Move over gold, there's a new metal in town, and it's not just making pennies anymore. Copper is its name, and being the most crucial ingredient in making EV batteries is its new game. And ounces to pounds, it's much more valuable than gold.
Moreover, it's easier to find and mine too. The best news, though, is that a small handful of companies are positioned to unearth enormous amounts of this semi-precious metal, capitalizing on what metals analysts are referring to as a "generational trade." And by drilling into the potential from its metal and mineral-rich properties, Bam Bam Resources (OTC: NPEZF) (CSE: BBR) (XFRA: 4NPB) has positioned itself to turn copper into dollars. A lot of them.
In fact, it's fair to call Bam Bam Resource's market opportunity an exponential one, noting that the EV sector alone is expected to become a $46 trillion industry over the next three decades. And there's no getting around the need for its product.
Copper Powers The Massive EV Industry
Far and away, copper is the critical ingredient to making batteries needed to power the surging EV industry. The better news is that although that $46 trillion estimate may be years in the making, the current opportunities are also tremendous. Hence, Bam Bam is in the right market at the right time, having a stake in the potentially massive Majuba Hills Mine operation that could contribute to giving NPEZF's small-cap price a large-cap valuation.
Its share price has already been responding to the opportunity in play. Since July, Bam Bam's stock price is higher by more than 64%, trading at $0.157 per share on October 8th. Still, while it's an impressive gain, it's likely the starting point for better gains to come.
Why? Because Bam Bam is ideally positioned to take full advantage of the booming copper industry by drilling into its Majuba Hill Mine in Nevada. Better still, even its non-core interest can drive revenues higher, with Majuba not only copper-rich but also proven to give up substantial amounts of silver, tin, gold, and zinc.
Put more simply, Bam Bam Resources, despite its small-cap price, is about to become a big-time contributor of metals to an industry lined up with demand.
The Potential From The EV Sector Is Ginormous
The news gets even better- the demand for copper is ginormous. And with 18 of the largest 20 automakers spending billions to penetrate the EV sector, market demand will grow even higher. One thing is for sure, the EV industry needs copper. Without it, its products are pretty museum pieces with little functionality.
Moreover, while the EV sector is obviously substantial, other consumer markets also need copper to power everything from power tools to parts on Mars Perseverance Rover. Hence, Bam Bam isn't targeting the need from just a single industry. Multiple are in play.
Even better from an investor's perspective, demand isn't expected to lighten anytime soon. On the contrary, clients are lined up to secure resources, even ahead of digs, to ensure they have the ingredients needed to expedite their own programs. Furthermore, with Bam Bam Resource's mining interests able to deliver lithium and cobalt, they are better able than most to attract several long-term clients ready to buy its entire production run. Sound like an unreachable ambition? It's not; stockpiling the ingredients to power billion-dollar investments is common in any industry.
Assets In The Ground Increase Too
Their need translates to another reality. The massive demand for these metals and minerals could have Bam Bam shares surge even before the company puts a shovel to the ground. And with copper prices coming back toward all-time highs, proven assets in the ground will earn their value on the balance sheet. Consequently, Bam Bam stock can benefit from assets underground and those brought to earth. It's indeed a win-win proposition.
Better still, recent updates from Bam Bam indicate that its Majuba Hill mine could be more valuable than previously expected. In a report last week, the company said it identified a second oxide copper zone. Core sampling on that rock is underway. Thus, while the value proposition in Bam Bam was already compelling, it appears to have gotten even stronger.
Better still, the need for its copper isn't going away. It has the highest electrical conductivity of all non-precious metals and is already needed to power millions of consumer and industrial products and machinery. Then, combine those markets with the EV sector, and it develops into a perfect storm of opportunity for Bam Bam to exploit. Consequently, that demand will turn into revenues, making current valuations a potential drop in the bucket compared to what its property assets can bring to market in the coming quarters.
Hence, while Bam Bam's 64% surge to $0.157 since July is impressive, a more appropriate forward-looking valuation could reward investors sooner than later. And knowing that copper prices are spiking despite other metals giving back recent gains adds to the bullish thesis.
Surging Copper Markets Benefit Bam Bam Resources
How strong is the copper market? Well, since 2019, copper prices have increased by about 46%, and in 2021 they are higher by roughly 2019. Compare that to gold, whose price is down by more than 7% YTD, and the disconnect becomes obvious. And the surge in price is happening in the wide open. The difference is that big money isn't quite ready to let their interest in the trade out of the bag just yet. Instead, they feed "gold bug" headlines to the news desks while building metals portfolios full of copper and other semi-precious metals needed to power global industries.
