Copper, Uranium, Lithium Gains Ahead in 2023

I’m on my way home from the Prospectors & Developers Association of Canada (PDAC). It was a busy three days of meetings, vetting deals, searching for new ideas and the extracurricular that come with it. 

The trip was productive, and though I’ll send subscribers a detailed update on the many companies I met with, there were some very clear trends and themes that I want to share.

Copper, Uranium, Lithium Gains Ahead in 2023.

The first one is that, although I believe the next several years will be lucrative for quality companies in the lithium space, it’s clear by the twenty-plus lithium companies present (many that ‘just became’ lithium companies) that there are a lot of Johnny come lately’s to the space hoping to piggyback off of a real trend and companies with real projects.

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The James Bay region — thanks to belle of the ball Patriot Battery Metals (TSX-V: PMET) (OTC: PMETF), which didn’t have a booth at PDAC but I was able to meet with — is hot. A bit too hot for a lot of companies hoping that Patriot’s success shines a spotlight on them as they rush to stake projects near the world-class Corvette district.

For those asking, there are less than a handful of companies (3 I like including Patriot) in the region that I feel have projects worth allocating capital to. The rest will have to deal with stabilizing (key word ‘stabilizing’ not ‘collapsing’) lithium prices and having to do more than just use analogues of successful companies.

About those stabilizing prices and calls for lithium oversupply: good luck with that!

Trafigura CEO Jeremy Weir recently commented about looming supply shortages of several key metals, like copper and lithium, threatening the global transition to clean energy. Companies are worried about shortages, not oversupply.

The reason is a simple one as Trafigura explained,

“It’s one of my biggest fears with this energy transition: Actually, can we transition, given the supply tightness?” he said. “We have to be more efficient in bringing things online.”

That’s not me saying it; that’s the world’s biggest copper trader showing concern, which brings me to sentiment at the conference on other commodities.

Gold and silver sentiment remained meh. 

Copper bulls are excited (as am I).

But it was uranium sentiment that, for the second time this year at a conference, was very bullish. Not just by perma-bulls but by very connected and influential players in the space betting with their checkbook and their future uranium supply; unhedged near-term producers chatting with utilities and end buyers.

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We had a peek at the beginning of last year of how quickly uranium equities move in the space. Then, we had a consolidation. 

I believe the next leg up is right around the corner followed by a violent move higher that’s going to make those who are well-positioned a lot of money.

Tidy up that portfolio… it’s about to get interesting!

Gerardo Del Real

Gerardo Del Real
Editor, Daily Profit Cycle