Cyprium’s Share Price Up 22.22% on Drilling Commencement News

Mineral explorer Cyprium Metals Ltd [ASX:CYM] announced today that a 330 metre Diamond Drilling Programme will commence this month at the Cue Copper Project, which is right next to the Hollandaire Copper area in Western Australia.

The company also released their Investor Presentation on the ASX today, highlighting the direction Cyprium intends to follow in the coming financial year.

Cyprium’s share price had a good start in today’s trading, up 22.22% from their previous close to sit at 22 cents per share. This is a significant leap for a company with a market cap of only around $8 million.

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Cyprium to chase the copper chain

In the presentation, Cyprium described the Cue Copper Project as one with ‘a number of high priority exploration targets to pursue’ in terms of base metal mining. This project was first discovered by mining company Silver Lake Resources Ltd [ASX:SLR], but quickly abandoned due to Silver Lake’s main focus on gold.

Cyprium are particularly interested in this site’s favourability for copper sulphide heap leach (SHL) processing techniques, which can result in LME (London Metal Exchange) Grade A copper cathode being produced at over a 99.99% purity.

The benefits of this site being SHL-suitable is that the SHL process is a simple one with little cost, other than that of power. Also, LME grade copper cathode is cheap to transport and isn’t subject to smelting charges because, unlike metal ores, the copper in the cathode doesn’t need to be separated via smelting.

It was made clear in the presentation that copper would be the frontrunner in many of Cyprium’s future projects, with the company intending to focus on Australian projects with ‘existing copper resources with growth potential’.

Does copper equal profit right now?

With a clear vision to steer away from precious metals, as well as cost-effective operations and resource-rich mining areas in their hands, Cyprium’s future success seems mostly to depend on the world’s demand for base metals like copper.

And unfortunately, today’s not-so-stable political climate is setting up for bouts of volatility for copper. For instance, China makes up almost half of the global demand for copper, according to Reuters. Yesterday, however, it was reported that copper fell to a three-week low overnight as a reaction to the US and China resuming trade talks.

And as a US dollar-priced commodity, copper is subject to any fluctuation in the US currency. As was seen from the recent strength in the US dollar, demand slowed as other world currencies couldn’t compete the metal price hikes.

Granted, Australia holds a decent chunk (around 13%) of the world’s copper resources, so it isn’t exactly a dull move for Cyprium to hone in on this particular metal, particularly when they are significantly smaller than other Aussie miners like BHP Group Ltd [ASX:BHP] and Galaxy Resources Ltd [ASX:GXY].

But Chile takes top position for holding copper resources with a quarter of world’s copper in their earth. And with Chilean-based miners like Hot Chilli Ltd [ASX:HCH] making bank on recent copper plays, Cyprium has a lot of strong competition to contend with.


Ryan Dinse

For Money Morning

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Ryan Clarkson-Ledward is an Editor at Money Morning.

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