'Economic World War' Has Begun: This Scarce Asset To Explode | Ivan Bebek

Summary

This video is distributed on behalf of Coppernico Metals (TSX: COPR | OTCQB: CPPMF). Ivan Bebek, CEO of Coppernico Metals, …

Transcript

Copper is the new oil and let's look at the history of what happened in the Middle East. He who has the most oil or the most control of the oil has the most power, you know, globally. It's kind of a economic world war that's been going on for some time. There's no shortage of copper, but there's a shortage of quality copper. This is the very very early [music] innings. This is not a a short-term fatter theme. This is a long-term problem with a long-term bull market in front of it. People who follow me know that the show's mission is about helping people better understand finance and economics so that we can all become better investors together. Part of that journey involves finding alpha where there is some. And uh right now I'm looking at one particular asset that has stood out. So this asset has not only outperformed the S&P 500 but has also been recently labeled a critical asset by the uh Trump administration in the US. We're going to talk about this, what this means for investors and what this means for the economy going forward with our next guest, Ivan Beck, CEO of Capernicle Metals. That's ticker COR on the TSE. Ivan has been on the show before. He's called this the new oil. And you can check out our last interview link down below for what he said last time. We'll get his updates now. Ivan, welcome back to the show. We're looking forward to it this time. Thank you. >> Thank you so much for having me. Great to be here. >> You were on the show back in May. you might called copper the new oil and it has rallied uh since then. It has continued it rally since then should I say it has outperformed the S&P like I said in the introduction uh by more than 10%. Copper is up 26% while the S&P 500 is up 15%. Uh there was a tariff uh instituted over the summer and I'm looking at uh the CME price. um the um uh LME price doesn't have this arbitrage red bar here that uh that happened in August. But regardless, the trend of this metal is up. The trend of all um not all but most metals, especially the precious metals, has been up and it has outperformed the broad markets. It's outperformed crypto in a bull year where everything seemed to have gone up. Um and now risk assets are taking a turn for the worse while they've been they've been sliding down and correcting while um copper base metals and precious metals have held steady. How would you characterize this capital rotation that's happened in the last couple of months that's culminated in what is now obviously a selloff in one sector but not a sell-off for the metals? Well, it's a great question and I've been in this this is my 25th year in the business. When I entered copper was about 60 cents a pound. Um the average grade of of how much copper comes out of a ton of rock was more than double almost triple the current grade of what we're we're seeing as the average grade of copper mines. Um world has changed a lot. There is electrification which is a massive massive influx of um of copper demand that we did not see coming. And the popular the global population has increased from the 80s it's almost doubled to now. So as we go into this new era of demand which is obviously very significant to anybody that has electronic device in their hand or has bought an electric car or about to buy an electric car like I am. You can see the demand for copper and electricity you know using devices with copper and piping for construction is going to be quite significant. The other factor that's facing it is the redevelopment of airports, sorry, refurbishment of airports, big cities. There's a lot of construction that needs to be redone. A [clears throat] lot of new houses being built, a lot of exploration of old infrastructure globally around many countries and then new populations such as India and China, you know, continuing to grow and need a lot more modernization in their countries. So, the demand curve got a lot steeper and there's a a massive influx of demand. the average amount of copper being produced by value in a ton of rock has dropped considerably from what it was. And importantly, something that directly relates back to myself and what I do for a living, which is explore for major mines around the world. Um, it's a lot harder to find these mines and it takes a long time to find a big mine, right? Um, from that perspective, in terms of looking at that outlook and that demand and the challenge of finding them, some of the biggest copper mines in the world like Escondidita and Chile, they're halfway dug down, you know, into that mine. And as you dig those deep holes in the ground, the deeper you go, the more challenging it is to bring that copper to surface or the harder the cost is. And, you know, a lot of other risks come into play. So, we're in a very pivotal time in copper. Um, you know, it's it's fun to be a bull in the metal because the demand cycle is so strong. It's really tough to be an explorer because good quality copper assets are really hard to find. And there's no shortage of copper to be very clear about it. Just probably copper in your backyard, in my backyard, but copper that could be mined economically, you know, rich enough amount of copper where you don't have to dig up, you know, half a city to to mine some small amounts of copper. Um so looking for high quality copper mines is become one of the most important metals out there. The US going to critical metals is a clear indication of that. Um they're a bit behind with China who's been cornering the copper market by putting infrastructure in places like the Congo which is very rich in co in copper. They've been investing heavily in South America to try and get an edge on world copper supply getting at least the first ride of refusal and buying copper at open market prices. The US has been somewhat underdeveloped. It's had some red tape around several well-known copper mines. And so there's a big shift here and it's a long-term problem that's becoming a short-term problem for supply. So as the economy grew in the last few years since co development went up, copper demand has gone up and the biggest outcome is electrification. So it's a new paradigm and it's really exciting to explore in this environment. >> Let's fill in the blanks for the next statement. Now Ivan, central bank buying and hedging against geopolitical risk is to gold as what is to copper. >> Okay. So as far as that um the banks do it because the currencies are devaluing. You know coffee cost I don't know $1.50 when I entered the business 25 years ago. It's now $5 $6 for a latte. So the money is worth less, right? So gold in the same equation went from $260 an ounce when I entered and now it's $4,000 an ounce. So real value assets will go up in value but currencies will go down. So a lot of the central banks would like to hedge themselves against devaluing currencies. In the copper world um the metal is a hard asset itself. So it's going to ex have the same experience from a currency perspective. It doesn't have as