Fitzroy Minerals: Chilean Copper Discovery & Potential Near-Term Producer Has Momentum

• Strong drilling results: Caballos project intersected 176m @ 0.31% Cu, 249 ppm Mo, 0.04 g/t Au (0.47% CuEq) in latest hole
• Geological validation: Expert analysis confirms Buen Retiro shows analogous characteristics to Candelaria, Chile's major copper-gold mine
• Near-term cash flow potential: Joint venture with Pucobre S.A. for heap leach operations could provide non-operated revenue
• Strategic location: Projects located in Chile, the world's largest copper producer with established infrastructure
• Financial position: C$11M cash provides 12-month funding runway for C$8M exploration budget across both projects

Copper Discovery in Chile's Mining Heartland

As copper prices reach record highs amid global supply constraints and rising demand from renewable energy infrastructure, Fitzroy Minerals Inc. (TSX-V: FTZ, OTCQB: FTZFF) has emerged as a compelling exploration story in Chile, the world's dominant copper-producing nation. The company's recent drilling success at its Caballos project and geological validation of its flagship Buen Retiro property position it as a potential beneficiary of the ongoing copper supply crunch.

Chile produces approximately 5.4 million tonnes of copper annually, representing 24% of global production. However, the country's mining industry faces significant challenges in maintaining output growth, with major producers like BHP projecting flat production through 2040. This production plateau, combined with rising capital intensity for new projects, creates opportunities for well-positioned junior exploration companies with quality assets.

Fitzroy's strategic positioning in Chile's Atacama region, combined with its partnership approach and experienced management team, offers investors exposure to potential copper discoveries in a world-class mining jurisdiction. The company's dual-track strategy of pursuing near-term cash flow through heap leach operations while exploring for large-scale porphyry deposits provides multiple pathways to value creation.

Focused Growth Strategy

Fitzroy Minerals operates with a market capitalization of C$103 million and maintains C$11 million in cash, providing financial stability for its exploration programs. The company's leadership team brings extensive experience in Chilean mining, led by President and CEO Merlin Marr-Johnson, who holds advanced degrees from Manchester University and Imperial College and brings 30 years of minerals sector experience including previous work with Rio Tinto.

The company's asset portfolio centers on two primary Chilean copper projects: the flagship Buen Retiro property near Copiapó and the emerging Caballos project in Valparaiso. These assets benefit from Chile's well-established mining infrastructure, including proximity to the Pan-American Highway, available power and water, and skilled labor force. Fitzroy also maintains secondary assets including the Polimet Gold-Copper-Silver project and exploration properties in Argentina and British Columbia.

The company's strategic approach involves partnering with established Chilean operators to reduce development risk and accelerate project advancement. This is exemplified by its joint venture discussions with Pucobre S.A., a Santiago Stock Exchange-listed copper producer with a US$1 billion market capitalization and continuous operations since 1992.

Strategic Significance: Buen Retiro's Candelaria Connection

The December 2025 site visit by Dr. Irene del Real Contreras, a renowned IOCG geologist and SEG Visiting Lecturer, provided crucial third-party validation of Buen Retiro's geological potential. Dr. Real's assessment that "the structural setting, the geology and the mineralization seen at Buen Retiro is analogous to that of Candelaria, with minor differences" carries significant weight given her expertise and independence.

Candelaria, operated by Lundin Mining with a 20% Sumitomo partnership, represents one of Chile's most successful copper-gold operations. The mine's proven and probable reserves of 622.1 million tonnes grading 0.47% copper and 0.11 g/t gold, combined with measured and indicated resources of 591.6 million tonnes at 0.37% copper and 0.09 g/t gold, demonstrate the scale potential of this geological setting. Candelaria's 2024 production of 162,000 tonnes of copper and 93,000 ounces of gold generated substantial returns for its operators.

Dr. Real's observations identified several key similarities between Buen Retiro and Candelaria, including mineralization hosted within the Upper Pucobre Formation, preferential copper deposition in hematitic breccias and tuffs, and structural controls involving NNW-oriented structures intersecting NNE-striking stratigraphy. These geological parallels suggest Buen Retiro may host similar-scale mineralization, though extensive drilling will be required to test this hypothesis.

Key Development: Caballos Drilling Breakthrough

Fitzroy's January 13, 2026 announcement of significant drilling results at the Caballos copper project marks a pivotal moment in the company's development. Drill hole CAB-DDH004A intersected 176 metres averaging 0.31% copper, 249 ppm molybdenum, and 0.04 g/t gold, equating to 0.47% copper equivalent. This intersection demonstrates the scale potential of the Caballos system and validates the company's geological model.

