Faraday Copper Corp made it back onto the Favorites Collection in 2025 because its Copper Creek deposit in Arizona is an advanced copper play that would benefit from a rising copper price. Faraday is well financed with $25 million working capital and is backed by heavyweights such as Murray Edwards, Pierre Lassonde and the Lundin family. The company has Bottom-Fish Spec Value rating because the PEA it published for Copper Creek in 2023 delivered numbers that do not robustly clear development hurdles at the $3.80/lb copper base case rice. Although copper surged toward $5/lb in early 2024 it had pulled back to the $4/lb level by the start of 2025. The PEA envisioned a 30,000 tpd mill initially processing open-pit mined ore until year seven when the operations starts to transition to fully underground mining by year twelve. Using a 7% discount rate the PEA indicated an after-tax NPV of USD $713 million with an IRR of 15.6% for a 32 year mine life that would produce 3.4 billion lbs of copper. The problem with these economic numbers is that CapEx came in at $798 million, 12% more than the NPV, and while the 15.6% IRR at least clears the 15% hurdle, there is not much room for error at $3.80/lb copper. Faraday Copper Corp was made a 2025 Favorite as a leveraged bet the future price of copper will be $4.50 or higher.
Most future supply-demand projections present a supply deficit emerging by 2030 which will be worse if the energy transition goals are not scuttled by the Trump administration. The IEA has predicted that copper consumption related to net zero emission goals for 2050 would require a 50% supply boost above macroeconomic demand from clean energy technologies by 2030 if the 2030 energy transition targets are to be met. But just because Trump and his devotees dismiss any linkage been global warming and greenhouse gas emissions, what they cannot ignore is that climate change in the form of rising temperature will cause electricity demand for air conditioning to soar. In addition during the past couple years the AI Dream has come to dominate the technology world and most predictions are that the AI data centers will boost electricity demand. While fossil fuel cars may continue to dominate car sales in the United States, China's EV sales are already more than 50% of total sales, and while cheap Chinese EVs with short ranges may not be good enough for Global West consumers, they are good enough for Global South consumers. Electric vehicle related copper demand growth will remain a factor along with demand growth from AI and AC needs. Faraday Copper Corp is thus a bet that higher real copper prices are coming and will boost the economics of the Copper Creek mining plan.
Faraday is pushing through with the permitting cycle which in the United States is a painfully slow process and continuing exploration for new zones that could scale the story bigger while we wait for the copper price to improve. Although copper is classified as a "critical mineral" because it is critical for energy transition goals, the global supply of copper is well diversified among Global West, East and South nations so it does not have criticality in terms of security of supply. North America is responsible for nearly 12% of global supply, but the GDP of the United States, Canada and Mexico is 30% of 2023 GDP. The implication is that the United States does require globalized trade to remain a reality so that it can continue to secure its needs at the market price for copper.
This assumption of globalized trade could be jeopardized by how Trump deploys tariffs, as well as the conflict between Global West and East escalating. The latter may not be a problem if the Global South stays allied with the Global West, but that may not be the outcome of thuggish isolationist policies. Should the United States suddenly find itself cut off from its full copper supply need because of a geopolitical realignment of alliances, exploration for and development of domestic copper supply could become a paramount priority for the United States. Faraday thus offers upside from three story lines: 1) discovering something bigger and better at Copper Creek, 2) witnessing higher global copper prices due to demand growth from sectors like AI, AC and EVs, and, 3) domestic price shocks arising from curtailment of global copper supply. |
