Mundoro to explore Arizona with Vale

2022-01-04 02:31:45

“We have out what I think is a stellar portfolio of copper projects in the Tethyan belt which have the potential for more porphyry-style mineralisation and that is what people have come to know us for. As we’ve built-out relationships with the seniors, we’ve been very keen for quite some time to expand that knowledge for porphyry exploration into other prolific porphyry belts. Going into the southwest US is something I’ve wanted to do for the last five years. There hasn’t been a real influx of exploration activity for new copper discoveries,” Dechev told Mining Journal.

Arizona is the backbone to Freeport-McMoran’s copper operations and a number of other companies have development stage projects in the state, such as Hudbay Mining’s Rosemont. For Dechev, the focus on development has seen exploration left in the shade.

“As an industry, we tend to blur the lines of what the word exploration means versus what development means. Putting an asset through engineering does not mean that you are exploring for new discoveries and that’s what I’m talking about; exploring for new discoveries. That’s going to be a lot of undercover type of exploration, which is what we’ve been doing for the last 10 years in the Tethyan belt so we’re using the same tools, the same expertise, the same knowledge, but applying it to a belt where people haven’t really shaken the tree for undercover copper style exploration because there has been so much potential near surface. I think the last time there was really any what I would call exploration activity for discovery in the Southwest US was probably the 1960s and the 1970s. Since then, it’s really been more about development of assets rather than exploration,” said Dechev.

Mundoro’s deal with Vale will fund generative exploration projects in Arizona and New Mexico, looking under cover, which Mundoro will operate for a management fee. Each designated project that results will be covered by a separate option agreement pursuant to which Vale can acquire 100% through sole-funding exploration during the option period and, upon completion of the option, make aggregate cash payments to Mundoro of US$9 million over four milestones and grant to Mundoro a 2% net smelter returns royalty, which includes annual advance royalty payments of $200,000 through to commercial production. In parallel, Mundoro has already generated one property which Vale has signed an option agreement on.

With Mundoro planning its entrance with Vale into the Laramide belt for more than a year, the timing of the announcement viz-a-vis events in Serbia where Rio Tinto is experiencing opposition to its Jadar lithium project and which lead it to announce the acquisition of the Rincon lithium asset in Argentina, is coincidental and not a reflection of the conditions Mundoro and Vale are experiencing around their two Serbian exploration joint ventures.

“It’s definitely not the reason why we’ve expanded into the Southwest USA. We did it this year, because funding was available to us for that initiative. Every jurisdiction goes through its own maturing process and the Serbian mineral sector is very important in the economic balancing act of the Serbian government. Minerals contribute a great deal to their GDP, so it is somewhat a resource nation, but they have not had a lot of foreign investment, and specifically not a lot of new mine builds in the last 10-20 years. There’s a well-established mining community in the board district where you’ve got four porphyry mines in production, which is quite phenomenal. There’s also Zijin Mining has four copper mines there and there is Dundee Precious Metals’ Timok project, which is going through a feasibility study. Jadar is somewhat unique in the sense that it’s not in the Bor district but in central Serbia that has not seen as much mining investment as Eastern Serbia,” said Dechev.

Looking ahead to 2022, Dechev foresees a year of drilling and news. “With the Southwest US generative alliance and project hopefully, drills will be turning by the end of 2022 in Arizona. We’ve got a contract signed in Bulgaria is for a sediment-hosted copper deposit, an opportunity came to light as a result of a generative alliance that we had with JOGMEC in 2019, and then there’s a couple of more deals in the pipeline which if they come to fruition, are going to be a really great opportunity for the company and our shareholders,” she said.

Shares in Mundoro Capital are trading at C20c, valuing the company at C21$ million.

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