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Sandere Resources: Investment Opportunity in Argentina’s Vikunia District

Key Concepts:

• Vikunia District: A highly prospective geological region in Argentina, known for recent major copper-gold discoveries like Jose Maria, Filo del Sol, and Luna Huasi.
• District-Scale Opportunity: The potential for multiple, significant mineral deposits within a large land package.
• Structural Corridor: A geological feature (faults, fractures) controlling mineralization, linking the key deposits in the Vikunia District.
• Epi-Thermal/Hybrid Epi-Thermal Deposits: Types of ore deposits formed from hot, aqueous fluids, often associated with gold and copper.
• Pathfinder Elements: Indicator minerals or geochemical anomalies that suggest the presence of a valuable deposit (e.g., silver as a proxy for gold-copper mineralization).
• Metallurgical Considerations: Understanding the economic viability of extracting metals from ore, factoring in grades and processing costs.

1. Company Overview & Team

Jeremy Gillis, Director of Capital Markets & Investor Relations at Sandere Resources, presented the company as a “reboot” with a new team and financing, focused on advancing a large property in Argentina’s Vikunia District. The company was restructured in the previous year, bringing in new management, a technical team, and well-connected investors.

The team assembled is a key strength:

• Alex Kachevki (CEO): Extensive experience in exploration, development, and production. Focuses on economic viability of mineralization.
• Steve McMullen: Award-winning geologist (PDAC prize for Kamoa discovery – now the 4th largest copper mine globally) with experience across the mining lifecycle.
• Peter Moroni: Successful mining entrepreneur (sold Yuma, now with Allied) known for building billion-dollar companies.
• Eduardo Elstein: Argentine billionaire with mining expertise and local knowledge.
• Pat Cappo (Power One): Experienced investor in the mining sector.

Gillis emphasized the importance of a strong team, stating, “It’s the management teams that change and unlock the value.”

2. Project Acquisition & Historical Data

Sandere Resources began evaluating the property in 2020, prior to the significant discoveries at Filo del Sol. The property comprises a 211 square kilometer land package with 40 years of exploration data, including 16,000 meters of drilling – all of which was mineralized. The initial company, Cindereo, went public and conducted exploration, but Gillis believes they “underwhelmed the market.”

The company leveraged existing data (including publicly available information from the entire Bunia region and data from Anglo American, Vale, and El Dorado) to build a new geological model. They even reprocessed data from Filo del Sol to understand the discovery process. This data synthesis is considered a key advantage, allowing them to accelerate exploration. “All of that data… has sort of fasttracked our exploration efforts,” Gillis stated.

3. Geological Setting & Exploration Strategy

The property is situated within the same structural corridor as Jose Maria, Filo del Sol, and Luna Huasi. The company’s exploration strategy is based on the understanding that these deposits share geological similarities. Gillis noted that while Luna Huasi is a deep deposit, Jose Maria and Filo del Sol are near-surface, highlighting the importance of understanding the specific geological context.

The initial drill program will consist of 3,600 meters (six holes) focused on a newly identified area of interest, guided by the integrated geological model. The goal is not simply to define a resource, but to discover a high-grade zone similar to the discoveries next door. “We want to go and we believe we have the path to that whole 41 foes discovery,” Gillis explained.

4. Data Integration & Modeling Approach

Sandere Resources emphasizes a data-driven approach to exploration, integrating geophysics, geochemistry, structural data, and historical drill results. While acknowledging the potential of AI, they prioritize “solid geological work done by people who actually understand what they’re doing.” The company invested in in-house data analysis, leveraging the experience of their technical team to build a comprehensive geological model.

Gillis highlighted the importance of understanding the controls on mineralization, noting that silver anomalies observed in Sandere’s historical drilling mirrored those associated with high-grade zones at Filo del Sol. He stressed that success isn’t about relying on a single data set, but rather the “culmination of all of these data sets.”

5. Financial Structure & Investment Opportunity

Sandere Resources recently closed a financing, raising over $4 million. The company has an option to acquire 100% ownership of the property for a revised payment of $65,000 and a $5 million spend on both properties, a significant improvement over the original $5 million payment and $10 million spend. This was negotiated with the provincial mining company (MSA), demonstrating their confidence in the project.

The company’s current market capitalization is approximately $30 million. Gillis believes the company is undervalued, particularly given the quality of the team, the geological potential, and the favorable financial structure. He emphasized the limited float and strong investor base (management and investors owning 60-70% of the company).

Quote: “Find me a company which has already got proven rocks in the right jurisdiction with the right people… then go and find it in a sub $25 million company with 24 million shares outstanding and at least uh you then have the opportunity for those coveted 10 20x returns.” – Jeremy Gillis

6. Key Targets & Potential Grades

The company is targeting gold-rich copper deposits, similar to those found at Filo del Sol and Jose Maria. While acknowledging the importance of bulk tonnage, they are also seeking high-grade zones that could drive significant value. Historical drilling on the property returned 354 meters of 0.5 g/t gold equivalent, demonstrating the presence of mineralization.

Gillis believes the property has the potential for multiple deposits and that the current drill program could unlock significant value. He stated, “We believe we have the path to that whole 41 foes discovery.”

7. Prioritization of Spend & Future Plans

The initial $4 million in funding will be used to complete the 3,600-meter drill program and fulfill the remaining obligations under the option agreement. The company plans to generate additional targets on the MSA-optioned ground and will consider further exploration based on the results of the initial drilling.

Gillis emphasized the company’s disciplined approach to spending, leveraging his experience in corporate procurement to negotiate favorable drill contracts. He also highlighted the team’s commitment to maximizing shareholder value.

8. Data, Research Findings & Statistics

• Land Package Size: 211 square kilometers
• Historical Drilling: 16,000 meters (all mineralized)
• Recent Financing: $4 million+
• Market Capitalization: ~$30 million
• Shares Outstanding: 24 million
• Warrants Outstanding: 12.5 million (at 16 cents)
• Filo del Sol Discovery Cost: $1.3 billion (Aurelian Resources acquisition)
• Kamoa Copper Mine: 4th largest producing copper mine globally.

Conclusion:

Sandere Resources presents a compelling investment opportunity in a highly prospective region. The company’s strong technical team, data-driven exploration strategy, favorable financial structure, and the potential for significant discoveries position it for success. The key to unlocking value lies in the initial drill program and demonstrating the potential for high-grade mineralization. Gillis emphasized that the company is currently undervalued and that successful drilling could lead to a significant re-rating.