The following is a transcription of the above video, and The Market Online has edited it for clarity.
The Market Online recently caught up with Ivan Bebek, the co-founder and CEO of Coppernico Metals Inc, a mineral exploration company focused on creating value for shareholders and stakeholders through exploration in pursuit of world-class copper and gold deposits in South America.
TMO: Would you share with us a bit of a background of Coppernico Metals and some key highlights of your projects?
Bebek: So just a bit of a backstory, I’ve been in this business for 25 years. The first appeal was to go and find a 5-million-ounce gold mine, and I joined a group, a partner and we found 5 million ounces of gold in Ghana, West Africa.
We thought this was the one and the stock did extremely well, went from 10 cents to $9 per share, about a $900 million valuation in the last gold bull market.
What it did for us was it gave us the hunger to go look for something bigger or repeat that success again because a lot of people did tremendously well during the exploration phase of that discovery.
We went out and we built a company called Cayden Resources, where we drilled a hundred holes in Mexico and in 2014 we were very fortunate to sell the company to Agnico Eagle. This gave us another big win on the belt and gave us more momentum and again, the anticipation of going for something much bigger or that hunger; it grew.
We met a few geologists from Newmont, the largest gold producer in the world, and we spent over a hundred million dollars since 2015. For five years we looked for the world’s larger copper, gold and silver assets.
In 2020, the company had gold, silver and copper, all three metals in one company. We felt that was the start of where we are today. About three years ago, we were a bit early.
We thought it was the start of the bull market, so we decided to split the company in three.
Coppernico has a flagship asset called Sombrero. Sombrero sustained a market cap around $200 (million) to $300 million as we were identifying the potential that it had. It started off with a target that’s a direct analogue to Las Bambas, the 11th largest producing copper mine in the world.
We ran into some challenges since 2020 with getting our social access. COVID was a very good fundamental challenge that affected us because we couldn’t have meetings with the communities for some time but, we finally persevered last fall and we got our first social access agreement for three years. As well, we got our drill permits in April of this year, which led to a financing in May where we raised $19.4 million to test the thesis that we might have the next Las Bambas. Potentially a top 20 copper discovery in the world as we head into this bull market in base metals and precious metals.
TMO: What would success mean for Coppernico shareholders? What would that look like to achieve here?
Bebek: The company is going to start with the drill, and it has never been drilled or explored for copper.
It has over seven kilometres of very prospective targeting on the first pass of drilling that we’re going to start here in July of 2024.
The success for us would be to support the thesis that we’re on to the next Las Bambas, something with quality of grade as well as mineralization over good widths. Potentially a mineable scenario starting to reveal itself for the expiration drilling, which would be consistent for the next 13 months straight.
That’s what the current funding is for. Las Bambas sold for $7 billion in 2013 as a much lower copper price at the time around $3.25 per pound.
The opportunity here is of that scale. I can’t say that we’re going to get there but, I can say that we have that kind of a look in terms of size potential. And that’s really been the driving factor for us. Why would you pursue something that aggressively? It was not just the evidence, but it was the scale of the opportunity, which is really rare to find. For me in my career, it was 25 years to be at the forefront of something that could be that big.
The timing of the copper and metal space is what really drew that perseverance to hang on tight and get to where we are today.
TMO: What happens if you don’t sell the company? I know that you may have looked forward to doing that but, what happens if you don’t? What does that look like for you?
Bebek: It’s a great question. There’s a tremendous amount of corporate interest on this project.
We’ve had CAs with several majors. We’ve got the investment from Teck Mining who owns 9.9 per cent of the company. They outbid a handful of other majors for the investment and they came early on our terms that we were looking for, which was an equity investment versus a project level financing.
So there’s definitely an audience of corporate tension in the background but, we still need to drill and make that happen.
In my experience, two things happen when you make a discovery and they both result in a great share price. The exit we’re after as a management team and a board is to sell the company. The event of finding something much bigger than we would originally or that somebody else could recognize early and want to take over.
If we don’t sell it, we would want to go and work towards developing it or possibly consolidating other copper assets in the space and become much bigger.
It’s a great saying, if you can’t get your price, you have to go it alone and we’re thinking in both directions as we take on this project.
The one way that we have confidence that we would sell it is just because of the scale of the opportunity is big enough that the early hallmarks would be something rare, not just to a junior but to the global copper exploration sector.
TMO: We also saw that there was an appointment of Keenan Jennings to your board and the former VP exploration for BHP, can you tell us more about the appointment?
Bebek: That was a tremendous addition to the team.
There’s some background with Keenan and the project.
