Adventus Mining (ADZN) - Financed Through to Production in 2024

Adventus Mining Corporation is a Canadian based copper-gold exploration and development company with three distinct copper-gold projects in Ecuador.

Matthew Gordon caught up with Christian Kargl-Simard, President & CEO of Adventus Mining.

Company Overview

The company’s flagship project is the Curipamba project, which is one of the highest grade and lowest capital intensive copper-gold projects in the world. The company has concluded with the feasibility study of the Curipamba project and has submitted its ESI assessment for governmental approval.

The company has most recently raised USD$ 250 million to fully fund the Curipamba project until commercial production which is scheduled to commence in 2024.

Management

Adventus Mining is led by Christian Kargl-Simard who serves as president, CEO and director. Kargl-Simard is a professionally registered engineer with over 19 years of experience in the mining industry. Kargl-Simard worked in the investment banking sector for 10 years, prior to him starting Adventus Mining. The experience that Kargl-Simard gained with being involved in more than USD$ 7 billion of fund raising as well as completing more than 35 merger and acquisition (M&A) transactions has served him well as CEO as can be seen by the project’s advancement through milestones.

The task of Chief Financial Officer (CFO), VP of finance and corporate secretary is that of Frances Kwong. Kwong has over 35 years of international financial and administrative experience, including strategic planning and financial system implementation management. Kwong has 15 years of global mining experience in ensuring compliance with financial and regulatory requirements.

Sam Leung is the Vice President of Corporate Development. Leung is a professionally registered engineer with more than 15 years of experience in corporate strategy, due diligence and mergers and acquisitions. Leung was the director of corporate development at Lundin Mining Corporation prior to joining Adventus Mining. Leung helped execute over USD$ 3.7 billion of transactions as well as being responsible for the activities of various joint ventures and strategic assignments.

Jason Dunning serves as Vice President of Exploration and is a professionally registered exploration geologist with over 20 years of greenfield and brownfield project experience. Dunning is well experienced in the development of sustainable project pipelines for small and large companies.

Olivia Gamache is tasked as Vice President of Environmental Management and Community Development. Gamache is a professionally registered engineer with over 20 years of international experience in environmental engineering, permitting strategy, corporate social responsibility, and community relations.

Dustin Small serves as the Vice President of Projects. Small has 20 years of engineering, procurement, construction, and project management (EPC/EPCM) experience and is also a professionally registered engineer. Small has experience in various industries including water treatment, power generation and oil and gas industries.

Rounding out the management team is Alvaro Dueñas who is tasked as the country manager for Ecuador. Dueñas is a qualified Ecuadorian lawyer with over 20 years of international business experience. He has served as undersecretary of international trade and investment in the Ecuadorian government as well as director of international negotiations in the ministry of foreign trade, industry, fishing and competitiveness.

The management team of Adventus mining is well versed in the Ecuadorian mining sector and believes the country holds untapped potential.

Ecuador: Potential and Projects

The country of Ecuador has only recently started to establish its modern mining sector and shares geological similarities to renowned mining countries such as Peru. The country is rich in resources including gold, silver, copper, lithium and various other metals.

The Ecuadorian government under the guidance of President Guillermo Lasso committed itself to the development of the country’s mining sector. The government encourages foreign investment into the country’s mining sector and believes that the sector holds the key to long term economic growth, as can be seen by various legislative reforms in recent years.

The country has also invested in hydroelectric power in recent years with the result of an abundant and stable power supply with the lowest cost in all of the Americas. Further factors such as technical colleges and universities, returning mining expertise and the country’s proximity to the Panama Canal all add to the country’s investment attractiveness.

Adventus Mining is committed to the development and advancement of the Ecuadorian mining sector and holds a close relationship with the Ecuadorian Government. Kargl-Simard states:

“In our last talk,…, with the president, it was a 90-minute meeting laying out expectations from both sides. I said to the president, ‘This is a very economic project, and we have the best metal backdrop ever to move this project forward, don’t worry about the financing. I have it arranged. I will deliver it. What I need you to deliver to us are the permits.’ Since that meeting, permits have been check, check, check, all the things along the way,…”

Adventus Mining has 3 Ecuadorian projects namely the Pijili and Santiago projects in southern Ecuador and the Curipamba - El Domo copper-gold project in central Ecuador.

Curipamba Project

The Curipamba project is a joint venture between Adventus Mining and Salazar Resources and boasts of being one of the highest grade and lowest capital intensity copper-gold projects in the world.  Adventus Mining filed a NI 43-101 report of the Curipamba project which coupled with a feasibility study published in October 2021 completed the final significant milestone requirement under its earn-in option agreement with Salazar Resources to acquire 75% ownership of the Curipamba project.

