Some investors want to invest in companies who are working in tried-and-true jurisdictions using tried-and-true business models. There are a lot of experts available to help these businesses, and often the costs are lower. And some investors want to invest in businesses that are doing new things in new areas. For these businesses, the rewards are higher as they pave the way for the future.
CuOro Resources (TSX-V: CUA) will appeal to both types of investors because it is using a familiar business model in a well-known mining jurisdiction but it is blazing a new trail. The name "CuOro" is a combination of the atomic symbol for copper (Cu) and the Spanish word for gold (Oro). CuOro Resources has two properties – a copper property and a gold property – in Colombia. Although gold is frequently mined out of Colombia, copper is not, and CuOro wants to blaze a trail to become the first major copper producer in Colombia.
We spoke to Robert Sedgemore, President and CEO of CuOro Resources about their work, to learn more about this hybrid approach.
We started by talking about their first and most advanced project, a copper project called Santa Elena: "We've been working on Santa Elena for over a year. We've done some preliminary work and we've started drilling a 25,000 meter drill program. We've completed 42 holes of about 8,000 meters to date."
The results have been favorable and the company is moving forward toward developing a resource: "Eighteen of the drill holes were mineralized. Our most recent drill hole came back with just over 103 meters at 1.44% copper. Going forward, we have 2 rigs on the ground right now and we're bringing a third rig on the site," said Mr. Sedgemore.
Then Mr. Sedgemore described the short-term plan: "Our plan is to continue the drilling program and, at the same, do some baseline studies and metallurgical test work and environmental studies. All of that is coming together and if we can complete a 43-101 compliant report by the end of the year, we'll be able to put together some economics and come out with preliminary scoping studies."
Highlights from assay results received from the first 42 drill holes returned values of:
• SE-DDH-002: 46.8m of 1.76% Cu, including 21.0m of 2.87% Cu
• SE-DDH-005: 40.0m of 2.28% Cu, including 10.0m of 5.32% Cu
• SE-DDH-020: 20.0m of 1.47% Cu
• SE-DDH-024: 9.0m of 2.69% Cu
• SE-DDH-026: 6.0m of 4.84% Cu
SE-DDH-039: 102.9m of 1.44% Cu, including 30.0m of 2.06% Cu
Mr. Sedgemore connects the deposit in Colombia with similar deposits in the Canadian Shield: "We're developing our model for a resource," he said. "Our deposits are similar in class to those in the Canadian Shield, which often have one large deposit of 30 million tons plus several small to medium sized deposits ranging from 5 to 15 million tons. We've identified at least two deposits and are investigating two others. In the economics of scale, the Santa Elena project has some significant potential."
Mr. Sedgemore is confident about the ability to create an affordable mine: "The resource is very close to the surface; it's high grade and economic. We've got all of the infrastructure in place; there's water and power and paved roads. Typically infrastructure costs are 20% to 30% but because everything is right up to our mine gate, we're looking at only 5%. Our power is reasonably price."
"If you're looking through all of the boxes to tick when you're developing a project, Santa Elena has everything required to put a mine into production," said Mr. Sedgemore.
Next, we talked about their gold project, Barranco de Loba. "What attracted us to the project is a geo-chemical anomaly we identified that extends over 5 kilometers and runs parallel to other structures that were mined. Our samples came back as 6 grams to 87.5 grams per ton of gold. There's a co-op mine nearby that has about 2,000 workers and 3 of their principal veins run into our property."
Barranco de Loba is not as far along as the Saint Elena project but it is moving forward. Mr. Sedgemore reported: "We're on the ground; we have our team mobilized this month. Our plan is: By the end of third quarter, we want to determine some good drill targets and we'll put some holes in the ground at that time."
The company is well financed with money to last them through to the end of the year. "We'll be spending about $8.5 million on Saint Elena and about a million on Barranco de Loba," said Mr. Sedgemore.
Everything is in place for CuOro to move forward on gold and copper so we wanted to know more about what it meant to be one of the first producers of copper in the country.
"To be the first copper producer of any significance in Colombia is an exciting challenge," said Mr. Sedgemore. "I've spent a lot of years in South America and I've seen a lot of countries come a long way. Peru, for example, was categorized as the 52nd largest gold producer. Now they are the 5th in the world. Colombia has some fantastic assets and they are willing to be a mining country. The government is very supportive. Some early talks [between the government and CuOro] have been looking at copper production and what potential that has for Colombia. It's an excellent opportunity. We have excellent support from the community and the people we're working with."
They're not only getting support from the federal government but they are also getting support from the local community as well, thanks in no small part to CuOro's effort to connect with the community. "We have excellent community relationships," said Mr. Sedgemore. "We had the local priest bless our project. We've worked closely with local mayors and community leaders. We have a team of environmental engineers and a team of social and community people working with us. It's an important part of our project. We also hire local workers. Over the last year, we went from no employees to 70, with only 3 expatriates out of that 70."
CuOro believes in the importance of being a first mover in Colombian copper mining, and they have set an aggressive timeline to achieve it. Mr. Sedgemore said: "Our target for exploration is to develop a large asset and a short window to production. We set out an aggressive timeline and milestones, and we've delivered on those. We're doing the right things and you can tell from the results that we're getting the work done."
Mr. Sedgemore summarizes CuOro's opportunity: "It's early days and there is a lot of work to do. We've got great projects, we've got money in the bank, and we have an excellent technical team that has the ability to execute."
For investors who want to invest in a tried-and-true junior gold exploration business model in a proven mining jurisdiction, AND for investors who want to invest in an interesting, innovative "first-mover" copper mining model in a country that doesn't have significant copper production, CuOro is worth taking a closer look.
CuOro Resources Corporation
1305-10900 W Georgia St
Vancouver BC V6E 3V7