Western Copper and Gold CEO: Copper is Essential for Electrification

Western Copper and Gold CEO: Copper is Essential for Electrification


Joining me now is Paul West-Sells from
Western Copper and Gold. Before we get started, tell us your symbol and what
exchange are you on. Our symbol is WRN we trade on the TSX and also in the
US on on the NYC American. How is business right at the moment? We’re at an exciting time when it comes to copper, it looks like we’re right at that tipping
point. You know it’s been good. I mean this has been a great
year. You know, we started, I mean I’ll be honest our share price was beaten up
a little bit at the end of last year like everyone does at the end of the
year but we hit 2019 with a bang and really have seen some good movement and
you know part of it’s gold which we’ll talk about, but another big part of it is
copper and you’re seeing copper you know I’ve had a bunch of people this morning
come up to me and say you know I think copper is gonna hit over $3 tomorrow when it opens and and I think it is and and you know the copper story, I
love the copper story, it’s a very, very simple story and there’s a couple things on the demand side and of things — it’s
electrification and it’s electric cars it’s the infrastructure associated with
it and a lot of that is located in China. If you look at the electrification
in China, I mean in China they are launching a fleet of electric buses the
size of the entire bus fleet of London every six weeks. That’s how fast they are
adopting electrification of vehicles in China so it’s absolutely astounding so
that’s on the demand side. On the supply side, it’s very, very simple, I mean
we’ve had a depressed copper price here now for about seven years
and in that depressed copper price environment, no one built any new mines and so what we’re seeing happening right now, seeing the copper price go up
and you know it’s now the time for mines such as the one that we’re
developing sort of come into fruition. When you were talking about
the electric buses, you know one of the thoughts that comes to mind is that
you can’t build electric buses without copper like there is no substitute is
there? No and that’s what’s beautiful about it, right, because it’s not going to be replaced by anything else and you’re not even, you know
batteries I mean there’s different battery technologies and they’re
being developed but copper is the foundation. Your electric motors are
filled with copper. You look at an electric car it has four times as much
copper as a regular car and that’s not including all the infrastructure, the
charging infrastructure, electrification of that, the new grids
that are being built around this electrification movement so you know
certainly there’s some, I guess, you know frothier metals around electrification
but copper’s the safe bet. Copper’s the absolute, going to be a winner with
electrification movement. A couple of points that I want to expand on. When we take a look at the electric car market right now, globally
it’s virtually nothing and even domestically it’s only what about 3% or so? The room for growth there is extraordinary and it
appears to be exponential. I think that’s true and you
know what you’re seeing and you’re seeing that the projections for electric car growth and you’re right it’s only 3% obviously you
know sky’s the limit yeah and every year they come out and
they revise that and every year they up it. They’re not decreasing it, they’re
not saying oh you know what people are adopting electric cars slower. It’s the
reverse, they’re adopting that as fast as they can. I put my money where
my mouth is, I bought a Tesla actually at the end of last year and I got to
tell you once you own an electric car you’re like why would I go back? My
gas station’s in my house, just plug it in it’s easy. Well also the transfer of
power from the generation from the electric motor to the wheels far
exceeds that of a gas tank so if you want that little kick… Exactly. Before you put your foot on the
accelerator you got to tell anyone put their head back pr else they get whiplash. Are you able to feather it in a little You can feather it in a little. You can definitely feather it in. The other thing that I want to touch on is like you talked about the charging stations and whatnot. If we want to have the most efficient transfer of electricity from
source to end use, nothing matches the the conduit properties of copper. Why is that? I mean it’s the physical nature of
copper and you know in terms of the conductor it’s actually not the
best conductor. The best conductor is gold. I don’t think we’re gonna be
replacing all of our… but copper is a very close second and so that’s
what we’re gonna use, I mean it’s a very, very simple sort of equation and
you know the only other alternative is aluminum and I don’t know– But there’s a 25% loss in transmission and power– For those of us that are a little bit older,
remember when they used to have aluminum wiring and then ones house caught on
fire so yeah that’s been banned yeah yeah so it’s not going to be replacing
it any time soon. Now the other thing that we
take a look at is, there’s no denying that with the ongoing improvement in
quality of life and the industrialization of China and India, the
demand for power electricity is going to continue to grow so why is copper languishing where it is when there is this pent-up demand that is going to take off? The thing is, it’s languishing but it’s not really because I look at… you look at the
copper price and then 2018 copper started to go up, going up it was about
$3.20 then mid last year Trump came in with his tariffs on China and then it
pulled back but now we’re starting to see it come up again even without a lot
of news around the tarrifs because I mean the fundamentals of it are just so
strong and just to continue the talking about copper,
I mean it’s part of– a very, very important part of the green economy. You
look at the green economy and it’s, you know, producing green electricity using
the cars in the backend and electrifying everything in between and that’s the way
it’s gonna happen and again I mean you’re sure bet is copper in terms of
that. It’s the new green metal. Being on the green economy also if
we’re generating power through solar panels and through wind you still
have to transmit that power. Absolutely. Nothing better than copper. So the requirement there is extraordinary. I mean I can’t remember the exact statistics but you look at these wind turbines and an
astounding amount of a copper with that, because again it’s just basically
a motor in reverse, it’s a generator right so this big windings, all that, tons
of copper in those as well so yeah as we move to green, as we move to electrification, as we move to the electric car situation. It’s all copper and you know
