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Universal Copper (TSX-V:UNV, Frankfurt:3TA1) has expanded
its horizons, literally, with Wednesday’s announcement that the TSX
Venture Exchange has approved a deal between Universal, Max Resource
Corp and a Max subsidiary, to acquire a portion of
Max’s Gachala Copper Project in Colombia.
First made public in February, the asset
purchase agreement involves UNV taking ownership of seven mineral
license applications comprising the North Block of
the Gachala Copper Project, located 60 kilometers east of
Bogota.
“We see the approval of this transaction as a very positive step forward
in the very carefully planned growth of our Company. Our technical team feels
Colombia in general and Gachala in particular is a fantastic
copper frontier with excellent potential for future copper discoveries,” says
Clive Massey, Universal Copper’s CEO.
To obtain the seven claims, Universal Copper,
formerly Tasca Resources, will issue Max 6 million shares at an
approximate value of $375,000 (UNV closed at 6.5 cents a share on Wednesday).
On Feb. 26 Tasca announced a name change to Universal Copper,
and a two for one share consolidation (ie. the number of outstanding shares
were cut in half).
When all is said and done, UNV will have about 42 million shares
outstanding, with Max taking a 14.3% ownership stake in the company.
Gachala
About $50,000 of the transaction’s value has been dedicated to a first
phase of exploration at the North Block of Gachala, a 53,538-hectare
sedimentary copper project owned by Max Resource (TSX-V:MXR), the
company exploring
for conglomerate gold in Colombia’s Choco department.
Max will retain three-quarters of the Gachala Copper Project
(40,258 ha) as Universal Copper begins exploring the North Block. The deal
for UNV to acquire the North Block was finalized on April 24.
Two of the seven mineral license applications are contiguous to an area
where historical exploration returned rock sample values ranging from 1.6% to
7.82% copper. These days anything above 1% is considered high-grade
copper.
Rio Tinto did stream sampling and limited rock sampling in 1999.
Sedimentary-hosted copper mineralization in Colombia is similar to the
large-scale, near-surface copper mineralization found in Poland and Zambia,
including the recently-discovered Kamoa deposits totaling 1.7
billion tons grading 2.5% copper.
The Gachala Project underlies a 250-km by 120-km belt of
Devonian Cretaceous rocks in a geological setting believed to be analogous to
the Zambian copper belt. This belt hosts Zambia’s “Big Four” copper mines -
Barrick Lumwana, FQM Kansanshi, Mopani and KCM (Konkola Copper
Mines) - which account for around 80% of Zambia’s annual copper production.
We know that Cretaceous-age rocks are conducive to sedimentary copper
deposits.
Sitting at the edge of the Andean Copper Belt, which produces about 40% of
the world’s copper, the Gachala Project’s 30 claims cover 107 km of
the highly prospective contact between the Devonian-Permian red beds and
overlying Cretaceous reducing black shales, one of the settings typical of
sedimentary copper deposits.
The North Block’s seven claims cover 48 km of this contact.
Sporadic historic exploration throughout the middle 5,625 sq km
of the Sedimentary Copper Basin has identified several areas of copper
mineralization, a number of which appear to lie on or near the Gachala project's
mineral license applications.
A
technical report filed by Universal Copper at the beginning of June
recommended that rock and soil sampling follow a Long Wave Infrared Imaging
Survey (LWIR), which identified copper anomalies associated with 40
kilometers of prospective unconformity between Devonian- and Cretaceous-age
sediments.
Poplar
Originally discovered in 1974, the Poplar Project southeast of Houston,
British Columbia has been heavily explored by a number of companies
including BHP, the world's largest mining company. Over 30,000 meters have
been drilled, in close to 300 holes. A number of the holes bottomed
in mineralization; the potential deposit delineated so far is open at depth
and along strike at surface.
An NI 43-101-compliant resource shored up 220 million tonnes of copper at
0.31%.
Universal’s
2019 exploration program at Poplar will include prospecting,
mapping, soil and rock sampling, focused on the western part of the property
where a forest fire last year likely exposed a number of mineralized
outcrops.
UNV will also be guided in its exploration efforts by three holes drilled
in late 2018. The drills cut mineralization consisting of disseminated
pyrite/chalcopyrite, and stockwork vein to veinlet pyrite, chalcopyrite and
molybdenite.
The best results were:
- a 30-meter interval of 0.554% copper (Cu), 0.027%
molybdenum (Mo), 0.104 grams per tonne (g/t) gold (Au) and 4.44 g/t
silver (Ag);
- a 27-meter interval averaging 0.643% Cu, 0.030% Mo,
0.146 g/t Au and 2.62 g/t Ag; and
- 0.330% Cu, 0.002 % Mo, 0.118 g/t Au and 3.46 g/t Ag over
151.10 meters.
For perspective, most copper mines in BC are under 0.4% copper, so the
grades are above average.
