Andina Copper - Copper Exploration Portfolio In Argentina, Colombia & Chile

Hey, everyone. Welcome to the K E report in a company introduction to and Dena copper company is traded on the TSX venture exchange under the symbol

AN DC and on the OTC QX also under that symbol A and DC. We are chatting with the president and CEO Joe Vanden Elson.

Now Joe, I want to get a kind of big picture overview of and Dena copper. You can tell by the company's name focused on copper exploration in South America. The company has a project in Columbia, a project in Argentina and a project in Chile.

The company also just closed the financing for 27 and a half million dollars. So that gives you the ability to move forward with the exploration here. So in terms of these three projects, you have Cabrasco in Columbia. You have Pioquines in Argentina and the Mantau project in Chile. All copper focused. Talk to us about how these all fit under the and Dena and Brella and if you could even what you would consider the flagship asset.

Sure. So the strategy behind the company was always put to put together a portfolio of all three discoveries in South America that had had limited or no follow up exploration.

So specifically, we were looking for projects that had had all grant intercepts and limited or no follow up exploration, friendly number of reasons. The idea was to always run a portfolio in order to diversify and I guess, dilute the jurisdictional risk and also to ensure that we had good year round news flow that might have been prevented if we had a single project on account of seasonality or project specific issues.

So with that in mind, we always set about trying to have two potentially three projects under that portfolio approach. The first project that we dealt on was in Argentina, the Pioquines project in someone. That was a deal that we struck in late 2023.

Fantastic project, high grade copper gold, fantastic address and the challenge we faced there from an equity market standpoint was maintaining investor interest when you can only drill six months of the year.

So with that in mind, the second project that followed was the acquisition of Cabrasco being the project we acquired through the acquisition of rugby resources and located on the Columbia and Choco belt.

That's a copper molly project that it had a couple of holes in it, but you could work year round. The third project, Mantell is in Antifagasta, Chile, immediately adjacent to money muckers, recent sulfide discovery at Pamper, Medina. It is undrialled, however, so that's very much a pipeline opportunity.

So in terms of flagship projects, I think we would look at both Argentina and Columbia has having an equal weighting within our portfolio. We're actively working on both those projects at the moment, two drill rigs in Argentina, one in Columbia with a beauty getting a second rig there shortly.

And the Chilean project, Mantell is something that work on when the Argentine field season finishes in around May.

Well, Joe, let's dive into the Argentine asset at Piacana is the drilling you've done there thus far is around 10,000 meters. I think you have roughly 5,000 planned here, but talk a little bit about the address. You mentioned it's near some other key projects of interest. I think that's another important aspect of this project.

Look, it's certainly is. So when we sit about looking for a flagship project to kick off the strategy, one of the things that drew us to the Argentine project being fielkenis was the address.

We access the property from Glencaw's Elpachon Road that runs out of the town of Burialin, San Juan, and we're immediately adjacent to Elta. We're contiguous to the North being elder brown resources, flagship asset.

So within about a 40 kilometer radius, you have Elta that I mentioned before, Glencaw's Elpachon, McEwan Mining's Los Azulis project, and on the Chilean side of the border, you have antipagats to minerals, operating Los Palomares mine.

So it's a very well-endowed belt, fantastic address, great infrastructure from an expiration standpoint. And in the case of Purikenis specifically, it's a copper gold porphyry system, indeed it's a gold rich porphyry system, and relatively shallow.

What have you hit here? So far, Joe, you guys have been drilling since early 2024. What are some of the highlights? What are some of the big picture kind of target or goals around this exploration?

So when we dealt on this property, it had been privately held since the 70s. We were the first public company to take an interest in the project, and it had a few thousand meters of drilling, largely shallow holes.

So for us, the focus was on trying to follow up on some of these high-grade copper gold intercepts and try and demonstrate size and scale.

So we set about trying to, I guess, mobilize as quickly as possible. Our first drill hole went in January of 2024, and what we had within a very short period of time was a number of very significant wide intervals of copper gold.

Our best drilling decept at Purikenis Central, from our first season, if I'm not mistaken, was 800 odd meters from 50 meters to end of pole at about 0.4 copper 0.51 gold.