much leverage and torque as gold might have because gold's appeal is more emotional. This is more industrial, but it's becoming kind of an industrial precious metal, per se, because of how challenging it is to become. We're watching LME inventories being extremely low. We're watching supply crunches in real time. Um, last year, May 24, we saw copper shoot from, you know, $375 to $5 a pound with a mine in Panama, Cobra Panama, that that went down. It got shut down for a while. The sensitivity of the copper market is new. It's big. And there's a mad rush for supplies. Last event that we saw was the largest miner in the world being BHP uh stepping into a M&A transaction between Tech and Anglo and bidding Anglo and that transaction amidst the Tech and Anglo merger. Um this is another sign of people trying to corner supply and good pipelines of copper growth. Um we've had [clears throat] a chance to deal with all the largest companies in the world cuz our asset has drawn that attention. Some of them are shareholders of our company and listening to them talk about the supply pipelines or the exploration pipelines of the next wave of copper that's going to be needed is where a lot of anxiety has been building and I think you're going to see a market that's going to compete percentage-wise with gold and silver and all the other metals. This is a market that cannot be fixed quickly. It's a time issue more than an amount issue because it takes a long time to find them and a long time to build a compromise. So, you're well positioned to talk about u the entire metals complex because not only are you leading and um running a copper project right now, but you've been involved with gold for quite some time throughout your career. Have you noticed a relationship or a synergy between gold investors and copper investors when it comes to capital flows and actually in actual investment flows? For example, this year, as you know, copper uh has been strong, gold has been even stronger on a percentage move. Silver has been breaching new all-time highs, not seen since 2011. And so the question is whether or not copper demand is up because gold demand is up. Is this an entire commodities complex issue or investors selectively picking what they think has potential? >> Yeah, it's a great question. So I was a gold bug to start. I still am. And found a gold market, sold one that we were finding. So I've had a lot of good gold experience. Um, what I've learned in the sector in my experience is gold is the most emotional investment you can make. There's that proverbial saying gold fever and it does affect the general mining equities across the board. When gold is performing well, all metals perform well. Um, copper is unique that it moves slower. It's less emotional than gold, but it has big industrial implications. It generally lasts longer. And a statistic that I don't think many people realize, the largest mining companies in the world are copper base metal companies, not gold companies, even though there's some pretty substantial gold companies on the planet. Um, that being said, what I've learned about the copper market and equity interest and speculators is like gold, there's a magic number that kind of turns the light switch on for equity investing that happens to be $5 spot per pound. Copper, copper is at $489 per pound spot as we have this interview. But anytime it crosses $5 a pound, there's [clears throat] like a frenzy of investing that comes into the copper space. Gold used to have $300 an ounce and it was a,000, there's 1,500, you know, and so on. And there's a new paradigm each cycle. But the paradigm for copper right now where my phone rings, our share price performs, you know, people pay attention to your news and start to speculate has been $5 a pound copper. Um, it's not as quick as gold, but it is longer term than gold because again, it's a slower it's a slower find and a slower mine to build and supply will take a long time to solve. >> What's the true long-term incentive price for carbon miners today? Is it still around $5 a pound, 550 higher? >> Oh, it depends on your grade. So, if your average grade is half a percent copper and you're open pit from surface, that's the global average grade of a copper mine right now. half a percent of copper in a ton of rock. Um, you could live with $4 a pound copper is great or even three $3 a pound copper. You're making money. If you're lower grade.35, you know, in that range, you're going to need a higher grade threshold because the capex or the capital required to build those mines is in the billions. It's quite substantial and you're going to need to be far enough away from your threshold so that the capital's comfortable to go and build a major mine that's going to take time and 6 to 11 billion to build. Right? So, in the world of what we're doing and where we're different than all of these other companies and what we're unique to, and I'm sure we'll get into it, is we're looking at 1% copper on surface, which is double the average grade. It's on the surface and it has incredible infrastructure. Everything's relative to where your project is, is there power? Is there water? Is there roads? What's the ge geometry of it? What's the elevation of it? You know, a lot of factors that make it a very profitable environment. And this goes for any mine, gold, silver, any of the above. But the world's challenge is a lot of the copper mines are either in really tough places that are not near any of this infrastructure or they have tough geometry or at elevation. There's a lot of challenges with some of the bigger ones. So, they'll take a lot longer and a lot higher price thresholds before they can support the copper market supply side. And by the time those make it into the threshold, say copper go copper goes to $7 a pound, it's going to take a long time to build those. So, it's it's a perfect storm right now for the copper price for copper equities. We're on the cusp of that magic $5 a pound. That's going to really have big impact on the equity side of things. Discoveries are still extremely rare and demand curve is increasing. With each electric car that's being built, each house that's being knocked down, anytime you see construction or anything that involves electricity, you're going to see um you're going to see a lot of demand for copper continue to grow. So, that's that's what we're excited about is looking for a metal. We started a decade ago and we had a good long-term outlook on copper. that long-term outlook is becoming a very short-term outlook the next couple years. I think you could have a major influx in the copper price. I think it's going to catch that that really tight supply curve and give us a chance to perform extremely well with our equities, especially if we make the kind of discovery we're going after. >> I want to point this story out to you and um like I mentioned in the beginning, copper has now been designated a critical mineral by the USGO. Now this came as a surprise to not very many people in the um copper industry. Basically the language of the US administration, the Trump administration has been very strong in regards to how critical and strategic