• After years as a mine builder, Don Hyma is planning his next major development at copper junior Caravel Minerals
• Adani-backed project will be one of the largest copper mines in Australia once built
• Stock is surging as copper price rises to record highs on supply shortage

Don Hyma’s name is well known in the mining industry.

But the well-spoken Canadian is an unusual figure to be seen at the small end of town.

Flip through the pages of his tome-like resume and the bounty of experience is palpable – with boots both on the ground and in the C-suite at Rio Tinto (ASX:RIO), Fortescue (ASX:FMG) and Mitsui.

Take a step back and two decades at Falconbridge, now part of Glencore, including a role spearheading the construction of the massive concentrator at the Collahuasi copper mine in Chile – one of the world’s three largest copper producers.

That mine is now at the centre of two of the biggest (proposed) M&A deals in mining history – Anglo American and Glencore each own 44% alongside a subsidiary of Mitsui, and Anglo shareholders have already approved a US$53bn tie-up with the majority owner of the nearby Quebrada Blanca mine Teck, while Glencore is in the cross-hairs of Rio.

Unlike many junior company heads, Hyma is a mine and infrastructure builder. That was one of the attributes that made the unconventional union with micro cap copper developer Caravel Minerals (ASX:CVV) a marriage made in heaven when he parlayed his role as a technical advisor into the managing director’s chair in 2023.

Caravel’s main game is a giant low grade porphyry around 90 minutes’ drive inland from Perth, which stands to be the largest new copper mine developed in Australia since OZ Minerals completed construction of the now BHP (ASX:BHP) owned Carrapateena in 2019.

And with copper prices at record levels in the orbit of US$13,000/t, the timing of a new definitive feasibility study due later this year could not be better.

“We’re seeing supply disruptions of these old mines around the world and at the same time, we’re seeing demand in copper over the next 10 years like we’ve never seen demand before,” Hyma said.

“And it is largely driven by decarbonisation and renewables and things like AI centres and wind turbines, electric vehicles, et cetera – things that didn’t exist 25 years ago are very much underpinning the forward looking demand.

“So we’re seeing this perfect storm of declining supply and very robust demand.”

The Pilbara of copper

Given his past working on Collahuasi, it would be tantalising to make links to Caravel’s future development.

Hyma and many members of his team have indeed been there and done that before. But the projects are very different in nature.

A bonafide tier-1 deposit, Collahuasi pumps out around 600,000t of copper per annum at a grade of ~0.9% Cu, very high these days for a porphyry.

But Caravel has its own charms. Expected to run at a rate of +60,000tpa for well over 20 years based on numbers disclosed in a previous study, the project runs at a far lower grade of 0.24% Cu – or a higher 0.27% in its important ramp up years.

Yet there are distinct advantages for Caravel. Its distance from Perth makes it a prime candidate as a drive in drive out or even residential operation and at a strip ratio of 1.22:1, or 0.64:1 in its first five years, Hyma says the economics make its extraction more like the low-lying bulk iron ore mines of the Pilbara than the mountainous Andean projects of Chile, Peru and Argentina.

Those same environmental factors make the future mine a prime candidate for automated trucking, pulling further costs out of the system and enabling some employees to work closer to home in Perth.

“It’s the copper equivalent to the big iron mines in the Pilbara and we know how to reduce our costs by going to scale, but also by multiplying automation,” Hyma said.

“We have ways of reducing costs, and by virtue of a bulk mine we can scale up the operation, and that’s what creates the profit margin for a project like Caravel,” Hyma said.

“The iron ore guys do exactly the same thing. They lower their cutoff grade of iron ore, they go to as high a scale as they can, and they create massive profit margin to earn their shareholders the returns that they’re expecting.

“We’re not the Pilbara in money terms, but certainly the concept applies for us.”

Copper valuations soar

With prices surging to record highs and expectations of continued demand growth, just about every major has set out their stall in the copper sector.

That has placed a premium on valuations, with BHP (ASX:BHP) CEO Mike Henry suggesting tier-1 copper producers clocked in at around US$50,000/t copper intensity equivalent.

CRU Group principal copper analyst Robert Edwards thinks a compromise will be met at around US$40,000 for tonne of annual copper production with ASX-listed Sandfire Resources (ASX:SFR) – a second-tier player by global standards – already clocking in at around US$39,000/t on its current valuation.

At a market cap of $230 million, that suggests Caravel has plenty of room to run even after a 156% gain in the past six months, given its planned production rate of +60,000tpa.

In 2024, Rex Minerals was poached by Indonesia’s MACH for $393 million for South Australia’s Hillside copper project. While more advanced than Caravel and shovel ready, its planned production rate will be less than half of the Caravel development.

The run in Caravel’s share price has all been about copper price so far, Hyma said. Around 80% of CVV’s future revenues will come from the Red Metal once molybdenum and precious metals credits are accounted for, making the firm strongly leveraged to the commodity’s performance.