First off, he was mapping Las Bambas back in 2000, 2001 when he was with Anglo. Then while at BHP, he took great interest in the project as a potential equity investment and waited for our social access. He retired last year before we got our social access and drill permits.
So I reached out to him post- his retirement to see if he would want to be involved. Obviously, his stature of being a VP of exploration per BHP was quite significant and he agreed to come on the team and elevate our profile. Not just in the technical merit but also at the board level.
He’s welcomed and accompanied by Antonio Arribas, who is formerly the VP of geosciences for BHP.
We have quality, we have exploration backgrounds from one of the largest mining companies in the world, and we’re adding one more person to that team here as we do this interview.
We want to cover all bases, exploration, quality of exploration as well as potential development. I think you’re going to have ambitions like we do to go out and try to find something as big as we can.
The first test shareholders are going to look for is are you capable to handle a major discovery. We certainly have that personnel now at the board level, as well as in the exploration team.
As far as development, it’s early to even say that word. If you’re not thinking development, you can make a lot of mistakes as you explore.
So our goal here is to explore in a very intelligent manner so that we can achieve the best premium we could for shareholders.
Our exploration team is led by Tim Kingsley. Our VP of Corporate development is Christian Rios.
Tim Kingsley comes from a base metal background. He’s worked extensively in Peru at length.
Everybody on our exploration team is fluent in Spanish and has either lived, lives, or has worked in Peru.
The team is really well versed with our team and country and it’s one of the best teams I’ve had a chance to assemble and is fresh eyes.
When you look at a project for nine years, you start to really fall in love with it. Bringing in Tim Kingsley and Keenan Jennings to the board, is really good to get fresh perspective on targets.
Their feedback and review has been very complementary to the things we thought of these projects.
A very exciting time, a very strong team from a management perspective. Both technically and our ability to monetize exploration success. We’re at that forefront of finding out if we have that world class major discovery here with drills turning in July of 2024.
TMO: You have the quality names behind you, and that’s obviously going to attract more quality candidates going forward. Back in late April, the company announced that its Peruvian subsidiary, Sombrero Minerales S.A.C., is now fully permitted. How does this level of permitting position the company?
Bebek: That’s a very valuable statement getting permitted in Peru.
Many know that Peru is an amazing jurisdiction for the potential of the big one. The world-class mines that we all hear about. (It’s) the second-largest producer of copper in the world, and it has some of the largest mines in country.
So getting permits there is the challenge. That’s well known. It’s slow, it takes time as we’ve certainly demonstrated. When you get them, that is key. Right now, we have the ability to drill 48 holes from 38 pads. This gives us plenty of exploration to reveal the first look at a world-class, major discovery.
There (are) targets well beyond those holes and we are going to concurrently apply for more permits. First look is the seven kilometres of strike length of skarn mineralization that we’re going to get to test extensively with those first 48 holes.
We certainly really appreciate the community support here. We’ve had a chance to do a lot of agriculture programs in the Andes where we sponsor these programs. We get government grants from the communities and we co-finance it with the government, the communities ourselves.
This has given us a tremendous start to this project socially and that’s extremely important to us. It’s really the community success that is absolutely our success. So far the project is being rewarded with permits. It’s being rewarded with agricultural programs. Now jobs, to a larger extent, as the project finally has drill permits to go and drill ahead.
As of right now, we are good for permits for three years of social access, and we can drill 48 holes through 38 pounds.
TMO: It speaks so much volume when you have that community that’s sticking behind you and they support what you’re doing. You’re bringing on locals as well and that alone is huge for a community up there.
Bebek: It’s more about listening than telling when it comes to social impact with these communities.
In our first company, we found 5 million ounces of gold in Ghana. We impacted 8,000 people that are benefiting today from that discovery back in 2005. That’s a massive level of gratification for us.
In Mexico we affected a lot of the people there as well in a very positive manner. We’ve been growing with our understanding and ability to affect these people in a very positive way. In a sustainable way as well. It’s their demand of what they like and to manage their expectations of what we can deliver at various stages of the project. That’s key but, we listen to the communities of what they want and their success.
So we’ll do whatever we can, not just to bring them agriculture. Also, to create jobs and improve their social level of living.
If we don’t find a mine, it’s very gratifying that these programs will sustainably benefit them for years to come. That’s something that we’re very proud of as a team at all levels.
TMO: Let’s skip ahead to your May 16 news where Coppernico closed $19.37 million private placement financing. This included participation by Teck Resources Ltd., which hold 9.9 per cent of the company. Can you tell us about the financing and the position this puts the company in?
Bebek: This project took us nine years to go online from the first look at the project. It took two weeks to raise that $19.4 million that you just mentioned.
Teck had caught onto this project back in 2018. They waited this long patiently to see if we’d actually get the social access and the drill permits.
