According to Carube Copper President and CEO Jeffrey Ackert, his company is navigating the copper industry in a period of vast opportunity.
According to Carube Copper (TSXV:CUC) President and CEO Jeffrey Ackert, his company is navigating the copper industry in a period of vast opportunity.
Carube Copper is a Canadian exploration company focused on the discovery and development of copper and gold in both Jamaica and Canada. Carube Copper’s wholly owned Jamaican assets include 11 copper-gold licenses covering more than 535 square kilometers of the most prospective regions of the island’s emerging copper-gold district. The company has successfully drilled a series of porphyry mineralized intersections at multiple locations extending well over 250 meters, and has aggressive plans to drill a variety of high-priority targets in 2017.
Carube enjoys first-mover status in Jamaica, a historically mining-friendly jurisdiction with excellent infrastructure, including deep-water shipping ports, a politically stable government and a British-based constitution and legal system. The country’s geology is similar to that of Chile, Argentina and the Dominican Republic — all of which are very productive mining jurisdictions.
In Canada, Carube holds a 100-percent interest in three porphyry copper-gold-molybdenum properties totaling 492 square kilometers within the Tertiary-aged Cascade Magmatic Arc in Southwestern BC. It also owns the promising 23-square-kilometer Fiedmont platinum–palladium project in Quebec, where it recently initiated exploration.
Below is a transcript of our interview with Carube Copper President and CEO Jeffrey Ackert. It has been edited for clarity and brevity.
Investing News Network: Please give our investor audience some background on Carube Copper and the Bellas Gate project in Jamaica.
Carube Copper President and CEO Jeffrey Ackert: Yes, I’ll start off with a brief history of my own exploration experience. I’ve been working in the business for over 30 years now. I started out as a Canadian geologist in the gold sector in Northern Ontario and Quebec and then worked for Barrick Gold (TSX:ABX,NYSE:ABX), gaining experience in mining, deposits and the economics of production. Following that, I was in West Africa, where I was one of the first movers with a company called Orezone Resources. With them, I was part of a few great early exploration projects in Burkina Faso. After that I worked in East Africa, where I put a gold package together, including a former mine in Kenya. I’ve been involved in early exploration and its development in many different countries throughout my career, and I’ve done the same with Carube Copper in Jamaica.
Carube Copper started in 2011, focusing on copper-gold and porphyry projects in Jamaica at a point in time when only a few companies had been looking into projects in the region. We put a package together as a private company, and did some of our own work, raising money privately, and started drilling in some of the higher-priority target areas. At that time, we attracted the attention of an Australian company called Tigers Realm and entered into a corporate deal with them. We took over their projects in Jamaica, and they provided us with funding while we were still a private company.
In 2012, we then attracted a joint venture partner, an Australian copper producer called OZ Minerals (ASX:OZL). There were good indications of similar types of mineralization in Jamaica to what they were looking at in Australia, so it was very familiar for them. In the joint venture, they would earn up to 70 percent by spending $6.5 million. It was a positive relationship and they continued to provide funding and did quite a bit of exploration. They then made the decision to continue to invest so they would earn up to 80 percent by attaining feasibility.
However, in August 2016, OZ Minerals went through a change in philosophy in their exploration focus, moving away from copper porphyry systems. As such, they handed back our properties, leaving us with 100 percent of all our projects that were previously under joint venture. We were also able to acquire five of the licenses that they had procured in Jamaica. By the end of last year we had 11 licensed areas in Jamaica belonging wholly to us. The timing for this was excellent because the markets were turning around and junior explorers were starting to get attention again in the market. This put us in a position to raise our money, and that’s what we did.
INN: Please tell us about your current drill program at Bellas Gate. When can investors expect to see results? What are the next steps for the project?
JA: When we were working with OZ Minerals under the joint venture, they did a fair amount of drilling, but really only drilled one or two holes in some of the identified target areas; they didn’t follow up on any of the successful mineralized intersections. So based on their work and on some of our own previous work, we decided on some high-priority target drilling areas. We focused the initial program on four of these areas and decided to run a 2,000-meter program. One of the areas that had first been explored in 2016 but was never followed up on was in a region called Provost. In one of the holes drilled there, we saw 339 meters of 0.34 percent copper equivalent. Within that we had a really nice high-grade zone; about 10 meters of 1.79 percent copper equivalent. Based on these results, we decided to further explore that area, and that’s what we’re working on right now at Bellas Gate.
In July of this year, we announced that the first drilled hole of the six we are working on returned 340 meters with a really nice intersection of constant mineralization: 0.25 percent copper equivalent. Within that zone we had about 55 meters of 0.51 percent copper equivalent and over 14 meters of over 1 percent copper equivalent. As you can see, there’s a wide, low-grade halo with a fairly high-grade center within that. These types of results seem to be consistent in both holes that we’ve announced so far, and visually it seems that this is the case throughout that zone at Provost.
We expect another batch of results around the last week of September, and we believe that we’ll have the results back from all drilling by the second week of October.
