Expensive, extremely complex and fraught with risk - MJG Capital Matt Geiger on copper hurdles

2024-07-19に共有

Copper projects still need a better incentive price, said Matt Geiger, managing partner at MJG Capital.

On Tuesday, Geiger spoke to Kitco Mining.

MJG Capital is a limited partnership that specializes in long-term natural resource investments. Founded in 2011, the partnership holds a concentrated, long-only portfolio of natural resource equities.

Geiger noted that copper-focused investments had increased significantly in his company's portfolio, up to 36%. Despite copper prices trading higher in 2024, the incentive price for greenlighting a copper mine needs to be higher.

"[Copper mines] are extremely complex, technically difficult, and expensive projects to build that are fraught with risk," said Geiger. "This is far different than building a medium-sized gold mine that could go into production in a 12- to 18-month period."

Geiger noted that the miners are still lagging the metal prices. While gold is up 16% year-to-date and copper is up 20% over the same period, he said that mining equities are not showing leverage to the metals. While other parts of the market have been on a tear, resources may soon have its turn.

Interest rate cuts, strong earnings, and big M&A deals are all potential jump starts for resources.

"There's a number of potential catalysts to start revenge of the miners," said Geiger.

Geiger argued that the stark disparity between tech and commodities valuations could herald a significant shift. He pointed out that the last time such a gap existed, it was followed by a decade-long commodities bull market, noted Geiger in his July investor note. While this might offer little solace to mining-focused investors who missed the recent tech boom, he suggested it could indicate future opportunities.

Geiger emphasized the intrinsic link between the mining and tech industries, despite this connection being largely overlooked in Silicon Valley. He highlighted that AI data centers, consumer technology, electric vehicles, national defense applications, and clean tech are fundamentally dependent on a wide array of metals extracted globally.

Geiger cautioned that if history were to repeat itself, substantial increases in metal prices could be on the horizon. He warned that such rises, and their impact on the cost and adoption rates of new technologies, might come as a stark revelation to many, said Geiger.

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@jamesp172 2日前

Really nice to see Matt again. He speaks with confidence and backs it up with real deals in the market. Patience is the key.

@GTStuning- 2日前

Great guest, bring him back, thank you!

@dp100951 2日前

Guest sounds like he has a comprehensive knowledge of the mining space. Good at talk.

@lesholland949 昨日

Hopefully you will have Matt back soon!

@todd8856 8時間前

Energy is key

@gardenersgraziers7261 2日前

which is why i am buying BHP and CHALICE in Australia

@gregorygreene1940 22時間前

Miners will continue to struggle to gather attention from investors. Too many perceived risks on a global level and too many other options out there for investors with a lot less risk. Just look at the GLD/SLV ETF's within the precious metals market itself. No mining complications, no waiting to see if miners catch up to the spot price, just a pure play on spot. Now add in all the momentum of the Crypto ETF's and miners are in a tough position to attract interest. Exhibit A: SSRM, one landslide took that company down to a point that it may never recover.