Since peaking at $4.89/lb in early May, copper has spent the last five months consolidating its enormous gains from the March 2020 low (+140%). In the last two trading sessions copper has jumped from below $4.30/lb to nearly $4.60/lb this morning – a 7% move in copper over a 48 hour time period is nothing short of enormous.
Copper (Daily)
If yesterday’s trading session is any indication, the junior copper miners are starting to catch a bid after several months of sideways-to-lower consolidation. Stocks like Copper Mountain (TSX:CMMC), Meridian Mining (TSX-V:MNO), and Filo Mining (TSX:FIL) saw absolutely enormous gains over a span of hours yesterday.
MNO.V (Daily)
Yesterday’s outsized bullish candlesticks came after several weeks of consolidation in most copper plays, adding weight to the thesis that this is the beginning of a new impulse higher. Most charts aren’t even in technically ‘overbought’ territory on the daily timeframe.
However, it is also important to remind ourselves that rarely do profits come as easily as they have this week. Chasing enormous market moves and adding risk out of the fear of missing out (FOMO) is the best recipe I know for losing money in financial markets. Yesterday after the market close I made a quick 10-minute video sharing some of my thoughts on yesterday’s memorable trading session.
Tiny $5 million market cap copper explorer GSP Resource Corp (TSX-V:GSPR) delivered an update on drill results at its Alwin Project, adjacent to TECK’s Highland Valley Copper Mine:
GSP Resource Corp – GSP Resource Corp. Intersects Additional Bulk Tonnage Copper Grades at Alwin Mine Project and Plans Fall 2021 Drill Program
GSPR delivered its best intersection to date in hole 21-05 with a 164.6 meter intersection grading .61% copper-equivalent, including a stellar 35.5 meters grading 2.71% copper-equivalent. The results reported this morning further support a shallow bulk tonnage deposit model at Alwin.
GSPR plans to commence a fully funded follow up drilling program to further test the bulk tonnage grade potential north of Alwin deposit with 3 diamond drill holes collared from the north of the historic deposit.
At today’s current market cap based on a $.30 share price, GSPR shares offer tremendous leverage to rising copper prices. In fact, if copper is on its way to $5+ I imagine even a name change to “GSP Copper Corp.” could warrant a double from the current valuation (I’m about 1/4th joking but I think it is time for a name change).
I like the chart setup here, I like the fact that GSPR is being aggressive and immediately following up with a drill program on the back of its best hole yet, and I like the extremely low trading float.
Disclosure: Author is long GSPR.V shares at the time of publishing and may choose to buy or sell at any time without notice.
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