November 8, 2018

VIDEO: Carube Copper Corp (CVE:CUC) CEO Expects Copper Prices to Soar in 2019

Midas Letter
Midas Letter
VIDEO: Carube Copper Corp (CVE:CUC) CEO Expects Copper Prices to Soar in 2019

Carube Copper Corp (CVE:CUC) CEO Stephen Hughes talks about the potential for an increase in copper prices as the world’s copper deficit grows. Hughes points to international political and economic disagreements as the reasons copper prices have continued to decrease despite soaring demand and dwindling supply. Carube has 30 ongoing projects in Jamaica and is currently focused on its gold discovery in the Main Ridge area. Carube is also searching globally for additional copper assets in anticipation of an industry rebound. While Hughes believes copper prices will soar next year, the resource’s depressed value has hurt junior mining companies, which also affects supply.



Ed Milewski:  Mining fellow here, Steve Hughes, he’s the CEO of Carabe?

Stephen Hughes:    Carube Copper.

[stock_chart symbol=”CUC:TSV” align=”left” range=”1M”]

Ed Milewski:  Carube Copper. Ticker CUC. Steve’s been all over the world, he’s been involved in all aspects of mining, copper, gold, etcetera. Steve, welcome to the show.

Stephen Hughes:    Ed, thanks for having me.

Ed Milewski:  Yeah. So I know you’ve been on TV in various places in the world: London, England, and wherever, right?

Stephen Hughes:    Yeah, I work for, my previous company was Asiamet Resources, so I was constantly doing podcasts for them.

Ed Milewski:  And was that sold?

Stephen Hughes:    Yeah, now it wasn’t sold, they’re doing a bankable feasibility study on it now; that’s going to be a secondary copper oxide project in central Kalimantan.

Ed Milewski:  Yeah. So, so, you know, a year ago, I really wasn’t paying any attention to copper; then I met Steve Dunn, and we started looking at, you know, the electrification of the world, started looking at a lot of different things. It looks like, you know, copper is going to be – and everybody you talk to, almost, says copper has to get a lot more expensive.

Stephen Hughes:    Look, I agree. You got Rio Tinto, you know, they’re got delays in their projects. Antofagasta and BHP, lower production; Freeport is going to shut down the Grasberg mine, that’s coming at the end of this year.

Ed Milewski:  That’s a big mine?

Stephen Hughes:    That’s a big mine, that’s the largest gold mine in the world and probably about the third or fourth largest copper mine.

Ed Milewski:  And is that in -?

Stephen Hughes:    So that’s in Papua, Indonesia.

Ed Milewski:  So, your area.

Stephen Hughes:    I used to be there for 23 years.

Ed Milewski:  Right, right.

Stephen Hughes:    So once that’s shut down, that’s going to take off about 350,000 tonnes off the market.

Ed Milewski:  And you know, as we say, everything points to higher copper prices. In the last three, four months, copper’s been doing nothing but going south.

Stephen Hughes:    Yeah, I think it’s because, you know, this conflict between China and the United States.

Ed Milewski:  Tariffs.

Stephen Hughes:    A lot of tariffs, uncertainty, so that’s never a good thing for mining.

Ed Milewski:  Sabre rattling.

Stephen Hughes:    Yep, who’s got the bigger sabre.

Ed Milewski:  Who’s got the bigger balls?

Stephen Hughes:    Who’s got the bigger balls. In this case, Trump’s trying to prove he does. But once that’s settled, you know, I’m pretty confident that’s going to get settled this year or, let’s say early next year. Copper has to go up, and because the demand is there, but the supply is not. That’s going down. Demand is going up, supply’s going down.

Ed Milewski:  Yeah. You know, I’ve talked to Steve, and I have bought a lot of Crown, and this isn’t really about Crown, but it’s about copper, and I didn’t realize it, but I guess if a lot of hospitals are built today, they’re going to put copper in some of the shelving and door handles, railings, because bacteria is killed on contact with copper after a while, right?

Stephen Hughes:    That’s right. They’re doing a lot of studies on that, and you got the electric vehicles, all piping in buildings, you’ve got expansions – look at Oakville. I mean, you got massive expansions everywhere, and there’s copper in all of that. In all of your devices we have around the house, the air conditioning, the fridges, everything has copper.

Ed Milewski:  Yeah. So, yeah, there’s nothing to replace it, either, right? You can use silver, but silver costs – who’s going to do it with silver? You can’t afford it.

Stephen Hughes:    I mean, it’s, it’s, it’s, look, you can use scrap, right? But it’s – the demand is always there. It is constantly going up. You see it, and there’s no reason to believe it’s not going to go up. China is continuing to do their stimulus packages, expansion in Indonesia, you know, all countries are continuing to expand. India, there’s going to be a lot of copper use. Copper prices are going up. I predict, next year, $3, to $4.

