Key Takeaways:

Cobre Limited (ASX: CBE) shares have gained huge market attention as they have delivered a return of over 1,300% in the last one month.

Cobre Limited is a mineral exploration company that focuses on the exploration and discovery of copper and base metals deposits in Botswana and Western Australia. The Company focuses on exploring metals like high-grade copper, gold, silver, and zinc within its Perrinvale Project area.

In this article, we will explore some factors that supported CBE shares to move up on the ASX in the last one month.

Renewal of the five exploration licences:

On 18 August 2022, the Company announced that Triprop Holdings (Pty) Limited received notification of the renewal of the 5 exploration licences which are held by Triprop conditionally on a binding earn-in arrangement with Kalahari Metals Limited.

The Company confirmed that the five exploration licenses were renewed for an additional 2 years until 2024. The license renewal strengthens the belt-scale chance provided by CBE’s wide land package in the Kalahari Copper Belt. It will aid an added exploration pipeline of targets for future drill testing.

Intersection of copper mineralisation:

Cobre Limited announced the 4th intersection of copper mineralisation from its continuing drill programme on Kalahari Metals Limited’s NCP licenses. Based on the visual estimations confirmed with pXRF readings, it was found that drill hole NCP10 met a broad 69 metres zone of copper mineralisation. It includes a 13 metre zone of rich chalcocite mineralisation, which is centred at 310 metres down hole.

Chalcocite is an important copper mineral ore and has been mined for ages. It is amongst the most profitable copper ores. It is regarded as the most profitable copper ore because of the composition of copper in it, which is approx. 80% by weight.

The beginning of Stage 1 Infill Diamond Drilling:

On 09 August 2022, the Company announced that it has extended its exploration plans on the Ngami Copper Project (NCP) and Kitlanya West (KITW) projects. CBE had established the existence of substantial concentrations of copper mineralisation at NCP. Hence, now it will focus on the level and continuity of drill confirmed mineralisation to reveal a possible new copper deposit. Meanwhile, the Company is also developing extra targets via a similar technical way to vector in and open up the district-scale prospects of the Kalahari Copper Belt.

Completion of the Placement:

On 04 August 2022, CBE announced the completion of an AU$7 million placement at AU$0.15 per share to sophisticated and institutional investors. The proceeds from this placement will support the Company in accelerating the exploration of the tenement package held by Kalahari Metals Limited (KML) in Botswana.

Other factors driving CBE’s shares:

• Besides the above few developments by the Company in the last one month, the Company’s shares were also influenced by the rising demand for copper globally. Copper is a reddish gold metal with a wide range of applications in our everyday lives. Most copper is used in electrical equipment for wiring and motors as it can conduct heat as well as electricity. It is also used in construction and industrial machinery like heat exchangers. Other than this, copper also has a biological role. It is an essential element a body needs on a daily basis to help enzymes transfer energy to cells. Copper is also a vital component of electric vehicles. It is used in electric motors, batteries, inverters, wiring, and charging stations. Hence, we can say that with the gradual increase in the demand for electric vehicles and their charging station, the demand for copper will also go up.

Interesting Read: Is there any room for nickel stocks to move up amid rising EV demand?

• CBE also produces other metals like zinc, whose demand is mainly driven by the production of galvanised steel. It is extensively used in various sectors such as construction, automobiles, home appliances, machinery, shipbuilding, etc. In the last one month, zinc prices have gone up by ~17%.

• As pointed out above, the Company is also engaged in exploring silver. As per Silver Institute’s World Silver Survey 2022, the global demand for silver is expected to increase by 5%, driven by structural gains in industrial fabrication and a constant post-pandemic recovery in jewellery as well as silverware. Rising US interest rates will create pressure on the silver price. However, several supporting reasons should limit the decline in its full-year average to 5%. It was also highlighted in the survey report that the global silver mine production wwill increase further in 2022. The Industrial demand for silver is estimated to rise 6% to a new record high this year.

Bottom Line:

The Company made significant progress in the last one month. The rising demand copper due to its wide range of applications as well as other metals like zinc and silver, which CBE explores, are expected to improve in the coming period. These factors supported this stock to move up on ASX and could support the stocks to surge further in the coming days.

Stock Information:

At AEST 12:45 PM, CBE shares are trading at AU$0.560, down 7.438% from the previous close. 

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