Domestic Metals, a great time to pursue #Copper in the USA!

Despite a weak Chinese economy (albeit improving, with GDP growth still +4%), and very significant global events — the Middle East, Russia/Ukraine, U.S./China — the Copper (“Cu“) price has held up remarkably well, currently at $4.97/lb. (COMEX).

That price is strong for existing producers, but not enough to get large, greenfield projects around the world off the fence and into production.

Some contend, and I agree, that $12,000/tonne ($5.44/lb.) is needed to get most projects going, and perhaps $15,000/t ($6.80/lb.) to get the highest quartile cost ones across the finish line.

I’m not suggesting a quick run above $6.50/lb. and then back under $5.00/lb., Cu developers need sustained evidence that pricing will be meaningfully higher later this decade and beyond.

A few higher cost projects include giants in S. America that the world urgently needs. Demand for Cu, growing at ~2.5%-3.0%/yr, seems manageable, but the top 15 Cu mines are an average of nearly 60 years old, with declining grades/rising costs.

Some mines are coming to an end of life. According to S&P Global Intelligence, the average Cu grade is down at least 50% in the past 30 years to ~0.45%.

Demand could surprise to the upside from AI/data centers, robotics, EVs (+ virtually all modes of transportation/shipping) & decarbonization.

Yet, I believe supply can only surprise to the downside, resource nationalism, geopolitics, global warming (water scarcity), etc. There are numerous examples of resource nationalism, like First Quantum’s Cobre Panama & Barrick’s problems in Mail, Africa.

Suffice it to say that U.S. production is highly prized when half of the world’s top eight Cu-producing countries are the DRC, Russia, China & Indonesia (heavily influenced by China).

On June 23rd, world-famous metals/mining entrepreneur Robert Friedland of Ivanhoe Electric said the following about his company’s PFS-stage Cu project in Arizona, USA…

“Given global conflicts that concern us all, the U.S. is now awake to the urgent national security imperative to restore domestic American mineral production to the scale of the American economy. Our government, industry, and defense establishment clearly recognize the paramount importance of having a secure, domestic supply of critical minerals in the 21st century, including copper.”

Unrelated to Friedland/Ivanhoe, but sharing a strong belief in having a U.S. presence, Domestic Metals (TSX-v: DMCU) / (OTCQB: DMCUF) has a great project, in a past-producing setting, in Montana, USA named Smart Creek.

NOTE: Most of the images, maps, charts, graphs in this article can be found in the Company’s new corporate presentation. Please review this presentation for more detailed info!

Smart Creek was optioned from Rio Tinto last year. Domestic Metals can acquire up to 60%. Smart Creel is accessible year-round via highway & gravel roads, and is ~100 km SE of Missoula, Montana.

Management is looking into affordable ways to possibly end up with more than 60% of the Project.

A total of 52 drill holes (45 at Smart Creek) have been done. Drilling in 2022 by Rio returned an interval of 109.7 m @ 0.75% Cu and 18.7 g/t Ag, incl. 80.8 m / 0.96% Cu + 23.5 g/t Ag, and incl. 16.8 m / 2.25% Cu + 46 g/t Ag.

That final 16.8 m segment has a strong Cu Eq. grade of 2.73%, quite attractive given that it’s very near surface (from 64.0 to 80.8 m). The 2.73% Cu Eq. assumes $4.97/lb. Cu, & $36.11/oz Ag.

If these deposits are as large as preliminary indications suggest they *could be,* then, (subject to metallurgy), a Cu Eq. grade of 0.45% could be amenable to a robust, U.S.-based, bulk-tonnage mining operation, especially with $5.44-$6.80/lb. Cu.

Note: Teck, HudBay, Centerra Gold & Taseko Mines, are mining 0.27% to 0.35% Cu Eq. grades in Western Canada

Domestic Metals needs to find more of what’s been found to date. A risk is that too much drilling (too many exploration dollars) will be needed to prove up a meaningful resource.

Chairman & CEO J. Patricio Varas, P.Geo., President Gordon Neal & CFO Stuart Ross are raising C$3M in a non-brokered private placement of up to 13,043,478 units at $0.23.

Each unit consists of a share + a half warrant. Each whole 3-yr warrant is exercisable at $0.33. Once it closes, there will be ~42M pro forma shares, resulting in an Enterprise Value (“EV“) of ~C$7.3M.

I believe this valuation is too low for a promising brownfield exploration play in the U.S. Domestic Metals (formerly Norden Crown Metals Corp.) is focused on four robust zones of alteration & mineralization at Smart Creek.

These four domains represent compelling exploration targets, including porphyry Cu targets previously tested by Rio. The Project contains two drill ready, high priority targets — Smart Creek & Sunrise — 1.5 km apart.

The Sunrise Mine target area operated in the early 20th  century as a small CRD deposit with grades up to 6.22  g/t  Au + 31.1  g/t  Ag and 1.5 %  Cu. In 2022, Rio  completed considerable reconnaissance drilling & geophysical surveys.

Sampling in March,  2025 returned up to 4.26  g/t  Au ~850  m east of the historic Sunrise Mine, confirming a new porphyry target.

Management believes there’s a critical mass of high-quality exploration data that can be leveraged to make new discoveries, as significant work was done by USBM, Exxon, Utah International, Noranda, Pegasus & Rio.

Importantly, Domestic Metals’ team recognized the “preservation of the host stratigraphy,” which provides the opportunity for additional porphyry (and related) targets, including structurally controlled/replacement style Au targets at Sunrise.

Four Key targets are: 1) a Cu porphyry below Rio’s drilling, 2) a gold-copper replacement mineralization zone at Sunrise, 3) a Cu-Au porphyry at depth, also at Sunrise, and, 4) a porphyry target at the emerging Radio Tower zone.

Domestic Metals is planning a comprehensive field program that includes geological mapping, geochemical sampling & IP (induced polarization) geophysics designed to identify drill targets at the Smart Creek, Sunrise Mine & Radio Tower targets.

Sixteen holes totaling 5,000 meters across multiple zones is planned for late Summer or early Fall. At Smart Creek, porphyry-related alteration & mineralization is evidenced by adits, pits and shafts, defining a 5 x 3 km footprint.

The past producing Sunrise Mine target consists of high-grade Cu, Au & Ag with potential for expansion through drilling. Sunrise has an anomalous footprint defined by surface alteration, mineralization & geochemistry measuring 3 x 2 km.

Note that 15 & 6 sq. km blocks are sizable, which is why Rio was exploring the area. There are 105 noteworthy Cu intercepts in 26 holes + 4 trenches ranging from 3.5 m of 0.14% Cu to 109.7 m at 0.75% Cu.

Smart Creek remains high-priority, with widespread, high-grade Cu oxides (and sulfides) that outcrop at surface. This mineralization is cut by numerous historic holes, with multiple good — and some very good — shallow Cu intercepts.

Metals/mining juniors are having a lot of trouble raising cash to explore. A past-producing project in the U.S., in the same state as attractive assets owned by Rio Tinto, Hecla Mining & Ivanhoe Electric, valued at just C$7M, offers an interesting risk/reward opportunity.

Disclosures: Domestic Metals is a speculative, early-stage, micro-cap company. It is currently raising equity capital for exploration work + drilling. Readers are urged to consult with investment advisors before investing in speculative stocks.

At the time this article was published, Mr. Epstein of Epstein Research owned shares in Domestic Metals purchased in the open market. Domestic Metals is not currently a paying advertiser on Epstein Research but is expected to become one in near the future. Mr. Epstein of [ER] is biased in favor of Domestic Metals.