Newcomer AXO Copper's High-Grade Mexico Copper Play with Production History Targets 15,000m Drill Program

• AXO Copper is preparing to list in June 2025, with a high-grade copper project in Jalisco, Mexico that has already demonstrated production capability through a local family's 3-4 year mining operation at grades of 4-5% copper.
• The company acquired the La Huerta Copper Project through staged payments totaling $11.1 million USD plus 5 million shares over five years, with no royalties attached, providing a royalty-free asset in a proven mining jurisdiction.
• Initial drilling has confirmed high-grade mineralization with intercepts including 9.4m grading 4.4% copper, with a subsection of 3.2m grading 21.4% copper, extending the known system to 200 meters below surface across a 5-kilometer strike length.
• The company plans a 15,000-meter drill program focusing on a 1.5-kilometer priority zone, with 70% of drilling aimed at defining strike extent and testing depth potential to 350-400 meters below surface.
• Management's strategy emphasizes building a project that can be developed by a junior rather than requiring sale to a major, differentiating AXO from typical porphyry discoveries that demand multi-billion dollar capital expenditures.

The copper sector presents compelling opportunities for investors seeking exposure to the energy transition and infrastructure development themes driving global commodity demand. AXO Copper Corp represents a unique proposition within this landscape, offering investors access to a high-grade copper discovery with established production history and near-term development potential.

De-Risked Discovery with Production History

AXO Copper's La Huerta project in Jalisco, Mexico, distinguishes itself from typical exploration stories through its production heritage. The asset was discovered and operated by a local Mexican family who built a 250-ton-per-day sulfide flotation plant and successfully mined high-grade copper ore for three to four years. This operational history provides crucial de-risking that most junior exploration companies lack.

The family's mining operation extracted ore grading between 4-5% copper, demonstrating both the geological continuity and metallurgical characteristics of the deposit. This production history eliminates much of the early-stage risk typically associated with greenfield discoveries, as the deposit has already proven its commercial viability at small scale.

President and CEO Jonathan Egilo emphasized this advantage, stating:

"They've effectively done a three or four year what I would consider like a bulk sample derisking process for us. And the next step is to see like what it should be kind of restarted up."

Strategic Asset Acquisition Structure

The company's acquisition strategy reflects disciplined capital allocation and favourable deal terms. AXO secured the project through an initial payment of $1.6 million USD in 2022, followed by staged payments totaling $9.5 million USD over five years, with approximately $4 million paid to date. The family also receives 5 million shares distributed over the same timeframe. Critically, the transaction includes no ongoing royalties, providing AXO with a royalty-free asset that enhances project economics. This structure allows the company to capture the full value of future production without encumbering the asset with perpetual payments to previous owners.

Interview with President & CEO Jonathan Egilo

Exceptional Grade Profile and Geological Continuity

AXO's drilling program has confirmed and extended the high-grade nature of the deposit. Recent drilling results include intercepts of 9.5 meters at 7% copper and 14 meters at 5% copper, with the system traced for 5 kilometers along surface. The mineralization consists primarily of chalcopyrite and bornite, with some intercepts reaching 20% copper over 1-3 meter intervals.

The geological model identifies a steeply-dipping copper sulfide dyke system piercing through andesite host rock. The deposit typically shows high-grade cores of 3-6 meters grading 3-6% copper, surrounded by alteration halos extending 10 meters into both hanging wall and footwall, with these zones grading approximately 1% copper.

Systematic Exploration and Resource Definition Strategy

The company has outlined a comprehensive 15,000-meter drilling program designed to systematically define the resource and test expansion potential. The program allocates 70% of drilling to a 1.5-kilometer priority zone extending the Las Marias target in the south to Punto Cornelio in the north. The exploration strategy targets both strike extension and depth potential. Current drilling extends to 200 meters below surface, with no geological indication limiting depth potential. The program includes deeper drilling to 350-400 meters below surface, testing the hypothesis that the current workings represent only the upper portion of a larger system.

Beyond the main target area, AXO has identified several regional prospects requiring follow-up drilling. These include copper expressions at surface in different geological settings and high-grade copper mineralization in limestone-andesite contacts showing grades of 3-5% copper. The company has allocated budget to test targets that have never been drilled, providing additional upside potential.

