Collective Mining Unearths a Polymetallic Copper-Gold Giant in Colombia's Next Major Gold District

• Collective Mining is exploring a large gold-silver-copper-tungsten project in Colombia.
• The company aims to drill off a 10+ million ounce gold equivalent system in 3-4 years, targeting a system that could produce 400,000 ounces per year or more.
• The Apollo project has favorable metallurgy with high recovery rates for multiple metals.
• Collective Mining is positioning itself for a potential multi-billion dollar takeover whigh-grade, near-surface mineralization which could provide early cash flow.
• The company's focus on creating a substantial resource base in a mining-friendly jurisdiction aligns well with the needs of major mining companies looking to secure future production.

Collective Mining, under the leadership of Executive Chairman Ari Sussman, is emerging as a significant player in the Colombian mining sector. The company is focused on developing what appears to be a substantial multi-commodity deposit, primarily consisting of gold, silver, copper, and tungsten. With an ambitious goal of defining a resource of over 10 million ounces of gold equivalent within the next few years, Collective Mining presents an intriguing opportunity for investors looking to capitalize on the growing demand for precious and base metals.

The Apollo Project: A Cornerstone of Potential

At the heart of Collective Mining's portfolio is the Apollo project, a large-scale polymetallic system that has shown promising results since its discovery in 2022. Ari Sussman describes the project's potential, stating, "Apollo was discovered and announced in 2022. We're now in 2024, so it's approximately 2 years old. We've drilled a system that is 600 by 400 by almost 1.2 kilometers vertically." This extensive mineralized zone starts at surface with high-grade material, providing an attractive proposition for potential development.

The presence of oxide mineralization in the upper portions of the deposit is particularly noteworthy.

Sussman explains, "We have oxide for the top 30 meters, which did us a favor – it leached everything else and left the gold." This oxidized zone has yielded impressive intercepts, with Sussman noting, "We drill intercepts like in the oxide top, like 40-50 meters at 6 grams per ton."

Such high-grade, near-surface mineralization could potentially provide early cash flow in a future mining scenario, significantly enhancing the project economics.

Metallurgical Advantages

One of the key strengths of the Apollo project lies in its favorable metallurgy. Despite being a polymetallic system, which can often present challenges in mineral processing, Collective Mining has reported excellent recovery rates across all key metals. Sussman elaborates,

"We're going to have 93 to 96% gold recoveries, about the same for copper. Our silver is going to average somewhere around 75%, which is very high for silver... and the tungsten is going to be 70%."

These high recovery rates are crucial for the project's economic viability, as they directly impact the amount of metal that can be extracted and sold. The ability to efficiently recover multiple commodities from the same ore body could provide Collective Mining with a significant advantage, potentially allowing for more robust project economics across various metal price scenarios.

Strategic Location and Infrastructure

The Apollo project benefits from a strategic location with excellent infrastructure. Sussman highlights this advantage, stating,

"We're at the top of a mountain, so you drive up the mountain, and we have rolling hills at the top. This is the area we're in. You're going to develop the underground portion of all of these deposits. You're going to come in close to the Pan-American highway, which we're right off of, at an elevation of about 1,000 meters above sea level."

This favorable topography and proximity to major transportation routes could significantly reduce development costs and operational expenses. The ability to access the deposit through adits (horizontal tunnels) rather than shafts could lead to substantial savings in both capital and operating costs.

Expansion Potential Beyond Apollo

While Apollo is the most advanced project in Collective Mining's portfolio, the company is also exploring other promising targets within its land package. Sussman mentions the Trap target, describing it as "potentially a very big discovery, possibly bigger than Apollo." This suggests significant exploration upside beyond the already substantial Apollo system.

Additionally, the company has recently announced plans to drill the Plutus target, which Sussman describes as a "potential copper-gold porphyry." Although he candidly admits that it's a "long shot," the potential for a large-scale copper-gold system adds another dimension to Collective Mining's growth prospects.

Favorable Mining Jurisdiction

Colombia has emerged as an increasingly attractive jurisdiction for mining investment. Sussman points out the country's improving regulatory environment,

"Colombia, by law, is 10 months. You're going to get on your environmental permit. You're going to get a yes or no in 10 months."

This relatively streamlined permitting process compares favourably to many other mining jurisdictions, where permitting can often take several years.

Furthermore, Collective Mining's projects are located in an area with a long history of mining activity. Sussman notes,

"We're next door to AUX Mining's Marmato mine, which is in construction going to production. More importantly, it's been in production for more than 500 years continuously. So we're in an existing mining camp where everyone is related to mining in their lineage in one way, shape, or form."

This established mining culture in the region could potentially lead to greater local support for the project and easier access to skilled labor. However, it also presents some challenges in terms of managing relationships with existing small-scale miners in the area.

Social License and Community Relations

Collective Mining appears to be taking a proactive approach to community relations and social license. Sussman proudly mentions the company's strategic alliance with the Colombian Coffee Growers Federation, stating,

"We ar the second ever mining company to gain a strategic alliance with the Colombian Coffee Growers Federation. You can imagine, everyone knows Colombian coffee, how powerful this entity is."

This partnership focuses on responsible water management and promoting the coexistence of agriculture and mining. Such initiatives can be crucial in gaining community support and maintaining a social license to operate, which is increasingly important for mining projects worldwide.

Market Dynamics and Investor Appetite

Despite the company's progress and the rising gold price, Collective Mining, like many junior miners, has faced challenges in the capital markets. Sussman attributes this partly to broader issues affecting the Canadian market, including regulatory changes and shifting investor preferences.