And what you also saw at Purikenis Central was a, I guess, a strong zone of oxidization from surface, which very much supported this idea of Purikenis being potentially surface-mindable.

So that target that I mentioned there, that one that had been the subject of a few thousand meters drilling historically, was Purikenis Central.

And since that time, we've now drilled a second porphyry, which we discovered last season, Purikenis East, similarly a gold rich or a copper gold porphyry system, and we're currently drilling two other porphyry targets at the moment.

But yeah, you can see on the map that you also have a south and a west. So waiting to see if some of those pan out too, as far as the meterage you have planned for this season, will it be mostly at Purikenis East, or will there be some central or those other two targets, give us a lay the land on where you'll be following up the drilling.

So we're active at the moment with two drill rigs.

The first rig is at Purikenis East, and the second rig is at Purikenis North, which is a large MTA anomaly that we've recently discovered, if you like, on the back of a property-wide geophysical program that we ran at the start of the season.

In addition to that, we will be drill testing, or we have drill tests that I should say, results pending, a separate porphyry or potential porphyry centre.

So no drilling plan to Purikenis Central, but three other porphyry targets to this season.

All right, well, Joe, it's go over to Cabrasco then this being in Colombia. I actually know this project quite well when it was in the prior company rugby mining.

Talk to us about what the plan is for Cabrasco. You are drilling now, I believe, so give us the lay of the land for Cabrasco.

So as you mentioned, Cabrasco fit very nicely into our narrative because it had been drilled, and it had a few thousand metres drilled by a previous owner being rugby, and it sat there largely dormant since they finished drilling in late 2022.

So we completed this acquisition in July of last year, and we were back drilling in October.

We're still drilling today with a single drill rig. We do expect to get a second rig in, you know, within the next sort of six months or so, and we've drilled about 4,000 metres to date since October with a single rig.

The setting here is that Cabrasco sits along the Colombian Choco Delta, the largest landholder along that belt is a private Canadian issuer, MCC, which counts Glencore Tech and First Quantum as their major shareholders, and we're also immediately adjacent both to the South and to the North with Rio Tinto's Cometa project.

So the narrative, I think, here is that you're talking district scale, potentially surface-mindable, upper-molly, or free systems.

As I mentioned, Rugby completed a couple of holes. We're on to hole eight at the moment.

Well, just to that point, Joe, I think a lot of people will know that Colombia is not always the easiest jurisdiction to work in, but your team to your point is already there drilling.

There's some big projects there, big large producers of base metals there. Maybe just talk about your approach to successfully navigating the jurisdiction.

So I prior to acquiring Rugby, and in a former life, I'd spent about eight years in Colombia, so I was certainly very comfortable operating in the jurisdiction, or putting it another way.

I had plenty of experience navigating what is a difficult environment.

If you look at a project like Pilkenes in San Juan, you're talking about a very, very easy operating environment.

No communities, fairly straightforward permitting. Colombia has none of those features.

So if you look at the Cabrasco project, the points of notes are that it's heli-supported. So it's an entirely heli-supported operation.

We have a community access agreement with the Afro-Columbia, the constitutional protected Afro-Columbia community.

And as is common in all projects in Colombia, we have military support around our exploration camp.

So it's a sort of project that's very hands-on. It's very human resource intensive, not just at the operational level, but also on the permitting and social side of things.

So we completed the Rugby Acquisition in July. It took us three odd months to remobilize the camp in the Choco jungle.

We were drilling by October, and we've been drilling sort of continuously since then.

So how many meters? How many halls are you going to get into this Cabrasco project this drill season, or let's say in the next few months?

So unlike Argentina, where you have a six-month field season on account of the elevation and the snowfall, Cabrasco is year-round drilling.

So we're not looking at this as defined drill programs. Our view would be that this is a very, very big large-scale target, and we plan to be here for a number of years drilling continuously, initially with one drill rig, and shortly with two.

So I guess a different way to answer that question would be to say that with a single drill rig, you can probably drill about 10,000 meters per annum, and therefore I expect to be annualizing about 20,000 meters drilling within six months or so.

One drill, just to remind people, these are not little tiny halls you're putting in. Some of these things are 600 to 1000 meters, so rather large halls maybe just talk about the nature of the deposit and why the halls are so deep.

