From Pan to Copperstone: Minera’s Next Growth Phase with a New PFS

[MUSIC] All right, good evening everybody. Welcome back in the mining stock daily. Late addition to today's corporate updates because we got breaking news from Manera Alamos, the pre-feasibility study for their copper stone gold project in Arizona literally just dropped about 90 minutes ago from this time of recording. So we are connecting here with CEO Mr. Daren Blasuti. They do trade on the venture with MAI and on the OTC QX with MAIFF. The numbers, they look really good. So Daren, good to have you on. Glad we can make this happen. The copper stone PFS base case, $3,500 gold shows. 108% IRR, 154% NPV that's world class in my eyes. Walk us through what changed from that 2025 PEA until now. Sure, and we've got a bit of a treat here. We've got Daren Connigan with us in Kevin Small. So both guys who have obviously done all the hard work to get this delivered and now they've got the real hard work is to build it. But they're here too to correct me. But I think the most obvious change is that we've gone to a level of study that's within plus or minus a very small percentage on capital and operating. And fully, we've got a full mind plan stoked out. We now have reserves, not just resources and inferred. We've got mind eluded grades. And so this is a really thought out program. And if you thought about comparing the PEA to the PFS, we'd have a 12 year PEA mind life instead of a six, which we're showing because eventually we're going to convert a lot of those MNI resources and some of that inferred to reserves. But right now, as a point in time update, as we take a snapshot, we look at gold prices. The other thing that's been incredibly hard, but very helpful to all of the stocks, of course, is when Darren started this PFAS gold was not at $4,500. It was at $2,500 and you could imagine trying to put a plan together with a moving target of where you want to go. So the resource was done at $3,000 gold. We've done some economics at $3,500 or $4,500. And obviously, if you used $4,500 gold, we'd be converting a lot more MNI. There's some drilling to be done to convert some of that. Well, what we have is on a snapshot basis, what you just described, I think, as a world cost project, triple digit IRRs, eight months payback on an after-tax basis, all the capital going in. So when you compare it, you're talking about going from 36 to 58. So again, the reader wants to know, why is the capital gone up? Well, the capital's gone up because we're putting in 1,000 ton of day mill and we're gonna make the access points, the portal and all the development bigger, then we would have, if we would have, on 600 tons a day. So that adds to the cost. The second thing that adds to the capital cost, of course, if you get the chance to read through the press releases, that when by the time the mill, which is the long lead item, gets in and installed and commissioned, Kevin and his team will have developed three months of gold production and have probably six or seven operating stoves in. So normally when you build these kind of projects and you're developing through, the mine is ramping up to be able to fill the process, to get that process plant filled. But because of the tremendous economics and the four kilometers of underground development, we're gonna start the mill first, refurbish it, get it going, and then the mine development can start in a few months and we're gonna have three months of stockpile. So that really derisks that. And so in the capital, there's $21 million of capital there. But a lot of that is actually developing into stoves and getting production ready to go. And so you've got this deris situation where you've got the crushing stuff there. We've now got the mill down and you see the pictures in the website and you see it on the press release, you can see all the mill starting to get down. The long lead time is to refurbish that equipment. And then once that equipment starts to go, we've got to order a bit of new equipment. And then when the mill starts going in, then the underground development will happen. So you could probably take two thirds of that development out in that capital. So what the capital's really increased because of the size of the mill, some of the size of the equipment we're gonna put in and how much we have to make the portal and some of the development bigger. And then of course, you got to count for the three months of stockpile all in that mining cost. So again, I think maybe there's a look at DK here, whether there's 10 or 15% cost creep, but the rest is really, you know, really what you're seeing here as a much bigger project. - Yeah. I did misspeak here in the intro. I apologize for that. The base case economic using the $3,500 gold, the NPV's 374 million with an IRR of 108%. The spot gold price of we use today is $4,500 or wherever we closed at today, that NPV jumps to $537 million with an IRR of 154%. So I apologize for being incorrect in my intro. But there, let's talk about it. I mean, with those numbers, obviously the board was not hesitant to really just approve the quick construction and decision you noted that in this PFS announcement in the news release, fast tracking construction timeline with the mining contractor mobilizing in two to three months with a mid 2027 production. In a market where timelines, delays, or common, what does the company have in store here to make sure they can stick to that timeline? - Well, I think again, the long lead item is