The Curipamba project comprises 21,500 ha of concessions, with one of the several being the El Domo copper-gold deposit.  The El Domo deposit is a flat laying tabular shaped volcanogenic massive sulphide (VMS) ore deposit. Mineralisation at the deposit begins at 30 metres from the surface and is approximately 800 m by 400 m. Historically the Curipamba project has seen over 75,000 m of diamond drilling, with the majority centred on the El Domo deposit, some of the highlights include 24.02 m with a grading of 5.41% copper, 6.40 g/t gold, 2.68% zinc, 58.6 g/t silver, and 0.15% lead.

Feasibility study

Adventus Mining together with its partner Salazar Resources published a feasibility study at the end of 2021 as well as an updated mineral resource estimate for the Curipamba copper-gold project

The feasibility project consists of an open-pit mineral resource that covers the first 10 years of the life of mine, the following 4 years (years 10 – 14) will include underground production.

The Feasibility study carried out cost a total of USD$ 12 million and resulted in an increase of the resource base, improved metallurgy and strong project definition with detailed geotechnical and hydrogeological drilling programs completed. The open-pit feasibility study includes highlights such as an after-tax internal rate of return (IRR) of 32% with an NPV8% of USD$ 259 million for the initial open-pit development. The production cost is estimated to be USD$ 1.14 per pound of copper with an all-in sustaining cost of USD$ 1.26 per pound of copper equivalent. The feasibility study estimates annual production values of 10,463 tons copper and 21,390 tons copper equivalent over the open-pit life of mine.

The underground portion of the feasibility study includes an after-tax NPV8% of USD$ 49 million, assuming underground production starts after the completion of the open-pit mine plan in year 10. The indicated and inferred underground mineral resource of the project includes 1.9 million tonnes with 2.72% copper and 1.37 g/t gold and 2.31% copper and 1.74 g/t gold respectively.

Recent Funding

Adventus Mining has recently entered into agreements with both Wheaton Precious Metals as well as with Trafigura Pty Ltd which will see the company securing a total of USD$ 235.5 million to advance and construct the Curipamba project.

The company entered into a definitive precious metals purchase agreement (PMPA) with Wheaton Precious Metals International Ltd., which entails certain gold and silver streaming rights allocated to Wheaton over the projects LOM. The agreement is however limited to volcanic massive sulphide deposits that can be milled within the proposed feasibility study process plant. The agreement secures a USD$ 180.5 million financial commitment from Wheaton Precious Metals International Ltd., with  USD$ 175.5 million upfront cash consideration and a USD$ 13 million early deposit for pre-construction activities. Wheaton Precious Metals International Ltd. will also contribute USD$ 500,000 for local community development initiatives and intends to provide up to USD$ 5 million in equity to Adventus Mining, subject to a maximum Wheaton Precious Metals International Ltd. ownership level below 10%.

The company also entered into a binding engagement for an offtake financing agreement  (OFA) with Trafigura Pte Ltd. entailing a total of USD$ 55 million in financial commitment. The financial commitment is composed of USD$ 45 million senior debt facility, including USD$ 5 million early deposit for pre-construction activities. The OFA includes an offtake agreement that provides certain concentrate offtake rights to Trafigura Pte Ltd., based on the feasibility study conducted, for future production from the El Domo deposit over the LOM. Trafigura also intends to provide USD$ 10 million in equity to Adventus Mining, subject to certain conditions being satisfied.

Kargl-Simard is pleased with the recent fund raising and believes that it is an extraordinary accomplishment for an Ecuadorian project, he states:

“Our institutional investors are thrilled; our strategic investors are thrilled. Just imagine raising USD$ 235 million for an Ecuadorian project at less than 10% total cost, funding 95% of the capital costs with 88% of it being non-equity. That would be a great deal for a project in Canada, let alone Ecuador. That press release went directly to the president of Ecuador and we think one of the strategies behind this is, this is the largest committed financing package for any project in Ecuador as a foreign direct investment in any industry.”:

The recent funding has de-risked the project extensively and has slightly altered the project pro forma cash flow as set out in the feasibility study. The total NPV8% moves from USD$ 308 million to USD$ 298 million with the after-tax IRR climbing to an astonishing 100% from 32%.

The company remains pleased with the recent developments and the fact that it is now fully funded until its commercial production which is scheduled to commence in 2024. Kargl-Simard sums up the recent activities as follows and his words ring true throughout the mining universe:

“We have a fully financed greenfield copper project in Ecuador and at $3.50 copper, we’re currently $4.50 today, it has close to 100% after-tax IRR. You can’t beat that anywhere on the planet.”

To find out more, go to the Adventus Mining website