(WALL STREET IS PAYING ATTENTION TO THE METALS SECTOR)
April 24, 2024
Hello everyone,
Arizona Metals Corp.
I’m diving into a Canadian gold explorer today that is only priced at $2.21.
New drilling results from its Kay Mine Project, located 45 miles north of Phoenix, Arizona, suggest the presence of high-grade copper and gold mineralization within the drilled areas, which could potentially lead to the discovery of a significant mineral resource.
Analysts at Scotiabank believe the company has completed 106,000 meters of drilling on the Kay property and remains well-funded, with $31 million in cash at the end of last year to complete the remaining 53,000 meters of the drill program.
There is an expectation by analysts at Scotiabank that shares will rise 114% to $4.50 Canadian dollars ($3.27) from current levels.
The Kay Mine, a wholly owned gold-copper-zinc exploration-stage project, is Arizona Metal’s flagship mine. According to the company, minerals have been identified through drilling from 150 metres to at least 900 meters below the surface.
Arizona Metal’s stock has a consensus price target of six Canadian dollars, representing a potential upside of 185%, according to FactSet data.
BMO Capital Markets analyst Rene Cartier has a price target of 6.50 Canadian dollars on the stock, giving it an upside potential of 209%.
Beacon Securities analyst Bereket Berhe, meanwhile, has set a price target of 10.50 Canadian dollars, suggesting a potential upside of 400%. This makes Scotiabank’s price target the most conservative among analysts polled by FactSet.
Investments in mineral exploration companies are often considered to be high-risk, so if you are risk-averse, please skip this investment.
Wall Street is bullish on copper.
Supply risks and rising demand amid the energy transition and the artificial intelligence boom have Wall Street taking note and becoming increasingly bullish on this metal.
Copper is used in data centres for power cables, electrical connectors, power strips, and more.
Global copper demand by data centres will increase from 239 kt (thousand tons) in 2023 to at least 450 kt per annum in 2030.
Jefferies analysts argue that the potential demand growth will exacerbate an underlying copper market deficit, ultimately leading to higher prices.
Data centres house vast amounts of computing power needed for AI workloads, and that need is set to grow as many tech companies are rapidly developing infrastructure for artificial intelligence. Large language models require a lot of data centre capacity.
Recently, Morgan Stanley predicted that the price of the metal will reach $10,500 per ton by the fourth quarter of this year – representing around 12% upside.
Copper is also widely considered an indicator of economic health. The metal has a wide range of applications throughout construction and industry. It’s also a critical component in electric vehicles, used in batteries, wiring, charging points, and more.
If you want another copper stock besides Freeport McMoRan (FCX) for your investment portfolio, you could consider Solaris Resources (SLSR) Price of $3.33. Analysts have given it a 100% buy rating, with the potential for more than 100% upside.
If you want to consider ETFs you could have a look at Sprott Copper Miners ETF (COPP) and the iShares Copper and Metals Mining ETF (ICOP), as well as the Global X Copper Miners ETF (COPX).
Cheers,
Jacquie
