In this episode of The Capital Compass, we’re taking a closer look at Avrupa Minerals (TSXV:AVU; OTC:AVPMF), a company that operates under a project generator model — a strategy designed to limit dilution, share exploration risk, and create multiple shots on goal for investors.
Avrupa is actively advancing projects across Finland and Portugal, focusing on copper and zinc volcanogenic massive sulphide (or VMS systems) in well-established mining jurisdictions. The company has also recently closed a private placement to fund continued exploration and partner-driven work across its portfolio.
Joining Ricki to explain the model, the projects, and what comes next is Paul Kuhn, President and CEO of Avrupa Minerals. Watch the full video above, or read the transcript below.
Ricki: So, Paul, let’s start with the business model. Avrupa is often described as a project generator rather than a traditional explorer. So what does that mean in practice and how does this approach benefit investors?
Paul: Well, Ricki, mostly it means we get into these attractive copper zinc VMS targets at a very early point in the exploration timeline. Typically, we like to get into well-known and well-endowed mining districts, historic mining districts in stable political areas. It’s been shown many times over that some of the best targeting areas are in and around old mining districts and close to old mines.
They may have been missed by previous operators for whatever reason. So, we have a great starting point, already known mineralization, tons of available information often helpful existing infrastructure and a generally supportive population.
We use our exploration expertise at this point to pick out, acquire, and upgrade the best of these targets. And then we try to JV them to a larger exploration or better yet mining company to move the projects forward.
The incoming partner funds the next phases of work to a point where they may earn into 70% to 85% of the project. We probably continue as the operator for the early stages, but we would relinquish the operatorship to the partner when we get to the PEA or EIS level where we don’t have as much expertise.
In the best situation we hold onto the minority portions, in several projects, rather than putting all of our eggs into one basket. And we can then decide how to move forward on all of these things via some sort of monetization or perhaps even continue forward as the minority funding partner if the project is really good.
At that point we’ve got all of our eggs in many baskets rather than one basket. And this is a real benefit to the shareholder. We’ve put in money from our partners rather than do equity financing. And in the case of our programs over the years, we’ve probably funded through JVs about $36 million Canadian versus equity funding of about $18 million Canadian.
So, over the course of our programs, for every dollar we raise in the market we’ve managed to raise $2 in technical support.
Ricki: Amazing. And so, shifting slightly then, Finland has become a key area of focus for Avrupa. So, what makes this region so attractive, and how does your expanded land holdings fit into the broader strategy there?
Paul: Well, in Finland it’s a great place to first of all look for mineralization. The country is well endowed for gold and base metals and nickel and quite a few critical materials at this point. Where we’re looking for copper and zinc is in the central part of the country.
It’s an area that’s been overlooked through previous exploration since maybe the 1990s. For 30 years it’s been ignored because the gold explorers and then the nickel explorers and then the rare earths and critical metals explorers went to other places leaving copper and zinc alone in central Finland.
The area is called the Pyhäsalmi Mining District. There are two old now inactive mines, large mines that were operated in the district.
And we’ve gone out and staked seven satellite operations or targets to the Pyhäsalmi Mine within trucking distance of the mine. And our premise here in the Pyhäsalmi District, which we think has got lots of potential because exploration did not go beyond the depth of 200 meters.
And it hasn’t had any new style of exploration, like I said, for 30 years. We think that there’s a lot of opportunity in and around the Pyhäsalmi Mine. We actually have two permits adjacent to the old mine.
They’re mineralized, they’re altered, and they would be our first chances for further exploration. In addition to those two permits, we have five other target areas around the district and within 40 kilometers of the mine itself, and the premise is here.
We’d like to find 10 million tons of copper zinc ore within trucking distance of the mine because the concentrator, the flotation plant is still operational and still being still being used, and it cuts down on the CapEx, on the capital expenditures, if you have a way to concentrate the copper zinc ore that we would truck in.
