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Los Andes Copper Ltd. – South America’s Largest Copper Deposit Not Controlled by Major

Overview

Los Andes Copper Ltd. (TSXV:LA) is a Canadian resource company focused on advancing its 100 percent-owned Vizcachitas Project in copper-rich Chile. The Vizcachitas property contains a large copper-molybdenum porphyry deposit which occurs in the same geological belt as several other world-class copper-molybdenum porphyry deposits.

An updated 2014 NI 43-101 resource estimate for Vizcachitas outlines an Indicated resource of 8.5 billion pounds of copper and 281 million pounds of molybdenum, and an Inferred resource of 2.4 billion pounds of copper and 88 million pounds of molybdenum. Based on this resource estimate, Vizcachitas is the largest undeveloped copper project in South America that is not controlled by a major mining company.

The 2014 preliminary economic assessment (PEA) completed on the project estimates a mine life of 28 years and an initial CAPEX of $2.9 billion. Vizcachitas is expected to be a low-strip, open-pit mining operation with a 176 ktpd mill, producing on average 179,000 tonnes of copper annually during its mine life.

The 2017 drill program is underway at Vizcachitas with a goal of upgraded the resource and optimizing the PEA. The company expects to complete the program by Q4 2017.

Los Andes Copper is managed by a strong team of mining professionals who have the expertise to advance the Vizcachitas project. The company recently raised $8.04 million in funding for its work programs on the property.  

Investment Highlights

  • Chile ranked #1 Mining Jurisdiction in Latin America
  • Largest undeveloped copper project in South America not controlled by majors
  • Large NI 43-101 resource base: 8.5 billion pounds Indicated copper and 2.4 billion pounds Inferred copper
  • Excellent local and regional infrastructure: water, power, smelters, ports
  • Positive PEA demonstrates robust project economics
  • 2015-2016 drill campaign indicates central higher grade core extends over an area of at least 1,400 by 700 meters
  • Drilling underway to expand and reclassify resource base, increase molybdenum grade, include silver content and optimize PEA
  • Exploration upside: 250 km2 trend with only 9 km2 significantly explored

Chile’s Prolific Copper Belt

Chile is the world’s largest copper producer and Latin America’s top mining jurisdiction. The South American nation owes its prominent position to the Neogene-era porphyry copper belt that runs north-south through Chile in the central Andes Mountains. Chile’s copper mine production totaled 5.5 million MT in 2016.

Los Andes Copper’s Vizcachitas Project is located in the Neogene-era porphyry copper belt, along with three of the world’s largest copper porphyry systems including:

  • Los Bronces, owned by Anglo American, Codelco and Mitsui;
  • El Tenientes, owned by Chile’s state mining company, Codelco; and
  • Los Pelambres, owned via partnership between Antofagasta, Mitsubishi, Nippon and Marubeni.

Key Property: Vizcachitas Copper-Molybdenum Porphyry Project

The Vizcachitas Project is located 150 kilometers by road and rail from Santiago, Chile in an area of low elevation (2,000 meters). The land package consists of 35 mining claims as well as 63 exploration concessions that cover the mining claims and surrounding areas. In 2010, Los Andes Copper consolidated all of the claims to bring the entire property under unified ownership for the first time since the 1980’s. Today, the concessions cover approximately 250 square kilometers with only nine square kilometers of the concession significantly explored.

Excellent infrastructure exists locally and in the region. The property is 60 kilometers from railway lines in San Felipe and 105 kilometers from a 220 kilovolt substation in Nogales. Los Andes already holds -consumptive water rights for 250 litres/second from the Aconcagua River.

Surrounded by assets owned by Codelco and Antofagasta Minerals, the property also boasts access to smelters and ports:

  • Anglo American’s Chagres smelter: ~100 kilometers by road
  • Codelco’s Ventanas copper smelter/refinery : ~140 kilometers by road
  • Concentrate port of Ventanas: ~140 kilometers by road
  • Deep sea port of Valparaiso: ~180 kilometers by road

Los Andes Copper – South America’s Largest Copper Deposit Not Controlled by Major

Geologically, the Vizcachitas Property covers a porphyry copper-molybdenum system with alteration delineated over three kilometers in a north-south direction and 1.5 kilometers in an east-west direction. Within this altered zone is an area of strongly-leached capping, copper oxide and sulfide and molybdenum mineralization covering an area measuring approximately two kilometers in a north-south direction and one kilometer in an east-west direction.

Historical Drilling at Vizcachitas

The San Jose claims portion of the Vizcachitas property was originally staked in the 1970’s. The property was first confirmed to be a copper-molybdenum porphyry prospect following the completion of geologic mapping and geochemistry work in 1981 by Compañía de Petroleos de Chile S.A. (COPEC).

Further exploration work was conducted intermittently on the property throughout the 1990’s by Placer Dome, which in 1993 drilled the first holes on the property, and by General Minerals Corporation.

