Analysts like Canadian miner Arras for low-cost Kazakhstan copper and gold potential

Hannam & Partners Research has raised its target price for Canadian small-cap Arras Minerals by 57% after revising its estimate of the resource potential at the company’s flagship Elemes project in Kazakhstan. H&P Research believes that Berezski Central, one of the project’s key targets, could contain significantly more copper and gold-bearing ore than previously thought, while Kazakhstan’s low operating costs make the project’s economics particularly attractive. Oninvest looks at the outlook for Arras’s projects in Kazakhstan and why H&P Research sees more than 90% upside in the stock.

Arras Minerals was created in 2021 through a spinout by Canadian mineral explorer Silver Bull Resources and received all of its Kazakhstan assets. These included an option to acquire the Beskauga copper-gold project from Switzerland’s Copperbelt AG, as well as exploration licenses for the Stepnoe and Ekidos properties. Arras shares were distributed to Silver Bull shareholders, including Silver Bull Chair Brian Edgar and CEO Tim Barry, who assumed the same positions at Arras.

After listing on Canada’s TSX Venture Exchange in 2022, Arras raised financing from investors including Canadian miner Teck Resources and focused on expanding its portfolio in the Bozshakol-Chingiz belt. According to the company, the belt is home to several world-class deposits, including Muruntau in Uzbekistan, the world’s largest known orogenic gold deposit, and the giant Oyu Tolgoi porphyry copper deposit in Mongolia.

Arras subsequently obtained licenses for the large Elemes porphyry copper-gold project and the Tay copper-gold project near the Bozshakol open-pit mine operated by KAZ Minerals, increasing its prospective holdings in Kazakhstan’s Pavlodar region to more than 3,000 square kilometers.

In 2023, Arras formed a strategic alliance with Teck Resources. Under the agreement, Teck committed to invest at least $2 million in exploration in 2024 and could take its funding to $5 million by the end of 2025. After the regional exploration phase, Teck could have selected up to four projects and invested as much as $47.5 million in each to earn stakes of up to 75%. Teck did not exercise the option, however, and Arras announced in February that Teck had withdrawn from the option while retaining an approximately 9.9% stake in Arras. Teck stated that the initial results did not meet its threshold for proceeding to the second phase of the agreement.

Arras had previously terminated its agreement on Beskauga in June 2025, declining to make a one-time payment of $15 million. It stated that the capital would be better allocated toward Elemes and other exploration opportunities across its Kazakhstan portfolio.

The company holds mineral exploration licenses covering around 3,300 square kilometers in Pavlodar Region in northeastern Kazakhstan. Arras is now focused on exploring Elemes, its key asset. H&P Research estimates that, if the resources are successfully confirmed, ore from Elemes could potentially be processed over the medium term at Bozshakol’s mill, which has capacity of around 35 million tons of ore a year.

In July, Arras closed a bought-deal financing that raised CAD25 million. The transaction was completed through an underwriting syndicate led by Haywood Securities and including SCP Resource Finance, Canaccord Genuity, and Hannam & Partners. Arras intends to use the proceeds to fund exploration and development at its properties in Kazakhstan.

The company subsequently announced that it was doubling its Elemes drilling program to 40,000 meters. The decision was made after results from an earlier phase: at Berezski North, the company intersected 935.9 meters of mineralization grading an average of 0.71% copper equivalent. Copper equivalent incorporates the contribution from all metals in the mineralization by converting their value into an equivalent amount of copper. In this case, however, gold rather than copper makes the largest contribution to the figure: the interval averaged 0.19% copper and 0.51 grams of gold per ton, H&P Research noted. Arras CEO Tim Barry said, “these latest results from Berezski North represent a step-change for the company.” He also noted the significant potential for the mineralized system to expand further.

H&P Research expects additional drilling results to serve as near-term catalysts for the stock as the boundaries of the porphyry centers become clearer. The grades encountered look particularly attractive given Kazakhstan’s low production costs, the outfit emphasized.

H&P Research identify the low cost of exploration in Kazakhstan as one of Arras’s key advantages. They estimate that diamond drilling costs the company around $110 per meter, significantly less than at most comparable projects worldwide.

To assess Elemes’s potential economics, H&P Research compared the operating performance of open-pit copper mines in Kazakhstan, Australia, Chile, and North and South America. According to its calculations, ore-processing costs at the Bozshakol mill, which could eventually process ore from Elemes, are around 13% below those of the closest comparable operations in North America. Meanwhile, all-in sustaining costs after by-product credits are around $3,171 per ton of payable copper – around 62% below those of the average Australian producer.

H&P Research attributes this primarily to low electricity costs: more than 70% of Kazakhstan’s electricity is generated by coal-fired power plants, many of which are integrated with nearby coal deposits.

Arras is already benefiting from Kazakhstan’s comparatively low exploration costs, H&P Research emphasized. If Elemes advances into production, that competitive advantage could persist because of low ore-processing and electricity costs.

Low exploration costs are an advantage offered by Kazakhstan generally, however, rather than one unique to Arras. The closest comparable company is Canada’s Mogotes Metals, which obtained an option in February on Beskauga, the Pavlodar Region project that Arras had declined to acquire the previous year. Mogotes estimates that diamond drilling will cost around $100 per meter, versus around $110 for Arras. Beskauga is also at a more advanced stage: unlike Elemes, it already has a mineral resource estimate.

Market conditions remain favorable for companies exploring for copper and gold. The World Bank expects its metals and minerals price index to rise 17% in 2026, which could support the outlook for the copper market. Copper prices have roughly doubled over the last two years as global production has failed to keep pace with rising demand from data centers, electric vehicles, and renewable energy, according to Streetwise Reports, a note by which was seen by Oninvest. Gold prices, meanwhile, are being supported by sustained central-bank purchases and geopolitical tensions.

H&P Research describes Elemes as a rare strategic asset, specifically, a large-scale porphyry system with potentially low development costs in a stable jurisdiction with developed infrastructure. According to its model, gold would generate around 55% of Elemes’s revenue over the future mine’s operating life. In other words, although Elemes is generally classified as a copper project, its economics depend more heavily on the price of gold. H&P Research’s updated model reflects this: alongside its revised estimate of the project’s resource potential, the outfit raised its long-term gold price forecast to $3,500 per ounce from $3,000.

Streetwise Reports writes that exploring several prospective targets simultaneously could allow the company to publish drilling results regularly, potentially confirming Berezski’s potential as a world-class copper-gold porphyry system.

In July, H&P Research raised its target price for Arras by 57% to CAD2.83 per share, implying 90% upside from the closing price on Thursday. Arras shares have about doubled year to date. The stock has one rating, a “buy,” according to MarketWatch data.

This text is for informational purposes only and does not constitute personalized investment advice.