Shaw and Partners rates Caravel as a Buy on copper strength

• Shaw and Partners rates Caravel as a Buy with $1.15 target

• Low-cost copper project stands out amongst its peers

• DFS and funding key catalysts

Shaw and Partners believes Caravel Minerals has the right ingredients to build a globally significant copper operation that is leveraged to ongoing structural demand growth for the red metal.

This belief is enough for the Australian broker to initiate coverage of the company with a Buy recommendation and a $1.15 price target, nearly 380% higher than its share price of 24c as of July 16, 2026.

Caravel Minerals (ASX:CVV) is progressing its advanced namesake project in Western Australia’s Wheatbelt region, which is the subject of a definitive feasibility study that is scheduled for completion in September 2026.

The Caravel project is a substantial porphyry-style system with a resource of 1.28Bt grading 0.24% copper that makes it one of the world’s largest undeveloped copper deposits.

Its mineralisation lends itself to a long-life, bulk-tonnage open-pit mining operation that will deliver significant quantities of copper into a starving market for several decades.

The resource scale is just one factor.

Caravel’s rare proximity to established infrastructure is another point highlighted by Shaw and Partners.

The project is within trucking distance of Perth and is connected to existing sealed roads, power infrastructure and skilled labour pools, avoiding many of the issues faced by more remote developments.

Location of the Caravel project. Pic: Caravel Minerals

“This infrastructure access significantly lowers capital intensity and operating risk relative to comparable greenfield projects,” senior analyst Peter Kormendy notes.

Engineering work continues to optimise the project’s development pathway, focusing on large-scale processing, automation and efficient mining methods to deliver competitive operating costs.

Permitting and stakeholder engagement is progressing simultaneously to position the project for quick development once the feasibility study concludes.

Development funding pathways are being evaluated with the project’s scale and long mine life lending itself to a diversified capital stack.

The company will pursue a mix of project debt, strategic investment and potential offtake-linked financing, to minimise dilution while providing the balance sheet required for construction.

Strong interest has already been received from potential strategic partners and lenders as highlighted by a non-binding MoU with Adani, reflecting growing global demand for secure copper supply.

Copper market

Caravel’s progress is timely given copper’s rally through May 2026 on massive data centre builds fuelling digital infrastructure and AI demand.

This upward momentum saw LME copper hit an intraday high of US$14,196/t and COMEX set a fresh record US$6.72/lb on May 13 though this was offset by a sluggish Chinese property sector and economic anxieties surrounding the Iran war.

While copper experienced a sharp reversal at the end of June following hawkish US Federal Reserve commentary and a firmer US dollar, the fundamentals remain bullish.

Mine supply remained constrained through the June 2026 quarter, extending disruptions that began in 2025.

Freeport-McMoRan’s Grasberg mine in Indonesia, under force majeure since a September 2025 flooding incident, pushed back its full-recovery timeline from 2027 to 2028 while Ivanhoe Mines’ Kamoa-Kakula in the DRC slashed its 2025-26 guidance by 23% due to a shortage of sulphuric acid.

Demand support comes from grid, power infrastructure and AI/data-centre-related electrification demand, alongside steady Chinese seasonal restocking though this was offset by a tightening macro backdrop.

Shaw and Partners also noted the numerous copper transactions in 2025-26 reflect majors opting to bypass the long wait for organic growth by acquiring ready-made optionality in the mid-cap or junior space.

It believes that this marks the beginning of a broader wave of consolidation as copper supply security becomes increasingly urgent.

Caravel resource model. Pic: Caravel Minerals

Low cost development

The broker adds that Caravel distinguishes itself from peers through the ability to target a bulk mining strategy modelled after successful Canadian benchmarks like Copper Mountain, Gibraltar, Highland Valley and the Pilbara in WA.

These focus on massive scale and operational efficiency, rather than pure ore grade to drive profitability.

By using large-scale, open-pit mining methods, Caravel aims to achieve exceptionally low unit costs.

“We project total operating costs of A$17.50/t of ore in the first production year rising to A$18.80 at steady state, before TC/RC and freight,” Kormendy said.

“This low-cost structure is a critical differentiator, allowing the project to maintain strong operating margins in our modelling before precious metal and molybdenum by-product credits, despite its lower-grade profile.”

Operating strategy is built on a “Mine of the Future” framework that integrates autonomous haul trucks, autonomous drills,and a remote operating centre to minimise labour costs.

The 2022 pre-feasibility study estimated all-in sustaining mining cost at $3.13/t mined and $7.14/t ore.

An update cut processing costs vs the original dual-train design and reduced C1 from US$1.72/lb to US$1.54/lb while the application of molybdenum credits in a further April 2023 processing update further cut C1 to US$1.23/lb.

Applying a 15-20% escalation to the PFS base for WA cost inflation, Shaw and Partners’ model now runs mining at A$8.50/t (2029) escalating to A$9.20/t by 2033, and processing at A$7.00/t escalating to A$7.58/t, plus a flat A$2.00/t overhead allowance.

“On Shaw and Partners’ gold, silver and moly price deck, we forecast the project will earn $0.65/t in by-product credits in the first full year of operation,” Kormendy noted.

“This is a critical financial buffer and effective ‘synthetic grade boost’ that generates $20m in “bonus” revenue at 30Mtpa.

“The by-product stream not only protects operating margins against copper price volatility but may also provide specific collateral to secure an upfront streaming deposit, a potential non-dilutive funding pillar in the capital stack.”

Proposed Caravel processing plant. Pic: Caravel Minerals

Exploration upside

Shaw and Partners adds that all current resources at Caravel remain open with potential to be extended at depth or along strike.

The immediate priority of exploration is to conduct infill drilling at the Dasher satellite deposit, which is likely to convert inferred resources to the higher confidence indicated category.

Additional drilling could potentially add 70Mt of ore to the mine reserve, further strengthening the long-term production profile.

Over at Bindi, deep holes have uncovered copper much deeper and further east than originally expected.

Based on how the rocks are twisted underground, latest interpretation is that rock layers have folded back on themselves in a U-shape.

This may act as a double-up, repeating the copper-rich layer further to the east.

Core drivers and catalysts

Looking ahead, Shaw and Partners expects the release of the DFS in September 2026 to be a major technical milestone that will confirm the project’s final capex, opex and updated JORC reserves.

Another major catalyst is the finalisation of the binding term sheet with Adani.

Consolidation of the multi-source project finance package is another key driver.

Caravel is assembling a diversified funding stack that includes European Export Credit Agencies, Letters of Interest from Finnvera and KfW IPEX for up to US$220m in senior debt, which show strong international support.

As CVV moves toward FID, securing the remaining financing package will result in the share price reflecting the transition from explorer to developer.