(Image via Merida Minerals Inc.)
Looking for a ground-level entry stock that is focused on developing the long-term mining potential of zinc, copper, and led in a low-risk and historic mining district?
Gold and silver prices have seen a correction from recent highs, and while it is still a solid play for commodity investors, the copper story has been gathering great interest, having recently risen above $5/ lb ($9,500+ per tonne) on the Comex market in March 2022.
The third most consumed metal after steel and aluminum, copper is widely used in a range of industries including power transmission, electronics, and construction. Copper is the most used commodity in the making of electric vehicles. The trajectory of its value shows it is likely going to continue its climb through the rest of the year. The trick to capitalizing on these gains is to find an operation with a good source.
(Copper price chart – Dec 2021 to April 2022. Click to enlarge.)
In the hunt for copper, location is key; you will be hard-pressed to find a safer and more stable jurisdiction than Spain. Despite seeing prospecting and mining activity for hundreds of years, Spain is unearthing new geological promise, and a Canadian-based mining company is looking to repeat the team’s past success in discovering some of these new secrets.
That company is
Merida Minerals Inc. (TSX-V: ESPN, Forum) which is actively engaged in base and precious metal exploration in southern Spain and is pursuing opportunities from exploration through to mine development.
Having just listed, Merida Minerals is a mineral exploration company focused on developing the long-term mining potential of the Zn-Cu-Pb enriched Puebla de la Reina (PBR) high-grade property in the low-risk and historic mining district in Extremadura, Southwest Spain. That property covers an area of 90km
2 and the project hosts a volcanic-massive-sulfide (VMS) deposit featuring copper, zinc, and lead mineralization.
Zinc has also claimed a significant level of attention in the metals space, with prices climbing 50% in 2021 from $1,975 in May 2020 to $2,965 as of May 2021. It is expected that prices could climb further this year with a potential supply deficit forecast, as trends indicate strong demand from China and India for infrastructure, rail, and galvanized products.
The rich geology of this region has given rise to more than a thousand known mineral deposits and benefits from a well-established mining infrastructure.
(Map via Merida Minerals Inc. Click to enlarge.)
Situated in an established mining district with rich geology and access to roads, power, water, and a city just 5 km away, the PBR project represents a typical Cu-Zn-Pb VMS orebody.
In 1981, it was discovered by Spain’s National Institute of Mining and Geology (IGME) and explored for the following decade. It consists of several stratiform lenses up to 9 metres thick and 150 metres long set in syn-Cadomian felsic volcaniclastic sandstones and massive dacites, with minor massive andesites, shales, and limestones.
Drilling by IGME cut a mass of approximately 300,000 tons with average grades of 11% zinc, 1.6% copper, 1.2% lead, and 32 ppm silver. A historical indicated resource of 500,000 tonnes of ore grading 1.6% copper, 11% zinc, 1.2% lead, and 32 g/t silver was established.
A pervasive hydrothermal alteration is seen in the deposit’s footwall and hanging wall, which is strongly dependent on the type of protolith. Felsic volcanic rocks are chloritized and sericitized and strongly silicified adjacent to the orebody Disseminated sulphides are common in the altered zones. The mineralization consists of pyrite, chalcopyrite, sphalerite, and galena, with trace amounts of tetrahedrite and arsenopyrite, besides minor carbonates, quartz, and illite.
The lay of the land:
(Ossa Morena Zone mapvia Merida Minerals Inc. Click to enlarge.)
Known as one of Western Europe’s most diverse mining countries, Spain boasts clear legislation and fiscal policies that mining companies appreciate. The infrastructure is well-developed, the workforce is highly skilled with a depth of mining knowledge. Base metals exploration is booming in the region among international companies, of which Merida is looking to join the top of the stack, much like Iberian Minerals did when it was first founded by some of the Merida team.
Spain, which produces most of the industrial minerals, has abundant reserves, coupled with one of Europe’s most diverse mining industries.
According to the World Mining Data 2021 Report, Spain was responsible for 106 000 metric tonnes of zinc production in 2019, 170 700 metric tonnes of copper, 28 000 metric tonnes of lead, and 1,913 metric tonnes of gold.
Future outlook:
(Image via Merida Minerals Inc.)
Merida has planned an upcoming exploration program to further develop the potential of the PBR project.
The team’s top priority is a property-wide geophysical and magnetic survey to trace the mineralized horizon and identify key lithologic, structural, and mineralized features. The survey is set to take place in Q2 2022 when more exploration work will be determined. As warranted, a diamond drilling program will be carried out.
One of the richest sources of metals, VMS deposits like this one are well-known for their potential to host economically significant levels of a wide range of metals such as zinc and copper.
Essential metals across a wide variety of industries, including high growth sectors such as infrastructure and energy, the long-term market outlooks for both zinc and copper remain highly favourable as these metals face widening supply gaps over the next few years.
Meet the Team:
The Merida Minerals management team is comprised of industry veterans with a combined experience of more than 80 years of mineral exploration and production experience in multiple jurisdictions.
The company was founded by its Chief Executive Officer, Norman Brewster, B. Sc, P.Geo, and Director Rahim Allani, MBA. Mr. Brewster with more than 30 years involved in mining and Mr. Allani with more than 20 years of capital markets experience, decided to pool their resources with a tight team to bring this project to fruition.
Extensive experience in the mining industry, particulary in Spain, is seen across the entire team. Mr Brewster was one of the founders of Iberian Minerals, which brought the Aguas Tenidas copper-lead-zinc mine into production in Spain and eventually lef to the $995.6 million (CAD) acquisition of
Iberian Minerals Corp. by
Trafigura Group Pte. Ltd. Thus, Spain was seen as an ideal country for Mr. Brewster and his former Iberian team in Spain to return to.
The team is also helmed by seasoned Chief Financial Officer, Kyle Appleby, CA, who over the past 18 years has worked both the audit and the issuer side of the business, concentrating on providing, contract CFO services to several reporting issuers and private companies, active in the resource, agritech, technology and cannabis spaces with experience in take-overs and amalgamations. He is also the CFO of
Renforth Resources,
DigiMax, and
Spaceify, and has served on the boards of several companies, including
URU Metals and
Captor Capital.
Geologist Brian H Newton, P. Geo, has more than 30 years of experience in all facets of exploration and has been working with mining exploration service consulting firm
Minroc Management, where he plans, budgets, and executes mining exploration programs in small and medium-sized mining companies prospecting to advanced surface and underground programs. He is currently responsible for drafting the NI 43-101 report for the PBR Project.
Investment conclusion:
(Image via Merida Minerals Inc. Click to enlarge.)
Given the Spanish government’s pro-mining policies, which promote low taxes and other fiscal incentives for exploration and mining activities, Merida Minerals counts the PBR project as a prime asset for the company and investors. With just over 64 million shares outstanding, Insiders own over 40% of the company’s shares.
Many analysts believe that copper prices will continue to climb higher as the global economy works to rebound from the COVID-19 pandemic. The demand for copper continues to surge on the back of the growth in renewable technologies, used as an electrical component in many green applications, a major component in electric vehicles.
Investors who want in on this action sooner than later and are looking for a stable play in a safe jurisdiction where results have already been impressive would be wise to deepen their due diligence into this company.
To learn more about Merida Minerals Inc. and its projects, visit the company’s investor presentation
here.
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.