VVC Exploration Corporation
Launching Copper Production in Mexico's Chihuahua State
This VVC Exploration Corp profile is part of a paid investor education campaign.*
VVC Exploration Corp (TSXV:VVC) is a resource company currently working to bring its flagship Samalayuca copper property in Mexico to production. The 4,055-acre Samalayuca property is situated in the northern part of Mexico’s Chihuahua state in the Sierra Madre region 60 kilometers southwest of El Paso, Texas. The project is also supported by infrastructure including an access road and an available mining workforce.
With its recently acquired environmental and land use change permits in hand, VVC Exploration is looking to bring the project back into production in the near term with a pilot mine program. The company is currently conducting metallurgical test work on mineralization from the Gloria zones as it awaits the final decision on the pilot mine.
VVC Exploration intends to source mineralization for the pilot mine from the Gloria zones, which have an updated indicated resource of 59.4 million pounds of copper and an inferred resource of 89.33 pounds of copper. The company hopes that the revenue generated from the pilot mine can support exploration and pre-production activities across the rest of the property and provide a healthy return for investors.
The company also has an additional two wholly-owned properties in Mexico’s mining-friendly jurisdiction: Cumeral and La Tuna. Both projects are gold-bearing and are at different points in the exploration process. VVC Exploration’s Timmins project in Canada is a greenfield project and the only project outside of Mexico.
VVC Exploration is led by a management team with a wealth of mining experience and is supported by a board of directors with significant influence in both the mining and financial industries. The management and board are also notably invested in the company, with the CEO, members of management and the board of directors listed as top investors. As a whole, the company has a tight share structure with over 90 million shares held by the top 25 investors.
VVC Exploration Company Highlights
- Flagship property in mining-friendly jurisdiction of Mexico supported by existing infrastructure and available workforce.
- Little production waste expected due to the structure of the mineralization zone of Samalayuca property
- The Samalayuca property has an indicated resource of 59.4 million pounds of copper and an inferred resource of 89.33 pounds of copper.
- The final decision to commence production at the pilot mine to be made in the near term.
- Metallurgical testwork in underway on copper mineralization from the Gloria zones.
- Tight share structure with significant investment from management
- Strong support from board of directors with deep experience in mining and finance
VVC has been involved in the Samalayuca property since October 2013, when the company optioned 33.75 percent of the project and took on management control. In 2015, VVC then increased that option to 67.5 percent.
2019 Resource Estimate
In March 2019, VVC Exploration released an updated resource estimate for the Samalayuca property. The report outlined an indicated resource of 59.4 million pounds of copper and an inferred resource of 89.33 pounds of copper.
“The 2019 resource estimate was generated using all exploration data up to December 2018. Whereas, the previous resource estimate in 2013 showed only an inferred resource, now both indicated and inferred resources are being reported. With a base case resource of 59.40 million pounds of copper indicated and 89.33 million pounds of copper inferred, VVC has a solid basis for treating Samalayuca as an attractive, viable project,” said VVC Exploration Chairman Terrence Martell.
Historical activity on the mine includes detailed reconnaissance sampling in the previously mined regions of the mine in 2010 and detail and regional mapping and sampling in 2011.
In 2013, a NI 43-101 resource estimate was completed, showing a resource of 4.1 million tons of copper ore, which represents approximately 42.5 million pounds of copper on just 10 percent of the property’s known mineralization zones. The company’s internal estimate is a 500 million pounds copper resource, at a minimum, with potential for significantly more.
* This estimate is an internal estimate base on exploration work of the company and is not NI 43-101 compliant.
Since 2015, VVC Exploration has been working on obtaining the required permits and approvals for launching production at Samalayuca. Throughout this process, VVC Exploration has seen support from government officials and local land owners that see value in the development of the Samalayuca property. The company finally received its environmental and land use change permits in July 2019.
In February 2017, the company filed for drilling permit for 53 drilling sites which could help in developing a further geological understanding of the property and lead to an updated NI 43-101 resource estimate. These permits were approved by SEMARNAT (Mexico’s Ministry of Environment) in May 2017 and VVC Exploration launched a 3,000-meter drilling program in August 2017.
The three-phased exploration program ended in November 2018. A total of 6,700 meters of drilling was completed across a five-kilometer-long mineralized zone that covers approximately two-thirds of the property. A total of 2,990 core samples were taken and 57 of the holes returned sections that graded between 0.1 percent copper and 0.95 percent copper.
The high grades recovered from the Gloria, Gloria Extension and Gloria Extension East areas indicate that the company should continue to plan its pilot mining program around these three zones. The results also show high grades in five additional areas that require more detailed exploration. Highlights from the Gloria zones are as follows:
VVC Exploration intends to conduct additional drilling at the Concha, Gloria Northwest, Thor, Juliana and Suerte areas and target new prospects, such as Zorra, Trinidad and San Nicolas, in future work programs.
