The "Copper" Rally: Three Small-Cap Stocks Outperform a Sector Fund. What Will Drive Their Growth?

As of late September, copper is trading near all-time highs: On September 29, COMEX futures were trading at $6.53 per pound. Since the beginning of the year, copper has risen 14.9% in price, and over the past 12 months, it has risen by approximately 36.7%. Against this backdrop, shares of companies that are merely exploring deposits or building mines are rising particularly sharply: when the price of the metal rises, the market values future production at a higher price, even though the first sales may not begin for years.

Oninvest analyst Aldiyar Anuarbekov selected three small-cap companies from the Sprott Junior Copper Miners ETF—since the beginning of the year, their stock prices have outperformed the fund itself.

The main reason for the price increase is related to supply. According to UBS estimates, global production grew by approximately 5% between 2023 and 2026, with virtually no increase in 2025 and 2026 (the report is available at the Oninvest editorial office). In Chile—the world’s largest copper producer—the state commission Cochilco expects the country’s production to fall by 2.6% this year, to 5.27 million metric tons: primarily due to a weak first half of the year at Codelco and at BHP’s Escondida and Spence mines.

Demand for copper is driven by power grids, manufacturing, and data center construction. According to UBS estimates, copper consumption by data centers has risen from 141,000 metric tons in 2020 to 922,000 metric tons in 2025 and could reach 1.23 million metric tons by 2027. UBS forecasts that the refined copper market will shift from a surplus of 231,000 metric tons in 2026 to a deficit of 329,000 metric tons in 2027. Cochilco, on the other hand, expects the surplus to remain at 179,000 metric tons in 2027.

Another variable is U.S. tariffs. Under a White House directive, the Department of Commerce was required to submit an updated market assessment by June 30. Based on that assessment, the U.S. president will decide whether to impose tariffs on refined copper imports: 15% starting in January 2027 and 30% starting in January 2028. However, the decision has not yet been announced. Anticipation of the tariffs has stimulated metal shipments to the U.S. and reduced its availability in other markets. UBS estimates that U.S. warehouses hold about 80% of global exchange-held inventories. If the tariffs are not imposed, the bank anticipates a temporary decline in copper prices of more than 10%, although it considers this scenario unlikely.

From the beginning of the year through September 29, 2026, shares of the Sprott Junior Copper Miners ETF (ticker: COPJ), which comprises 69 small companies in the copper sector, rose 13%. Oninvest has selected three stocks from the fund’s portfolio that have outperformed the fund itself by a wide margin since the start of the year. The companies are at different stages: Osisko and Panoro Minerals are exploring and developing copper projects, while Blue Moon is already building a mine and simultaneously expanding its tungsten business.

Rising copper prices are helping all three companies, but each has its own additional drivers. If copper prices fall, construction is delayed, or the companies require more capital, the stocks could quickly give back some of their gains. Investors should focus primarily on new resource estimates, budgets, and project financing terms, as well as the actual launch dates of these projects.

Stock price increase since the beginning of 2026: 135.5%

The main asset of Canada’s Osisko Metals is Gaspé Copper in Quebec, a project located on the site of a former copper mine. The company is engaged in exploration and preparation for the development of deposits, but does not yet produce any metal. In April, it updated its resource estimate to 1.83 billion metric tons of ore with an average copper grade of 0.27%. The amount of copper in these resources increased by 119% compared to the previous estimate.

In September, Osisko reported the results of a drill hole located approximately 800 meters from the boundary of the current resource model: over a 256.5-meter-long interval, the average copper grade was 0.85%—nearly three times the deposit average—including a 28.5-meter interval with a grade of 4.74%. The drill hole points to a potential expansion of the project and higher-grade zones, but its results have yet to be incorporated into a new resource estimate.

The next important milestone is the preliminary economic assessment for Gaspé in December. It should reveal how construction costs and the low average copper grade will affect the future mine’s economics. On September 16, Canaccord Genuity maintained its “speculative buy” rating and a price target of 3.25 Canadian dollars—81.5% above the closing price on September 29.

According to Market Screener, the company's stock has a total of seven "buy" recommendations from analysts. The average price target is 3 Canadian dollars, which implies an increase of approximately 67% from the current price.

Year-to-date growth: 315%

Panoro Minerals owns the Cotabambas project in southern Peru and has not yet begun mining operations. According to the company’s estimates, the project’s resources include approximately 1 billion metric tons of ore, with about 222 million metric tons having a higher metal content, comprising both identified and inferred resources. According to analysts at Raymond James, this portion accounts for 40–50% of the value of all metal in the current resource estimate. Panoro’s plan is to begin development with this portion specifically to improve the project’s economics. In addition, new drill holes have shown that the metal-rich Cotabambas zone may extend deeper than previously thought, which offers the potential to increase resources.

The company has expanded its drilling program to 45,000 meters and is preparing an updated resource estimate and a feasibility study. The main risks include the cost of the future mine, the project timeline, and relations with local communities in Peru. In June, Panoro signed an agreement with the Guaclé community granting access for exploration, but this does not eliminate all risks associated with future construction.

Since the beginning of the year, Panoro’s stock has risen more than any other stock in our sample—by 315%. Raymond James (report on file) maintained its price target for Panoro shares at 4.25 Canadian dollars—nearly 160% above the closing price on September 29.

Year-to-date growth: 50%

Blue Moon Metals is developing several projects in Norway and the United States. Its Nussir copper project in northern Norway is closer to production than the assets of the other two companies: the decision to proceed with construction has already been made. The company expects to begin production in 2027.

Blue Moon has another growth driver—the Springer tungsten project in the U.S. Its partner, Elmet Group, which secured $450 million from the U.S. government to develop the tungsten supply chain, plans to allocate approximately $150 million to the Springer project. This includes a $25 million purchase of Blue Moon shares and financing for future deliveries once the terms of the agreement are met.

The company has not yet generated any revenue from production: for the first half of the year, it reported a net loss of 56.4 million Canadian dollars, compared with 7.5 million Canadian dollars a year earlier—primarily due to higher exploration and project development expenses. As of June 30, cash, including restricted cash, totaled 159.1 million Canadian dollars.

On September 17, a Scotiabank analyst maintained a “beat the market” rating (a recommendation to buy the stock) with a price target of 14 Canadian dollars—twice the closing price on September 29. On September 15, Maxim Group maintained its “Buy” rating with a price target of $15 for the stock on the Nasdaq. At the same time, the bank’s analyst anticipated a new stock offering in the first half of 2027, which carries the risk of diluting the stakes of current shareholders.

According to Market Screener, five analysts recommend buying the company’s stock. The average price target is 15.4 Canadian dollars, which means the stock could rise by 120% from its current price.

This is not intended as individual investment advice.