copper is. Um and they've outlined this in writing up until they instituted their copper tariff in July. So they basically telegraphed that to the entire market. Now this is an interesting um article from Reuters. I want to read this particular paragraph to you here. Market dynamics have gener have generated sorry a tectonic redistribution of global copper to the United States where it is now locked in by the same dynamics. Without anyone seeming to plan it, the country is successfully building what might be described as a strategic stockpile, just one held by the commercial rather than the state sector. The stockpile is still growing and will continue to do so as long as the arbitrage allows traders to make an easy profit by scooping up metal everywhere else and sending it to a US port. The author is referencing the arbitrage between the London market and the US CME market where because of US tariffs the US price is much much higher. So earlier this year the tariffs made uh the tariff trade is visible from the form of rising copper stocks held by the CME which is only domestic US delivery points. So, if this is true and we're seeing a quote unquote shadow strategic stockpile being built in the United States from either the state or the commercial side or both, what do you think they're preparing for? Well, it's it's a great question and you could go down the rabbit hole and speculate on a lot of factors, but let's look at the common copper is the new oil and let's look at the history of what happened in the Middle East with oil with the Iraq war, Kuwait, you know, and all of what we see in that direction. Um, he who has the most oil or the most control of the oil has the most power, you know, globally. It's kind of a economic world war that's been going on for some time, a very competitive environment. um the movement to buy Canada and Greenland by the US was also driven by critical metals as well as copper and oil. So that so we're looking at a new paradigm for copper. I'm sure obviously the US recognizes that um the US is growing. It has some of the most developed regions in the world, but they do need to be rebuilt and expanded. You listen to US administration to President Trump, they're trying to rebuild airports and we're seeing it in the moment. So I think that the movement there is to corner as much copper as they can so that they can support their own supply and not need to go to the global market and will give them a lot more capabilities to advance and modernize their culture or their society. Um that being said the second part of it is if the US if you find a new copper mine in the US it can take 20 20 plus years or longer to permit to drill it off and permit that mine. So if the copper stockpile is build, it's going to prevent a big shortage of copper in the US. The the worst thing that could happen in this kind of technical or modernization race amongst China, Russia, the US, and several other countries is to fall behind with copper supply. Um you'll get caught on extremely high prices but limit of supply later. And I think that's why they're building the stock piles right now and really making a movement for it. Everyone sees an electric future. It's the cleaner planet and that's where we're headed. But that electric futures main ingredient is copper. >> Does this move to add copper to the critical minerals list have any investment implications? I know that uh large copper producers, it was reported that Freeport Macaran for example now has tax credits because of this strategic or legislative change. But what does it mean for the investor? >> So, so now we're seeing US government invest directly into junior copper explorers. That's the first time. I never thought I would see that. There's I believe it's a billion dollar fund that's been put together by the US government that's in encouraging investment into copper mining explorers and that's that's inaugural lifetime event that [clears throat] I would never have speculated on no matter how bullish I get in the sector but it's clearly an indication outside of the tax implications and the desire to move ahead on delayed permits or hang-ups in certain major copper assets. Um, but that's a movement that you've got to pay attention to. If the US government is starting to invest into junior speculators that are looking for copper within the US, that's something that's really, really got to give a signal to investors to consider that this is a market that's going to get more expensive and tighter and it's becoming more valuable to see this copper come online and you could potentially do extremely well with your investments if you get a big copper discovery during this time frame. So what you're saying is potentially a lot more capital flowing from the state side, not just private investments. >> That's correct. >> Would you as an investor want the government to be involved as a stakeholder though? >> So we're not in the US with a copper asset yet. We're looking at a few we might add to our portfolio and we've had this discussion with our board and with our management team and you know I don't I don't know the US estate sides end goals in what they want to do with that investment besides encourage the mind to go ahead and capital can be scarce and they're a good check writer to do that but as of right now you know in our business model we've had tremendous success in our previous companies by not involving the state whether it is in Africa or Mexico or or you know the US we haven't gone to that and I like that factor. But in the event that we find an asset and capital's needed and it's not available, the state being there is something that you'd have to consider and welcome. I'm I'm quite sure they're going to be extremely advantage or creative to that company to drive ahead and and support those efforts. But, you know, our business is not black and white. It's quite there's a lot of complexities to it. I think in the right asset at the right time, they make a great partner and they can be a great investor. But I still don't know because I haven't gone down that path yet. What the end goal is for the US government on that investment. If the mine gets found and later gets built, do they keep writing checks to build the mine so they have supply? Do they look for a roofer? Do they look to to nationalize a copper asset or not? You know, I don't know what the plan is. I just know they're making that movement towards getting the copper discoveries on underway in the US so they can have a good supply of their own. >> I want to show a long-term chart of copper once more. So this one goes all the way back to um 1999 only. But since basically uh the late '90s, copper has risen more than sixfold uh or fivefold. And that does make sense given that copper tracks global economic growth as well as inflation, although it's debatable whether or not copper feeds into inflation in the first place. And that is my next question to you. Let's say I were a captain of industry. Doesn't matter which industry they use as copper. Basically everything. And I wanted to get together my industry friends and say, "Hey, copper's getting too expensive. It's increasing our input