Pilot Mine Initiative
With the relevant permitting in hand, VVC Exploration intends to use its first phase of production to develop and run a pilot mine in the most promising of the previously-mined areas of the property. Although a final decision has not been made to resume production at a pilot mine, the verdict is expected to be announced in the near term.
In the meantime, VVC Exploration has commenced metallurgical testing at the property on copper mineralized samples from the Gloria zones, which are being considered for the pilot mine. Results from the testing are expected in the near term.
The Samalayuca property is situated in an area that has minimal vegetation, which is expected to keep environmental mitigation costs low. The mineralization at the Samalayuca property occurs close to the surface and should be relatively inexpensive to recover, keeping mining costs low. VVC Exploration plans use low-cost, low-tech processing, producing copper cement that is directly usable in many industrial processes.
VVC Exploration’s Other Projects
The Cumeral project is a 16,622-acre property located in northern-central Sonora, Mexico and 130 kilometers south of Tucson, Arizona. The property boasts a gold mineralization zone that runs at least 3.6 kilometers long.
Early exploration on the property has outlined a non-resource descriptive only NI 43-101, which has been filed with the TSX. The initial exploration suggests that this property has all of the indications of a potentially very large gold resource that could be recovered in a relatively inexpensive manner through open-pit mining and heap-leach technology.
The La Tuna project is a wholly-owned 9,000-acre property located at the meeting point of the Rio Fuerte and Rio Baboyahui rivers in Mexico’s Sinaloa state. The property is located in a known mining region that is supported by reliable infrastructure.
The property hosts two mineralized structures with potential for a gold-copper resource. Initial exploration on the property took place in 2013, suggesting the viability for an open-pit structure.
In 2018, VVC Exploration’s chief geologist confirmed that high-sulfidation alteration is present on the property, changing the company’s exploration approach to the property. The new approach led to the discovery of four gold-silver mineralized trends on the property. Rock sampling and soil analysis showed significant gold-silver values in four mineralized trends over a 400-meter strike length with a width of 300 meters over the rediscovered La Perdida and La Plomosa artisanal adits. Values of 61.1 g/t gold and 49.4 g/t silver and 25 g/t gold and 104 g/t silver have been recovered at La Perdida and La Plomosa, respectively.
VVC Exploration’s Timmins property is located 48 kilometers southeast from Timmins, Ontario and 35 kilometers south of the junction of the Gibson Lake Road and Highway 101. The property is accessible by the Gibson Lake Road and other bush roads. The project is a greenfield property where the only work has been a geophysical survey.
VVC Exploration’s Management Team
James (Jim) Culver, PhD—President, CEO and Director
Dr. James Culver has spent his over 40 years in the fields of commodities, international trade and trade finance, holding posts in government, academia and the private sector. For the last 20 years, he has focused on commodity finance and commodity project finance, primarily in mining and metals and agricultural products. He spent 22 years working in New York City where he most recently managed two private commodity asset-based lending companies and developed hedge funds to support their lending activities.
Previously, Dr. Culver served as Chief Economist and Director of the Economics and Education Division for the Commodity Futures Trading Commission where he was responsible for market surveillance and new product approvals. He also served for five years on the staff of the Committee on Agriculture of the US House of Representatives. In addition, Culver has been an active participant in a family-owned and operated business, The Parsons Group International Education Inc., for-profit educational services company. He earned his B.Sc. at the University of Tennessee Martin and his M.Sc. and Ph.D. degrees from the University of Tennessee Knoxville.
Andre St-Michel, PEng—Senior Consultant, Mexican Operations
A Canadian mining engineer and geologist residing in Chihuahua, Mexico, Andre St-Michel has over 30 years of experience in the mining business with a focus on mine development, mill operation, administration and finance. He has spent the last 10 years working in Mexico where he currently serves as President and CEO of Freyja Resources.
From 2003 to 2008, he was a senior executive of Dia Bras (now Sierra Metals), responsible for its exploration programs and the start-up of its Bolivar copper and zinc mine. From initial start-up of the mine in 2005, production reached 450 tons per day in 2006 with annual projected revenues of approximately $27 million and cash flows of approximately $10 million, Prior to 2003, he served as President of ECU Silver Mining, developing programs and properties in the US, Brazil and Mexico. He holds a degree from the Laval University Engineering School and a Master’s degree in Project Management from University du Quebec. He is a professional engineer.
Michael Lafrance — Director and Secretary-Treasurer
Michael Lafrance has been VVC Exploration’s Secretary and Treasurer and geological consultant since December 2012. Since 1980, he has served in similar roles with many other publicly-traded exploration companies. He is also the corporate secretary of POET Technologies Inc. (formerly Opel Technologies), a pioneer in the field of integrated circuits. He is a graduate of the University of Ottawa.
