+90kton Cu resources found in exploration

Cu mineral value increases by c. SEK 10.6bn

Fair value range of SEK 1.1-2.8 per share

Exploration activities uncover significant resources
In December, Copperstone reported a rise in Cu resources, from 137.1 to 227.7 kton @1.29% Cu (1.23%), as a result of exploration activities at Viscaria’s D-zone. Indicated Cu resources increased from 125 kton @1.2% Cu to 169.5 kton @1.33% Cu, and inferred resources from 12.2 kton @1.55% Cu to 58.2 kton @1.18% Cu. Accounting for the new findings, the total amount of PERC 2017-compliant Cu at Viscaria is 699 kton (609). The discovery means that the total Cu value of measured, indicated and inferred resources rises by c. 24% (vs. Q3’20) to SEK 55.5bn at a Cu price of 8,146 USD/t. In addition, the exploration uncovered Fe resources of c. 5 Mton as a potential by-product of future mining operations. The Fe resources contribute SEK 7bn to Copperstone’s total mineral value at a Fe price of c.170 USD/t.

New findings are a sign of quality
The increase in resources, both Cu and Fe, as well as the higher Cu grade affects the quality of the Viscaria project positively. Successful exploration opens the path to initiating mining operations. Our mid- to long-term view of Copperstone’s robust end-market potential is bolstered by the discovery. Management have communicated that Copperstone will start working on upgrading the A- and B-zones in order to move forward with the exploration operations. Note that Copperstone has previously announced a rights issue of c. SEK 160m, with the subscription period ending on 25 January, 2021.

Fair value range of SEK 1.1-2.8 per share
In the light of the newly uncovered mineral resources as well as the strong Cu price (c.+29 % in 6M), we make minor adjustments in our fair value range from the previous SEK 0.8-2.7 to 1.1-2.8 per share.

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