Copperstone Resources: Closing in on the permit application – ABG


Permit timeline reiterated, to be submitted in March
Copper price spike amidst increasing economic uncertainty
First revenues expected in ’24e, full capacity by ’26e

Q4: Timeline for permit application reiterated
Copperstone reported Q4 EBIT of SEK -4m (ABGSCe -6m). Capitalised expenses for exploration and opex increased during the quarter, indicating that operations continue to scale up, and we have revised our estimates to reflect this. Most importantly, the timeline for submitting the environmental permit application for the Viscaria project was reiterated, and thus we expect submission in March. The company has estimated that the permit will be approved by mid-2023.

Copper price spike due to market uncertainty
The recent geopolitical and economic uncertainties have led to a spike in demand for several commodities, including copper, which now trades at a spot price of USD 10,466/tonne (up 10% L3M). The Cu spot price is currently 13% above our long-term price assumption of USD 9,275/tonne for the Viscaria project, meaning that there is additional potential to our estimates should prices remain high.

Viscaria EBIT of ~SEK 1bn when operating at full capacity
We expect the first revenues from Viscaria in H1’24e, followed by a ramp-up period until ’26e when we expect full capacity of 3mt milled tonnage per annum at 1.0% Cu grade to be reached. For ’24e, we have estimated ~SEK 600m in revenue and ~SEK 200m in EBIT from Viscaria, but at full capacity we see annual revenue and EBIT reaching ~SEK 2.5bn and ~SEK 1bn, respectively. We keep our fair value range of SEK 1.1-2.4 per share.

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