Centenera Mining Corp. (“CT”) [TSX-V:
CT / OTCMKTS:
CTMIF] is a 100% Argentina-focused junior mining company with attractive assets spanning
Copper (“
Cu”)
, Gold (“
Au”) &
Lithium (“
Li”), and a cheap valuation.
The most important asset to watch, at least in the short-term, is the
Esperanza copper-gold porphyry project —
(formerly known as the Huachi project) — an outcropping
Cu-Au porphyry system with a blockbuster discovery hole that had a giant intersection of
353 m grading 0.49% Cu Eq., (incl. 243 m at 0.57% Cu Eq. and 88 m at 0.69% Cu Eq.).
The project is located in San Juan province in northwestern Argentina, 135 km north of the city of San Juan. Esperanza is within 35 km of power lines and has year-round road access. It is located at elevations between 2,800 m and 3,250 m, low relative to other projects in the Andes. Exploration can be conducted year-round.
Centenera has a great management, Board & technical team for a company its size
{66.6 M shares outstanding x C$0.20 = C$13.3 M market cap}. Drill permits are in hand, and drilling will start the first week of the new year.
The Esperanza drill program will investigate the potential for a bulk-tonnage
copper-gold porphyry-style deposit. The company plans to initially drill four drill holes for ~2,000 m, step-outs of at least 150 m from known holes. Planned holes will aim to reach deeper than historical holes, to 500 – 600 m.
Keith Henderson, President & CEO of
Centenera commented in a recent press release,
“Previous drilling advanced the project significantly, demonstrating grade from surface and continuity at depth. The new drill program will investigate the tonnage potential of the deposit with holes planned to test deeper and stepping out approximately 150 metres from previous mineralized intersections.“
Esperanza (fka Huachi) Cu-Au project
In January 2017, Centenera signed a
binding Letter of Intent granting it an option to earn a 100% interest (
subject to a 2% NSR) in the
Esperanza Copper-Gold project. The Property consists of a central Cu-Au porphyry deposit and a peripheral epithermal Au system. On March 6th, a NI 43-101
Technical Report was published.
Esperanza is in San Juan Province (
2nd highest of 9 ranked provinces; Source:
Fraser Institute Mining Survey, 2017) in Northwestern Argentina. The project has been known for a long time, but it was only first drilled in 2006.
From 2005-2007,
Cardero Resources conducted a modern, systematic exploration campaign focused on the porphyry mineralization. The program consisted of systematic rock sampling, detailed property scale mapping, an IP survey, and drilling (
11 holes, 2,552 m).
“Exploration programs completed by CarderoResources from 2005 – 2007, and Kestrel, 2011 – 2012, greatly increased the understanding and potential of the Property. Cardero’s was the first comprehensive modern exploration with an emphasis on finding and defining a porphyry copper deposit. Cardero was successful in identifying both widespread porphyry copper and low sulphidation epithermal gold style mineralization.” {Source:
Page 51 of Huachi Technical Report}
As a rough valuation exercise, one could compare Huachi / (
now Esperanza) to
First Quantum’sTaca Taca project, which was acquired for ~
US$0.015 per Measured, Indicated & Inferred
Cu Eq. resource pound. Current pre-development projects are valued by the market in the range of ~
US$0.0025 (a quarter of a penny) to above
US$0.05 per pound of
Cu Eq. in the ground. Since many peers have a primary project with a PEA, PFS or BFS completed, I assumed a per pound value of
US$0.0075 for
Centenera’s project.
Management is shooting for 500 million metric tonnes (“Mt”). 500 M Mt x 0.35% Cu Eq.
(Cu Eq. grade adjusted for recoveries and contingencies to be conservative) would be 3.8 billion pounds, worth ~
US$29 M, (
at $0.0075/lb.) — equal to ~
C$0.46 per share. Indicative share prices are based on millions of tonnes of potential resource (
from 100 to 900 million along the top of chart) and prospective market valuations (
from US$0.0025/lb. to US$0.0225/lb.).
The yellow-shaded portion of the chart below is a base case range of share price scenarios. The green-shaded portion represents upside scenarios for the company, and/or underlying strength in Copper prices. For example, if the Cu price were to trade above
US$3.50/lb. next year, valuations of peers would likely be higher than they are today.
At 500 M metric tonnes and a realized
Cu Eq. grade of 0.35%, the value of the
Esperanza project alone could be
C$0.46 per share in a base case, or
above C$1.00 per share in a more bullish case
(based on 78.6 M pro forma shares – pro forma for the 12 M unit capital raise). This is forward looking on my part, and my own opinion (
not necessarily that of management), the Company has no maiden mineral resource yet. One should haircut, i.e. attach a risk factor, to the values on the chart accordingly. As a reminder, the current share price is
C$0.20.
To be perfectly clear, delineating 500 M tonnes is far from a sure thing, and won’t come in the maiden resource. However, historical exploration points to targets to be drilled in January that could provide evidence of a scale that attracts considerable attention.
Even after risking the indicative share prices in the chart, I believe
Esperanza’s valuation more than covers the entire market cap of the company. If true, that means investors today are getting all of
Centenera Mining’s [TSX-V:
CT / OTCMKTS:
CTMIF] other properties / projects for free.
Readers would benefit from reading the March 2017
EsperanzaTechnical Report, (
not that long or overly technical).
Recent press release:
November 20th
Corporate presentationWebsiteTwitter
Disclosures: The content of this article is for information purposes only. Readers fully understand and agree that nothing contained herein, written by Peter Epstein, about Centenera Mining
, including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is to be considered, in any way whatsoever, implicit or explicit investment advice. Further, nothing contained herein is a recommendation or solicitation to buy, hold or sell any security. The content contained herein is not directed at any individual or group. Peter Epstein and Epstein Research [ER] are not responsible, under any circumstances whatsoever, for investment actions taken by the reader. Peter Epstein and [ER] have never been, and are not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and they do not perform market making activities. Peter Epstein and [ER] are not directly employed by any company, group, organization, party or person. The shares of Centenera Mining
are highly speculative, not suitable for all investors. Readers understand and agree that investments in small cap stocks can result in a 100% loss of invested funds. It is assumed and agreed upon by readers that they will consult with their own licensed or registered financial advisors before making any investment decisions.
At the time this article was posted, Peter Epstein owned shares and stock options of Centenera Mining
and the Company was a sponsor ofEpstein Research.
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