the mill. And so one of the challenges with delivering the PFS as well as building the mine is we've got a refurbish a bunch of equipment and it's not always simple to figure out how long it's gonna take to refurbish some of this equipment. Sometimes it goes a lot faster, sometimes it goes a little longer. So I think the way the team has described it is we've got a 12 month build period. That doesn't mean that we, you know, the mill won't be ready earlier, but it also means, but I think as a result of having all the equipment on site and having to order very little equipment, I think when you think about blow outs of these big projects, one, very small team on site until the mine gets operating. And two, you're talking about a month or two the other way, it could be 11 months, it could be 13 months, but it's not gonna be 25 months or it's not gonna be 14 months. The challenge is, again, we're for a small company, a lot of work to get the PFS out. And then, you know, we've got a bunch of equipment as you can see with the pictures down to site. And that equipment's gotta be refurbished. And you'd be shocked to know that in the engineering community there's not a lot of people that know how to deal with, not something that's completely off the shelf that has a number they can pick from, you know, whatever engineering supply or whatever supply company. So that estimate took a little bit longer. And again, I think the de-risk aspects, and I've said this before, we're looking at another property in Oregon that's, you know, 16 months to get built and $145 billion of capital to build a 650 ton of day mind. We're gonna build a thousand ton of day mind, 600 the first year, a thousand the second year for the processing. We're gonna build that thousand ton of day mind in 12 months for 58 million. So the challenge is the savings, and the massive savings you're getting, there's a little bit of uncertainty in the timeframe and we still got a few months to work out. But I think we're highly confident that, you know, by the end of the second quarter, you know, we're gonna, we think that mill will be up and running and we'll be processing. And again, the other thing that I would say that's very different is when the mill is ready, the or will be ready to go and the mill will be running at relatively, you know, that's 600 tons a day. So again, I think, you know, I think, you know, if we blow out the cost by 15%, it's seven and a half million dollars, you know, like the small nature of the capital cost and the amount of development we're putting in, I think really takes the cost of a big overrun out of the way. But I think you're right, the issue is a bit of time and I think by the end of the third quarter, we're gonna have a much better estimate of timing, exact timing. But again, because all this equipment's gonna start getting refurbished right away and then we'll have a much better view and we'll find out that hey, the stuff that we thought was gonna take longer will be less or this piece that we brought, we actually gotta get a new one. So let's go do that. And I think again, a lot of this stuff is pretty simple off the shelf. There's not a lot of piping there and it's a pretty simple plant, right? Maybe just describe the plant for everybody out there if you could. >> Yeah, I think the biggest difference is all the infrastructure and mind development work that's already been done. So a lot of those-- timelines where things get blown out can be just the mind development taking longer than plan whereas in this in that in this case it's it's not it's actually the short shorter piece to get done so having all the site infrastructure the extent that it's there is the biggest security blanket that things don't take a lot longer than than plan that's usually where these program projects go sideways and it's the bulk of that background stuff is there already. So I want to go back and you mentioned kind of the resource conversion and what this report shows is a six-year mind life but that's not the true life here of Copperstone. Maybe that will get lost in the fray here in context but maybe you can break down on getting back why the long you know why 12 years is still kind of on the horizon here for the project. Well strictly speaking we we actually put together 600 plus thousand ounces of underground accessible material and so it's not not just the 300,000 we put in the mind plan it was actually 600,000 plus and so that was that was all piece together and quantified based on it being underground accessible it's just what we decided to do at least for this point in time and especially given how much the gold price keeps changing was we focused on the portion the material that was accessible right now from the from the existing ramps and the bottom of the old pit so the 300,000 something ounces is just that material the other 300,000 ounces is still accessible to do develop from underground that's why it's in the resource right now but it's it's the big the majority of it is in areas that are actually above where those where those existing portals go in so you know if we were going to do this just as an underground mind we could have ramped in from surface to access that material too and we would have ended up at the 10 the 12-year life that we're talking about here we we made a decision for the at this point in time that it's better for us to rather than spend all that time right now to to put that into the plan and we'll take a look first at how much of that can be accessible