Interview with Hayden Locke, President & CEO of Marimaca Copper

Our previous interview: https://www.cruxinvestor.com/posts/marimaca-copper-tsxmari-most-advanced-copper-developer-on-the-tsx-5269

Recording date: 1st July 2024

Copper: A Critical Metal for the Global Electrification Push

As the world accelerates its transition towards a sustainable and electrified future, copper has emerged as a critical component in this transformation. The copper market presents compelling opportunities for investors driven by robust demand projections and potential supply constraints.

Marimaca Copper, a company developing the Marimaca oxide copper project in Northern Chile, offers an interesting case study on how junior mining companies are positioning themselves to capitalize on these trends. The company is pursuing a balanced strategy of advancing its flagship project while continuing exploration efforts to potentially expand its resource base.

Hayden Locke, President and CEO of Marimaca Copper, highlights the global nature of copper demand: "The scale of transmission investment, particularly by China but also the rest of the world, is going to be the big driver of demand for copper over the next 5 to 10 years." This demand is underpinned by worldwide efforts to reduce carbon emissions, electrify transportation, and upgrade power grids.

On the supply side, challenges persist. Developing new copper mines is time-consuming and capital-intensive, often taking a decade or more from discovery to production. This dynamic could lead to a supply gap, potentially driving copper prices higher in the coming years. As Locke notes, "The only way it's going to be supplied is if the price goes up."

For companies like Marimaca Copper, this market environment presents opportunities and challenges. The company focuses on completing the definitive feasibility study and permitting process for its main Marimaca project while simultaneously pursuing exploration at its Mercedes site and other targets. This approach aims to create value through potential resource growth while advancing towards production.

Strategic partnerships play a crucial role in the capital-intensive copper mining industry. Marimaca's partnership with Mitsubishi Corp illustrates this, providing financial support and industry expertise. Such relationships can help de-risk projects and improve their chances of successful development.

Investors considering the copper sector should know the potential rewards and risks. While long-term demand projections remain strong, copper prices can be volatile in the short term. Additionally, mining projects face various risks, including potential delays, cost overruns, and geopolitical challenges.

However, the macro thematic supporting copper investment remains compelling. The metal's crucial role in renewable energy, electric vehicles, and grid infrastructure positions it at the heart of the global sustainability push. As Locke emphasizes, "This is a global phenomenon. We're not talking about one jurisdiction, we're talking about every jurisdiction, every developed jurisdiction in tandem, and that will create a wave of demand."

For investors, companies like Marimaca Copper offer exposure to this macro trend. With its balanced approach to exploration and development, strategic partnerships, and focus on a commodity with strong long-term fundamentals, Marimaca represents the opportunity available in the copper sector.

As the world continues its push towards electrification and sustainable development, copper will likely remain a critical component of the global economy, offering potential rewards for well-informed and patient investors.

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Learn more: https://cruxinvestor.com/companies/marimaca-copper

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Interview with Gregory Martyr, Executive Chairman of Capital Markets

Our previous interview: https://www.cruxinvestor.com/posts/capital-metals-aimcmet-major-backing-for-flagship-high-grade-emp-in-sri-lanka-pfs-by-2025-5418

Recording date: 1st July 2024

Capital Metals, a junior mining company focused on mineral sands, is forging ahead with its Eastern Minerals Project in Sri Lanka, despite recent setbacks in securing a strategic partnership. The company's Executive Chairman, Greg Martyr, emphasises that this project stands out as one of the highest-grade undeveloped mineral sands deposits globally, potentially offering significant economic advantages.

The company recently faced a challenge when a planned deal with Sheffield Resources fell through due to market conditions affecting Sheffield's valuation. However, this setback has led Capital Metals to reassess its strategy and focus on demonstrating the project's standalone viability. With $2.8 million USD in cash, the company is well-positioned to advance key development milestones.

A primary focus for Capital Metals is expanding the project's resource base. The current resource estimate, dating from 2016, is based on relatively shallow drilling. The company plans to conduct a new drilling program to depths of 10-14 meters, potentially uncovering significant additional mineralization. Martyr has set an ambitious target of doubling the resource in the short term, which could significantly enhance the project's attractiveness to potential partners or financiers.

Rather than pursuing a large-scale development from the outset, Capital Metals is considering a staged approach. The initial focus would be on producing 550,000 tonnes per year of heavy mineral concentrate, representing the simplest part of the project to implement. This strategy aligns with current market trends and could help manage capital requirements and technical risks.