In terms of what’s happening next, within our 11 licenses there are two licenses that we want to prepare for drilling. We may not get to the drill stage this year, but we expect to do some basic exploration work, including ground geophysics and soil geochemistry. As accessibility and workforce availability are both really good in Jamaica, it doesn’t take too much investment to get the sites to a drill-ready state. We’ll do some groundwork on a few of the other locations and we will review the results that we’ve had from this drilling program. We feel we’re at a point now where we understand to a degree what’s happening in the system. We’ve found that there’s a whole series of porphyry systems that are lining up along several different trends.
We believe that what we have found is comparable to two existing models, both located in Eastern Australia: Northparkes, owned first by Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO) and now by China Molybdenum (HKEX:3993), and Cadia East and Ridgeway, owned by Newcrest Mining (ASX:NCM). Both of these projects are big systems and show similar features where they have a series of porphyries lined up along different zones. To give you an idea of how much metal exists in these systems, Cadia’s 2016 reserves hold over 40 million ounces of gold and over 19 billion pounds of copper. Ideally, if we have even half of that at Bellas Gate, we would count that as a success for us and for our shareholders.
INN: For investors not familiar with mining in Jamaica, please tell us about the upsides to resource exploration and mining in this jurisdiction.
JA: Jamaica is a great place to do business. What we like about Jamaica is that they have mining experience, so they have a mining mentality and an established community. Mining there started not in copper, but in bauxite in the 1950s and a number of big players were involved in that. They understand what mining is, and the government understands the importance of its contribution to the economic health of the country. So when we came in wanting to look for copper, they saw the value in that initiative as they knew bauxite was a finite resource. As a result, government agencies have given us lots of support.
Another factor to consider is the accessibility to water ports. With Jamaica being an island, everything is near the ocean. At Bellas Gate, it’s only 15 kilometers to the existing deep-water ports, and that is a very positive thing.
Another perk about Jamaica is that we’ve had excellent support from the local communities. We’re employing quite a number of people through a rotating workforce, and thus providing more people in the community with access to work and training. We purchase local produce and, where we can, employ artisans to create different things for us, including our sample bags for either soil sampling or drilling.
INN: Savvy investors know strong management is key to a company’s success. Are there any star players you would like to highlight on your board and management team?
JA: I like to think that all of our team is star worthy. I would like to highlight a couple of new players that we’ve just brought on board. We elected two new directors to the board this year during our AGM. One of these is Tony Manini, and he was involved with us early on with the Tigers Realm group. He’s had lots of success developing new companies in other sectors, including NexGen Energy (TSX:NXE,NYSEMKT:NXE). With his background and with his network of investors, we feel that this appointment is going to benefit our company.
The second director we elected is Yale Simpson. He was previously co-chair at Exeter Resource, which was recently sold to Goldcorp (TSX:G,NYSE:GG) for a copper porphyry asset in Chile. Yale has been in the business for quite a number of years, knows when there’s a decent asset to develop and has the proven ability to attract the likes of Goldcorp and Yamana Gold (TSX:YRI,NYSE:AUY). This could be beneficial for us down the road when we have decent resources and reserves of copper.
Another person I’d like to highlight is our chairman, Alar Soever. He’s been hands on with our company since we did a RTO with one of his spin-off companies, Miocene Metals. Miocene Metals was the company we identified as our transaction company for going public. So when we did a deal with them, Alar was involved and we then brought him on as our chairman. He’s a great asset for us as well.
INN: How well financed is Carube Copper to advance at Bellas Gate? Is there anything else you can tell us about the company’s financials and share structure?
JA: What we did earlier this year was decide, since the market had started to turn significantly, that we should raise some money in it, and do some of our own work, rather than jump into another joint venture. This was despite the interest we were getting from other big players.
Up until early June of this year, we’ve raised about $3 million. We are using about half of that to conduct this drilling program in Jamaica. Once that is done, we will have around $1 million in the bank. If at that point we want to conduct a major drill program, we will have to go back to the market at some point, but we’re not obliged to do that right away. We will see how the market goes, and where the share price is.
Now, our burn rate for G&A is pretty low. Between our team here in Canada and our office and staff in Jamaica, our burn rate is approximately C$50,000 per month, which is very manageable.
As far as shares outstanding, we have about 100 million shares outstanding. We have approximately 30 million warrants and about 7 million options. Both the warrants and options are priced around the 20-cent range, so they’re a little bit out of the money at the moment. Hopefully that will change in the next couple of months.
INN: Taking a more macro view, what would you say is the outlook for copper for 2017 and beyond?
JA: I’m very bullish on copper prices. One of the things I see taking place is strong consumer demand for copper in the form of the electrification of vehicles. It’s going green and it’s less reliant on commodities like oil and gas that may be very expensive in the future. We’re producing electricity in different ways now; ways that are a lot more environmentally friendly. I think that’s where copper is going to get a really big kick in demand, whether it’s for your car, your electric motorcycle or your electric bus. I think the electrification of both the first and second world is really going to generate a lot of demand. It’s the junior explorers that are taking the risk at this point with their shareholders to find the new deposits that will feed this demand and enable consumers for 10 years, 20 years, 30 years down the road. I think we’re in a good space at a very good time.
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