An Investment in Copper Worth Considering

• Fitzroy Minerals is developing multiple copper & gold projects in Chile & Argentina, with a focus on high-potential copper assets near established mines like Candelaria.
• The company's newest copper asset shows promising drill results, including 135m at 0.7% copper from surface and 38m at over 3% copper, with a large mineralization footprint.
• Their epithermal project (Polimet) is strategically located on strike from a million-ounce deposit, featuring high-grade samples of 9g gold, 2% copper, and 17g silver.
• Fitzroy plans to begin drilling at their main copper targets in Q4/2024 (pending acquisition completion and funding), followed by their high-grade epithermal project in Q1/2025.
• The company recently raised C$1.7 million to fund work on their existing portfolio but will need additional capital to develop their newest copper acquisition.

Copper Giants: The Next Investment Frontier

In today's rapidly evolving global economy, few commodities offer the combination of established industrial demand and future growth potential that copper provides. As the world transitions toward renewable energy and electrification, copper stands at the crossroads of multiple macroeconomic trends. Within this landscape, junior mining companies like Fitzroy Minerals are positioning themselves to capitalize on the growing copper market through strategic exploration in Chile, one of the world's premier copper jurisdictions.

The Fundamental Case for Copper

Copper remains an irreplaceable component in the global electrification movement. Its superior electrical conductivity, durability, and recyclability make it essential for everything from traditional power infrastructure to cutting-edge technologies. The metal's role in renewable energy systems, electric vehicles, and energy storage solutions has transformed it from a cyclical industrial metal to a strategic resource for the green transition.

Global copper demand is projected to increase significantly over the next decade, driven by several converging factors. Electric vehicles require approximately four times more copper than conventional vehicles. Renewable energy systems like solar and wind use between 4-12 times more copper than traditional power generation. Meanwhile, the digitalization of the global economy continues to expand data centers and telecommunications infrastructure, all copper-intensive sectors.

On the supply side, significant challenges exist. Declining ore grades at existing mines mean more material must be processed to produce the same amount of copper. New discoveries have become increasingly rare, with the average time from discovery to production now exceeding 15 years. These supply constraints, coupled with growing demand, create a compelling fundamental case for the copper market.

Chile: The Copper Kingdom

Chile stands as the world's premier copper-producing nation, accounting for approximately 28% of global copper output. The country's Andean geology provides exceptionally favorable conditions for large porphyry copper deposits and IOCG (Iron Oxide Copper Gold) systems, which host some of the world's largest copper mines.

The Chilean mining sector benefits from a well-established regulatory framework, skilled workforce, and developed infrastructure that supports efficient exploration and production. While the country has seen regulatory changes in recent years, it remains committed to its mining heritage and continues to attract substantial investment from major mining companies seeking to secure copper resources.

Fitzroy Minerals: Strategic Positioning in Copper-Rich Territories

Fitzroy Minerals represents an emerging player in the copper exploration space, strategically building a portfolio of assets in Chile's prolific copper belts. The company, named after Captain Fitzroy of the HMS Beagle (who mapped much of South America and transported Charles Darwin on his famous voyage), has carefully selected projects with significant upside potential and reduced exploration risk.

Merlin, CEO of Fitzroy Minerals, explains their strategic approach: "What we're doing here is building a portfolio of assets that can drive capital. People can see it's a team that's got some real chance of exploration success, and that's how you generate alpha in these junior companies—through the drill bit."

This philosophy guides their project selection methodology, focusing on assets with established mineralization indicators that reduce exploration risk while maintaining substantial upside potential.

The Fitzroy Project Portfolio

Fitzroy's emerging flagship copper asset sits strategically positioned near Lundin Mining's Candelaria operation in Chile. Candelaria represents a world-class IOCG deposit that supports a billion-dollar market capitalization for its owner. Fitzroy's project shows promising similarities and early exploration success.

"We've got some great drill results there. We're hitting copper from surface with 135 meters at 0.7% copper, and just below surface, 38 meters over 3% copper," states Merlin. "It's a very big footprint with kilometers of potential. Every drill hole we've put in has hit copper mineralization. There's background copper mineralization; there's a lot of smoke, and it's a big IOCG target just south of Candelaria."

