Metals and mining corporation Rio Tinto (RIO) has announced that it will invest $108 million to study the possibility of underground mining at Kennecott copper operations in the United States. The study is expected to be concluded in 2024.
The Kennecott mine is a 20-million-ton treasure trove of mineral resources at 3.65% copper and 1.62 g/t gold. This estimate has further upside potential, which can be confirmed upon drilling.
With the study, the company will collect critical geological, geotechnical and hydrogeological data to evaluate its options of underground development. (See Rio Tinto stock chart on TipRanks)
Rio Tinto Copper Chief Executive Bold Baatar said, “Kennecott holds a range of options to extend our supply of copper and other critical materials, to meet the strong demand being driven by electric vehicles and renewable power technologies.”
Recently, Goldman Sachs analyst Paul Young upgraded the company’s stock rating to a Buy from Hold and raised the price target to A$144.40 from A$128.
Young believes that a strong free cash flow outlook will help Rio Tinto tide over its operational issues and growth concerns at the mines of Pilbara, Simandou, and Oyu Tolgoi.
Rio Tinto gets a 7 out of 10 on TipRanks’ Smart Score ranking system, suggesting that it is likely to outperform market expectations.
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