So, it’s a nice situation. We don’t have a lot of competition other than Boliden, which is a Swedish company that’s picked up a lot of area, but we’ve picked up seven mineralized target areas, and we intend to move them forward through joint venture with another exploration group.
Ricki: Great news. Moving to slightly warmer climates now, you’re also active in Portugal where you’re calling in from today. How does that fit into the portfolio as well? Like what milestones should investors be watching out for on that front?
Paul: Well, in Portugal, we discovered a copper zinc bearing massive sulphide deposit, a volcanogenic, massive sulphide deposit in 2014. We’ve worked it intermittently since then with various partners. The last partner decided to move on early to middle of last year due to the vagaries of the Portuguese Mining law.
We’re at a point in our project that we’ve had to apply for a mining license for our project there. It’s called Sesmarias, and it’s really not quite ready to be mined. We need to do more exploration there. Our previous partner didn’t want to be involved in any further exploration at the time.
The Mining Bureau has let us know that this will work if we can find a new mining partner, and that’s what we’re doing right now is working on that. But it’s a nice deposit. It’s copper and zinc rich in the central area. We believe it’s zinc rich in the northern and southern extremities, but we haven’t done a whole lot of exploration other than in the central zone.
And I believe we’re going to get a first mineral resource estimate, a 43-101, and maybe a JORC compliant resource estimate sometime towards the end of the first quarter of this year.
Ricki: And so, Paul, you recently closed a private placement too, so how will those funds be deployed and how do they support your partner based exploration strategy across the portfolio?
Paul: Yes, we recently raised $570,000 on the market in Vancouver. And some of the funds are going to be used to actually advance the partnership search in Portugal and for the portfolio projects in Finland. Finding a partner for both programs is essential in the coming months and we’ve got to have some funds to be able to do that.
We also hope to upgrade a couple of the Finland properties a little bit before we do get a partner.
We do have an active joint venture in Kosovo covering the Slivova Gold Project which we discovered in 2013. The program there has been on hold for the past year due to inability of the Kosovo Mining Bureau to review the project and our request to extend the exploration permit.
However, there’s a new government in the country, which should propel the Mining Bureau to get back in business so we can get the Slivova project going and we’re going to need a little bit of support to do that.
We’ll probably have to help fund the mineral resource estimate there. The last one was done in 2023 when gold was $1,850 per ounce and now it’s at $5,000. Things have changed quite a bit since then.
The partner, Western Tethyan Resources is 76% owned by AIM/ASX-listed Ariana Resources, and Ariana is a capable small mine operator, and we look forward to having them as our mine operator for the Slivova deposit in Kosovo. It’s I’m pretty sure we’ve got a good opportunity to become a miner there. And we’d like to monetize our portion of the project.
Ricki: Well, it sounds like you have a lot of plates spinning. So, as you balance those multiple projects and partnerships and jurisdictions, what are the key priorities for Avrupa over the next 12 months, and where do you see the most potential for value creation?
Paul: Well, there’s three. Find a partner in Finland, find a partner in Portugal, and monetize our 49% holding in Kosovo. All three of those milestones will move us forward. Once we get the JV partner going in Finland, we can start on our exploration around the Pyhäsalmi Mine with those two permits that I mentioned earlier.
In Portugal it’ll take a little bit more time to get that going, but we’re looking forward to getting a mining partner as soon as possible and pushing the Sesmarias mining license application through the Mining Bureau.
Ricki: Well, Paul, thank you so much for joining us and walking us through the Avrupa Minerals story.
Paul: Thanks Ricki, great to be on with you. Thanks for having me.
Once more, that is Paul Kuhn, President and CEO of a Avrupa Minerals. For more information, visit avrupaminerals.com.
Join the discussion: Find out what the Bullboards are saying about Avrupa and check out Stockhouse’s stock forums and message boards.
Stockhouse does not provide investment advice or recommendations. All investment decisions should be made based on your own research and consultation with a registered investment professional. The issuer is solely responsible for the accuracy of the information contained herein. For full disclaimer information, please click here.