costs for construction or car batteries or whatever the case may be. Um, we need to keep our margins down by I hate to use the word manipulate, but we we need to control or somehow have some sort of control over global market prices. So, let's engineer some sort of way to keep prices at bay so that we don't run out of business here." Um, in this fictitious scenario, how would I possibly do this? Well, you know, at um how to manipulate a commodity market. Um if you look at gold and and silver, and I know a lot of listeners will relate towards that, a lot of speculation about how things have been kept in check. Um I don't think you can with what's coming for copper because if there's any kind of a dent in the world copper supply, another mine has an issue, a a pit collapses or shuts down for social reasons or what have you, you can't react quick enough with additional supply. the market is so tight, you're going to see a reaction. So, there's more than one buyer for the copper market. It's the whole world that's buying it. You know, gold and silver have select investment groups that will will take big positions, but copper is needed in every economy in the world that wants to grow and everybody is always growing. So, I think that it's a market that's extremely tight. It's going to have more explosive returns. You've seen some good spikes on your chart that you showed me there over the last 25 years, and I think that's more to come. >> [clears throat] >> um a gentleman by the name of David Lol, the late David Lol. He was the most renowned ex discoverer of mines in the world. He found I think 25 major copper mines around the planet. I sat down with him in his 80s before he had passed and he showed me a chart like yours that went all the way up to instead of uh now another 50 years out and copper got to $50 a pound in his chart. And looking back at his chart and comparing to where we are today here, I wish I had it for this interview. um we're right on his schedule and so the performance is perpetual and the only thing that could happen you know which which is the counterargument to copper is if the price goes high enough a lot of the less rich mines will come online but they still won't meet it fast enough and if you have a lower grade mine meaning you know less than half of the average grade it takes a [clears throat] lot longer to produce the same amount of copper so it's a time equation more than anything else so we are we can't speed up production >> didn't you say earlier in the interview, correct me if I'm wrong, that copper doesn't have a shortage currently? >> No, there's no shortage of copper, but there's a shortage of quality copper. And quality copper gets mined. Copper, like I'm in Arizona right now with this interview, and I can almost bet you that there's copper in my backyard. There's a lot of copper in this state. Some very large copper mines in the US are in this state. But just because it's there, it's trace amounts. So, there's trace amounts of copper everywhere. It's a very common metal, one of the most common metals in the planet. But minable copper is the challenge. And so that's the thing to really make clear is minable copper comes at a certain value that needs to be in each ton of rock. And that's what's becoming difficult to find. So we have a time equation because if you don't have rich copper being mined, the amount of time it takes to get copper out of a ton of rock is longer. When it's lower grade, you have to crush way more tons. It takes time and power to do that. But it still points towards a slow supply solution to a a ramping up market and and you look at speed of technology. That's fascinating. How fast did we develop with iPhones and computers and [clears throat] technology even to do interviews like this? Um that speed is also matching with the demand for more electric materials which all involve copper. So it's it's really pointing in the right direction to outpace the supply that we could possibly achieve as a planet. >> You mentioned to me you you've been a gold bull for quite some time, a gold bug. You've been bullish on copper for quite some time. You've been involved in the operations of gold companies before. Now you're I I believe you're primarily focused on this co uh copper project. Why did you pivot from precious metals to copper? >> So interesting question. And Capernicico Metals was spun out of Orurin and after finding a gold mine, building it and selling one that was in the process of being discovered, obviously we had a a big windfall there. We set out to raise the bar and go and find a top 10 mine in the world, copper, gold or silver. We found all three assets in one company and after co we made the decision to segregate the companies by investment of asset. So we have a gold company, copper and a silver company. Um I chose Capernico and the copper asset not because I know which one's going to perform the best but it had a lot of hallmarks of the early indications of a top 10 copper discovery in the world. And it also had a lot of head headwind in terms of social access and permitting. And I felt, you know, with my career, my abilities personally, and with my network financially, I could persevere to bring this big opportunity online. And so far, it's it's working really well. It's finally getting into that direction. And so, I chose it for for size. The challenge was was the biggest challenge of all the companies. And I fell in love with copper. I fell in love with copper as I saw my first electric vehicle on the planet. And I said like the future, we've all seen the movies, it's going to be electric. And that started to make really common sense to me in logic. And I'm I'm a huge logical speculator and investor. So looking for copper, something big that takes time to find an arising copper market in an area that was challenging that we were able to overcome those big challenges. So we get access to go and explore for this big mine. It was the appeal. The harder it is when someone says I can't do it, I want to do it more. And [clears throat] uh and so far it's working really well. Would you characterize just based on your observation, your meetings with investors and talking to media and your associates, would you character characterize copper as being an underappreciated asset by the mainstream invest investment community in the sense that given how strategic and important it is? And I think just digging into the facts, we can all agree that our society wouldn't function without this metal. The US just recognized it as a critical mineral. I keep repeating this over and over again. Maybe delayed the bandwagon, but has the investment community fully priced this reality in do you think? No, >> absolutely not. This is the very very early innings. Um, I feel there's a significant lag. There's a lot of narrative. I mean, the US government is out there declaring it a critical metal. As we said numerous times, they're investing into junior companies. This is not a a short-term fad or theme. This is a long-term problem with a long-term bull market in front of it. Um, we're seeing increased interest on the copper side. We're seeing there was a company that went