Before it drills the 62,000-hectare land package, Universal’s team is
ground-surveying gold targets identified during previous exploration
programs, and by a long-wave-infrared (LWIR) survey completed at the end of
2017.
A key takeaway from the survey was a direct correlation found between the
Silver Queen property, owned by New Nadina Explorations, and the
Poplar deposit, particularly the identification of sericite, an alteration
mineral frequently associated with hydrothermal mineralization, such as vein
and porphyry deposits.
Porphyry deposits are usually low-grade but large and bulk mineable,
making them attractive targets for mineral explorers. Gold, copper, silver
and lead are among the metals found in porphyries.
British Columbia is known for its low-grade but large copper-gold
porphyries including Highland Valley, KSM, Prosperity and New Afton.
Princeton
Adding to Universal Copper’s project pipeline, earlier this month the
copper junior adjusted an earlier option agreement it had
with Canarc Resource Corp and Sydney Wilson, regarding the
Princeton gold property in southern BC.
The 14,650-hectare project is in good company. It lies11 km south of the
producing Copper Mountain copper mine, 95 km
from Westhaven Ventures’ (TSX-V:WHN) Shovelnose property, and 35
clicks from Princeton, a good-sized hub for labor and mining supplies.
Under the new
option agreement, Canarc has agreed to spend $490,000 in
exploration over the next two years, issue 375,000 of its shares and pay Universal
$25,000 cash, to earn a 75% interest in Princeton.
Clive Massey, Universal Copper’s CEO, said that optioning off Princeton is
a good move for UNV as it pivots toward copper exploration:
“We have always felt the gold veins at Princeton represent an excellent
geological target. With Universal’s shift in focus to copper, we are ecstatic
to have the great explorers at Canarc bring their expertise to the
Princeton Project and fully expect them to meet with continued successes.”
Previous work at Princeton highlighted a quartz vein assaying 217 g/t gold
over 0.9 meters; a second sample 3 meters along strike that assayed 99.7 g/t
gold over 0.9m; and two angular quartz float samples that returned 11.5 and
108 g/t gold.
Mineralization is found mostly in quartz veins ranging from 0.3 to 1.8
meters wide.
This month, Canarc is expected to start an exploration program
at Princeton which includes prospecting, mapping, sampling and trenching of
the gold vein prospects, as well as evaluating geochemical and geophysical
methods to detect buried gold veins. The property is permitted for 10
drilling sites and 50 trenching sites.
The team
With two great copper projects and a gold project under option, Universal
Copper has its work cut out if it wants to impress the market with
exploration success. The junior’s chances are boosted significantly due to
its stellar management team that brings decades of combined mining industry
experience.
CEO Clive Massey has been the CEO of a number of junior resource
companies and coordinated successful marketing program for Lumina Copper,
acquired by First Quantum Minerals for $470 million in 2014. Director Wesley
Pomeroy is a 30-year professional geologist with an MBA. Two geologists serve
on the technical advisory board, including Tim Henneberry who has
37 years experience in both exploration and mining production, at the senior
level, and Ricardo Valls, who has spent nearly four decades managing all
phases of the exploration and mining cycle.
Wesley Hanson was brought onto the board of directors in May. Another
professional geologist, Mr. Hanson has held several senior positions in the
mining sector, bringing over 32 years of industry experience, including
President and CEO of Noront Resources (2009-12), VP Mine Development,
Western Goldfields / Silver Bear Resources (2006-09), Director of Technical
Services, Kinross Gold (2002-06) and Project Geologist, SNC-Lavalin Engineers
and Constructors (1999-2002). He is currently COO and technical advisor
to Unigold Inc.
Conclusion
Just five months out from a name change and a shift in focus to copper, we
see that Universal Copper means business. We like that Universal already has
two very prospective copper projects to get going on - one of which has
geology analogous to such monster copper mines as Kamoa-Kakula, the
largest undeveloped high-grade copper discovery in the world.
Its Poplar project in British Columbia has seen a lot of historical
drilling and it comes with a resource - meaning Universal is able to skip
that step and move straight into proving up reserves and starting a PEA. The
prospect of finding a porphyry among BC’s jumbled copper-gold mineralization
is very exciting.
And we have the potential for a high-grade hit at Princeton, which has
seen some bonanza grades in the quartz veins, albeit in short intercepts so
far.
Universal Copper has a bulked-up treasury after a $2.1 million financing,
more than enough to complete the $1 million budgeted for exploration this
year.
We like the company’s very experienced management team, who is knee-deep
in geology, bringing knowledge of both exploration and mining to UNV.
Finally, we like the company’s tightly held share structure with just 35.9
million shares outstanding, not including options and warrants. Max owning
14.3% of the shares is a good sign; it minimizes the risk of share
dilution.
For all of these reasons I have UNV on my radar screen.
Universal Copper Ltd
TSX-V:UNV, Frankfurt:3TA1
Cdn$0.065 July 18th
Shares Outstanding $35.9m
Market cap Cdn$2.3m
Universal website
*****
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