Kevin Barnes has served as the corporate controller and CFO of various public and private companies over the last 12 years. He also served in the role of IT Manager and Senior Accountant with Duguay and Ringler Corporate Services, a firm which provides corporate accounting and secretarial services to publicly-traded companies. He served as the Controller of Canada’s Choice Spring Water, one of Canada’s first publicly-traded bottled water companies.
He currently serves as CFO of Poet Technologies Inc., a pioneer in the field of integrated circuits and Controller of an international training institute with revenues of $100 million. Barnes received a computer operations diploma from Careers Development Institute and has a Certified Management Accountant designation from the ICMA Australia. In 2006, he became a member of the Institute of Chartered Secretaries and Administrators of Canada.
Terrence Martell, PhD—Chairman of the Board
Dr. Terrence Martell is the Director of the Weissman Center for International Business at Baruch College and the Saxe Distinguished Professor of Finance where he oversees a myriad of international education programs and projects. He is also the Chairperson of the University Faculty Senate and an ex-officio member of the Board of Trustees at The City University of New York. His area of expertise and research is international commodity markets.
He is a Director of the Intercontinental Exchange (ICE) where he serves on the Audit Committee and has many roles. He serves on the Board of the Manhattan Chamber of Commerce and is a member of their Executive Committee. He is also a member of the New York City District Export Council of the US Department of Commerce and a member of the Reuters/Jefferies CRB Index Oversight Committee. Dr. Martell received his B.A. in Economics from Iona College and his Ph.D. in Finance from the Pennsylvania State University.
Peter Dimmell is a geologist and prospector who has been involved in mineral exploration in Canada, the United States and overseas for 38 years. He is experienced in all aspects of the mining industry and has guided on-site operations from exploration through to production. He is a past president of the Prospectors and Developers Association of Canada (PDAC), a director and former chairman of the Newfoundland and Labrador Chamber of Mineral Resources and a councilor and member of the Geological Association of Canada. He sits on the Board of Directors of four other public companies: Arehada Mining Ltd, Linear Gold Corp, Pele Mountain Resources Inc and Silver Spruce Resources Inc, for which he also serves as CEO.
Bruno Dumais is Vice President, Finance, for BroadSign International, a Montreal-based provider of digital signage solutions. He possesses over 20 years of experience in financial, forecast and strategic planning and is responsible for overseeing global financial activities. Prior to joining BroadSign, he was the Chief Financial Officer, Vice President of Finance and a Consultant at Mitec Telecom for seven years. He has also held senior level positions in companies crossing a variety of sectors, such as Gestion Exponent, Nortel Networks and Premier Tech. Dumais is a Chartered Professional Accountant and holds both a Bachelor in Business Administration from the University of Quebec in Rimouski and an International MBA from the University of Ottawa.
Patrick Fernet is a legal, operations, and corporate governance expert with more than twelve years’ experience in Canadian small-cap public corporations. He serves as a consultant to VVC on a variety of corporate matters. He has more than 15 years of governance experience with small-cap Canadian corporations.
Scott Hill has served as Chief Financial Officer of Intercontinental Exchange Inc (ICE) since May 2007. He is responsible for all aspects of ICE’s finance and accounting functions, treasury, tax, audit and controls, business development, human resources and investor relations. Hill also oversees ICE’s global clearing operations. Prior to joining ICE, Hill was Assistant Controller for Financial Forecasts and Measurements at IBM, where he oversaw worldwide financial performance and worked with all global business units and geographies. Hill began his career at IBM and held various accounting and financial positions in the US, Europe, and Japan, including Vice President and Controller of IBM Japan, and Assistant Controller, Financial Strategy and Budgets.
Emily King—Director and Secretary-Treasurer
Emily King is a professional geologist specializing in building and leading multi-disciplinary teams to achieve clients’ high-priority objectives. She is the Founder and CEO of Global Ventures Consulting (GV), a mining and natural resources consulting firm. She is also the President of DZG, focused on partnering North American and Afghan capital to develop Afghanistan’s mining sector, and Senior Geological Advisor for SODEVCO, a chromite toll processing company.
Prior to founding GV, King led the $40 million per year mineral exploration, investment and promotional activities for an economic development task force in the US Department of Defense where she oversaw a team of over 40 experts. In that role, she explored 15 mineral deposits throughout Afghanistan, promoting and tendering four early-stage copper and gold deposits in partnership with the Afghanistan Ministry of Mines and Petroleum, Afghanistan Geological Survey and the US Geological Survey. She earned a degree in Geology from Bowdoin College, where she recently was a guest lecturer for the Earth and Oceanographic Science Department. She is also the Founder and active leader of Women in Mining: USA.
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