Resource World Magazine

48 www.resourceworld.com F E B R U A R Y / M A R C H 2 0 1 7 I n spite of copper's surprisingly strong performance towards the end of 2016, analysts remain more cautious than optimistic about the outlook for the red metal. Due to concerns about the expected arrival of new mine supply over the next two years, the price of copper hovered between US $2.00 and US $2.30/lb for much of 2016. That was before prices raised eyebrows by surging to US $2.72/lb in late November on the back of a sudden rise in mine disruptions and stronger than expected demand from China, a country that remains the world's leading consumer of copper, accounting for 45% of global demand. The move prompted a number of investment firms to revisit their price forecasts for the coming year even though supply sur - pluses are expected to put a damper on prices in 2018 and 2019, potentially offsetting the impact of infrastructure spending in the US and China. Credit Suisse raised its 2017 average price target to US $2.45/ lb from US $2.00/lb in early December. Scotiabank also pledged to revise its own targets which currently stand at US $2.20/lb in both 2017 and 2018. Copper remains the globe's most traded bulk commodity after oil. The metal tends to be a barometer of industrial activity due to its use in water pipelines, electrical motors, appliances, com - puters and electric wires. It is why sentiment in the industry has improved amid reports that newly-elected US President Donald Trump is proposing to spend up to US $1 trillion over a decade to make America's infrastructure "second to none." If Trump delivers on his promise, it would mirror China's recent pledge to spend 4.7 trillion yuan ($724 billion) in trans - port infrastructure over the next three years. That money would fund the cost of 303 key transportation projects, including rail- ways, highways, waterways, airports and urban rail, according to China's Ministry of Transport and National Development and Reform Commission (NDRC). Aside from the promise of infra- structure investment, mining industry officials say the electric car revolution is also driving demand for copper as an electric vehicle requires roughly four times more copper than a conventional car. While the price of copper slipped back to US $2.50/lb by the end of 2016, the November rally was welcomed by Canadian producers, including Copper Mountain Mining Corp. [CMMC- TSX], operator of Canada's fourth largest copper mine in southwestern British Columbia. Every 10 cent move in the price of copper is worth about $10 million to Copper Mountain's bottom line, said Chief Financial Officer Rod Shier during an interview with Resource World. As a producer, he said Copper Mountain tends to take a con - servative approach and is not counting on the copper price to remain at its current level. But buoyed by the recent rally, the company will move from optimizing the production levels at its BC mine site to exploration around an operation that is expected to produce about 80 million pounds of copper in 2016. Improving sentiment has also sent investment money trick - ling down to other companies in the sector. Copper Fox Metals Inc. [CUU-TSXV], which was trading at 12.5 cents on December 30, 2016, is looking ahead to advancing key projects in Canada and the US. That includes the flagship Schaft Creek copper-gold- molybdenum-silver project in northwestern BC, where Copper Fox is working in a joint venture with Vancouver-based Teck Resources Ltd. [TECK.B-TSX, TECK-NYSE]. Schaft Creek is a very large deposit; it hosts a measured and indicated resource of 1.23 billion tonnes, grading 0.26% copper, 0.017% molybdenum, 0.19 g/t gold and 1.69 g/t silver. However, the remote location, 45 km from the Stewart-Cassiar Highway, means the construction cost 2017 COPPER OUTLOOK by Peter Kennedy TSX:FT | OTCQX: FTMDF fortuneminerals.com Investor Contact: 519-858-8188 Ext. 114 CANADIAN COBALT DEVELOPMENT PROJECT • Rechargeable batteries driving cobalt demand • $115 million invested, positive Feasibility Study, test mined, pilot plants completed, and EA approvals • 1.1 M oz gold reserve & ~12% of global bismuth reserves • Working to secure off-take agreements and financing to start construction FortuneAD-September2016_Layout 1 2016-09-20 2:57 PM Page 1 COPPER

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