Canaccord’s Paul Howard put a 60c price target on the stock last year when it was trading at under 20c, since when CVV’s share price has more than doubled and copper prices have lifted over 40%.

The Indian copper boom

Given its scale, the 3Mt Caravel will come with a large capital bill, estimated in its 2022 pre-feasibility study update at $1.6bn.

But there is already strong momentum to potentially secure a joint venture partner for what will be a +billion dollar development, after a subsidiary of Indian conglomerate Adani signed a non-binding MoU establishing a framework for company and project level investments as well as a life of mine 100% offtake for its copper concentrate.

It comes after Adani opened a 500,000tpa copper smelter in Gujarat last year, one of the world’s largest copper factories. Plans are already in place to double its capacity by early in the next decade as India emerges as the next global growth centre after China.

That places Caravel in pole position as copper smelters scramble for supply amid a shortage of concentrate. Spot smelter TC/RC charges have turned negative, meaning some smelters are being forced to pay miners to refine their product, an untenable situation.

“It’s not just a smelter. I stood there and watched the copper cathodes being stripped off the starter plates, as they call them, in the actual casting room or in the cathode part of the facility,” Hyma said after visiting the facility last year.

“Those cathodes then just get trucked out one door into the next door. They remelt them and they make wire rod and all sorts of down the stream shapes and materials needed for car manufacturing, for example, or for wire or for transmission lines.

“All of their copper production is being consumed in India.”

In India, companies like Adani are “building the Pilbara, which took 50 years, in 25,” Hyma said.

“They’re not really interested in us for the existing smelter because we don’t come online fast enough.

“But for the announced expansion, doubling to a million tonne a year copper production, we are very much of interest to them.”

2026 a key year

Hyma has stressed that the big focus for Caravel is that every aspect of its DFS is done right, ensuring the project is on a solid footing before a final investment decision is made.

A host of workstreams are planned this year to push the project along that virtuous path.

Adani is expected to travel to site at the end of January 2026 for due diligence ahead of the signing of a binding term sheet expected this quarter, with engagement is progressing with export credit agencies to explore financing structures for the eventual project construction.

The final land purchase option agreement for the Bindi deposit has been executed already, a milestone that lays the foundation for the granting of a mining lease and general purpose leases covering the open pit mine area at the Wheatbelt site.

An updated JORC reserve is planned for release this year as well as part of mining studies by Byrnecut’s Mining Plus, with engineering studies for the DFS significantly advanced and an environmental review document due for resubmission in mid-2026.

Caravel is expected to have a unique water source, enhancing the environmental credentials of the project.

It plans to extract saline groundwater unsuitable for use by farmers which has the added benefit of improving copper recoveries in the mill.

That saline groundwater kills vegetation after winter rain, meaning Caravel could turn the mine into a net positive for the environment even before its product’s use in EVs and renewable energy is taken into account.

“The very unique opportunity we have on this project is … by virtue of us drawing down that water table, we’ll be able to over time start to reverse that surface damage that’s occurring to vegetation,” Hyma said.

“But at the same time, we’re getting the water that we need for the process plant.”

The point is highlighted by Sandfire’s offer for Havilah; Trek stumbles across big WA manganese deposit.

Last week it was mentioned here that savvy investors were buying the copper dip in anticipation of a price surge and more M & A action.

They are doing all right too as the copper price has rebounded towards record levels of more than $5/lb and things on the corporate front have begun to stir again.

Last week copper was $US4.85/lb. It’s now knocking on the door of $US5/lb ($US4.96/lb) which means the price year to date is up some 20% on last (calendar) year’s average.

While the chatter around the reasons why the red metal is on the march again usually gets linked to the daily politics of the US, there is something much more fundamental driving the metal - a supply deficit.

As noted last week, BHP estimates copper demand could grow by 1Mtpa each and every year to 2035 in response to demand being powered up by global electrification.

Meeting that demand is a seemingly impossible task unless copper prices fly up in a major way.

Anticipating all that, industry players – and a good dash of private equity – have been increasing their copper exposures, be it at the production or advanced project level, through M & A action and/or by forming strategic alliances.

That the industry and other corporates have front-run the equities market on the copper squeeze is reflected in the big premiums they have paid in recent times to take over ASX names like OZ Minerals, Rex Minerals, New World Resources, MAC and Xanadu.

They have all popped off at fancy premiums to their pre-bid market values, confirming that while investors are now catching up with the copper thematic, the remaining copper stocks on the ASX have continued to be undervalued.

Sandfire/Havilah:

All that was reflected in Thursday’s market when South Australian copper stock Havilah (ASX:HAV) climbed 48% to 40c for a market cap of $140 million after agreeing to sell Sandfire (ASX:SFR) up to 80% of its 2Mt Kalkaroo copper project for $210m.