So the reality of this belt is that it's certainly being promoted by our neighbors, so MCC and Rio Tinto for its potential to host surface-mindable or free systems.

Our neighbor, Rio Tinto, I understand their deepest hole is only about 500 meters, but I think what we're trying to do is demonstrate the potential sort of size and scale of depth as we target grade.

So our deepest holes have been to date about 900 meters, and I expect the form of some time our average will be around about 800 meters.

In terms of the, I guess the size profile, we're talking about the initial target that rugby drilled back in in 2022 was a three square kilometer copper and molly soil anomaly,

complemented by limited geophysics. So we are talking a very, very significant sort of strike length.

As I mentioned before, we do sit contiguous to the north with Rio Tinto that have also been drilling over a three kilometer strike.

So this is a very, very big system. Deep-ish holes are certainly warranted, but at this stage, I wouldn't see us needing to test the kind of depths that you'll see in, you know, San Juan or other parts of the high and these where drill holes can get to sort of 2000 meters or thereabouts.

Alright, so drilling Caprasco drilling Pioquanas, what about this Mantel project? Do you mention it's undrialed? Do you think you'll be drilling it this year or working up targets at least?

Yes, is the short answer from a, I guess a human resources standpoint, we can operate two projects for currently operating a third concurrently, I think would be a challenge.

So with that in mind, and also in the interests of being able to work on two projects in currently year round from a new slow standpoint, our approach has always been that this is a project that we would work on when the Argentine Film Season ends in May.

So the attractiveness of this project is its address. This sits within the largest producing copper district in the world.

Immediately adjacent to, you know, Marymarker's recent sulfide discoveries, which in mind, you're a big driver of Marymarker's re-rate from sort of 700 million to 1.4 billion market cap.

So we will look to do some geophysics kicking off in around about May and potentially some, you know, relatively small drill program to follow shortly from there.

Okay, so you kind of have the advantage of seasonality with these projects to rotate depending on which project is more ideal to drill at what time of year.

In addition to the mineral inventory, let's talk about the human inventory. Joe, it's the first time you've been on the show. Maybe share your background in the industry with folks listening and then anybody else on the team report that you'd like to highlight from a high level.

Yeah, sure. So the, as I mentioned, the strategy came together in late 2023 when we set about trying to put together a portfolio of South American portrait discoveries with limited or no follow up exploration.

The architects and the drivers behind that strategy were myself and Tony Manini. Tony Manini is one of the principles of EMR capital, a private equity, a mining private equity fund run out of Australia.

And him and I got involved, you know, jointly in late, around about 2022 when we control of the company, if you like, and was 2023 when we did the first meaningful deal in Argentina.

The board is also comprised of Bryce Rocksbrook. So sorry, so I should have said Tony Manini serves as our chairman is also our major shareholder.

And Bryce Rocksbrook is also a non executive director and a large shareholder of the company.

He's the founding CEO of rugby resources, the company that we acquired in the middle of last year.

And well known in Canadian capital markets for being behind a number of success stories, including exeter and extore.

Paula is a non executive director also. She's a former Colombian diplomat who now works in governance for a multinational oil and gas company.

From a technical standpoint, we have Gustavo's our principal geologist. He's a very well known Argentine poor free geologist, couple of advisors, Steve Macintosh, large shareholder of ours,

former head of expression globally for Rio Tinto, Daniels and other one of our advisors. He's currently the CEO of Highlander Silver, also quite known in Canadian capital markets for being CEO of Solaris and part of the Richard Marks or Augusta Brut.

From a, I guess, a more project specific level, one of the benefits of the rugby resources acquisition last year was we did acquire a very strong technical capability.

So we have Cisco and Alvaro, sort of a role-serving project geologist at Cabrasco. And, you know, we've built out a comparably strong team on the Argentine side.

I myself got involved in the company in 2022. I started out in finance, so I'd actually studied law at university.

I worked at a firm that became Goldman Sachs straight out of the high school, moved over to UBS on the wealth management side for sort of six odd years, kept studying during that time, did some postgraduates in mining law, mineral exploration and mineral economics.

And last, I think 12 or 13 years, I've been running around the Virginia space in South America. I'd spent eight odd years in Columbia previously.