to go public on a on a lower grade copper asset. They went to raise $35 million. Their interest was $100 million to invest. They took 55. So, we're seeing that kind of influx of capital starting to come into the space. Um, I'm aware of numerous family offices, investors of of consequence globally, and there's kind of a not a panic but an anxious push. How do we get exposure into the copper equity market? The problem with the copper equity market, it's tiny. It's so small. If you took the companies that look for it, produce it, and find it, and look at the availability to get exposure to it. When you're in the major companies of the world, sure, the $180 billion companies, but when you look at the selection, there's probably about 20 top explorers that are worth speculating on. And when you put a fraction of the money that might come into the space, there's there's no room. the share prices would be egregiously perform eg egregiously well and I think it's a matter of time before we get there um in a matter of 2 weeks we saw copper go from 375 to $5 a pound roughly in 2024 that shift in capital availability phone was ringing all day every day like that interest spiked but as copper back people are patient they wait for it it's a longer term play in terms of the metal but that's starting to become shortterm based on the supply curve and the demand curve finally kind of hitting that flection point. So, I think the next 18 to 24 months are going to be very developmental for the copper price. I think you're going to continue to see interest come to the sector into the space and if somebody does make that that big discovery, you're going to see a tremendous return. Um, the last one that was notable, Felo Mining, and I believe they went from $3 to $35 a share before they were purchased by BHP and that happened in a period of a few months. And that's the kind of returns you can get is that in this sector. So that that's what that's what we're facing. Our timing is parallel with the best timing in the copper market I think in history. And it just a trifecta of a perfect storm of things that are all pushing towards the right time. And people are barely invested into it. Some have it in their portfolio, but many don't. And if you want to invest into something that is easier to um invest into and you don't need to really fully understand, buy a copper producer and you you'll see a great performance over the next 5 to 10 years. >> And just one final note on the macro picture of copper before we move on to the mining side. We have here the chart one more time. Throughout the 2000s, the copper rise story can be largely attributed to the rise of China. Uh China was the world's largest consump consumer of copper. I think it still is. and they were uh entering a construction renaissance, some would call it, which required an unprecedented amount of copper. That story made sense. Going into the future, do you think EVs, which you mentioned, will be the primary driver of copper or AI data centers or something else? I think it's going to be a combination, but I think construction still is number one in the copper demand cycle. And one thing is when you don't have infrastructure, another thing is when your infrastructure needs to be redone. So there's a there's a huge new wave coming if you look at when most of the global infrastructure was built in the 50s and 60s. There is a time lapse on those and there's a modernization coming to all of our buildings and the way we behave from a construction standpoint. I think the EV market is would go a lot quicker if there was access to more power. So we have a power crisis as well. You're seeing uranium perform and that's starting to become a key element. I think the the market can only go at the pace of where submetals and supply and resources are providing. Right? So from that perspective, you've just kind of signaled the whole commodity bull market that we've waited over a decade to kick in. And if you ask me why did the last commodity bull market end back in 2012, the mines were found and were built and we hit supply factors that were were overwhelming. And so there was not a huge dr uh drought or demand issues in that sense that was driving supply issues. Now there is. And why if you look at a chart or a table of the lack of discoveries and how much they've reduced over the last decade, you know, or the two decades, there's very few mines being found, they're very difficult to find and even fewer mines being built. So, we look at metals in every material item in your house that you use, you drive, your car, and we understand it as explorers of where that's really hard to find now. The hardest it's ever been because any mine that's been sticking out of the ground that could be found easily has been mined already or it's halfway gone. Some of the largest mines in the world are halfway produced. So, it's a it's a really fascinating time. Um, to answer your question specifically, construction is still going to drive, but the paradigm of electrification is real and it's going to compete with it going forward. Why did you pick Peru as your your base, your HQ for operations? So, I mentioned earlier that Peru is one of the largest producers of copper. Um, let's just for the audience watching who aren't professional geologists, why is Latin America so rich with copper? Uh is it is it a function of deposits, geology and legislation or is it more heavily [snorts] just purely you know rocks in the ground or is it is it a powerhouse in production because of legislation that favors production more so than other jurisdictions? Which is it? >> It's the geology. It's just the part of the earth where some of the largest copper occur and um size matters to us and so go where the biggest mines are being found and developed. There's a few other parts in the planet that have them but Peru and Chile and Ecuador have some of the most fertile ground. It's also underexplored because of legislation challenges. Permitting is slow and not everybody can sustain the long permitting time periods to go in there and explore for these big mines. And then lastly, your third point is you can produce successfully. It's a very stable country in terms of mining laws regardless of how many presidents they go through in a decade, which is about seven or eight in the last 10 years, but they um they never ever deter the mining code or the mining laws. And that's a big reason for that is 40% or better of their GDP is based off of mining. So you have a country that's going to allow you to find it and allow you to produce it. And uh and that's and they have some of the largest mines in the world. >> This is your primary project, I believe. Sombrero project initially acquired in 2015. Over the past 10 years, the company through its predecessor and more recently Carpernico assembled a considerable land position covering approximately 53,800 hectares of prospecting concessions. Tell us about some of the major up updates in drilling since we last spoke in late May. >> Yeah, so um so we did this over 10 years and we had about 160,000 hectares. We went and refined that so we had the best 53,000 hectares and we did this by screening