Positioning for Copper’s Coming Supercycle: Chakana Poised for Discovery Ahead of Impending Supply Crunch

• Chakana Copper is a junior copper explorer focused in Peru with a new discovery at its Soledad project.
• The company recently raised $3 million from investors including Rick Rule to fund an upcoming drill program targeting what is believed to be the core intrusive center of the mineral system.
• The Soledad project hosts high-grade copper mineralization in tourmaline breccia pipes related to a larger intrusive system. Over 50 additional targets have been identified.
• Peru is the world's second largest copper producing country and production is increasing.
• The CEO sees Chakana as fundamentally a copper investment play, with increasing investor appetite for copper due to looming supply deficits.

With copper prices languishing below $4 per pound in recent years despite a positive long-term outlook, junior copper explorer Chakana Copper believes the base metal presents a compelling investment opportunity. Operating in Peru, the world’s second-largest copper-producing country, Chakana is focused on advancing its Soledad project, which contains high-grade copper mineralization and over 50 additional drill targets.

Details on Chakana’s Soledad Project

Chakana’s flagship Soledad project is located 35 kilometers south of Barrick’s Pierina mine and resides within the prolific Miocene mineral belt, known to host several large copper deposits. According to Chakana President and CEO David Kelley, “When you start looking at checking the boxes, we check the boxes.”

The project contains an intrusive-centered system that has produced tourmaline breccia pipes containing exceptional copper grades at the surface, including some intervals grading as high as 27% copper with nearly 1 kilogram per tonne of silver. Importantly, mineralization observed in the pipes has been continuous. As Kelley stated, “we’ve hit 485 meters of over 1% copper from the surface – continuous mineralization."

While precious metals like silver and gold exist in higher concentrations near the surface, Kelley views Soledad as fundamentally a copper play, noting, “as we go deeper this becomes more of a pure copper play. There will always be byproducts but I see this being fundamentally a copper investment.”

Interview with President & CEO, David Kelley

Positive Mining Investment Climate in Peru

From a mining investment perspective, Peru offers a favorable and stable jurisdiction for foreign companies. As Kelley explains, "I get weekly updates from our team down at Peru and things are nice and stable and business as usual." While noting room for improvement in permitting, he emphasizes that "mining is happening in Peru and we're glad that we're there."

In fact, copper production has steadily risen in Peru and is projected to increase in 2024. This contrasts favorably with declining grades and disruptions observed in other major copper producing regions like Chile and Panama.

Upcoming Exploration Plans on Targets

With Chakana recently raising over $3 million from investors to fund exploration, including renowned resource investor Rick Rule, the company is now poised to demonstrate the larger potential of its Soledad project. The upcoming drill program will test multiple targets across the property with a focus on what is interpreted to be the core intrusive center driving the broader mineral system.

As Kelley states regarding the primary target, “it’s a giant 2.5 square kilometer gold anomaly in the soil right and within that is very high molybdenum in soils, very intense alteration, the geophysical targets sit right in the center...you can check so many boxes when you look at the project from the targeting standpoint”. Kelley expects hitting this target could represent a major success, saying if we “hit there...we’re going to hit it out of the park for sure.”

Impending Global Copper Supply Squeeze

While copper has lagged other metals in recent years, hovering below $4 per pound, many industry analysts predict a significant supply deficit emerging in the coming years. This expected squeeze, resulting from years of underinvestment in new mines, comes just as demand is forecasted to surge higher from electric vehicle adoption and renewable energy infrastructure build-outs.

Chakana is positioning itself to take advantage of what many anticipate will be a supercycle in copper prices developing in the next few years. As a first mover among junior copper explorers in Peru on relatively undervalued assets, Chakana could garner substantial upside should exploration efforts intersect large high-grade discoveries ahead of the oncoming copper deficit. Rick Rule's investment and confidence in Chakana's prospects underscores this potential. As Kelley states, regarding Rule and other recent investors in the company, "I think he's done a brilliant job of recognizing the undervalued nature of our company at the time that he invested."

The Investment Thesis for Chakana Copper

• High-grade copper intercepts demonstrate compelling grades that warrant additional exploration, especially given the extent of mineralization
• Over 50 untested tourmaline breccia pipe targets provide significant exploration upside and optionality
• The main target in the identified intrusive center has clear discovery potential if the upcoming program intersects significant mineralization
• Copper market fundamentals point to a looming multi-year supply deficit by 2025, which would favorably impact prices
• Stable and increasingly productive mining jurisdiction in Peru minimizes country risk

With Chakana Copper set to drill test what is interpreted to be a significant copper-bearing intrusive center at its Soledad project amid rising copper output in Peru, the company presents a unique exposure opportunity ahead of a potential boom in copper prices. The upcoming months will demonstrate if Chakana’s geological modeling can deliver material high-grade discoveries to bolster confidence and valuations. As Kelley aptly states, “It’s way too early to call what the ultimate impact of that discovery is going to be.” Investors positioning early could benefit disproportionately from the success of Chakana’s exploration efforts should they intersect substantial mineralization where few others have yet searched in Peru.