plus more low grade material around it in by just extending the old pit that's there and accessing it as an open pit operation but it's your 100 it's 100% right if if we were strictly speaking just comparing this like the PA was done last time we have now like a 12-year-min life at this rate we've only we've just put the first half of it into the into the plan so far because that's the material that's directly accessible from the existing ramps and because we think a good chunk of what's left can be better accessed from a pit that we're going to work on as we go through this year the capex for copperstone in this pfs comes in a little over 58 million dollar capex whopping 58 million dollar capex Darren you and I chatted I think just last week on your q1 financials and talking about how pan the the pan cash flow has a capacity to fund copperstone plus that revolving credit facility I think the critical the critical question now I mean this is always the overhanging question like are you absolutely committed to zero equity delusion to fund this copperstone where are the economics at today yeah so just a recap Trevor 46 million dollars and cash at the end of q1 we're we're probably generating now again we haven't talked about this but with prepaid ounces gone and the remaining 3,000 forward ounces that were at 2120 gone we're generating 15 to 18 million dollars of free cash flow at pan and we've got 30 million dollars of revolver capacity so from our perspective we can build this end gold rock which again we've got some work to do before we're gonna we're gonna announce that but in our plan a future planning as we get that pf that study done we can build both of those fines without any in equity delusion now we had a little bit of equity delusion when we when we were getting the the the royalty buyback from serradoro that's because our friends at orm at who held the security that we needed to give to bank and Nova Scotia national bank wanted stock because they have seen the plans and they know what we're going to be generating so they wanted stock in in relation instead of cash so again are we gonna as our whole business never gonna add more than you know the 110 million shares that are outstanding now well we're gonna limit that materially but we don't need any equity we will not be doing an announcing an equity financing in relation to this gold would literally have to drop lower than three thousand dollars and we could still potentially build these two minds without equity delusion very good so that's the plan i i don't know how i could be clear i know there was some yacht who's on twitter commenting about what we would and wouldn't have to do again the bank of Nova Scotia and the and national bank have a lot more thoughtful process and have technical guys go and look at sites i would place more faith in them than than guys sitting behind computers typing words on the on the internet so well if everything moves according to planned here guys um if you take a look at late 2027 let's you know looking to the future here 80,000 ounces a year production from both pan and copper stone is that on the table is that something that is probably a two yeah so we're trying to i think the way we market it to an investors we're going to exit 2026 at around 35,000 ounces of production uh-huh if you look at our plans for copper stone next year starting you know at the end of q2 you look at um what we want to do with gold rock and how quickly we can advance that satellite pit which we believe we can be putting ore on the leech pad by the end of q3 2027 and hopefully earlier i'm looking at the two guys here hopefully earlier um then i think we're exiting 2027 at an annualized rate of 120,000 ounces a year and if we can get serodoro permit then we're exiting 2028 at at you know 170 to 180,000 ounces so that's obviously an annualized run rate not what we're going to do in that in those years but like that's the kind of growth we're talking about on a base of 110 million shares right? So again i think that's that's the growth that we see if you look at our presentation on our website you know the analysts have done production keger and what's available out there uh between the 2026 and 2028 time frame were tied for the best production keger like 68% and if you include serodoro which is the only unpurmitated asset in 2029 where the highest keger from 2026 in the entire mining and just gold mining industry so that's what you're buying you're buying us at a.2 times nav based on our numbers in a rising gold environment with projects uh you know that are within our control to be built because we have the cash flow and we definitely have the team to do it. The so you have another technical report the gold the gold bar technical report is kind of on in the queue for later this year is copperstone also like are you going to do a bankable feasibility study on copperstone or is this is this it like knowing that you won't be looking for funding you know you can do it all internally is this is this the last technical report for copperstone or will you be publishing? Well there'll be one on the open pit at some point but from from an underground perspective we've got everything we need I mean we had the we got the money from scotion before we did the pfs right right so ultimately we're an operating company we're not we're not a company that's out there trying to fund stuff so the answer is that's done and then on gold rock I think you called gold bar but gold rock because I know