Ed Milewski:  And if India follows the path of China, I mean, the need for copper in a place like India with a billion-plus people…

Stephen Hughes:    Yeah, that’s right, that’s who – exactly. India, China, Indonesia. Indonesia has 300 million people, expanding rapidly.

Ed Milewski:  So where are you focused with Carube? What’s your goal there at Carube? I mean, are you looking for raw exploration, are you looking for drill-ready, are you looking for, you want to be a producer or you want to find things and sell them?

Stephen Hughes:    Yeah, look, we’ve got quite a few – we’ve got about, I think we’ve got about probably 30 projects in the tenements we have in Jamaica. We’re focusing on the main ridge right now, that’s a gold project we found; we found up to 19 grams per tonne in rock chips.

Ed Milewski:  Has that been drilled yet?

Stephen Hughes:    Not been drilled, but there’s a mine to the southeast, and that was about 750,000 tonnes running at about 20 grams. That’s a historic mine, no longer active. But we’re right along the trend of that northwest, and we’re also looking to the southeast of that, and we’re trying to tie that all up, do our work on the ground, which we’re active right now, get it all in together, model it up, and then we’ll target for drill delineation.

Ed Milewski:  Yeah, yeah, yeah. Now, there’s been some pretty good activity in BC lately; golden triangle, and I see there’s been a – I’m pretty sure somebody put out a report the other day saying that GT Gold, I think they got a $6 target on that. Like, you’ve seen some of the results; I know we had a chat. What do you think about GT Gold?

Stephen Hughes:    Look, I reviewed what they’ve done to date; it’s porphyry, the grades are very high. Just looking at what they’ve hit, how they’ve stepped out, there’s potentially 300 to 600 million tonnes there, with good gold and copper. It’s a very good discovery, and good for Canada.

Ed Milewski:  And that stock’s sitting around where, about $0.75, $0.80?

Stephen Hughes:    Yeah, I can put it up, here. I think it’s $1.75 now.

Ed Milewski:  So are you discouraged at all with the price of copper, or do you think it’s just a blip? You obviously –

Stephen Hughes:    No, I’m not really discouraged, because I believe it. I believe it, right? I believe copper is going to come back. So anyone that’s, you know, actively exploring for copper right now like we are, we’re also actively, you know, looking across the globe to pick up additional copper assets, will do well over the coming year. Things are going to change, and so long as your property is worthy of drilling and is potentially mineable, I believe next year that there’ll be a significant turnaround in the business.

Ed Milewski:  Right, right, right. How many shares do you have in Carube?

Stephen Hughes:    Roughly about 1 million, I own, yeah.

Ed Milewski:  And then how many shares outstanding?

Stephen Hughes:    Uh, the company, I think there’s roughly about 250 million shares.

Ed Milewski:  Okay.

Stephen Hughes:    So our market cap is around 10 million, a little over 10 million.

Ed Milewski:  Sure, sure. And it’s no secret to say, it hasn’t been fun for junior mining companies.

Stephen Hughes:    No, it’s brutal. We’re at $0.05.

Ed Milewski:  Yeah. And you know, the longer they stay depressed like this, that’s also going to impact supply, because there’s nothing coming on, right?

Stephen Hughes:    Yeah, it’s a big gap in the exploration. This happened, I believe it was in 1998 through to 2003, right? There was this massive gap in exploration, and now we’re going to go through that again, because the companies like us, we find it hard to raise capital unless you have a good asset, or a good team behind your project.

Ed Milewski:  Right.

Stephen Hughes:    So you know, it’ll put more pressure on the metals: copper, lead, zinc.

Ed Milewski:  Yeah. Just a matter of time.

Stephen Hughes:    It’s only a matter of time; it’s going up. I mean, I’ve been looking at, and I’ve got my statistics here, I’ve been looking at the average grades of systems in Canada; you can see good mines in Canada are running 0.3 copper, 0.3 old. And they –

Ed Milewski:  But is that a porphyry, when you say – ?

Stephen Hughes:    Yeah, that’s a porphyry. And that dirt in the ground runs at, let’s say, $25 at today’s prices. Whereas if you have a leach mine, and it’s running 0.6, that dirt’s only about $20 per tonne. And then you look at Chile; their average grades are anywhere from 0.5 to 0.7, they don’t have a lot of gold, so you’re looking at $30 to $35 per tonne. So I believe, I strongly believe, that the new norm is going to be, you’re going to be looking at copper deposits over the next 10, 15 years that are going to be about 0.4, with some credits of silver and gold.

Ed Milewski:  Right, right. Interesting. The low hanging fruit, there is no more low hanging fruit, is there?

Stephen Hughes:    There’s not. There’s very few projects around. I mean, I constantly look for acquisition targets, right? And they’re not easy to find. There’s a lot of stuff that’s in the range of 0.1 to 0.3, very little in the range of 0.3 to 0.6, and almost none above 1 percent. It’s not easy to find good copper assets.

Ed Milewski:  Yeah, interesting. Steve, we’re going to leave it there.

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