I recently returned from a hectic trip to Toronto for an annual mining industry investment conference known as PDAC. I met with 28 companies and spoke to dozens of investors. While there, I expected to talk a lot about Lithium and Cobalt—how the sell-off in those sectors could be close to over, how demand forecasts keep rising in the face of uncertain long-term supply, etc.
Although there were plenty of discussions regarding "battery metals," I was surprised by the universal excitement over a metal that's old school, but also indispensable to the future of electric vehicles and renewable energies, a metal that needs no further introduction: #Copper.
One of the best stories I heard at PDAC was an update from Keith Henderson M.Sc., CEO and director of Centenera Mining Corp. (CT:TSX.V; CTMIF:OTCQX), an Argentina-focused company with attractive Copper (Cu) and Gold (Au) exploration projects. Upon a positive change in Argentina's government in late 2015, Centenera was quick to jump more actively into the country.
Drilling is underway at the company's flagship project, and management believes that it's going quite well. The first assay is expected around the end of March.
The crown jewel asset and primary focus of Centenera this year is the 100% controlled, near-surface Esperanza copper-gold project—formerly known as the Huachi project—an outcropping Cu-Au porphyry system with a blockbuster discovery that included a drill hole intersection of 353 meters grading 0.49% Cu Eq., (incl. 243 m at 0.57% Cu Eq. & 88 m at 0.69% Cu Eq.). Mineralization outlined at surface and found in shallow drilling is open in all directions and at depth.
Assays from the discovery drill campaign included:
Esperanza is in San Juan province in northwestern Argentina, sitting at an elevation of between 2,800 and 3,250 meters. That's relatively low compared to work being done in the high Andes. The project is 35 km from existing power lines. Proximity to key infrastructure is absolutely critical for mining bulk tonnage porphyry deposits.
Exploration can be performed year-round in San Juan, ranked in the 2017 Fraser Institute of Mining Survey as the #1 province in Argentina, and third best mining jurisdiction in all of South America. Despite well-known players like Barrick and Yamana Gold being active in San Juan, the Esperanza project remains remarkably underexplored. Only seven drill holes (2,011m) have tested this extensive, outcropping copper-gold porphyry system.
After several weeks of delay due to unseasonal storms and flash flooding across multiple northern provinces, drilling is well underway at Esperanza. Interestingly, while repairing road access to site, new mineralization was exposed at surface in an area thought to be barren. Mineralization is now interpreted to extend significantly further to the southeast than previously known. Some of the best mineralization to date has been intersected in this area.
The Phase I drill program is investigating the potential for a bulk-tonnage copper-gold porphyry-style deposit. Management is currently drilling four step-out holes, ~2,000m in total, each at least 100m away from historical holes. The aim is to reach deeper, (500–600m), than prior efforts. Deeper drilling was called for because several assays from 2006–2007 showed grade increasing at depth.
Some drill core from the first hole is about to be sent out for assay. I'm told that upon visual inspection, the technical team felt that the core looked really good, but readers will have to wait along with management until the end of March for lab results.
Upon success in Phase I, a Phase II program would include four additional step-outs of 100–150m, plus two IP targets 500m to the east, for a total of six holes.
Based on exploration to date, the significant grade, and thickness of reported intervals, management believes there could be hundred(s) of millions of metric tonnes of mineralization. The area of interest is already 1,400m by 850m. If strong grade and wide intervals continue to be found, the deposit could host billion(s) of Copper Equivalent (Cu Eq) pounds. Make no mistake, it's still early days, but there's a real possibility for substantial scale to be unearthed here.
It's worth reminding readers that McEwen Mining's Los Azules project is also in San Juan province. McEwen's website describes Los Azules as follows: 962 million tonnes containing 10.2 billion pounds Cu in the Indicated category, plus 2.666 billion tonnes containing 19.3 billion pounds Cu Inferred, with (Cu only) grades of 0.48% and 0.33%, respectively. That's a combined 3.6 billion tonnes of mineralization, containing 29.6 billion pounds Indicated & Inferred Cu, at an average grade of 0.37%.
Delineating hundred(s) of millions of tonnes is not a sure thing, and it won't necessarily come in the maiden mineral resource estimate. However, historical exploration, combined with the current drill program, could provide further evidence of grade, scale and continuity that attracts considerable attention.
Centenera has a tremendous management, Board and technical team for a company its size (72.4 million shares outstanding x C$0.165 = C$12.0 million = US$9.3 million market cap).
Centenera Mining Corp. [TSX-V: CT / OTC: CTMIF] is sitting on what could be a major copper-gold asset in San Juan, with important drill results coming soon. It also holds a portfolio of promising projects, also in Argentina, including a high sulphidation epithermal gold mineralization project and a hard rock lithium play, both in Salta province.
Here's a very good 4-minute video clip of CEO Henderson from PDAC in early March.
Readers would benefit from reading the March 2017 Esperanza Technical Report
Peter Epstein is the founder of Epstein Research. His background is in company and financial analysis, and he is a Chartered Financial Analyst (CFA). He holds an MBA degree in financial analysis from New York University's Stern School of Business.
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