But, by any stretch, to those taking the time to look, copper is in play. Even better, as the world's most valuable "green metal," it's earning the attention of decision-makers who are quicker to fund green energy products than they are carbon projects. That interest won't go away either. In fact, some counties are preparing to spend TRILLIONS of dollars on green energy initiatives. And know that part of that investment includes incentives and credits for companies like Bam Bam that can change the trajectory from carbon emissions to electric.
Thus, if there was ever a "perfect" time to get exposure into the copper market, now could be it. And current price consolidation in the metals markets offers investors a second chance to take advantage of lower prices. In fact, an interesting dynamic that shows the interest in Bam Bam is that while the copper and metals markets have pulled back slightly in September and the first part of October, Bam Bam shares prices moved higher. In fact, its market price of $0.157 was its highest level since July16th. Again, the stock is showing strength in weaker markets.
Seizing Upon Low-Cost Mining Plays
Still, short-term weakness in a bull market is to be expected. And macro headlines often have a way of pulling everything lower in its wake. But, in the case of copper, any weakness comes with a silver lining. Thus, market weakness in the metal itself has a silver lining by providing a potential opportunity to invest in both the markets and mining companies at lower prices. And with the near and long-term demand forecast getting stronger, doing so may be a wise decision.
And the best part is, while copper is bullish by gaining, say, 3%, miners get an exponential boost, sometimes tripling the actual percentage increase in the metal. Of course, that's because mining companies, like Bam Bam, have assets in the ground. Thus, when metal prices increase, it has a compound effect on the balance sheet and project valuations. Therefore, while investing in miners adds more risk, the returns can be exponentially higher than the commodities themselves.
An excellent example is with Bam Bam itself. In 2020, when copper prices surged by 95%, Bam Bam's stock increased by 450%. Hence, the beta given to Bam Bam stock (NPEZF) can deliver significantly higher returns in a bullish market. And by cost averaging investments, downside risk can be mitigated. Remember, while copper demand is here to stay, trading smartly also has its advantages.
Still, with every EV car battery needing about 80 kg of copper to function correctly, trading smart also means taking advantage of opportunities when they arise. And with Bam Bam prices at pre-dig levels, capitalizing on its Majuba Hill interest alone makes the consideration timely and compelling.
The Lucrative Majuba Hill Mine
Indeed, Bam Bam's interest in the Majuba Hill Mine is its greatest treasure. The mines in and around Majuba Hill have delivered 2.8 million pounds of copper, 184,000 ounces of silver, 21,000 pounds of tin, and 5,800 ounces of gold. In the mining business, proximity matters. Thus, with historically proven assets and with Bam Bam identifying its own pockets of metals, it's understandable to see the interest in NPEZF stock building.
Moreover, with geological mapping, rock/soil geochemistry, and geophysical data on Bam Bam's assets showing the area contains approximately 40 million tons of oxide copper, prospects remain excellent. Better yet, it's enough copper to keep mining operations in the region busy and lucrative for a long time.
Remember, too, the mine also contains significant amounts of silver, gold, lead, tin, and zinc, which diversify revenue streams and add additional revenue-generating power to its portfolio. Even better, with access to the mine through a newly constructed access road, which also exposed oxide copper zones up to 100 feet long, more efficient operations translate to more impactful revenues.
Consequently, Bam Bam gets the benefit of operating an efficient mine with lower production overhead. Again, great news for the company and its investors.
Time For A Bam Bam Breakout
Combined, the assets in the ground and the timing of its projects put Bam Bam Resources in its best position ever to generate substantial near-term shareholder value. And with the copper markets heating back up even in the face of other metals' weakness, Bam Bam offers a tremendous asset to share price opportunity from an investment perspective. It's a gap, however, expected to get filled soon.
That could happen once headlines turn from gold and back to the needs of the EV market. And the reality of that is that copper will be the prime discussion for those who genuinely understand the EV market's underpinnings. Moreover, trading in undercovered companies can deliver the highest rewards.
For example, while investing in Apple (NASDAQ: AAPL) stock may be a way to get exposure to technology, investing in its chip maker may be a better option. In other words, sometimes not playing the biggest, most apparent trades can maximize returns. That could be the case for those that invest in Bam Bam Resources.
And with proven assets, cash on hand to fund exploration projects into next year, and market demand that is red hot, playing Bam Bam as a residual to more prominent mining names may be a wise consideration. Its 61% increase in price since July indeed shows investors are in tune with that strategy.
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