To fund the initial development phase, Capital Metals is exploring several financing avenues, including vendor finance, offtake financing, and targeted equity raises. The company aims to minimise dilution while securing the necessary funds to advance the project. Martyr believes this combination of financing options could significantly reduce the need for traditional project debt.
Recognising the need for specialised mineral sands expertise, Capital Metals is in discussions with industry professionals to strengthen its operational team. This move aims to bolster investor confidence in the company's ability to execute its development plans effectively.

The mineral sands sector is characterised by a limited number of high-quality development opportunities, potentially enhancing the strategic value of Capital Metals' project. By advancing the project independently, the company aims to strengthen its market position and create optionality for future partnerships or standalone development.

Investors should watch for several key milestones that could serve as catalysts for Capital Metals' valuation, including results from the planned exploration program, appointment of key operational personnel, an updated development plan, permitting progress, and potential offtake or financing agreements.

While the Eastern Minerals Project presents a compelling opportunity, investors should be aware of potential risks, including execution challenges, financing uncertainties, regulatory hurdles in Sri Lanka, market fluctuations, and potential technical issues during development.

In conclusion, Capital Metals offers investors exposure to a high-grade mineral sands project with significant potential for resource expansion and staged development. The company's revised strategy focuses on demonstrating the project's standalone value, which could unlock significant shareholder value if executed successfully. The coming months will be crucial as Capital Metals works to turn its confidence into tangible progress, potentially rewarding investors who recognise the opportunity at this pivotal juncture.

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Learn more: https://cruxinvestor.com/companies/capital-metals

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Interview with Andrew Williams, President and CEO of New Pacific Metals

Our previous interview: https://www.cruxinvestor.com/posts/new-pacific-metals-nuag-advancing-2-large-bolivian-ag-au-projects-3092

Recording date: 28th June 2024

New Pacific Metals (TSX:NUAG) is emerging as a compelling player in the silver mining sector, with two significant discoveries in Bolivia that are attracting attention from investors and industry experts. The company's flagship Silver Sand project has recently reached a crucial milestone with the publication of its pre-feasibility study (PFS), while its second project, Carangas, is advancing towards a preliminary economic assessment (PEA).

The Silver Sand project's PFS results are particularly noteworthy, showcasing robust economics that position it as one of the world's premier undeveloped precious metals projects. With an after-tax Net Present Value of $740 million at $24 silver, a 37% Internal Rate of Return (IRR), and a payback period under two years, Silver Sand demonstrates significant potential for value creation. The project's NPV to initial capital expenditure ratio of over 2 further underscores its attractiveness.

New Pacific's second discovery, the Carangas project, adds another dimension to the company's growth potential. With a PEA expected in the coming months, Carangas could potentially unveil another significant silver asset, further enhancing the company's resource base.

One of New Pacific's key strengths lies in its strategic backing. The company boasts strong support from major players in the silver mining industry, with Silver Corp holding a 27% stake and Pan American Silver owning just under 12%. This backing not only provides financial support but also lends credibility to New Pacific's projects and approach.

Operating in Bolivia presents both opportunities and challenges. While the country has a rich mining history, it hasn't seen a new large-scale open-pit mine permitted in some time. New Pacific has taken a strategic approach by employing a 100% Bolivian team for its in-country operations, complemented by experienced expats and Vancouver-based management. This structure effectively balances local knowledge with international mining expertise.

The silver market outlook provides an attractive backdrop for New Pacific's projects. Silver demand is driven by both investment and growing industrial applications, particularly in sectors such as photovoltaics and electric vehicles. The supply side is constrained, as 75% of silver is produced as a byproduct of other metals, potentially setting the stage for significant price movements if demand outpaces supply growth.

From a financial perspective, New Pacific is well-positioned with approximately US$15 million expected in cash reserves by the end of the year. This runway provides the company with flexibility to continue advancing its projects without immediate financing pressure.

For investors, New Pacific Metals offers exposure to two high-quality silver assets in a jurisdiction that, while challenging, offers potential for lower costs and less competition. The company's strong backing, experienced management, and advancing projects make it an attractive option for those seeking exposure to the silver market.

However, investors should be mindful of the risks associated with mine development in Bolivia and the inherent volatility of the silver market. As with any mining investment, careful due diligence is essential. Potential investors should closely monitor progress on permitting, stakeholder engagement, and project advancement, as well as broader trends in the silver market.

View New Pacific Metals' company profile: https://www.cruxinvestor.com/companies/newpacificmetals

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