Cohiba chairman ups ‘skin in the game’ with early option exercise

Cohiba’s chairman continues to show his confidence in the company’s prospects of becoming a major explorer for IOCG deposits in one of the world’s most prospective jurisdictions for these types of big finds – the Gawler Craton.

Cohiba Minerals’ (ASX:CHK) Executive Chairman Mordechai Benedikt has increased his ‘skin in the game’ by exercising all his options in the emerging copper producer before the cut-off date, taking his substantial stake to 9.3%.

This injected a further $278,595, increasing Cohiba’s cash balance to continue the busiest 15-18 months of exploration activity in the company’s history.

Benedikt, who has been a shareholder in Cohiba for the past five years and injected millions of dollars, told Stockhead he chose to exercise his options early to show his support for the company and grow Cohiba’s cash in the bank.

His rationale for picking up more shares in the company is the “mega potential” for another Olympic Dam discovery in South Australia’s Gawler Craton.

Cohiba recently expanded its South Australian portfolio to include the Warriner Creek prospect because of the strong potential for a major iron oxide-copper-gold (IOCG) discovery in BHP’s (ASX:BHP) backyard.

Iron oxide copper gold ore deposits (IOCG) — like BHP’s Olympic Dam mine or more recent Oak Dam discovery — can be tremendously large, and simple-to-process concentrations of copper, gold and other economic minerals.

Late last week, the company revealed it had completed a 2-hole, 2000m drilling program at the Pernatty C prospect, part of the Olympic Domain project, which showed “multiple encouraging signs for further IOCG exploration”.

“Cohiba has a large landholding in a highly prospective area that is demonstrated by the nearology of some of the largest companies in the world and the excellent copper grades of some of our neighbours only hundreds of meters away,” Benedikt explained.

“I think the potential is absolutely massive and it’s on Australian soil. Many investors are investing in overseas companies, but we are advancing a potentially major discovery on home soil.

“This will create Australian jobs and inject money back into the Australian economy, which is extremely important at a time of economic uncertainty created by a global pandemic, rising cost of living pressures and the Ukraine-Russia conflict.”

Cohiba recently started drilling at its new Warriner Creek prospect, which is shallower than the company’s Olympic Domain tenements, where drilling at the promising Horse Well prospect is reaching +1.3km depth.

A shallower target depth means drilling at Warriner Creek will be significantly shorter, and cheaper.

Copper demand and prices soaring

Global copper demand continues to accelerate thanks to supply disruptions stemming from the COVID pandemic and Ukraine-Russia conflict, another possible round of stimulus in China to kick start its economy after a second lockdown and governments around the world ramping up investments in “green” technology such as electric vehicles, renewable energy and the associated infrastructure required to support that.

Mining consultancy group CRU expects the annual copper supply deficit to be 6 million tonnes a year over the next decade.

To give you an idea of just how much copper that is, it roughly equates to around eight new mines the size of BHP’s and Rio Tinto’s massive Escondida mine (only the world’s largest producer of copper concentrates) needed to fill the gap in the immediate future.

CRU head of base metals supply Erik Heimlich said an investment of more than $100 billion is required if the world is going to meet demand requirements.

The supply disruptions, which have forced stockpiles to record lows, coupled with the rapidly increasing demand has pushed the price of the red metal to record highs of over $US10,000 a tonne.

This article was developed in collaboration with Cohiba 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.