Pan Global Resources (TSXV:PGZ) - Unearthing Copper Potential in Spain's Prolific Mining Belt

Pan Global Resources: Uncovering Copper Potential in Spain's Prolific Iberian Pyrite Belt

Pan Global Resources (TSXV:PGZ) is a mineral exploration company focused on uncovering new copper deposits in Spain's renowned Iberian Pyrite Belt. With a promising discovery already made at their La Romana target and multiple additional prospects identified, the company is working to define a significant copper resource that could attract attention from major mining companies.

The Iberian Pyrite Belt: A World-Class Mining District

The Iberian Pyrite Belt, stretching across southern Spain and Portugal, is one of the world's most prolific regions for volcanic massive sulfide (VMS) deposits. These deposits are known for their polymetallic nature, often containing copper, zinc, lead, silver, and gold. The region has a rich mining history dating back over 2,000 years to Roman times and continues to host major operating mines today.

Moody notes that while the global average size for VMS deposits is around 8-10 million tons, deposits in the Iberian Pyrite Belt are often double that size. Many operating mines in the region consist of clusters of deposits totaling 40 to over 100 million tons.

Interview with President & CEO Tim Moody

Pan Global's Escacena Project

Pan Global's flagship asset is the Escacena project, located in the eastern part of the Iberian Pyrite Belt. The project area had seen limited modern exploration due to post-mineral sedimentary cover, which obscured potential deposits from earlier explorers. This presented an opportunity for Pan Global to apply modern exploration techniques to a prospective but under explored area within a world-class mining district.

The La Romana Discovery

In 2019, Pan Global made a significant copper discovery at the La Romana target within the Escacena project. The company has since completed 180 drill holes, with the majority focused on defining and expanding this discovery. Key aspects of the La Romana discovery include near-surface mineralization, with the average depth of drilling around 200 meters, which is relatively shallow compared to many modern exploration projects. The discovery remains open for expansion, with recent drilling indicating potential for a 400-meter strike extension to the northwest, where high-grade copper mineralization continues. Furthermore, the company has conducted extensive metallurgical work, reaching pre-feasibility level for about two-thirds of the drilled deposit, demonstrating significant progress in understanding the deposit's characteristics and potential processing methods.

Moody comments on the potential scale of La Romana:

"We can see potentially another 5 to 10 or maybe more million tons just from drilling some of the extensions to La Romana."

Additional Exploration Targets

While La Romana has been the primary focus, Pan Global has identified several other promising targets within the Escacena project. One such target is Cañada Honda, a 3-kilometer-long gravity anomaly that shares similarities with the San Antonio mine, a 100-million-ton deposit composed of five different ore bodies. Another notable prospect is Bravo, a newly identified target that the company is working on and believes could be another significant discovery. Additionally, Pan Global has digitized historical gravity survey data, revealing several anomalies that could indicate potential clusters of deposits. These multiple gravity anomalies provide the company with a pipeline of exploration targets, enhancing the overall potential of the Escacena project beyond the initial La Romana discovery.

Exploration Strategy and Upcoming Plans

Pan Global's exploration strategy is built on several key principles that leverage the unique characteristics of the Iberian Pyrite Belt and modern exploration techniques. Central to their approach is the cluster concept, recognizing that VMS deposits in the region often occur in groups. This principle suggests that finding one deposit increases the chances of discovering others nearby, potentially leading to multiple discoveries within a single project area. The company also relies heavily on gravity-guided exploration, using gravity surveys to identify potential targets. This method has proven successful in past discoveries in the region and forms a cornerstone of Pan Global's target generation process. Additionally, the relatively shallow depth of mineralization in the area allows for cost-effective exploration compared to deeper targets. This shallow drilling strategy enables the company to test multiple targets efficiently, maximizing the potential for discovery within their budget constraints.

The company is planning an extensive drill program to advance the project, which includes a comprehensive 60-hole campaign. This program will focus on expanding the La Romana discovery and testing several other promising targets within the Escacena project area. Pan Global has estimated a budget of $5-10 million for this planned drilling, demonstrating a significant commitment to advancing their exploration efforts. In terms of timeline, the company has set an ambitious goal to complete much of this drilling by mid-2025.

