Pecoy Copper Expands South Breccia and Targets Major Resource Growth

Ian Wagner (0:15)

Welcome back to Mining Stock Daily, Ian Wagner here with a corporate update or reintroduction to an emerging copper developer in South America. I'm talking about Pecoy Copper, a copper developer in southern Peru, with its flagship project Pecoy, which hosts more than 6 billion pounds of copper.

Pecoy trades on the TSX venture under the symbol PCU. They host a market cap of about $370 million Canadian, give or take. And with us today is the president and CEO of Pecoy Copper, Mr. Vincent Metcalfe. Vincent, good to see you. Welcome back to the podcast.

Vincent Metcalfe (0:52)

Well, thank you very much. Good to see you again, Ian, and got a lot to talk about this morning, so looking forward to it.

Ian Wagner (0:59)

Yeah, absolutely. So we'll just jump right in, in case this is a new story for people. Kind of, why don't you give a background on how the company came about and then what the project is, because you guys are kind of the result of a consolidated ownership of some land packages and an asset that was already a little bit defined. So kind of walk through that reverse spinout, the raise, just kind of like how that came together and kind of how that's positioned you.

Vincent Metcalfe (1:27)

Absolutely. So as you mentioned, it actually took us about nine months to put all the different pieces together. But yeah, there was two private companies, two families, proven families as well, which all own various parts of the concessions or various rights on those concessions. And the main thing is that all those various players and parties over, I would say, a period of six years had worked those concessions or different claims.

Basically, doing some exploration work and doing some drilling from 2011 to 2016 And came out with what, when you consolidated all the data, a very, very good first pass of a deposit, of a porphyry. But the main issue with the concessions and the claim and the actual deposit was that everything was separate. So the main aim of what we were able to do with Pecoy Copper is to have all those various parties come under one umbrella for the first time. And that's what really unlocked the value here. Because when you combine all the various pieces, we end up, as you mentioned, with a resource of around six billion pounds of copper. But the most important thing is that once you combine all those different pieces, you realize that a lot of the various parts of the deposits remain to be drilled, or there's a tremendous amount of upside to be looked at. But going back to the structure, so once we put all the different pieces together, in July last year, we raised $63 million to go public. And post closing of the RTO and various payments, some of those parties had some significant debt.

So once we started trading, we started with around $49 million in treasury to help us or to support us, I would say, in the exploration efforts. And this year we're planning for around 40,000 meters of drilling with that money, which again, is to go and prove out those various gaps in the geological model.

Ian Wagner (3:46)

Yeah, absolutely. And I want to talk about the drilling for sure, because there's a lot of drilling left to do, but some holes that are really exciting. But just to kind of define the projects and the resource, right, first in the geology, you mentioned Porphyry, and want to note, it's sort of one of two deposits, right, Pecoy, and then I'm not sure if I'm saying this right, but Tororume is actually bigger, I think, but essentially undrilled. But just, I'm going to read some headline numbers, and then maybe you can kind of unpack some context or clarity around it. So you guys did a resource, a maiden resource estimate, 865 million tons at 0.34% copper.

That comes to that 6.45 billion pounds number, and that's at a 0.23% cutoff grade. Obviously, there's sensitivities for different cutoff grades and things that can scale that up and down. But just tell us about that estimate and the asset as it stands right now, and how you think that positions you guys.

Vincent Metcalfe (4:55)

Yeah, correct. So that was the why we decided to spend nine months trying to consolidate this, is that when you looked at the combined asset or the combined concession, just at Pecoy, when you look at where it sits in the context of copper, gold, loli, developers, this is a very unique asset. It's in a great jurisdiction, southern Peru, so very good infrastructure for these types of mines, these big bulk tonnage copper operations. It's located around 85 kilometers away from the coast, so very good access to ports.