News & Analysis

Is copper a good investment?

24 Aug 2021 | by: Patricia Miller

Is copper a good investment?

The global expansion of the middle classes is helping fuel the need for resources such as copper. This age-old metal is used in many of the modern consumables and trends pertaining to economic growth. Think advancements in infection control and electrification for starters.

As a junior copper exploration stock, Bam Bam Resources is placed to give investors access to this trend. And better still, it’s operating in a safe jurisdiction. Bam Bam Resources is exploring in the Nevada region of the USA, where its flagship Majuba Hill copper gold project is located 156 miles outside Reno.

A recent exploration study shows oxide mineralisation present to at least 800 feet below the surface. With the vast area to be uncovered, the potential discovery is massive. In fact, there’s even speculation it could be a 350—500 million-ton copper porphyry. Not to mention the gold and silver potential, too.

It’s now getting set for a 2021 drilling program, to uncover the true extent of value within this copper mountain.

There are several reasons copper is a commodity worth investing in, not least of which is rising demand. Which is why investors are asking is copper a good investment and should I buy copper stock?

Fundamentals of copper stock

Following the March market crash last year, the price of copper steadily climbed 72%. The impressive price rise copper enjoyed last year, was in part thanks to investors seeking safe-haven assets in response to the pandemic.

So, what makes Bam Bam Resources a company worth investing in? There are several reasons it’s worth checking out. First and foremost, it made a successful discovery in May last year. At its Majuba Hill project, it intersected a significant copper and silver value play. 33 of the 34 samples returned contained greater than 0.05% copper. But the best result was 146 ft of 2.4% Copper equivalent.

A notable feature of this location is its proximity to Tesla’s Gigafactory in Nevada. Tesla is well known for its revolutionary advancements in electric vehicle progression.

For any investors interested in getting on the copper train, Bam Bam Resources and its flagship Majuba Hill project could be a match made in heaven.

What is the bull case for copper stock?

China’s quick economic recovery also helped, along with expectations that copper demand will surge as the green economy takes shape in a post-Covid world.

China is an emerging market making massive strides in global dominance. It’s home to the manufacturing of much of the world’s consumable goods, commodities, bitcoin miners, and is on a major push to become climate friendly.

China is seeing electric vehicle demand booming, so copper usage and prices should continue to surge in response. China accounts for 51% of copper demand because of its use in infrastructure and construction projects as its citizens strive for a higher standard of living. Even if demand in this area begins to slow, China’s increasing demand for renewables should offset this.

As if that wasn’t enough, the health sector is increasingly using the age-old commodity in its fight against infection. Copper has been used for its antimicrobial properties for over 4000 years. Nowadays its use is not only valuable but vital in the manufacture of many applications from hospital bed railings to medical devices and even touch screen pens.

For this extensive list of reasons, it seems apparent that copper is a commodity worth investing in for the long-term.

What is the bear case for copper stock?

Although copper looks as if it may be a sound investment and developments in copper exploration along with the increasing demand due to its uses in electric vehicles and infection control, it is important to remember that it can be volatile.

The price of copper stocks can fluctuate quite frequently, which may not be an issue for investors looking for long-term investments, but if you are looking for quick gains then copper may not be the stock for you.

Also the capital requirements of mining copper requires mining companies to take on debts which can ultimately lead to these companies filing for bankruptcy, which can be devastating for investors in those companies.

Should I invest in copper stock?

Copper certainly looks to be a promising commodity, as Bam Bam Resources copper exploration continues to gather momentum copper and the company could be one to watch in the very near future.

As with all investments, and especially those in precious metals and other commodities, markets can be prone to volatility and the exposure to risk for investors could be high. But sentiment towards copper is currently encouraging.

Valuethemarkets.com, Digitonic Ltd (and our owners, directors, officers, managers, employees, affiliates, agents and assigns) are not responsible for the content or accuracy of this article. The information included in this article is based solely on information provided by the company or companies mentioned above.

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

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