During the following two years after acquiring the project in 2007 Los Andes Copper completed an drill campaigns on the southern section of the property, excluding the central core of San Jose, as the mining property on the central core had not been consolidated.

2014 Resource Estimate and PEA

An updated NI 43-101 resource estimate on Vizcachitas was released in February 2014 and was based on a total of 146 drill holes and 40,383 meter drilled, including a total of 16 drill holes and 5,128 meter of drilling completed after the 2008 resource estimate was released.

The 2014 resource estimate outlines an Indicated resource of 1,038 million tonnes at 0.434 percent copper equivalent (0.373 percent copper and 0.012 percent molybdenum), containing an estimated 8.5 billion pounds of copper and 281 million pounds of molybdenum, and an Inferred resource of 318 million tonnes at 0.405 percent copper equivalent (0.345 percent copper and 0.013 percent molybdenum) containing an estimated 2.4 billion pounds of copper and 88 million pounds of molybdenum using a 0.3 percent copper equivalent cut-off. Mineralization remains open to the east, north, west and at depth.

The 2014 PEA completed at the same time as the updated resource estimate highlights the Vizcachitas project’s robust economics:

  • An estimated initial CAPEX of US$2.9 billion
  • Open pit operation
  • 176,000 tonne per day mill
  • Average annual production of 179,000 tonnes of copper and 11 million pounds of molybdenum
  • LOM by-product cash costs of US$1.69 per pound of copper
  • Pre-tax NPV of US$1,581 million (at an 8 percent discount rate and copper price $3.00 per pound)
  • Pre-tax IRR of 14.7 percent (at a copper price of $3.00 per pound)
  • Payback period of 4.7 years (at a copper price of $3.00 per pound)
  • Strip ratio of 1.03

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2015-2016 Drill Campaign Supports New Geological Model

In preparation for the 2015-2016 drill program at Vizcachitas, Los Andes geologists re-logged all of the previous 146 drill holes (40,000 meters) on the property to gain a better understanding of the project’s geologyl. These efforts showed that the previous geological model did not properly identify the width and depth extent of the deposit’s higher grade central core, which extends over 1,400 meters north-south and 700 meters east-west.

The results of the 2015-2016 drill program support the presence of higher grade mineralization and the new geological model.

2017 Exploration Program

In March 2017, Los Andes Copper announced the 2017 Exploration Program at Vizcachitas which includes approximately 10,000 meters of diamond drilling, including the higher grade central core of the deposit. The program is focused on testing extensions of the new geological model, drilling extensions within the PEA pit area, upgrading the resource and evaluating the silver mineralization. Los Andes will also collect samples for metallurgical testing with the goal of increasing recoveries over the current 90 percent level.  

Los Andes will use the data from the 2017 program to create an updated resource model and optimized PEA for Vizcachitas. The company expects to release initial assay results in Q3 2017 and complete the program in Q4 2017.

Management

Anthony Amberg – President & CEO
Mr. Amberg is a geologist who is a graduate of the Royal School of Mines, London, has an MSc. from University College London and is also a Chartered Geologist with the Geological Society of London. He has close to 30 years of diverse experience having worked in Asia, Africa and South America for both multinational and junior companies. He began his career in 1986 working with Anglo American in South Africa before moving on to an exploration position with Severin-Southern Sphere. In 1990 Mr. Amberg moved to Chile where he first worked with Bema Gold on the Refugio project before taking up a position with Rio Tinto. At Rio Tinto he was involved in exploration programs in the Atacama and Magallanes Regions and managed the Barreal Seco (now part of Las Cenizas) exploration program.

In 1996 he joined Kazakhstan Minerals Corporation in Kazakhstan setting up and managing offices for the drilling and resource estimation for JORC compliant feasibility studies on three large projects that are now operating mines. He became General Director for two joint ventures in KazMinCo where he managed all technical and local issues. In 2001 he returned to Chile where he started a geological consulting firm specialising in project evaluation and NI 43-101 technical reports. Mr. Amberg’s clients included Rio Tinto, Barrick, Codelco, Anglo American, Pan Pacific Copper and various junior mining companies. He joined Los Andes Copper in 2012 as Chief Geologist. Mr. Amberg is a Qualified Person under NI 43-101.

Gonzalo Saldias—Geologist Consultant

Mr. Saldias is a geologist who is a graduate of Universidad Católica del Norte, Chile. He has over 35 years of experience working within Chile and internationally; mainly on copper porphyry, epithermal gold silver and iron-oxide copper gold systems. For the last seven years, he worked for Antofagasta Minerals evaluating copper porphyry projects within Chile, assessing their geological and economical potential. Prior to that he had worked for ten years with Placer Dome Latin America, generating and evaluating exploration projects within the region. Prior to Placer Dome, he worked for Codelco as head of exploration geology for the El Salvador Division, developing the prospective areas near to the mine. He also worked for Northern Resources, Homestake, Utah, Anaconda and as an independent consultant.