I do it too don't worry there's too many assets floating around on gold rock the plan is to get first the MRE out a mineral was our estimate on the open pit which we hope to do hopefully by the end of the third quarter and then on the basis of that we don't because we're we're hopefully because we're mining a satellite deposit from pan we want to and we're talking about building a leech pad and stripping some some stripping and mining from there you know we're going to do the least amount of study work we can because we know the economics it's it's double more than double the grade of pan so the thing about pfs is they take a lot of time and energy and management time and I think you know with the with the team and the resource already there you know the plan would be to probably put out an MRE another resource update on on pan and gold rock and then hopefully the most minimum amount of studying we could do to kind of get that thing into construction for the board. Darren, I don't know if I'm overstating that, but, you know, a PFS is take a long time and we're talking about a pit that's eight miles away from the southern, you know, nobody did a, nobody did a PFS on the southern pit from the North pit at, at, at, at pan. They just went and started working on the South pit and doing it. We, we hope that we could do the same thing. We got to get ourselves comfortable. We got to get our board comfortable and we have to get our lenders comfortable. But all of those things can be done. The question is we would like to not do that report because we want to get going as soon as we can. We're going to definitely do an updated mineral resource estimate. But I'm hopeful that we can, we can get on that without having to wait for a PFS. Okay. I'm going to wrap up this class or this interview with one more question. And I'd actually like to give it straight to Mr. Connigan here because, you know, I've been a shareholder of Manera for many years. We've covered the, the evolution of Manera for many years. In fact, the eight years ago Manera was one of the first stories we began covering full time on mining stock daily. And it's, it's always, it's kind of been the story where it's gone through times where the investors waiting for something to happen, just waiting, waiting, waiting. And now it seems like a lot of that execution risk has been significantly taken off the table. In fact, you and I could probably have a conversation on mining stock daily, almost every week, the, the speed at which the team is putting things forth. And that's a huge testament to this new fervor of this company and where it's going. Tell me about this growth thesis of yours. And as this, you know, the execution laid out in front of you and how, you know, this is a brand new company, but, you know, it's a newer version of Manera Alamos. In fact, it's not even going to be Manera Alamos here pretty soon, but just maybe talk about that evolution from your words to talking about, you know, just removing that execution risk here. And all of a sudden, it seems like a blink of an eye. I, I mean, look, I, I think this is the, the similar kind of development plan that we started with some years ago. And it's the same largely the same tactical team, the same group that's done this many times before. And, and we all, we all ran into the same issues. Anybody was operating in Mexico over the last number of years where, where, you know, the permitting changes there and delays were, were, what caused the problems, right? And, and so I think the difference now is, you know, we've been able to, it, we've been able to come into a circumstance where the permings not an issue anymore. And so the speed that we're able to roll things out and get going and get things constructed is as, as was originally the, you know, the plan before we all, we all ran into the problems that we had in Mexico and that hopefully will be coming out of shortly in Mexico. So, I mean, I don't know if I, how much more I can say to it other than that, I mean, it's, it's largely the same, you know, the same people and the same capabilities. It's just we've, we've managed to emerge from the, the permitting issues that everybody was dealing with there for the last number of years and, and with that gone, we'll be able to piece things back together as, as we were working to do before we all hit that wall. Very good. Gentlemen, thanks so much. We are recording here Wednesday evening. I'm pretty excited to see how the market opens with your stock here tomorrow morning. I think it'll be a good time to be watching the tape here. I appreciate your time. Congratulations. Incredible, incredible report here in the cloud. We could connect and, and get your comments on it. Great. Appreciate it, Trevor. Thanks a lot and always appreciate your support. Yep. Appreciate it. All right, guys. Manera Alamos. Thanks, guys. Yep. For the next about month, I guess, still trades on the TSX venture with MAI and on the OTC, QAX with MAIFF under that name and there Alamos until most likely the branding change moves to mining America's ink. We'll be back tomorrow morning with the morning briefing, everybody. All right. Be well. The information presented should not be considered investment advice. Mining stock daily and affiliates are not responsible for any loss arising from any investment decision. Any connection with the material presented herein. Please do your own research or speak with a license of financial representative before making any investment decisions.