Things are certainly looking good for junior miner Superior Copper Corp. (TSXV:SPC). Earlier this month, the company reported that it had discovered a new zone of copper-silver-gold mineralization on its wholly owned Superior Project.
Following that, it announced a $2,250,000 best efforts non-brokered private placement to fund continued exploration on the property on July 14. That placement received a favourable response from investors, as it was oversubscribed just three days later, and was increased by $1,225,875 to up to $3,475,875.
Copper Investing News checked in with Superior Copper President and CEO, John Tait and Senior Geologist Mike Kilbourne to get a bit more insight into the news and find out more about what it means for Superior Copper.
To be sure, the results were positive. Drill hole SPC-14-01 intersected grades of 1.26 percent copper, 9.89 grams per ton of silver and 0.1 grams per ton of gold over 5.5 meters. However, Tait, stressed, “it’s also important to say that we only have one hole in it at this point, and so our data set is minimal. It’s going to take a few more holes to get a good handle on it. and obviously a ton more holes to bring it up to a N1 43-101 reportable resource.”
Still, According to a Bloomberg article from July 10, First Quantum Minerals (TSX:FM) president Clive Newall stated that most new mines average roughly 0.5 percent metal grade, while the overall average is less than one percent. That company, who just acquired Lumina Copper (TSXV:LCC) for $470 million, is still on the hunt for copper projects, adding a sentiment of copper confidence to the market that could benefit juniors mining for the red metal.
Kilbourne was happy with the preliminary assay results, drawing attention to the favourable nature of the geology. “It appears at this point the mineralization is along the bedding, and the bedding is shallow dipping. We need additional drilling to confirm this, but if true, it would be the first stratiform copper-bearing horizon found on this side of Lake Superior,” he said, referring to a broader geological setting famous for larger copper deposits on the Michigan Penninsula. “A flat lying horizon means short holes to drill, and it allows us to prove up big tons quickly over a fairly large lateral area.”
Furthermore, it is interesting to note that Superior Copper is taking a unique approach relative to other exploration that has been done in the area. As many resource investors will have noted, junior explorers commonly point out that there has been historic exploration or mining near their targets. However, for Superior Copper, it’s the opposite.
The company proudly states that the new mineralized zone was “deeper than any previous work done anywhere on the property,” and stresses that “[n]o previous drilling has occurred within 1.7 kilometres (“km”) of this drill hole.” That’s because Superior Copper is focusing on previously unexplored parts of what it believes to be a larger geological formation that is responsible for the multitude of copper discoveries throughout the region.
Kilbourne stated, “in this package of rocks, no one’s done a lot of regional drilling. They’ve concentrated on the old mine sites and the old trends. So we’re moving away from what everyone else has done. We’re drilling some regional, grass roots geological and geophysical targets.” The senior geologist stated Superior’s motivation behind this model – “[w]e believe there’s one source for a multitude of copper showings and small copper mines in the area” he said.
As for what’s next in terms of exploration at the Superior Copper project, Kilbourne stated, “going forward, we’re going to put a second drill on the newly discovered zone and we’ll probably announce results on 4-5 holes at a time. The biggest thing to look for is consistency in grade and width stepping out.”
Tait added, “we’ll be fully financed for about 60,000 metres, maybe 70. So our program will be minimum two years. There’s a ton of copper showings in the area, a ton of copper produced in the Lake Superior area, and we’re very confident that with this much meterage we’ll be able to find something.”
More on the business side of things, Tait spoke to the company’s decision to buy First Mineral Exploration out of a previous joint venture and to buy back net smelter royalties. “One hundred percent ownership with no royalties just makes out job easier,” he said. “We don’t have a JV partner to deal with. And obviously, with no royalites, that just adds value to the properties. If we find anything, we have no minus right off the bat.”
Although Superior Copper’s exploration approach may be novel, its business model is fairly standard. “Our business plan is to drill to our 60-70,000 meters, hopefully develop an asset that you can put a dollar value on and then hopefully sell it to a major thats interested in adding a copper project to their stable of properties,” Tait said.
The CEO was confident in that process, noting the experienced management at Superior Copper. He pointed out, “a lot of management at Superior Copper are the same management that were on the Gold Eagle Mines thing in ‘08 that sold to Goldcorp (TSX:G) for $1.5 billion.”
The CEO concluded by giving his two cents on what is most important to look for when investing in a copper junior. “One of the biggest factors is percentage of money into the ground and percentage of G and A into Toronto or wherever the head office is based,” he said. More specifically, he described how this looks with Superior Copper. “You’ll find in our information circulars and that sort of thing that we don’t get paid very well here in Toronto,” he pointed out, “because we want all the money that investors put into our company to go into drill holes. That’s one of our major things. We all have a significant piece of the company percentage wise, so we’re not working to drain treasuries, we’re working to increase the value of our equity.”
Certainly, Superior Copper looks to be a junior with its eye on the prize. With copper prices picking up and larger miners like First Quantum on the lookout for copper projects, Superior Copper could be one to keep an eye on this summer as exploration continues at its property.
Securities Disclosure: I, Teresa Matich, hold no investment interest in any companies mentioned.
| Updated December 2015
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