Horizon Copper - A New Copper Play Poised for Growth

• Horizon Copper is a new copper mining company that launched with 3 high quality assets, including 2 currently producing assets generating $10-15 million in annual cash flow. The assets are minority positions operated by major mining companies.
• The company has a market cap of around $50 million Canadian but an enterprise value of $250 million due to friendly financing terms from Sandstorm Gold, which holds debentures convertible into a 34% equity stake over time.
• Horizon Copper is using its cash flow to pay down debt and has over $20 million in working capital, so it has no need to raise additional equity capital in the near term.
• The company is looking to acquire additional minority positions in quality copper assets that are cash flowing or near construction, avoiding exploration assets that would require significant capex.
• The CEO believes copper prices could potentially drop below $3.50/lb in the short term due to financial factors, but sees multi-year deficits driving prices higher by 2027 as supply lags growing demand.

About Horizon Copper

Horizon Copper is a newly established copper company looking to become a premier mid-tier producer over the next 5 years. The company currently has three world-class assets, two of which are already in production and cash flowing. Horizon Copper was founded in partnership with Sandstorm Gold, which holds a sizable minority stake of 34% and provides strategic support.

Interview with Erfan Kazemi, President & CEO of Horizon Copper Corp.

Diversified Portfolio of High-Quality Assets

The anchor asset for Horizon Copper is a 1.66% net profits interest (NPI) in the Antamina copper mine in Peru, one of the largest copper mines in the world. This asset alone is expected to generate $10-15 million in annual cash flow for Horizon. Antamina is operated by a consortium of major mining companies including BHP, Glencore, Teck and Mitsubishi.

The second core asset is a silver stream on the Oyu Tolgoi underground copper/gold mine in Mongolia, operated by Rio Tinto. Horizon will receive 50% of the silver by-product production, which could amount to 1.5 million ounces per year once the underground expansion is complete. This will provide both cash flow and significant exposure to exploration upside.

The third key asset is a 30% interest in the Hod Maden project in Turkey, which contains extremely high-grade copper-gold resources and is on the path to production in 2025. The project operator was recently acquired by SSR Mining, a leading mid-tier producer focused on project delivery.

Strong Financial Position

Horizon Copper has over $20 million in working capital and no need to raise additional funds for its existing growth projects. The company can fully finance its share of development costs from operating cash flow. This removes any risk of dilution or reliance on uncertain equity financing.

Annual cash flow from Antamina alone could be sufficient to repay Horizon's $250 million in debt obligations over the next decade. As debt is paid down, Enterprise Value will shift to equity holders. The company also has the option to repay the debt in shares rather than cash.

Disciplined Growth Strategy

Horizon plans to continue expanding its portfolio by acquiring minority positions in world-class assets, partnering with premier operators. The company is targeting cash flowing assets as well as near-construction development projects that can be funded from internal cash flow.

This disciplined approach removes development and funding risk, providing downside protection in the event of weaker copper prices, while maintaining full exposure to the upside as projects advance.

Horizon can be patient and selective, avoiding overpaying or taking on risky projects. The company has access to Sandstorm's extensive global deal flow and can leverage the technical expertise of its operating partners.

Attractive Entry Point

Horizon Copper is currently valued at just a fraction of its Enterprise Value, providing a compelling entry point for investors. The company offers torque to the copper price along with downside protection from its high-quality assets, cash flow and balance sheet strength.

In a tough market for juniors, Horizon stands out with its self-funded growth plan focused on world-class mining assets. As the company continues to advance its portfolio and demonstrate the value of its assets, the discount to fair value should narrow over time.

Conclusion

For investors seeking leveraged copper exposure along with meaningful downside protection, Horizon Copper presents a unique opportunity. The company combines cash flowing assets run by premier operators with disciplined capital allocation and no reliance on external funding. As Horizon pays down debt and progresses its portfolio, value should continue to accrete to shareholders.