all of the ground. We have access to a small portion of this large land position at this map that you're showing here. Those are all major mines on the right hand side of the page. The brown color is indicating copper mines that are sticking out of the ground. And on the left there's volcanic cover. So we're in an area simto means hat in Spanish where a volcano erupted and covered all the rocks on our side. Erosion did its part and a few areas where it eroded. We started to see the exact same rocks as the mines next door. The most notable analog is Los Bombas. uh Los Bombas there on the right. It's 200 km or 120 mi east of us and Los Bombas is the 11th largest producing copper mine on the planet. Part of our property is a direct analog to that. But our thesis is that we could have three or four of these major mines in our large land position. So since we spoke last or in the last 10 years, we've started to find we found 17 targets that could deliver a discovery of caliber of some of these ones next door and most notable one is the one that's a direct analog to loss bombas. We [snorts] drilled 20 holes. We ran into we were vectoring, meaning as we were drilling the it was getting better and better towards the source of the copper we were looking for, but we ran into permit boundaries issues. And then there's parts of the Somber project that have some drill holes in them that the discoveries are already there. It's about expanding that discovery drilling more, so very low risk. And there's other parts that we recently have sampled that are showing tens of meters of 1% copper or better on surface which is the richest that I'm aware of globally of a company finding on surface of a copper asset. Uh obviously it's what's beneath the surface that's going to make a difference. So we just announced a a substantial permit that we filed. This will give us access in 2026 to drill some of these very very prolific, very probable from our potential risk perspective targets that could develop into these kind of mines next door. Um we've attracted two major miners you know Newmont is there as a major shareholder about 6% that's one of the largest gold companies in the world and uh Tech Anglo if that merger completes it owns 9.9% of the company. Um every major in the world is following this. It's been at the top of question with many and you know the next funding we do sometime next year do we consider a third major or do we do an equity raise and we go back to go drilling the interest is certainly out there and the geology from a scientific perspective it's really really encouraging uh many ask how I've endured 10 years no discovery yet working towards discovery and through permits through you know communities how have I done it every time I sat down with a major mining company even as recent as October the reaction they get when they see the geology is is basically, wow, this this is an incredible system. And that's what's kept me going. And as I've persevered with my management team and my board and our shareholders, I keep getting that confidence building reaction from third parties that have no bias or direct interest. So that's why we've done it. But a great thesis here is that we come up with two or three of these mines next door that collectively could be a top 10 miner in the world for copper. and revealing that's going to take place here in the next 18 to 24 months. So that's a really good time frame for us based on getting permits and getting access to drill these areas. The majority of our targets are hidden. They're either just a little bit of sticking out of the ground like the tip of the iceberg and they could deliver some even bigger discoveries because of the environment because of the scale of the mines next door and because of the endowment in Peru. though from a copper perspective, this has a chance not only to be a tremendous amount of copper, but it has really rich values. It's a scar system and that's a geological term. Basically, when an underground volcano is coming up to surface, there's rocks that are, you know, limestone rocks or or sediment rocks that it hits and as it hits those a crust forms and that's where you get this really rich average grade of copper. Some of the richest mines in the world are scar systems. They're more challenging to explore for, but they're some of the most rewarding in terms of profitability in the world. And everything that we're exploring is right on surface. So, we're not going down, you know, hundreds of meters. It it has a small layer of cover, a few meters to to 30 or 40 m of volcanic ash in some areas, but everything's on surface. There's power lines over top of the property. There's water, there's roads, and there's two communities that are nearby. And and how we got into this area was um came into an area which saw some really challenging times back in uh the 1980s. There was a group called the Shining Path which was a terrorist organization that was a communist regime that went through Peru. There was uh an incident that happened nearby and communities were opposed to foreigners coming through. We came through. We've lived in the communities for 10 years. We formed a great partnership with them. We brought in agriculture. Agodas is the name of the program by sp getting programs sponsored by the government. So we created this agricultural environment where they can run and sustain their own agricultural business which not only helped them nutritionally but gave them jobs and you know in the last year of being here the next part as we started to get permits and explore we've employed over 120 people in the last 12 months and and that number is consistently moving ahead. The geological probability is the highest I've seen. It's just a matter of getting out there to drill it. The one challenge that has why our share price isn't much higher in my view has been waiting for permits and because we just filed major permit last week. We do have permits but we want to expand that permit. As we get closer to those permits, we're going to start to see speculation come into the share price because the prize of what could be there is it's got a lot of potential probability and the scale of it is unheard of in terms of richness and potential great globally. Well, my first reaction to looking at that map is it's so close to the operations, the continuing operations of some of the largest uh copper uh miners in the world already. Uh like you mentioned uh and like you mentioned the uh some of these majors have been wowed by the land package. So why hasn't the land package been acquired yet? It seems like a pretty logical thing to do if I were operating as a large minor right next to you. So there's a view in common in geology. If you can't see it, it's not there. And because of that cover, nobody could see it, right? And what we did differently cuz majors had been through here before, they took select samples and they saw rich values of copper and gold. We also have gold up to 200 g, which is incredible. It's very rich with gold as well. But as as the majors came through there and other geologists, the government survey it took the rocks and it aged them. They want to see how long ago these rocks were formed. And because the government took rocks that were on top of rocks, not the rocks that were hosting underneath it, it looked younger. It looked about 20 million years younger. And all the mines next door were 40 million years old. These are about 20 on surface. But looking at the erosion, exposure, and [clears throat] sampling, and we took about 25 different age dates in the areas we're exploring, they all came back in the exact same era that all those major mines next door were formed. That's a really critical thing in geology when you have that analog comparing. And then lastly, nobody ever did trenching here. Meaning you dig down two or three feet from surface and you sample. And we sampled over 200 meters of over half a percent copper or recently 52 m over a percent copper. 