And this, however, is the first time I dealt with a Canadian public company, previously it always went private or on the A6.

All right, Joe, I do want to ask you a final question here. Look, you just closed the financing for $27.5 million.

The market cap of the company is $175 million. Talk to us about the money you have in the bank, then. What's the amount that you have in your war chest to go out and explore these projects?

And give us a comment on valuation. Who are some of your peers that we can look to? And how do you think that 175 is allocated between these projects?

So what I'm doing is I'm just getting out my code for the year because we have had some obviously share price movements over the last couple of weeks.

We've got 267 million shares on issue. So at current levels or at the raising price of about 80 cents, it's about a 213 million market cap of which we have 28.5 million in cash at the moment, which gives us an EV of about 185 million.

That 27.5 million raising was taken up by three funds for the, I think probably 75% of the raising.

The rest was distributed to a core group of existing shareholders and a few sort of small size funds.

The, that amount of capital funds us for about 18 months and allows us to get, I guess, even more aggressive across the portfolio.

We are drilling the two rigs at the moment in Argentina, one in Colombia with a view to getting a second rig in there shortly.

You know, within next six months is the target and then obviously to do some work in in man tower as well.

The, the other question you asked, less or less, my trainer thought was around sort of valuations, bumps and what not.

Look, when I look at the valuation today, I think there's a large amount of recency bias in the stock.

It's been a long time since we put out results from Argentina and I think all the focus has been on Colombia.

So I don't think the value of the Argentine or the Chilean accent are being reflected.

And that's a situation that we're going to address through putting results out and, you know, progressing both those projects as, as aggressively as we can.

In terms of the, you know, the listed comparison universe, obviously it's very difficult to make straight like for like comparisons.

What I would say is that I think we have quite a unique value proposition and very, very few companies have multiple discoveries of the sort of quality that we do.

So if you look at the, I guess the early stage universe, very few companies have been able to demonstrate the grade and size profile that we have across our projects,

which then shifts us to, I guess, the comparisons of some of these more advanced, more developed projects,

which would include the likes of Solaris, Atex and to a lesser extent, our immediate neighbor in Argentina, Alta.

So Alta is the flagship project of Alta Brown Resources.

I'm not sure what their market value is today, but you're probably talking $500 million there.

Single asset, less attractive grade than our own, but certainly much more advanced.

You look at our peer, or I should say our neighbor in Columbia, MCC, they recently raised 75 US at the 425 million US valuation.

So to try and answer the question as directly as I can, I think there's a hell of a lot of upside in our portfolio.

I think that this is the sort of thing that could easily trade out 500 million, you know, EV fairly quickly.

Once we demonstrate results, consistent results across the portfolio, being all three projects.

Well, Joe, we've talked about a lot here at all three projects.

Just wrap us up with the batting order of the news flow on tap for the balance of the year, just for investors that are interested in following along.

What's first in the docket and what comes up after that?

So I think we may have some results tomorrow out of Argentina, and I would expect to have some more results next week out of Columbia.

So we're two rigs going in Argentina and one in Columbia with a view to getting a second in there.

I think we've got a very strong pipeline, and I'd be expecting drill hole results on a three-weekly cycle from now out until the end of the year.

So a lot of news to come out, obviously not all holes are going to be, you know, material rewriting catalysts.

But the strong advantage or the big advantage we have here is that we have confirmation of braille and scale on both projects.

And we're very confident that we've got, you know, globally significant projects here, and that more drill holes than not.

They're going to be strong and eye catching.

So yeah, expecting a lot of interest in our stock over the next nine months through the end of the year.

One of the big challenges that we've faced up until now is that we have traded, in my opinion, come raising.

So being able to lock in that 27.5 million funding puts us in a much stronger position now to navigate capital markets and just to focus on adding value to the projects through exploration.

All right, Joe, thank you very much for this introduction.

Again, Joe, Vanden Ellsson, President and CEO of Endina Copper.

I'll post a link in the show notes to the company's website.

You can read over the recent news and the presentation.

If you have any follow-up questions, please email us. We'll get those addressed for you in future calls.

Joe, thank you very much for the introduction today.

Now, thanks for having me.