The project features extensive oxide mineralization with grades that exceed many producing copper mines. According to company data, the median grade in the oxide zone is approximately 0.55% copper, which positions it favorably against global copper operations. Beneath this oxide zone lies a substantial IP anomaly measuring 3km long by 2km wide, suggesting potential for significant sulfide mineralization at depth.

Additionally, Fitzroy holds the Poly epithermal project, which demonstrates significant high-grade potential. Located on strike from an established million-ounce gold deposit with identical geology, Poly shows exceptional grades in preliminary sampling, including 9g/t gold, 2% copper, and 17g/t silver. Geochemical surveys have identified mineralization extending along a 7km strike length.

The company also maintains early-stage exploration assets in Argentina's Rio Negro province, where they're investigating a potentially new goldfield. While earlier in the exploration cycle, these assets provide additional optionality for investors.

Exploration Strategy and Timeline

Fitzroy Minerals has outlined a clear exploration strategy that balances near-term catalysts with systematic development of their project pipeline. Pending the completion of their newest copper acquisition and associated financing, the company plans to commence drilling at their copper project in Q4 2024, focusing initially on the oxide mineralization with potential to test deeper sulfide targets in the first half of 2025.

Their Poly epithermal project is scheduled for drilling in Q1 2025, targeting the high-grade zones identified through surface work and historical small-scale mining. The Argentina assets will continue to advance through low-cost surface exploration programs throughout 2024 and into 2025, with potential drilling later in 2025 if results warrant.

This staggered approach provides investors with multiple potential catalysts over the coming 12-18 months while managing exploration expenditures efficiently across the portfolio.

Copper Market Dynamics & Future Outlook

The global copper market faces a potential structural deficit as demand growth outpaces new supply additions. Major miners have struggled to replace reserves, with few world-class discoveries announced in the past decade. Meanwhile, development timelines for new projects continue to extend due to declining ore grades, more complex metallurgy, and increasing environmental and social requirements.

Demand projections consistently show accelerating consumption driven by the electrification megatrend. The International Energy Agency estimates that achieving global climate goals would require copper demand for clean energy technologies to more than double by 2040. Electric vehicles, charging infrastructure, renewable energy generation, and grid modernization all contribute to this demand growth.

The current global copper development pipeline appears insufficient to meet projected demand, creating a favorable pricing environment for the metal over the medium to long term. This market dynamic enhances the potential value of new copper discoveries, particularly those in established mining jurisdictions with development pathways to production.

Investment Considerations & Risks

While Fitzroy Minerals offers exposure to potentially significant copper assets, investors should recognize the inherent risks in junior mining exploration. Exploration success is never guaranteed, and even promising projects can yield disappointing results. The company will require additional capital to advance their newly acquired copper asset, potentially leading to dilution for existing shareholders.

Market conditions for mining equities can be volatile, influenced by broader commodity price movements, macroeconomic factors, and shifting investor sentiment. Junior explorers typically experience more pronounced volatility than established producers with cash flows.

Regulatory environments in mining jurisdictions can evolve, impacting project economics and timelines. While Chile has a strong mining heritage, the country has seen regulatory debates regarding mining taxes and water usage in recent years.

Nevertheless, Fitzroy's approach of building a portfolio of de-risked assets with substantial upside potential helps mitigate some of these risks. Their focus on projects with existing mineralization indicators and proximity to established deposits reduces pure exploration risk while maintaining significant discovery potential.

Financing Strategy & Capital Structure

Fitzroy recently secured C$1.7 million in financing to support their existing portfolio's work commitments. However, additional capital will be required to advance their newest copper acquisition if the deal closes as expected. Management has indicated that a "top-up raise" would be necessary to fund the planned drilling programs.

For investors, understanding the company's capital requirements and potential financing strategies is essential for assessing potential dilution risks. Companies that can time their capital raises to coincide with positive exploration results typically secure better terms and minimize dilution impact on existing shareholders.

Strategic Exposure to the Copper Thematic

Fitzroy Minerals represents a targeted approach to gaining exposure to the copper thematic through focused exploration in premier mining jurisdictions. Their strategic project selection methodology, emphasizing de-risked assets with substantial upside, aligns with prudent exploration investment principles.