The earn-in is in two stages comprising $105m upfront (70% scrip and 20% cash) and a further $105m on completion of a new feasibility study into Kalkaroo’s development. Sandfire will also spend $30m on regional exploration under a strategic exploration alliance.

Clearly then Havilah has been under-valued by the market something chronic. That is despite it having once had a strategic alliance with OZ Minerals that recognised Kalkaroo as a leading development candidate.

But BHP walked away from that arrangement when it acquired OZ on the basis that it had enough SA copper with its Olympic Dam, Prominent Hill and Carrapateena mines, and the Oak Dam discovery.

Kalkaroo is also not BHP scale. But it is to Sandfire with its $7.5 billion market cap. It marks Sandfire’s return to operating in Australia after it pushed into copper in Spain and Africa ahead of its DeGrussa mine in WA coming to an end.

Kalkaroo is a potential 20 year-plus project likely capable of producing 45,000tpa of copper and 100,000 oz of gold annually, with cobalt credits and lots of exploration upside.

Caravel:

One of the clear signals that copper supplies are already under pressure has been the collapse in the treatment and refining charges for the processing of copper concentrates by custom smelters.

The charges have fallen to less than zero in some cases and are the lowest in living memory as the smelters compete for concentrate flows.

That has just played out on the ASX with Indian conglomerate Adani striking a strategic alliance with Caravel (ASX:CVV) over its 3Mt namesake copper project in Western Australia’s central wheatbelt.

Adani needs long-term concentrate supplies to feed its newly built 500,000tpa Kutch smelter in the western state of Gujarat. It also has plans to expand the smelter to 1Mtpa, such is the demand for domestic supplies of copper.

Caravel in the meantime is well advanced on a definitive feasibility study into the development of its project, a low-grade but bulk tonnage opportunity where economies of scale can deliver margins that triumph over the low-grade (0.24%).

An updated preliminary feasibility study in 2023 arrived at a $1.67 billion development producing 65,000tpa of copper along with molybdenum, gold and silver. Using a $US4/lb copper price assumption and a US72c exchange rate, the pre-tax net present value (7%) was put at $2 billion.

Plug in $US5/lb copper and the NPV would be more like $3.8bn. There will be changes in the DFS, but the point is made about the project’s value creation potential.

Caravel was a 24c stock for a market cap of $140m on Thursday. Clearly the market continues to hold back on the stock because of the capex bill, and the low grade, even if it is not so low-grade in a $$US5/lb-plus copper market.

Adani, which is obviously now deeply enmeshed in the copper market, obviously thinks differently, hence the non-binding strategic alliance.

The alliance envisages collaboration between the companies on funding to advance Caravel towards a final investment decision in 2026 and the negotiation of a potential life of-mine offtake agreement covering 100% of Caravel’s production for processing at the Kutch smelter.

At the same time, Caravel is working with leading banks to structure a financing package, including what could be available from export credit agencies, alongside traditional debt and equity. Financing is now all that much easier with Adani’s presence.

Alma/Canterbury:

Another low-grade but big copper project on the other side of the country to Caravel is also coming into its own thanks to the heightened interest in potential large scale and long life copper projects.

It is the 2Mt and growing Briggs copper project in central Queensland, a joint venture between Alma Metals (ASX:ALM) and Canterbury Resources (ASX:CBY) under which Alma is earning a 70% interest by spending a further $7m before June 2031.

The pair have tiny market caps – Alma $15m (0.7c share ) and Canterbury $6.5m (2.4c). Importantly they have just committed to a pre-feasibility study into the project which is wonderfully located 60km from Gladstone.

The commitment follows the completion of a scoping study, the key findings of which can’t be reported because the proportion of the indicated resources was not high enough. But the partners did point to an “aspirational”’’ mining rate of 30Mtpa.

There it is again - a low-grade but bulk tonnage opportunity where economies of scale could deliver margins that triumph over low-grade, with multi-decade production potential.

It is the very stuff that attracted Adani to Caravel. By the by, Caravel shares office space in Perth with Alma and Alasdair Cooke is on the board of both.

Trek:

Investors in junior explorers are happy to see a solid share price gain whatever the underlying reason.

And so it was on Thursday for Trek Metals (ASX:TMK) which gained 1.6c or 38% to 5.8c, taking its market cap to $35 million.

Investors in the stock are there for the Christmas Creek project in WA’s Kimberley region. It’s a former Newmont project with big-time gold potential in the rocks beneath extensive soil cover.

Trek has been working away at teasing out that potential both with high-tech wizardry and good old-fashioned reconnaissance work like walking the ground, pick in hand.

On one of the pick-in-hand excursions, outcrops of manganese were encountered and are now interpreted to be part of a large hydrothermal system, with rock chip assays returning super high grades of up to 58% manganese.

Given the grades and the 750m strike of the cluster of outcrops before they dive under cover, and because the style of mineralisation is thought to be similar to the world-scale Woodie Woodie deposits in the Pilbara – Trek is now preparing a drill program at the virgin prospect.