90 m of about a percent copper. And nobody ever did that exploration because they thought [clears throat] it was just leaking out couple bits of copper and gold. So we took a risk. We we were certainly not sure we were going to be right until we got the results. And as we did it, we got paid for taking early risks in an area that was clearly overlooked. And now, as we collect more data and use more techniques from science and technology that we can use, we're starting to find more targets and substantial targets that could really be impressive if the discovery is there. Uh in your recent um press release dated September 4th, uh Carpernico Metals through his holy own Peruvium subsidiary, Sombrero Metals Minerals is pleased to announce its initial surface channel sampling results from the NEO target area in his flagship Sombrero copper gold project in Peru, including 52 m of 1.06 copper, uh 0.19 g ton gold, and 1.2 2 g per ton silver and 36 m of 1.1 uh% CU. Now just this is really really high grade and uh for those of us who aren't geologists just explain what that means but more importantly what I'm curious to see or understand is how does grade affect a company's valuations? >> Great question. Grade is king in the the mining business. It it solves everything. Why? Because grade means you have to crush a lot less rock or dig a lot less rock out to produce a certain amount of metal. So grade is number one and it will solve every economic problem you have if the grade's rich enough because of that statement right there. You need a lot less rock with that rich values to consider it. And then when you look at the global copper grade being.5% in a ton of rock this is 1%. It's double. So we'll just simplify it in the logic sense. If the if the average copper mine in the world is half a percent of copper and a ton of rock and this is 1%. That's outstanding. Um this is right at surface. So geometry works in favor. Um we are doing a lot more sampling around this. And the term we use is called channel sampling and and I know that's to many even in the mining sector. Not everybody is quite familiar. Basically you take a saw and you cut the rock for 52 m and then you chip the rock out and you crush it and you put it and you see what copper's in it. Why is that critical? Because if you're cutting rock on surface, the chances of the rock being beneath the surface goes up a lot. We can use electrical currents, magnetic currents to speculate on how deep it goes and how wide it could be. But that cutting the rock on surface, it's like drilling a hole horizontally on surface. So we believe it's a much more representative sample and it gives you a lot more probability of potentially having a deposit underneath it. >> Okay, I'm going to go back to the valuations part again. I'm trying to understand this. So if I were to model a you know discounted cash flow model for a producer operating on let's say this particular property let's just take this as an example um how how does this companies how does this this fictitious producers free cash flow differ for a 1% grade uh versus a half% global average for example uh how does the uh production output change uh for actual usable copper however you want to define that versus the costs for example so uh rough differential between 0.5% grade and 1% % grade on free cash flow. >> So biggest challenge or biggest variation there is going to be the profitability that comes out and the lower cost. So your cost will will be a lot lower and you'll be you have a much bigger profit margin on what you mine and that's the appeal of of these this type of grade. So it's going to be way more profitable. Real simple. Yeah. >> So the nav should be double. Does that does that work like that? 1% versus 0.5%. when you're calculating the nav, you'd have to look at the infrastructure as well and the powers or water the roads and this this project's blessed with all the the great infrastructure. So all of that comes into factor and is the rock oxidized or is it sulfides? You know, some rocks will crush easier, some rocks will take more power to crush them. But in the case of what we're seeing here, it it ranks in the top appealing in terms of grade infrastructure, all of the above, which is why this is so rare. It's been underappreciated in my view in the share price dramatically because no one's finding this in in a copper rising market. Um we have a lot more samples coming from here before the end of the year and into the first quarter before we drill it. And that's going to show more of the potential of how wide it could be, how big it could be. And that's our job right now is to show the world how big and how rich this potentially could be. And then we go and drill it in the second quarter of next year and start to get that answer. What's encouraging and what's different is to see this much on surface. It's just not found and I'm not seeing it in other companies globally right now. It's that unique. >> Yes. And uh tell us about your current financial position and what you plan to do with the capital so far. >> So right now we're funded to June of next year. In my world I raised almost a billion dollars as needed for companies that look for mines. That's that's plenty of money to give us a lot of runway to get the key catalyst out. You will see a lot more surface sampling. you'll see a lot more science that really is going to strengthen the proposition that we might have major minds on this property. Uh you're also going to see a lot of permit advancements and what investors like to do is wait till the final moment before you get your permits cuz that shortens the investment time horizon before getting the answers from the drilling. Um in this model and and how it works in our business, the stock price should continually perform, you know, and potentially perform into that permit completing. So, as we put out permit updates and more results on surface, there should be a lot more speculation in the company and once the drills turn, I think that's I mean that's the most exciting part and in in a few holes you could find the start of a major mine. The thesis could start working out and that's what we're buying for. And at the same time, copper markets performing and as we discussed earlier, it would be much more rewarding in this copper environment, but in any copper environment because of the