Aurora Davidson – Chief Financial Officer

Ms. Davidson holds a Certified General Accountant designation from the Certified General Accountants Association of British Columbia and a BSc in Business Administration from Alliant International University in San Diego, California. Ms. Davidson has over 20 years of experience in financial and general business management having assisted private and public companies in the roles of Chief Financial Officer, Vice-president, Finance and Corporate Controller within the mineral exploration and high technology sectors.

Pedro Loch—Controller

Mr. Loch is a Certified Accountant from the Chilean Association of Accountants. He has over 20 years of experience with multinational companies. Before joining Los Andes Copper in 2011, Mr. Loch worked as Regional Financial Officer for the Chilean subsidiary of Mincom International from 1997 to 2010, with responsibilities for the offices in Chile, Peru, Colombia, Brazil and Mexico. From 1987 to 1997, he worked at Raychem, as Controller for Chile and Peru and prior to Raychem, he was Controller for 7 years at the Chilean subsidiary of Transammonia Inc. (New York).

Klaus Zeitler – Director & Chairman
Dr. Zeitler received his professional education at Karlsruhe University from 1959 to 1966 and obtained a PHD in economic planning. Dr. Zeitler is a member of the Canadian Institute of Mining and Metallurgy and the Prospectors and Developers Association. Dr. Zeitler financed, built and managed base metal and gold mines worldwide (Europe, Africa, North America, South America, Pacific) with a total investment value of $4 billion.

Dr. Zeitler was a managing director of Metallgeschaft AG, a German metals conglomerate and in 1986 founded and was a director and CEO of Metall Mining, later Inmet, a Toronto Stock Exchange listed company with assets of over $1 billion and base metal and gold mines in different parts of the world. After having been a director of Teck and Cominco for many years, Dr. Zeitler joined Teck in 1997 as Senior Vice President and had responsibilities for the exploration and development of mines in Peru, Mexico and the USA. Since his retirement in 2002 from Teck Cominco and in addition to being President and a director of Amerigo, Dr. Zeitler has been actively involved as a director in various junior base and precious metal companies.

Eduardo Covarrubias – Director
Mr. Covarrubias holds a degree in chemical and industrial engineering from the Catholic University of Chile, and a Master of Science in Management from the Massachusetts Institute of Technology (MIT), Sloan School of Management. Mr. Covarrubias has been overseeing the mining interests of Turnbrook Corporation prior to the recent consolidation of ownership of the Vizcachitas project. Mr. Covarrubias was a banker with the Chase Manhattan Bank for almost a decade, covering the mining sector in Chile. He was based in New York and Santiago and his responsibilities included project financing, structured finance and mergers and acquisitions transactions.

Gonzalo Delaveau – Director
Mr. Delaveau is a lawyer graduated from the Catholic University of Chile. He has been professor of Modern Contracts at the Magister postgraduate program of the Universidad Catolica de Chile and of Regulated Markets at the Magister postgraduate program of Universidad del Desarrollo. He is also Chairman of Chile Transparente, the Chilean chapter of Transparency International, member of the International Bar Association and the American Bar Association. Chambers and Partners has distinguished Mr. Delaveau in the areas of Natural Resources, Energy, M&A and Capital Markets. Mr. Delaveau joined Aninat Schwencke & Cía. in August 2012. Prior to joining the firm he was a partner for 12 years at Guerrero, Olivos, Novoa y Errázuriz. He has specialized in complex and innovative corporate transactions, finance and trade, both in Chile and abroad, and in the development of projects related to energy, mining, natural resources and public concessions.

Francis O’kelly – Director
Mr. O’Kelly is a graduate of the Royal School of Mines, London. He has worked in metalliferous mining throughout the Americas, having previously being employed by Exxon, Anaconda and Rosario Mining Co. He also has served as an officer of JP Morgan and a partner of Elders Finance and acted in the capacity of a director of Glamis Gold, Alamos Gold, Northgate, Campbell Mines and Rayrock Resources. Mr O’Kelly currently is an independent financial and technical consultant based in Santiago Chile.

Francisco Covarrubias – Director
Mr. Covarrubias holds a degree in Agricultural Engineering and a Bachelor of Science in Agro Resources. He also holds and MBA form the University of Melbourne. Mr. Covarrubias works with Acfin, the largest Add descriptionmaster servicer for asset backed securities in Chile and a leading player in the Mexican market. Prior to Acfin, he worked with Australia Trade Commission expanding and promoting Australian business interests in Chile. MRr. Covarrubias began his career in the agri-business sector working with the Conosur winery and Chiquita brands.

Paul Miquel – Director
Mr. Miquel holds a degree in Mathematics applied to Social Sciences, and a degree in Economics from the Universidad de Chile. He has been working in international investment banking since 1990. He has been Director for Sudameris (Intesa BCI Group), Country Head for Chile, Peru and Colombia for Societe Generale and Country Head for Venezuela and Chile for BNP Paribas. During the last 15 years, Mr. Miquel has been working in structuring, negotiating and distributing some of the major transactions in the energy and mining sectors, for multinational and local groups and governments, in South America.

 

 

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