what with us at Casino, 10 billion pounds of copper. Let’s talk a little about Casino. Where is it, where are we at, we are we going? The Casino project that we’ve been developing for a
little over a decade now, located up in the Yukon. Great location, I mean the
Yukon, very mining friendly obviously we’re in Canada, you know which has a
great history of mine building and we’re sort of in that Western Canada area
where there’s there’s a fairly established sort of big copper mines, I
mean you’ve got Highland Valley copper that Teck’s running, you’ve got Gibraltar with
Taseko and a couple others and so we’re sort of in that Western,
it’s a rich area and you know well-established in terms of copper and
we’ve been developing it for about 10 years. We did a feasibility
study back in 2013, we’re currently sort of midway through permitting and so
that’s where we are right now. Where are we going? This year really the key things
that we’re going to look to do on this, there’s a little more drilling, there’s
actually a little, I mean it’s already a billion tons reserve but there’s
actually more there so we’re going to drill that out and it’s important
for the permitting that we sort of have that well established, so we’re
gonna drill that out and also look to– you know probably after that, and this
would probably drag into 2020, update that feasibility study. So what are your plans as a company? Once that’s done I mean
this has always been an asset that we’ve said you know it’s a two and a half
billion dollar capital cost project yeah it’s a bit too big for a junior mining
company such as ours to do alone so we’ve always said that when the
time is right, when the deal is right, we’ll look to partner on that and with the price of copper came a lot of people knocking on the doors and so we’re just going to continue all of this. There’s certainly growing interest, and that’s part of why we’re drilling this out and updating the
feasibility study as well is that it brings everything up to
date, has a good look, a good establishment of what the project
exactly looks like. A, to go through permitting, B to bring in a partner for
the project. Have a quick sip and then I’m going to talk about gold, ok. You are Western Copper and Gold so let’s also talk about gold. You talked about gold as being that other perfect conduit for electricity. That’s not where we’re going, but what are your gold reserves and prospects? That’s a very good segue because we are Western Copper and Gold
and the reason that we’re called Western Copper and Gold: copper is about half of the projected revenue from our
mind and gold is is close to 40% of the projected revenue so it’s a big part
of what we’re talking about. The overall resources :18 million ounces of
gold, what half of that is in reserves and with this drilling that we’ve talked about, will add more than that so right now we’ve got 9 million ounces
reserves, after the drilling, will be over 10 and that’s very, very
important because as we’ve seen these big mergers and obviously
the Barrick-Randgold and Newmont-GoldCorp, these companies need big
gold deposits and if you look at our overall resource and you put
it on a list of junior mining companies, we come up as number six in that list
and I’m not going to go through the ones in front of us but you know you can take
a look at them and they’re in bad locations, they’ve got permitting
challenges. This is, with the Casino deposit, it’s a big gold asset,
a lot of copper, clear permitting in front of it, very good economics, I mean today at today’s quantity prices we’ve got I
think a twenty four percent IRR on the project. Right and you’re in a stable
jurisdiction stable, it’s mining friendly and good infrastructure. Absolutely and you know just a little bit on the infrastructure I mean a year
I guess a year and a half ago now are our esteemed Prime Minister, Prime
Minister Trudeau maybe not so esteemed today, came to the Yukon, announced infrastructure investment,
three road projects and one of those work projects is the road to the Casino
mine. With every potential investment, investors are saying okay well tell
me about the team. Who am i investing in? The property is one thing, but who
is this team and why should I believe in it? If you look at our team, we’re led by our chairman Dale Corman, and Dale has been in this
industry for a long time and his big key deal was selling the Penasquito asset
with Western Silver to Glamis Gold, which was then taken over by Goldcorp. If you
look at Gold Corp right now the Penasquito asset is actually the
largest revenue generator within their– central to the company. If you look at Penasquito, it was a large, lower grade in that case lead-zinc-
silver-gold mine, sold to a gold company and you know we’re sort of doing
the same thing here again and so Dale’s got that track record, our engineering
team is the same engineering team that was involved with Penasquito
and that team sort of has moved over to this big copper
gold asset in the Yukon. We’re having this conversation
so that people who are looking at you as a potential investment are
saying why should I put my money there? What’s your pitch to
them at the moment? Because if everything you’re telling me, I like it. What’s your pitch to somebody to say this is a good solid investment so
long as you have patience of course. If you look at the way our stock trades, our stock trades on copper and and you know we started off
this conversation talking a lot about copper and I’m a big copper bull, very
simple you know very simple economics on our own copper and so if you like copper,
why our shares? Because as the copper, I think, I don’t know if
it’s gonna break out on Monday but you know we’re gonna break through $3 and
hit 350, as that happens our share price goes up. I mean and you can look at the
history of our share price so it’s a good– and we have very good leverage to
that copper price so that’s you know the simple reason to buy our shares and the
bonus on our shares of course, if we bring in a partner, if we sell the
company, then you’re gonna see a massive re-rating on that and you know we’ve
again, you look at the assets out there you look at the copper space, there’s not
a lot of assets in the copper space. We happen to have a very, very nice asset in
a good jurisdiction and in the big gold deposit space, that’s a small area
and you know what, when I saw these big gold mergers, I was like this
is great for our company because these companies need big gold assets and guess
what? That’s what we have. Well it sounds like a pretty exciting opportunity and time for you. We will be watching of course and hopefully you’ll come back
and give us updates in the future. Absolutely, thank you very much. you

1 Comment

  1. Re: Copper is not the best conductor, the best conductor is gold. Actually, the best electrical conductor is silver. Interestingly enough, it is also the most thermally conductive and most reflective metal.

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