The drilling results at both the Chincolco and Mule Hill targets show characteristics consistent with established porphyry copper deposits, including potassic alteration, veining, stockworks, and brecciation. Significantly, the mineralized trend now extends over 600 metres based on results from drill holes 1, 4A, and 9, with exploration still in early stages.

As President and CEO Merlin Marr-Johnson stated:

"The latest results from Caballos show that we are onto a robust copper-molybdenum-gold system with multiple phases of mineralization and many of the signature features of classic Chilean porphyry copper deposits."

To advance understanding of the Caballos system, Fitzroy has commissioned an airborne MobileMT geophysical survey covering 716 line-kilometres, expandable to 966 line-kilometres. This deep-penetrating survey will map subsurface resistivity to depths of 1-2 kilometres, helping identify conductive features like fault structures and sulfide concentrations that could guide future drilling campaigns.

Current Activities: Accelerated Development Timeline

Fitzroy has outlined an aggressive 12-month work program requiring C$8 million in exploration expenditures across both projects. At Buen Retiro, the company plans to complete 11,000 metres of RC drilling including infill holes to support resource estimation and pre-feasibility study advancement. The upgrade from preliminary economic assessment to pre-feasibility study level reflects management's confidence in the project economics and joint venture potential with Pucobre.

The Buen Retiro joint venture structure with Pucobre offers attractive risk-sharing characteristics. Under option terms requiring US$11 million in eligible expenses by August 2027, Fitzroy can earn 100% project ownership while Pucobre retains a 30% clawback option. This arrangement provides Fitzroy with full upside exposure while giving Pucobre participation rights if the project advances to production. Importantly, Pucobre operates an underutilized 800 tonne per month copper SX/EW facility with grandfathered permitting, only 30 minutes drive from site, potentially providing near-term processing capacity.

At Caballos, Phase 2 drilling will commence following completion of the airborne geophysical survey, with results expected to guide optimal drill targeting. The company has allocated C$2.5 million for Caballos advancement over the next 12 months, including additional drilling and potential ground geophysical surveys. Management expects the airborne survey completion in Q1 2026, setting up Phase 2 drilling for the latter half of the year.

The Investment Thesis for Fitzroy Minerals

• If copper prices sustain above $4.00/lb, Fitzroy's CuEq calculations become increasingly attractive.
• Monitor Q1 2026 geophysical results as positive findings could drive significant re-rating before Phase 2 drilling begins.
• Evaluate position sizing based on upcoming Buen Retiro assay results from holes 40-45, which could validate the Candelaria analogy.
• Watch for pre-feasibility study milestones as positive economics could accelerate Pucobre joint venture finalization.
• If Fitzroy can show route to production from oxides in H1 2028, revenue could fund an aggressive drill programmes for sulphides at Buen Retiro & Caballos.‍
• Consider Fitzroy as a copper pure-play alternative to larger diversified miners with declining production profiles.
• Factor warrant and option exercises (C$5.4M potential inflow in 2026) into share count calculations for valuation models.

Fitzroy Minerals represents a compelling opportunity for investors seeking exposure to copper discovery in a world-class mining jurisdiction. The company's recent drilling success at Caballos, combined with expert validation of Buen Retiro's geological potential, positions it advantageously within the copper exploration sector. The partnership approach with established operator Pucobre provides both risk mitigation and accelerated development pathways.

The current market environment for copper exploration companies remains challenging, with declining real copper prices over the past decade creating valuation pressure. However, great assets with demonstrated scale potential continue to attract investment, as evidenced by Capstone Copper's C$9 billion market capitalization despite similar grade profiles. Fitzroy's advantage lies in its early-stage exploration potential combined with near-term cash flow prospects through the Pucobre joint venture.

Key upcoming catalysts include pending assay results from Buen Retiro drill holes 40-45, Q1 2026 completion of the Caballos airborne geophysical survey, and advancement of the pre-feasibility study for the heap leach joint venture. Success in any of these areas could provide significant share price appreciation, while the company's C$11 million cash position provides financial stability through the exploration campaigns. For copper-focused investors, Fitzroy offers a unique combination of exploration upside, partnership de-risking, and Chilean mining jurisdiction advantages.

TL;DR

Fitzroy Minerals (TSX-V: FTZ) is advancing two significant copper projects in Chile with C$120M market cap and C$11M cash. Recent drilling at Caballos returned 176m @ 0.47% CuEq, while Buen Retiro shows geological similarities to the major Candelaria mine which is 40km away. A joint venture with established Chilean operator Pucobre offers potential near-term cash flow through heap leaching operations.

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