Fortescue Deep Dive: Cañariaco Copper (Peru) – large-scale optionality, but higher Cu prices needed for FID

Research evidence excerpt

Fortescue Deep Dive: Cañariaco Copper (Peru) – large-scale optionality, but higher Cu prices needed for FID

J P M O R G A N Asia Pacific Equity Research

15 June 2026

Fortescue Neutral

FMG.AX, FMG AU

Deep Dive: Cañariaco Copper (Peru) – large-scale Price (12 Jun 26):A$20.21

optionality, but higher Cu prices needed for FID Price Target (Dec-26):A$24.00

FMG is looking to diversify its earnings through copper, having recently acquired Australia

a 100% interest in the Cañariaco Project in Peru. Key takeaways: 1) The project

Head of Australia Metals & Mining

could produce ~220ktpa of copper equivalent production at peak, with our

preliminary model estimating a 2034 start-up requiring ~$6bn upfront capex; the Lyndon Fagan AC

28-year mine life and large inferred resource base suggest there is scope for (61-2) 9003-8648

lyndon.fagan@jpmorgan.com

expansion. 2) The project has a declining grade profile that drives more J.P. Morgan Securities Australia Limited

challenging economics through the back end of the mine plan; we estimate a ~ Jonathon Sharp

$7.25/lb copper price is needed to generate a 15% IRR, suggesting further drilling (61 2) 9003-8312

and project redesign is likely rather than FMG moving quickly to FID under the jonathon.sharp@jpmorgan.com

preliminary economic assessment (PEA) parameters completed by Alta Copper. 3) J.P. Morgan Securities Australia Limited

At peak production, Cañariaco could add ~20% to EBITDA and provide Devwrat Vegad

meaningful diversification into copper. We don’t include Cañariaco in our base (91-22) 6157-3608

case. FMG remains Neutral-rated, trading on a P/NPV of 0.84x and FY27 EV/ devwrat.vegad@jpmchase.com

J.P. Morgan Securities Australia Limited/ J.P.

EBITDA of 6.6x. Morgan India Private Limited

Branko Skocic

• Cañariaco Copper Project.