It is great to see that Cascade Copper is now trading under the symbol CASC after completion of an IPO for $1 M. This has taken a while, but I believe the wait was worth it, as it essentially frees up resources and financial assets to allow Brodie Sutherland (CEO) to work 100% on Pilar and El Picacho, Tocvan's two properties in Sonora, Mexico.
From Cascade's May 24th press release, "Cascade Copper Corp. has completed its initial public offering of 10 million units at a price of 10 cents per unit for gross proceeds of $1-million. Each unit consists of one common share in the capital of the corporation and one common share purchase warrant of the corporation. Each warrant entitles the holder thereof to acquire, subject to adjustment in accordance with the warrant indenture governing the warrants, one common share at an exercise price of 15 cents at any time prior to 5 p.m. Toronto time on Oct. 24, 2024, being the date that is 18 months following the date of issue. The common shares of the corporation are expected to commence trading on the Canadian Securities Exchange on April 25, 2023, under the trading symbol CASC." What does this mean for existing Tocvan shareholders?
Unfortunately, this doesn't benefit new shareholders, but I believe new shareholders will benefit greatly going forward as the focus will be on increasing the incremental value of both Pilar and El Picacho, representing a significant return on investment at these current prices.
Each shareholder of record as of the close of business on May 31, 2022 will receive, on the distribution date, one common share of Cascade Copper for every 6.5384044 common shares held in the Company. The share dividend is expected to be distributed to the Company's shareholder on or about the time that Cascade Copper completes its initial public offering. I suspect this will occur very soon as certificate preparation is in the works.
Some may believe the recent price pullback is in response to the loss of the Rogers Creek asset, but I believe Tocvan is now worth more without Rogers Creek. The volume last week was very light and certainly not indicative of a mass exit, but rather the selling was from those who don't understand the progress and underlying value of Tocvan or simply don't have the patience to wait.
You know my dad's old saying, "in Canada they generally say the inexperienced sell on news and buy on rumours, but the experienced buy and hold for value".
Best to let these shareholders sell here and replace them with stronger, longer term shareholders. Pilar was acquired as a highly leveraged asset with over 17,000 meters of drilling to take advantage of depressed pricing markets when the junior resource sector was in a severe downturn. It was considered to have excellent value then, and even more value today with over 23,000 meters of drilling and critical production studies well underway.
However, it is not just the drilling that is important, there have made several key advancements, for example, metallurgical and leaching studies; and the on-going processing of a 1,000 ton bulk heap leach sample to determine the head-grade and recovery of gold. Also the recent discovery and proven recovery of "Free Gold" further adds to the overall economics of Pilar.
But more importantly, mineralization starts at the surface (and continues at relatively shallow depth), which greatly increases the long-term production economics. Given the progress and results todate, many think Pilar represents the next potential gold and silver producer in the Sonora area of Mexico.
The bulk sample represents a significant step in bringing Pilar to production. Preliminary results indicate that material collected during trenching has returned not only consistent gold, but also high grade gold in comparison to other producing properties in the Sonora area. Assays from the 15 duplicate samples collected from the crushed material to be used for the bulk heap leach pad ranged from 1.11 g/t and 2.18 g/t Au, with an average of 1.64 g/t Au. Economic grades from producing mines in the area are believed to be around 0.6 g/t Au. A bulk sample of this size is not commonly undertaken by early stage mining companies as the cost is prohibitive when deposits are deeper in the ground, this gives Tocvan a considerable cost advantage. Conclusion: Nothing substantive has changed. Tocvan continues to systematically explore Pilar and assemble the pieces required to take Pilar to production or be acquired. Tocvan has a strong institutional partner, and together with financial support from existing shareholders, is well funded for the next two years. There are only about 39 M shares issued, with a good warrant pricing structure to prevent significant dilution prior to production
Even today, the risk continues to be further minimized with the discovery of new underground mines at Pilar as a result of recent trenching while collecting material for the bulk sample (this will further enhance the value proposition as it allows for additional important drill target areas). Numerous underground mines support the thesis that a robust gold system is present. Sonora is a mine friendly area and is very quick to assess and issue drilling and production permits, as evidenced by the approval of 83 drill pads at Pilar totalling 10,000 m. It is my understanding that production permits take about a year to process.
I suspect drilling will start soon at both Pilar and El Picacho.
As my dad said, "once you catch a tiger by the tail, hold tight and don't let it go, it's going to be a wild ride".