- Culpeo Minerals’ ownership of the Lana Corina project in Chile rises to 50%
- Guy Le Page calls the stock a ‘speculative buy’ on the back of hits over 2-3km of strike at Lana Corina, including 257m at 1.1% copper equivalent
- Fortuna project also shows promising mineralisation
- Lana Corina and Fortuna analogous to Teck’s 250Mt Carmen de Andacollo mine, 80km away
Special Report: Copper explorer Culpeo Minerals (ASX:CPO) has been flagged ‘a major rerate opportunity’ after boosting its stake in a potentially large and high-grade Chilean copper-molybdenum porphyry deposit to 50%.
Guy Le Page, director and responsible executive at Perth-based financial services provider RM Corporate Finance, has carefully analysed the copper exploration company and believes their strategy is sound.
Copper deficit to push prices higher
“Copper has been strengthening over 2024 as supply disruptions push the market towards a large deficit with the price breaking above US$4.26/lb for the first time since August last year,” Le Page says.
“Three month copper futures also remain in strong contango with Morgan Stanley this month projecting spot prices to rise to US$10,200 by Q3 2024 with copper deficits likely to persist into 2025.”
According to Morgan Stanley, copper will go into a 700,000t deficit after Chinese smelters cut 2.5Mt of production in Q2.
“There also remains significant supply side risks from Zambia, where recent power shortages have put 60kt of new copper production at risk,” Le Page says.
“While supply remains tight, growth in copper consumption is forecasted by Morgan Stanley at 1.7% over 2024, compared to 2.3% in CY2023.
“Chinese growth is anticipated to soften as the property market continues to struggle. But on a positive note, demand in sectors like spending on infrastructure investment, electric vehicles and consumer goods looks robust.
“LME copper inventories have been drawing since October, while SHFE inventories are showing the first signs of inflection after the usual seasonal build.”
Culpeo a ‘major rerate opportunity’
Le Page has earmarked copper explorer Culpeo Minerals (ASX:CPO) as a major rerate opportunity after boosting its stake in a potentially large and high-grade Chilean copper-molybdenum porphyry deposit to 50%.
He’s stamped a speculative “Buy” label on Culpeo on the back of hits over 2-3km of strike at Lana Corina, including a headline strike of 257m at 1.1% copper equivalent from 170m downhole.
Culpeo is making massive strides into Chile, the world’s largest copper producer, after increasing its stake into Lana Corina – a move that comes right on the back of acquiring the nearby Fortuna Project.
The geological setting of both Lana Corina and Fortuna looks analogous to Teck’s Carmen de Andacollo mine, which has reserves of 250Mt @ 0.62% copper and 0.25% gold, 80km northwest of the projects.
“Success at either project has the potential to re-rate the company to a +$100m market capitalisation; the primary risk in a relatively soft junior resources market is the dilution suffered as a result of exploration costs required to outline a mineral resource estimate,” Le Page says.
Increased exposure to Lana Corina
Culpeo has now increased its stake in the highly prospective Lana Corina copper project to 50%, with options to increase that ownership to between 80-100%.
Recent drilling efforts have unveiled substantial copper-molybdenum, including hole CMLCD002 which showcases mineralisation that extends to a depth of 700m with promise for further expansion.
The latest results include one hole returning 85m at 1,369ppm molybdenum (Mo), (with 0.58% CuEq) from 486m downhole and 35m @ 1,704ppm Mo (0.84% CuEq) from 570m downhole.
Drilling activities are poised to target extensions of high-grade copper mineralisation within the breccia pipes and associated porphyry intrusion in the prospect area, where deeper zones of molybdenum-rhenium enrichment have been identified, indicating the presence of a lucrative copper-bearing heat source.
Good Fortuna
Culpeo is also running fast on digging up its Fortuna copper project 10km to the north, where recent drilling returned 26m @ 0.81% copper-equivalent.
Drilling is ongoing across four key prospects, with the central and southern areas returning elevated surface channel and rock chip samples of up to 1.3% copper and 2.4g/t gold.
The company has also found a possible new third zone of copper within the 3km-long El Quillay trend at the project area, opening the door to further drill testing.
It’s currently targeting the Vaca Muerta prospect, which contains numerous elevated oxide/sulphide copper grades of up to 2.14% CuEq and is being drill-tested over an identified 500m strike.
“The recent developments at Lana Corina and Fortuna underscore the immense potential of our Chilean assets. We are excited about the promising results from recent drilling and remain committed to unlocking further value through targeted exploration efforts,” Culpeo Managing Director Max Tuesley says.
Next steps in exploration
Looking ahead, the company is gearing up for imminent drilling activities at Lana Corina, focusing on extending mineralisation zones and exploring deeper copper and molybdenum deposits.
Surface geochemical results from the La Florida Prospect are also anticipated in the coming quarter, further bolstering the company’s exploration endeavours.
With the potential to outline high-grade copper-molybdenum resources, the company says it remains optimistic about the future prospects of its projects.
This article was developed in collaboration with Culpeo Minerals, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.