Path to Resource Definition and Development

Pan Global is working towards defining a mineral resource at La Romana and potentially other targets, having made significant progress in areas that will support rapid advancement once a resource is defined. Environmental baseline studies were initiated two years ago, providing a solid foundation for future permitting processes. Advanced metallurgical testing has reached pre-feasibility level for much of the deposit, offering valuable insights into potential processing methods and recoveries. In terms of resource classification, about two-thirds of the drilled deposit at La Romana is expected to fall into the measured and indicated categories, which could enhance the confidence in any future resource estimate. Furthermore, the company is positioned to potentially release a Preliminary Economic Assessment (PEA) alongside or shortly after an initial resource estimate. This comprehensive approach demonstrates Pan Global's commitment to not only defining a resource but also rapidly advancing the project towards potential development.

Market Position and Valuation

Pan Global Resources currently has a market capitalization of around C$30 million, significantly below its peak of C$180 million reached earlier in the exploration process. The company believes that continued exploration success, particularly new discoveries, could drive a re-rating of the stock.

Moody expresses confidence in the company's target portfolio:

"At this time, our target portfolio for Pan Global is as strong if not stronger than I've ever seen it... We're working methodically to that point [of releasing a resource estimate]."

Financing and Cash Position

As of the interview, Pan Global had approximately C$1.5 million in cash. The company acknowledges the need for additional funding to complete its planned exploration program and is exploring financing options. This is a common situation for junior exploration companies and represents both a challenge and an opportunity for potential investors.

Conclusion

Pan Global Resources offers investors exposure to a promising copper exploration project in one of the world's most productive VMS districts. The company has made a significant discovery at La Romana and has identified multiple additional targets with strong potential. With an experienced management team, a clear exploration strategy, and a project located in a mining-friendly jurisdiction, Pan Global is well-positioned to continue advancing the Escacena project.

The success of the planned drilling program in expanding La Romana and making new discoveries will be crucial in determining the company's future value. For investors interested in the copper sector and willing to accept the risks associated with junior mining exploration, Pan Global Resources presents an intriguing opportunity to gain exposure to a potentially significant new copper discovery in a world-class mining district.

The Investment Thesis for Pan Global Resources

• Exposure to copper exploration in a world-class mining district
• Significant discovery already made at La Romana with potential for expansion
• Multiple additional targets identified with strong discovery potential
• Experienced management team with a track record in the Iberian Pyrite Belt
• Advanced stage of technical work could allow for rapid advancement to development stage
• Current valuation well below previous peak, offering potential for re-rating on exploration success
• Copper demand expected to grow due to electrification and renewable energy trends

Key Takeaways

Pan Global Resources presents a compelling opportunity for investors interested in copper exploration. The company's Escacena project in Spain's Iberian Pyrite Belt has already yielded a significant discovery at La Romana and offers multiple additional targets with strong potential. With a clear strategy focused on identifying clusters of VMS deposits, Pan Global is well-positioned to potentially define a resource that could attract attention from major mining companies. However, investors should be aware of the risks associated with mineral exploration, including the need for additional financing and the inherent uncertainty of exploration success. The company's progress over the next 12-18 months, particularly in expanding La Romana and testing new targets, will be crucial in determining its long-term value proposition.

Macro Thematic Analysis

The exploration efforts of Pan Global Resources are set against a backdrop of growing global demand for copper. As the world transitions towards renewable energy and electrification, copper plays a critical role in numerous technologies, from electric vehicles to wind turbines and solar panels.

The International Energy Agency (IEA) projects that copper demand for clean energy technologies could increase by up to 350% by 2050 in a scenario aligned with the goals of the Paris Agreement. This surge in demand, coupled with the challenges of bringing new copper mines into production, has led many analysts to predict a potential supply deficit in the coming years.

In this context, the discovery and development of new copper deposits take on increased importance. The Iberian Pyrite Belt, with its history of large, high-grade VMS deposits, represents a prime exploration target in a stable, mining-friendly jurisdiction within the European Union.

Pan Global's focus on this prolific region positions the company to potentially benefit from these macro trends. If successful in defining a significant resource, the company could become an attractive target for larger mining companies looking to secure future copper supply.