Infrastructure Advantages and Operational Readiness

The project benefits from excellent infrastructure positioning in an established mining region. AXO operates within 7 kilometers of a major iron ore mine operated by ArcelorMittal, providing access to established infrastructure, skilled labor, and supply chains. Access to the project requires only a 1.5-hour drive from Manzanillo port via highways and gravel roads. Manzanillo serves as a major Pacific port handling goods destined for Guadalajara and Mexico City, with ArcelorMittal operating iron ore pelletizing facilities and direct shipping operations. This industrial infrastructure provides AXO with access to power, transportation, and logistics networks essential for mining operations.

Management Team and Mexico Expertise

AXO's management team brings relevant technical and capital markets experience to the project. CEO Jonathan Egilo combines mining engineering background from Detour Gold with equity research experience covering copper and gold companies at Desjardins Capital Markets and National Bank Financial.

The company benefits from shared expertise with GoGold Resources through overlapping board members, including Executive Chair Glenn Jessome. This relationship provides access to established Mexican operations expertise, local relationships, and proven ability to navigate regulatory and community engagement requirements.

Egilo highlighted this advantage:

"With Mexican people on board who are very smart comes with our group of companies, right? The family when we picked up the project in 2022 wasn't looking to sell, right? We found them and it was actually about a yearlong of negotiation process with a local Mexican family."

Development Strategy and Capital Requirements

AXO's development approach focuses on building a project suitable for junior company development rather than requiring acquisition by a major mining company. This strategy differentiates the company from typical porphyry discoveries that demand multi-billion dollar capital investments beyond junior company capabilities.

The bulk underground mining approach anticipated for La Huerta aligns with capital requirements that could be financed through traditional junior mining channels, including debt financing, streaming arrangements, and equity raises. This development path provides optionality for value creation through either independent development or strategic sale at appropriate valuations.

Market Timing and Copper Fundamentals

The copper market presents favorable supply-demand dynamics supporting higher prices over the medium term. Global electrification trends, renewable energy infrastructure development, and electric vehicle adoption drive structural demand growth. Simultaneously, copper supply faces constraints from declining ore grades, permitting challenges, and limited new major discoveries.

AXO's high-grade profile positions the company advantageously within this market environment. High-grade deposits maintain economic viability across commodity price cycles and command premium valuations during development and production phases.

Conclusion

AXO Copper presents investors with exposure to a high-grade copper discovery that has already demonstrated production capability, reducing typical exploration risk. The company's systematic approach to resource definition, combined with excellent infrastructure positioning and experienced management team, provides a foundation for value creation through systematic exploration and potential development. The royalty-free asset structure and junior-developable scale differentiate AXO from typical copper stories requiring major company acquisition for advancement. Investors should monitor drilling progress and resource definition as key catalysts for value creation over the next 12-18 months.

The Investment Thesis for AXO Copper

• ‍Near-Term Catalysts and Value Creation: Target the June listing for initial position establishment, monitor drilling results from the 15,000-meter program beginning in Q3 2025‍
• Risk Management Considerations: Assessment of execution risk on drill program delivery, results quality, and jurisdiction risk amid copper price volatility impact on junior valuations‍
• Valuation and Positioning Strategy: Comparing valuation metrics to peer group of high-grade copper developers and position sizing based on risk tolerance for junior exploration companies‍
• Strategic Investment Rationale: Focusing on the de-risked nature of the discovery through production history, the royalty-free structure enhancing project economics, and infrastructure advantages reducing development risk and capital requirements along with the management team's relevant experience and local Mexico expertise

Macro Thematic Analysis: Copper's Strategic Importance

The global copper market stands at an inflection point driven by unprecedented demand from electrification initiatives and renewable energy infrastructure development. Electric vehicles require approximately four times more copper than conventional vehicles, while renewable energy systems demand significantly higher copper intensity than traditional power generation. The International Energy Agency projects copper demand could double by 2040 under ambitious climate scenarios.

Supply constraints compound this demand growth story. Global copper ore grades have declined consistently over decades, requiring increased processing for equivalent metal production. Major copper discoveries have become increasingly rare, with most new supply additions representing smaller, higher-cost operations. Permitting timelines for new mines extend across decades in many jurisdictions, creating structural supply limitations.

These fundamentals support a sustained period of higher copper prices, benefiting high-grade discoveries disproportionately. Premium copper assets command significant valuation multiples during both development and production phases, as they maintain economic viability across price cycles and generate superior returns on invested capital.

This positioning in an under-explored district with high-grade potential provides AXO with exposure to both immediate resource growth and longer-term district-scale discovery potential, aligning with the structural copper market opportunity.