richness of the grade on surface. So what investors will get excited about will be size and probability prior to the drilling and how much logic or obvious nature we can put towards the potential of these targets developing into what we're looking for. >> The carpenter metals stock is roughly flat year to date. What are the next drivers of valuation growth >> if you were on a few things? Yeah. >> Yeah. So if you look at the last second half of the year [clears throat] we've turned. So in the beginning of the year there we were we drilled we stopped drilling and we stopped marketing the company because we were collecting the data you know you go back to the board what you learn so you could be really efficient in the next programs um we started to market it in the middle of the summer and we tell people then in September we announced those channel samples and then the general markets have been volatile so we fluctuated with a copper price the general markets but the general trend that you see it's just starting to perform uh just been through Europe a few times I'm basically every second week I'm on the road. Why? Because I'm introducing our new findings and the opportunity to the world because I think the whole world should be watching this caliber of a potential discovery and the value and the richness of it as well. So, we are active now. We just started to get marketing. We finally got this permit that the world's been waiting for. For the last year and a half or so, we've been working on this permit. It's 3,000 pages long, but it's in. And so, now the exciting part starts in first quarter as we work towards those permits completing the second quarter. And we start drilling. um company has four million cash. Sorry, to answer your question, I'm on a treasury >> and so um that's it's enough. There are dilutables that could bring in 5 million more that are pretty much close to being in the money right now. But um we're very strategic when we finance and we may or may not take another major mining company as an investor or we might do an equity raise closer towards when we're going to drill after all these milestones I've referenced with more sampling and permit advancements are into the share price. I wonder and maybe you could uh shed some light into uh how you're marketing the company in the second half of the year. Your prime your primary core messages to investors when you're meeting them in meetings and road shows. You mentioned you're doing marketing or you've been doing more marketing in the second half of the year. Uh in a bullish environment and I suppose the gold and silver miners have even more of a problem than this uh this company. The uh the the objective is not just to compete with other miners in the space. It's to compete with the metal itself. You have to convince the investor to take capital away or perhaps allocate capital away from the bullion which has done spectacularly. Gold's up 50%, silver's up slightly more and copper itself is up more than 20%. And yet the the copper stock itself you're taking on additional risk. You're taking on additional um uh operational uncertainty. Uh, so you're basically, yes, there's more interest in the metal overall, but you're fighting an uphill battle to win investors hearts. How will you do that? >> So, great, great point. Risk versus reward, and you just clearly outlined all the extra risk we have. So, there's a lot more reward than just buying bullion, right? Um, I reference loss Bombas a lot because it was a very fortuitous transaction. Uh, it was sold by Glen Core to MMG in 2013 when copper was 325 a pound. We're at around $5 a pound now. It was sold for 5.8 billion was the value of the metal that was found at Los Bombas. And our analog matches that and potentially has more mines beyond that. Um, if you take half of that value, 2.5 billion roughly of that valuation, and you apply it to our expected dilution, we have about 178 million shares out. we could be around, let's just be conservative and say 250 million shares out by the time we got to that point of, you know, enough probability about the scale and this being a mine. Um, that would put us about $10 per share and we trade at 25 cents per share today. Um, as an entrepreneur that's been successful twice before in finding mines and monetizing them, that's one of our biggest strengths. Um, I wouldn't chase an asset if it didn't have a potential to be a multi-billion dollar double-digit share price. And this project has so many avenues to get there. doesn't mean that it's guaranteed that they are, but it has a lot of potential in a lot of different targets that could deliver that kind of success and it's falling in the perfect backdrop of the commodity cycle. So, we're swinging for that. We're swinging for a double digit share price in a rising commodity market and that's where we are going to draw a lot of people that will want to speculate. Obviously, you don't put house money into a speculative adventure like this. You have a lot of risks that fall naturally with our sector, not just geological, geopolitical, all of the above. We've mitigated most of our geological risks by some of the obvious nature of what we see on surface. Um, also having 17 targets, 17 chances to find something of consequence. We have a very, very good track record of monetizing exploration success. Um, this is the biggest swing I've taken with my partners as a group and my management team and it's one of the most probable opportunities I've seen in my career that just happens to be matching perfect timing in the commodity market. >> Good. Uh, next milestones we should be looking for? uh more results from surface around those incredible channel samples. So a lot more results from surface uh results of studies that are going to take place here in the very near term and so you're going to see that and then a lot of permit advance advancements. So the timeline the countdown has started and the projects should have a lot more probability and potential based on results coming. Uh we'll have a lot more idea of the scale and how fast this discovery or how slow it might take to happen. But right now, we're extremely encouraged by what we're seeing, and we're really looking forward to the next six months being quite developmental as we look forward to these permits that are on their way. >> Uh, thank you very much. Where can we follow you and the company? >> Uh, capernicmetals.com is the best place to follow us. As you mentioned, we trade on the TSC under uh, COPR and on the US we trade under CPPMF. I'm on LinkedIn. I'm very active with points of view about copper independent of our general announcements, but we post all of our media frequently and we email shareholders from our website. So add yourself to our shareholder base and if you have any questions just reach out anytime. >> Great. We'll put the links down below. So uh please uh follow uh Ivan and Capernico there. Very interesting project. Interesting and uh worth watching and following. Thank you very much for your updates, Ivan. We'll speak again soon. Take care for now. >> Thank you so much. Have a great day. >> Thank you for watching. Don't forget to like, subscribe.