To address these challenges, the company has recently listed on a U.S. exchange. Sussman explains the rationale: "We just listed in New York. I didn't want to list, it's expensive, I didn't want to have to do this. I don't think we had a choice." This move aims to increase liquidity and access a broader investor base, potentially leading to improved valuations.

Investment Thesis and Potential Outcomes

Collective Mining's strategy is focused on creating a compelling acquisition target for larger mining companies. Sussman outlines the company's goals:

"We ultimately want to sell this company in 3 to 4 years' time. We're hoping, now it's becoming more reality, that we could drill off a system that will have 10+ million ounces gold equivalent."

The company is targeting a system that could potentially produce 400,000 ounces per year or more, which would put it in the realm of tier-one assets. Sussman explains the rationale: "If you want the multi-billion dollar takeout like we had previously at Continental Gold, those are the two metrics that you need to be able to deliver to someone that can pay a big number like that."

This strategy aligns with the current trend of major mining companies seeking to replenish their reserves through acquisitions.

As Sussman notes, "We're going into a large M&A cycle. We saw today another deal announced. Right now, it's by production for the gold industry versus very advanced stage development, but that's going to change very shortly."

Risks and Challenges

While Collective Mining presents an intriguing investment opportunity, it's important to consider the risks and challenges:

1. Exploration Risk: Despite promising early results, there's no guarantee that further drilling will confirm the presence of an economically viable deposit.
2. Commodity Price Risk: The project's economics are sensitive to fluctuations in gold, silver, copper, and tungsten prices.
3. Country Risk: While Colombia has become more mining-friendly, investors should be aware of potential political and regulatory changes.
4. Financing Risk: The company will likely need to raise additional capital to fund its exploration and development activities.
5. Operational Challenges: Managing relationships with local small-scale miners and maintaining community support will be crucial.

Conclusion

Collective Mining represents an interesting proposition for investors seeking exposure to the precious and base metals sector. The company's Apollo project, along with its other exploration targets, offers significant potential for resource growth. The favorable metallurgy, strategic location, and the company's approach to community relations are all positive factors.

However, as with any junior mining company, investment in Collective Mining comes with substantial risks. The company's success will depend on its ability to confirm and expand its resource base, navigate the regulatory environment in Colombia, and ultimately attract the interest of potential acquirers.

For investors with a high risk tolerance and a bullish outlook on gold and other metals, Collective Mining could offer an opportunity to participate in the potential development of a world-class polymetallic mining district. As always, thorough due diligence and careful consideration of one's investment objectives and risk tolerance are essential before making any investment decision.

The Investment Thesis for Collective Mining

• Large-scale polymetallic system with potential for 10+ million ounces of gold equivalent
• High-grade near-surface mineralization could provide early cash flow
• Excellent metallurgy with high recovery rates for multiple metals
• Strategic location with good infrastructure and favorable topography
• Exploration upside with additional targets like Trap and Plutus
• Experienced management team with a track record of success in Colombia
• Potential takeover target for major mining companies seeking to replenish reserves
• Exposure to gold, silver, copper, and tungsten in a single investment
• Operating in a mining-friendly jurisdiction with relatively quick permitting processes
• Proactive approach to community relations and social license

Actionable advice

• Consider Collective Mining as a high-risk, high-reward component of a diversified mining portfolio
• Monitor drilling results and resource estimates for signs of project advancement
• Keep an eye on management's progress in land acquisition and community relations
• Watch for potential catalysts such as updated resource estimates or economic studies
• Be prepared for share price volatility typical of junior mining stocks
• Consider averaging in over time rather than making a large single investment
• Stay informed about broader trends in the gold and base metals markets

In conclusion, Collective Mining presents a compelling opportunity for investors seeking exposure to a potentially world-class polymetallic project in Colombia. The company's Apollo project, along with its additional exploration targets, offers significant potential for resource growth and value creation. With its experienced management team, strategic approach to project development, and focus on creating an attractive acquisition target, Collective Mining is well-positioned to capitalize on the growing demand for precious and base metals. However, investors should carefully consider the inherent risks associated with junior mining companies and conduct thorough due diligence before making any investment decisions. As the company progresses towards its goal of defining a substantial resource base, it may offer an exciting opportunity for those willing to accept the risks in pursuit of potentially outsized returns.

Macro Thematic Analysis

The macro thematic surrounding Collective Mining's projects is rooted in the growing global demand for precious and base metals, particularly gold, silver, copper, and tungsten. This demand is driven by several factors:

1. Economic uncertainty: Gold and silver continue to be seen as safe-haven assets during times of economic instability, inflation concerns, and geopolitical tensions.
2. Green energy transition: The shift towards renewable energy and electrification is driving demand for copper, which is essential for electrical infrastructure and clean energy technologies.
3. Industrial applications: Tungsten's unique properties make it valuable in various industries, including aerospace, automotive, and mining.
4. Supply constraints: Many established mining jurisdictions are facing declining grades and increasing costs, making new discoveries in emerging mining regions like Colombia increasingly important.
5. M&A activity: Major mining companies are seeking to replenish their reserves through acquisitions, creating opportunities for junior explorers with significant discoveries.

Collective Mining is positioned to potentially benefit from these trends by developing a polymetallic project that offers exposure to multiple in-demand commodities. The company's focus on creating a substantial resource base in a mining-friendly jurisdiction aligns well with the needs of major mining companies looking to secure future production.