

What/Where:

• Asia
  • Mongolia: Oyu Tolgoi
• North America
  • USA: Kennecott, Resolution Copper 55% (development)
• South America
  • Chile: Escondida (30%), Nuevo Cobre (development)

How much

• 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

Notes

• 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

Broker consensus

• 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)

Price history

Sandfire Resources (ASX: SFR)

What/Where

• Africa
  • Botswana: Motheo
• Europe
  • Spain: MATSA
• North America
  • USA: Black Butte (development)

How much

• 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)

Notes

• 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)

Broker consensus

• 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)
• UBS BUY, PT $8.88 (6 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)

Price history

South32 (ASX: S32)

What/Where

• South America
  • Chile: Sierra Gorda (45%)

How much

• 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

Notes

• 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)

Broker consensus

• 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)

Price history

ASX Copper Producers Summary Table

Check out this comprehensive guide to the stages of mining company development

This article first appeared on Market Index on Tuesday 9 April 2024.