I think we shocked everyone with our perseverance, but they were early believers in the project. Having them come on board has been outstanding so far.
There’s a lot of very parallel visions towards the project in terms of exploration. The majority of our capital will go into the drill bit to explore this great opportunity.
In other companies that were looking at this, we kept running into the project level financing. This means you joint venture with a major or they get to earn two thirds of your project with an investment.
We are very reluctant to do that because we wanted to keep all the risk and all the upside.
We had spent the time to get here. They were the first to agree to the equity investment, and we’re very proud and honoured to have them as shareholders.
TMO: We’ve heard you say that Sombrero Project is now a direct analogue to the Las Bambas mine in Peru. Do you mind expanding on this just a little bit?
Bebek: Las Bambas is made up of a cluster of intrusions that are causing mineralized skarn. To keep it on the general sense, we have the same cluster footprint as they do very similar in scale.
It has age dated or mineralization that they have formed in the Eocene era, which is the same as the mineralization that was formed at Las Bambas.
We also have the same stratigraphic rock columns, the same for Las Bambas limestone, extensive limestone that’s forming the skarn and what interacts with the intrusions.
Having those similarities is outstanding.
To take a big swing as an investor, I prefer an analogue. An analogue to a major mine is key. In the case here, we’re calling it a direct analogue because everything’s the same.
The only thing we don’t know yet is are the drill holes going to yield the same kind of results? Could the same tonnage and grade be there? Could this be something of that significance?
So far, the scale of the targeting is there but, we just need to go and drill it. We’re very confident with the current stratigraphic rocks that are there and the time it was formed.
That’s a great start, and that’s the first 5 per cent of our land position.
We have over a hundred thousand hectares. We’re talking about 2,000 square hectares of what we’re looking at right now.
So there’s a lot more potential than we haven’t gone after yet.
Now that we have social access, we’re going to start to expose more opportunities. The appeal not just for Teck but, several of the majors have been, this is a place where you could be making discoveries for multi-generations.
There’s so many underexplored regions. We’re actually extending a world-class belt, not just with Las Bambas on the east side of the belt.
Also well known mines such as Costancia, Hudbay, a lot of the big ones that occur in Southern Peru. So the opportunity here is we are first movers.
We have the same style of geology. It has the same time with mineralization being formed. We have a thin layer of volcanic cover that is masking most of this opportunity. The erosion is what opened it up, and we were the first ones to jump onto it.
So there’s a lot of unknown potential here that we’re going to explore, and it’s perfect timing for us as we have the right partner.
The other shareholder of consequence in our company is Newmont. They own about 6.25 per cent of the company as well.
This came from the investment that Goldcorp made into Orin Resources for about $37 million the predeceasing company. This was one of the assets we weren’t able to drill back at Orin. We’re going to be able to drill here.
So we have Teck and Newmont as major shareholders, and we have several active other majors that are following the project.
It’s a perfect backdrop. All of what I’ve said about the project and the similarities to Las Bambas are really the fundamental reasons why we’re getting this much attention. The capital was raised at a very good valuation, and the opportunity is really exciting progress.
TMO: All of that is creating an even larger community, and that’s really what it’s all about. You’re in it together for sure.
Bebek: The opportunity here in the next 12 months is the best as an exploration investor. The company’s financed for 18 months of working capital.
From the date the financing closed, it has about 12,000 to 13,000 metres of drilling that’s paid for.
We will pause for the month of December as we do for the holidays, as everyone does in South America.
The biggest return you can get as a shareholder is from a drill hole, a discovery hole to something new. That’s what we’re going to be testing for the next 13 months. With the drill bit, with working capital to extend ourselves beyond that.
Every hole we drill could be an answer or support that thesis that this could be the next Las Bambas. It’ll take about three or four to really have a good handle on it.
I’m not afraid to miss because if you don’t take that risk, you can never get that big reward. Where we lose a lot of stake now is to start drilling these holes and see what could be on the other side.
A really exciting time and as a shareholder. It’s going to be very rich with catalysts as we’ll have constant drills turning in the next 13 months.
The timing couldn’t be better. The catalyst couldn’t be better, and the project couldn’t be better.
If you’re looking at us today, you’re catching us nine years after time. About $35 million has been spent and nine years of the projects lives to get to this point.
So that’s what you get to save if you look at us as an investment at this time.
And then the potential would be to hopefully deliver something big like a discovery such as Las Bambas.
TMO: Well, Ivan, that’s all the time we have but thank you again for joining me today.
Bebek: Thank you so much. It was a great pleasure to see you at this exciting juncture of turning the first drills and seeing if we have the big one.
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