Description:

True North Copper (ASX:TNC) offers investors strong risk-adjusted returns from current prices and several upside from its Cloncurry copper project, according to a report published by Australian market research firm Morgans.

With its portfolio of complementary copper assets in a world-class mining district in Australia, Morgans’ analyst Tom Sartor believes the value of in-situ copper at TNC’s assets will increase in line with the copper market.

“We like TNC’s: 1) multi-year production/cash flow potential; 2) self-funding potential; 3) mine life/exploration upside; and 4) higher grade development prospect at Mt Oxide,” the report said.

TNC has announced it will commence mining ore at Wallace North in the fourth quarter of 2024, following the company’s mining restart study for the Cloncurry copper project (CCP). In January 2024, TNC secured an offtake agreement with Glencore and a US$28-million dollar loan facility from Nebari Natural Resources Fund.

“Execution of the CCP re-start to plan is company-defining in 2024 as TNC has an opportunity to achieve self-funding status and allay market fear of liquidity risk,” wrote Sartor in the report.

Highlights of the report:

Upsides include multi-year production and cash flow potential from CCP mine restart; self-funding potential; mine life expansion potential and exploration upside; and higher grade development prospect at TNC’s Mt Oxide project.TNC’s aim to become a self-funding, NorthWest Queensland-focused copper producer-developer remains intact. In fact, several value-adds since the reverse takeover, including CCP de-risking, orebody confidence and exploration success are being overlooked as liquidity dominates market attention.Price catalysts include successful CCP mining/tolling re-start and demonstration of CCP commerciality and positive cash generation by late 2024. The Morgans report notes it expects “quarterly cash outflows to continue through 2024 as the ramp-up of revenues will take time to catch-up to and overtake expenses linked to the mining contractor ramp-up, pre-stripping and logistics required to unlock it.”

For the full analyst report, click here.

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