Several years ago when I was considering career choices with the potential to make me rich I was attracted to the mining space because of the extreme volatility of the sector.
In bear markets, or at times when commodity prices are going lower, there is little to no appetite for early-stage mineral projects. But when prices are rising, those same projects can be extremely desirable among investors and producers.
There’s no better illustration of this than the track record of geologist Ross Beaty during the last decade. Ross’s company, Lumina Copper, acquired a portfolio of ten out-of-the money copper projects in 2002-2003 for “almost nothing” only to spend the next 11 years selling those projects off for billions.
Mr. Beaty told us that story in a April 2013 interview, recalling that IPO investors in Lumina, if they held on, made an over 80X return on their money.
I had the chance to follow Mr. Beaty around Europe in January 2012 as he updated investors there about his various companies, including Pan American Silver and Alterra Power. The trip was arranged by a mutual friend, Gianni Kovacevic, a Vancouver-based investor with ties to Europe.
Day one of the trip taught me about Ross Beaty’s work ethic. We flew from Vancouver to Iceland so he could take a few hours of meetings while I went for a swim in the Blue Lagoon. Then we flew to Dublin, Ireland so Ross could meet another potential partner, while I swilled pints and sang songs in a local pub. When I finally rested my head on a pillow that night in Paris, France, having crossed the world that day, I realized that the best entrepreneurs in mining have other-worldly energy.
It was an inspiring trip and evidently Ross’s story had a big impact on our travel companion, Mr. Kovacevic. Fluent in 4 languages, Kovacevic built relationships across Europe and became an important conduit for early stage companies looking to build an audience for their story there.
At home in Vancouver, he became one of the best connected players in the space, and a substantial investor in early stage companies.
He is one of the founders, a large shareholder and Executive Chairman of a new company that started trading on Friday called CopperBank Resources Corp (symbol CBK on the Canadian Securities Exchange).
CopperBank is following the Lumina Copper model by assembling a portfolio of early stage copper projects at a time when there is little to no outside financing available for them.
Their plan is to house multiple projects under one low overhead roof to ride out the bear market before beginning to option off, sell or re-ipo those projects when times are better.
The company has a few things going for it. To start with, it has two established copper projects already that are in line with the company’s strategy. In an email Friday, Kovacevic said these projects were acquired for less than 1/3rd of 1 penny per pound of copper in the ground.
CopperBank’s first two 100% owned projects are Contact, located in NorthEast Nevada and Pyramid, located on the Aleutian Islands of Alaska.
Highlights of Contact:
- 100% consolidated ownership
- 7,000 acres of patented and unpatented mining claims
- 2013 PFS design for 50 million pounds per year of copper cathode production
- Heap leaching with SX-EW to make copper cathode at site
- Located in NE Nevada near the border with Idaho, one mile west of Highway 93
- Excellent infrastructure with available roads, grid power, and water
- Extensively drilled with over 250,000 feet of drilling (329 core and RC holes)
Highlights of Pyramid:
- Porphyry Copper, Moly, Gold discovery
- Extensive supergene copper enrichment blanket
- Near surface mineralization
- Adjacent to tidewater, 25km from SandPoint Alaska
- Completed 7486 metres of drilling in three years with former joint venture partner Antofagasta
- Established an open ended mineralized footprint of 1,800 metres by 1,050 metres
- Situated on Native owned lands (Aleut Corp.), avoids Pebble like project complications
The company intends to use its stock to acquire additional projects in the near future. They are looking for projects with established resources, little to no ongoing work commitments, and obviously, realistic financial terms.
Another strength of CopperBank is its shareholders. Kovacevic has been able to attract some impressive investors, from Chilean-based family owned miner, Antofagasta, to Lukas Lundin’s Denison Mines.
As Executive Chairman, Kovacevic is Copperbank’s driving force. He has a new book out on copper that provides a unique platform for also telling the CopperBank story. The book is called My Electrician Drives a Porsche?, and US Global Investors founder Frank Holmes wrote the forward. Many of the mining industry’s most influential CEOs have already read it, and you can get a copy on Amazon here.
Behind Kovacevic is a team of experienced engineers, geologists and capital markets professionals to help CopperBank evaluate and acquire other projects. The team also includes Rob McLeod, Will Willoughby, Todd Hilditch, and Terry Ortslan. These gentlemen have long track records of accretive mining transactions.
The company raised $1.6 million in cash and has a $13 million market cap, based on roughly 130 million shares outstanding with the last financing price at $0.10.
The mining down-cycle is now almost 4 years old and Copperbank may be early in its strategy. On the other hand, their timing might be perfect.
For more information, visit copperbankcorp.com and add CBK to your watch list.
Disclosure: Author owns shares in CopperBank Resource Corp and they are a CEO.ca conference sponsor. The company had no influence on this story. All facts are to be verified by the reader. Always do your own due diligence as this is not investment advice.