“These High-grade Copper Results Are Incredibly Rare” says Coppernico Metals CEO Ivan Bebek

Key Concepts

• Sombrero Project: A copper and gold exploration project in Peru.
• NEOK Target: A specific area within the Sombrero Project that has yielded significant drill results.
• Grade: The concentration of valuable minerals (e.g., copper) in a deposit. High grade is crucial for economic viability.
• Geophysics: Scientific methods used to study the Earth's physical properties, such as magnetic and chargeability surveys, to identify potential mineral deposits.
• World-Class/Globally Significant Opportunity: A mineral deposit of exceptional size and grade that could be among the largest and most valuable globally.
• Analog: A comparison to a known successful project (e.g., Las Bambas copper belt) to infer potential for a new project.
• Channel Sampling: A method of collecting rock samples by cutting channels with a rock saw, providing a more representative sample than grab samples.
• Oxide vs. Sulfide Mineralization: Different forms of mineral deposits. Oxide mineralization is found at the surface and can be enriched, while sulfide mineralization is deeper and more stable.
• Permitting: The process of obtaining government approval to conduct exploration and mining activities.
• Commodity Cycle: The cyclical rise and fall of commodity prices, which impacts the profitability of mining operations.
• Tier One Assets: High-quality mineral deposits with significant potential for large-scale, long-term production.
• Dilution: The reduction in the ownership percentage of existing shareholders when new shares are issued.

Sombrero Project: Recent Exploration Successes and Future Outlook

This summary details the recent significant exploration results from Capernico Metals' Sombrero Project in Peru, focusing on the NEOK target, and outlines the company's strategic plans and outlook.

1. Groundbreaking Results at the NEOK Target

• Exceptional Copper Grades: Capernico Metals announced drill results from the NEOK target that have generated considerable excitement, leading to a 40% share price increase. Key highlights include:
  • 52 meters of over 1% copper.
  • Specific high-grade intercepts such as 6 meters at 2.2% copper, 14 meters at 2.43% copper, and another 6-meter interval grading nearly 3% copper.
  • A significant 93-meter intercept grading 0.87% copper, oriented perpendicular to other channel samples, indicating the potential for substantial mineralization.
• Rarity of High Grade and Scale: Ivan Beck, founder, chair, and CEO of Capernico Metals, emphasized the rarity of finding such high grades in combination with the potential for significant scale on the global copper scene. He stated, "These results are incredibly rare on the global copper scene to see this kind of grade coinciding with geoysics that really indicate the potential for something that could be what we would call globally significant or world class as an opportunity."
• Channel Sampling Methodology: The samples were collected using channel sampling with a rock saw, cutting directly into exposed rock rather than digging trenches. This method provides a more accurate representation of the mineralization.
• Geophysical Footprint: Geophysical surveys (magnetic and chargeability) have outlined a massive target footprint at NEOK, measuring approximately 1.4 km by 1.8 km, described as a "considerable bullseye."

2. Strategic Land Optimization and Project Analogies

• District-Scale Opportunity: Capernico has assembled a land package in Peru that is considered an analog to the world-renowned Andes Yari copper belt, home to the Los Bronces mine, ranked among the top copper mines globally. The company believes it has secured the "other half" of this prolific district.
• Optimized Land Holdings: The company has strategically reduced its land position from over 100,000 hectares to approximately 45,000 hectares. Beck explained, "It's not about how much land you have, it's about having the right land and that's certainly where we've put the company in that position." This optimization is projected to save approximately $4 million USD annually.
• Analog to Las Bambas: The Sombrero project is compared to Las Bambas. While Las Bambas had significant surface exposure (90% mineralization exposed), Sombrero is largely covered by volcanic ash (90% covered, 10% exposed). This difference highlights the tenacity required for exploration at Sombrero and the potential for significant discoveries beneath the cover.

3. Geological Context and Mineralization Characteristics

• Tip of the Iceberg Analogy: The exposed rock windows are described as the "tip of the iceberg," suggesting that the true extent and potential of the mineralization lie beneath the volcanic cover.
• Grade and Oxide/Sulfide Presence: The project exhibits mineralization at surface, with both oxide and sulfide forms present. This is a positive indicator, as it suggests a potentially homogeneous and high-grade system that extends beyond surface enrichment. Beck noted, "grade has always been king and oxide has been queen... the really positive factor here in these results is you have sulfites with grade at surface as well as oxides."
• Multiple Targets: Beyond NEOK, Capernico has identified other promising targets within the Sombrero project, including Antipa, Typic, and Machima Machai. New ground has also been staked in the south based on encouraging new outcrops.

4. Community Engagement and Social Responsibility

• Long-Term Community Investment: Capernico has invested a decade in agricultural programs in the region, introducing red meat livestock to improve community nutrition and sustainability at high altitudes (3900 meters).
• Local Employment: The company has employed over 100 local workers to date, with plans to increase employment as permitting progresses. This commitment fosters goodwill and supports the local economy.

5. Permitting and Future Exploration Plans

• Permitting Process: The company is in the process of filing for expanded drilling permits. While no specific timeline is provided, Capernico is leveraging its established goodwill with communities and the government to expedite the process.
• Next Drill Program: The upcoming drill program will focus on:
  • Drilling beneath the spectacular channel samples at NEOK.
  • Following up on historical drill holes at the Furaso target, which previously returned 230 meters of 0.5% copper on surface and 110 meters of 6.8% copper-gold equivalent in drill holes.
  • Exploring other obvious, uncovered areas.
• Permitting Updates: Regular updates on the permitting process are expected. The company is confident that expanding existing permits will be smoother than applying for new ones.

6. Financial Position and Funding Strategy

• Well-Funded: Capernico Metals is funded through June of the following year and has optionality for additional funding without resorting to typical financing routes.
• Investor Interest: The project is attracting significant attention from major mining companies and astute investors.
• Strategic Financing: While not currently in need of capital, the company has attracted strong shareholders, including Teck Resources (the largest shareholder), which will be beneficial for future financing. The company aims to avoid punitive dilution by ensuring the right shareholders are involved.
• Capitalizing on Commodity Cycle: The company's strategy is to time its exploration and potential financing with the favorable commodity cycle. Beck stated, "this kind of an asset of this caliber doesn't come by in a career."

7. US Asset Acquisition Strategy

• Complementary Portfolio: Capernico is actively seeking to acquire "tier one type of assets" in the United States to complement its Sombrero project. This strategy aims to provide optionality, allow for year-round drilling, and mitigate potential permitting delays in Peru.
• Transactional Window: The current quarter is identified as a key transactional window for acquiring such assets.
• Low Geopolitical Risk: US assets offer the advantage of low geopolitical risk, making them more marketable and potentially profitable.
• Portfolio Approach: This strategy is reminiscent of Capernico's previous success with a portfolio approach at Orin, which led to significant shareholder value.

8. Conclusion and Key Takeaways

Capernico Metals' Sombrero Project, particularly the NEOK target, is demonstrating exceptional potential with high-grade copper intercepts and a large geophysical footprint. The company's strategic land optimization, strong community relations, and well-defined exploration and permitting plans position it favorably to capitalize on the current commodity cycle. The potential acquisition of US assets further strengthens the company's growth strategy. The perseverance and patience shown by the company and its shareholders are proving to be well-rewarded as the project continues to reveal its significant scale and grade.

Company Information:

• Company: Capernico Metals
• Ticker Symbol (Toronto): COPR
• Ticker Symbol (OTC): CPMF