Infinitum Copper Corp. (INFI:TSX) has announced a CA$1.5 million private placement, which it will use to get the drills turning at its La Adelita flagship property in Mexico now that it has closed a joint-venture deal on the Hot Breccia Arizona project.
The company is issuing up to 21.4 million units at a price of CA$0.07 per unit.
A recently closed deal with Prismo Metals Inc. (PRIZ;CSE) will transition Hot Breccia to a 75%-25% joint venture over the next five years, allowing the company to focus on exploring in Mexico this year.
The Hot Breccia solution was an "elegant" one, Caesars Report newsletter editor Thibaut Lepouttre wrote on March 1.
"In a perfect world, Infinitum would have been able to work on both assets," Lepouttre wrote. "But the reality is that even with copper trading at US$4 per pound, exploration stage companies still have difficulties securing funding to be used specifically for exploration, and tough choices have/had to be made."
Last month, technical analyst Clive Maund of CliveMaund.com rated the stock a Speculative Buy.
"Infinitum’s chart looks exceptionally bullish, in good part because of the extraordinarily bullish volume pattern," Maund wrote. "It is not known what is going on behind the scenes, but we can safely assume from this chart that whatever it is, is positive."
For the private placement, each unit consists of one common share and one common share purchase warrant, with each warrant entitling the holder to purchase one additional common share at CA$0.14 per common share for a period of 24 months following the closing date of the offering.
The Hot Breccia solution was an "elegant" one, Caesars Report newsletter editor Thibaut Lepouttre wrote on March 1.
The offered securities will not be subject to a hold period under Canadian securities laws. The closing date is on or about March 31.
"We are looking forward to resuming drilling at La Adelita," Chief Executive Officer Matt Hudson said. "Our 2022 exploration program produced multiple high-grade intercepts which show the deposit is open to the north and at depth."
The Catalyst: A New Resource Estimate
The company is working toward having a resource estimate for La Adelita, which is in the Alamos Mining District, near the Alamo Dorado Mine in Southern Sonora, Mexico.
"The drill bit encountered 24.35 meters (20.60 meters true width) of 1.91% copper (Cu), 2 [grams per tonne gold (g/t Au)], and just under 41 g/t silver (Ag)" at La Adelita, Lepouttre wrote of recent assay results. "This represents an official copper-equivalent grade of 3.71% . . . Needless to say, encountering that type of grade over an interval in excess of 20 meters on a true width basis is excellent."
"Infinitum’s chart looks exceptionally bullish, in good part because of the extraordinarily bullish volume pattern," Maund wrote. "It is not known what is going on behind the scenes, but we can safely assume from this chart that whatever it is, is positive."
The discovery of high levels of magnetite among the high-grade copper, gold, and silver at the site should aid the company in its exploration. A detailed magnetometer survey should help locate more mineralization, the company said.
Hudson told Lepouttre that Infinitum was still processing all its data from the last drilling season at the project.
"We are waiting for two more holes that were sent back for re-assaying," Hudson said. "A lot of work is going into generating this year’s drill targets."
Another hole at La Adelita, AD-22-0019, returned 32.25 meters of 1.01% Cu, 0.52 g/t Au, and 39.69 g/t Ag, or 1.74% copper equivalent (Cu Eq) starting at 36.65 meters downhole in the Cerro Grande zone.
La Adelita is 6,446 hectares and made up of seven mining claims. The company has identified three zones of significant copper, silver, gold, and zinc mineralization at the Cerro Grande Footwall, Las Trancas, and Pericos zones.
It’s just 5 kilometers away is the past-producing silver mine Alamo Dorado, and the copper-producing Piedras Verdes mine is 60 kilometers northwest.
In the deal with Prismo Metals on Hot Breccia, Infinitum received CA$350,000 cash and 500,000 shares from Prismo. Prismo will complete CA$5.5 million of exploration work at the site over the next five years, after which Prismo and Infinitum will have a 75% to 25% JV, respectively.
Demand Pressuring Energy Transition
Companies are rushing to explore for the red metal, also known as "the metal of electrification," because of its conductivity and importance to the new green economy.
According to a report by S&P Global, The Future of Copper, demand is expected to double from about 25 million metric tons (Mmt) today to about 50 Mmt by 2035.
Electric vehicles (EVs) use at least three times as much copper as fuel-burning cars.
"The implications are that high copper prices (relative to history) are likely to continue and will need to be high enough to encourage additional new greenfield capacity or brownfield expansions to come on stream," a copper market analysis by RFC Ambrian said in 2022.
Streetwise Ownership Overview*According to a report by S&P Global, The Future of Copper, demand is expected to double from about 25 million metric tons (Mmt) today to about 50 Mmt by 2035.
"The mismatch anticipated in this study between demand and supply will put pressure on the goal of Net-Zero Emissions by 2050 and will likely slow the pace of energy transition," the S&P report said.
Ownership and Share Structure
About 16% of the company is owned by management and insiders, including Director Ivan Po Kwong Chan with 4.04% or 2 million shares, and Board Chair Steve Robertson with 3.32% or 1.64 million shares.
About 17% belongs to institutions, and strategic investor Minaurum Gold Inc. owns 12% or 6.11 million shares. The rest, 55%, is retail.
Infinitum has 49.5 million shares outstanding, 33.2 million free-floating, according to the company. Its market cap is CA$3.42 million, and it trades in a 52-week range of CA$0.52 and CA$0.04.
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