The company's upcoming drilling programs at both their copper and gold-copper epithermal projects provide near-term catalysts that could drive revaluation if successful. Their proximity to established mines and preliminary work indicating significant mineralization enhance their probability of exploration success.

For investors seeking leveraged exposure to the copper market through exploration-stage companies, Fitzroy offers a compelling risk-reward profile based on their project portfolio, exploration approach, and planned work programs. As with all junior mining investments, position sizing and portfolio diversification remain important considerations given the inherent risks of the exploration sector.

The Investment Thesis for Fitzroy Minerals

• Strategic Copper Exposure: Gain leveraged exposure to copper through focused exploration in Chile's premier mining districts, positioning for potential significant discovery upside
• De-Risked Exploration: Benefit from projects showing existing copper mineralization, including substantial oxide resources and proximity to established mines like Candelaria
• Multiple Catalysts: Expect continuous news flow with drilling planned at copper targets in Q4 2024 and high-grade epithermal gold-copper in Q1 2025
• Experienced Team: Leverage exploration leadership with proven track record in identifying and advancing mineral discoveries in South America
• Portfolio Approach: Reduce single-project risk through diversified assets at various exploration stages across multiple jurisdictions and commodity types
• Early Entry Point: Consider establishing a position before major drilling programs commence when valuation potential could increase significantly upon exploration success
• Staged Investment: Implement a staged investment approach, establishing an initial position and expanding upon successful exploration results from upcoming drill programs
• Risk Management: Limit position size to appropriate level for exploration-stage mining investments within a diversified portfolio to manage inherent exploration risk

Copper stands at the intersection of multiple global trends, from electrification and renewable energy to infrastructure development and technological advancement. Supply challenges including declining ore grades, limited new discoveries, and lengthening development timelines create a favorable fundamental backdrop for copper prices. Within this landscape, junior explorers like Fitzroy Minerals offer investors leveraged exposure to potential new discoveries in established mining jurisdictions. While exploration investments carry inherent risks, Fitzroy's approach of targeting de-risked assets with substantial upside potential and proximity to established deposits helps mitigate exploration risk while maintaining discovery optionality. With multiple drilling programs planned over the next 6-12 months, investors have clear catalysts to monitor for potential revaluation opportunities.

The Copper Supercycle

The global transition toward electrification and decarbonization has fundamentally altered the demand outlook for copper, potentially initiating a multi-year supercycle that differs significantly from historical commodity cycles. Unlike previous cycles driven primarily by industrialization and construction, today's copper demand is underpinned by structural shifts in energy systems, transportation, and technology.

Electric vehicles represent perhaps the most visible demand accelerator, with each vehicle requiring 2.5-4 times more copper than conventional internal combustion vehicles. The International Energy Agency projects that EVs and charging infrastructure alone could increase copper demand by 1.5 million tonnes annually by 2030. Renewable energy generation adds another substantial demand layer, with solar and wind installations requiring 4-12 times more copper per megawatt than fossil fuel alternatives.

This demand surge coincides with significant supply constraints. The copper industry faces declining ore grades at existing operations, with average grades falling nearly 25% over the past decade. New greenfield discoveries have become increasingly rare despite rising exploration expenditures. The time from discovery to production now averages 15-20 years due to more complex deposits, stricter permitting requirements, and higher capital intensity.

These supply challenges reflect the geological reality that most easily accessible, high-grade copper deposits have already been discovered and developed. Future copper supplies will increasingly come from lower-grade, more complex, and often more remote deposits requiring greater technological innovation and capital investment to develop economically.

The resulting supply-demand imbalance has prompted many analysts to forecast a significant copper deficit emerging in the mid-to-late 2020s. Goldman Sachs estimates this deficit could reach 8.2 million tonnes by 2030—nearly 30% of projected demand. Such a deficit would likely drive copper prices substantially higher, potentially creating a supercycle with prices exceeding previous historical peaks.

As Merlin from Fitzroy Minerals aptly observes: "What we're doing is building a portfolio of assets that can drive capital through the drill bit. That's the prize—the kind of asset that drives a billion-dollar market capitalization." This statement encapsulates the exceptional value creation potential that significant copper discoveries offer in today's market environment, where quality copper assets command premium valuations due to their strategic importance in the global energy transition.