The following is a transcription of the above video, and The Market Online Canada has edited it for clarity.
Adventus Mining Corp. (TSXV:ADZN) continues to be focused on its El Domo project, a copper-gold project in Ecuador. The company is swiftly moving forward, post-merger with Luminex Resources.
And with a year of growth planned, we thought who better to speak with than the president and CEO himself. Here to talk about Adventus Mining is Christian Kargl-Simard.
TMO: I know we have said this before in our segment, but Adventus Mining is seeing lots of changes right now. Adventus Mining’s website is going through a revamp, but more specifically, what are the plans for the Luminex merger and its various properties?
Kargl-Simard: The merger with Luminex closed at the end of January and that included the closing of $18 million U.S. equity financing. So that equity financing sees us through to the start of construction, which we expect to make a mobilization decision on construction in Q2 of this year.
The Luminex assets bring a very large copper-gold exploration portfolio to Adventus. Combined between both companies, we’re the second-largest concession holding in Ecuador after SolGold. We’re currently reviewing all those properties and our goal this year is to look to joint venture at least four of those with new mid-tier or larger counterparties.
We’re currently talking on six of these properties for additional joint ventures, one of which we hope to announce by PDAC (March 3-6). So, we’re trying to turn that business into a cash-generating business, something that may be able to help de-risk our El Domo project in due course.
TMO: Looking at the El Domo project out of Ecuador, what makes it so significant for the company at this specific time?
Kargl-Simard: It’s the highest-grade undeveloped copper project in the world, so call it the highest margin undeveloped copper project globally, not just in Ecuador. We’ve just received our environmental permits and we expect to be the next copper mine in the world to start construction.
With high margins, this is a significant free cash-flow generating asset and should be able to build a significant mining company on the back of it when we expect production to start early 2026, and hopefully that aligns with all-time high copper prices.
TMO: I know you just mentioned the major permitting milestone that the company hit. So where does the company stand now that it’s February, and what is left to accomplish with that?
Kargl-Simard: The environmental permit is the key one. We spent 27 months advancing that with the government. There are a few secondary permits that are required in the project. We’ve now received two of the five of them but the first two that we received are really big ones.
One is a tailings permit and one is a permit allowing us to discharge into the environment and on top of it we have our investment protection agreement. But those three final secondary permits we expect over the coming months, so the next step to start construction will be the end of the rainy season, which ends at the end of March, some of those secondary permits and a little bit more capital.
TMO: As you mentioned, everything’s moving quite quickly with El Domo now and you mentioned as well in March things are going to start to happen. But is there another timeline we’re looking at, that things need to be accomplished to move the project to a construction decision?
Kargl-Simard: We’re looking to start mobilization around May 1 and mobilization to us is a two-month process where we’re bringing mining equipment in from our contractors Stratcon to project site. Stratcon is a Peruvian mining contractor, so the equipment has to come through Peru into Ecuador. Before we make a decision, we want to have sourced an additional $25 (million) to $30 million.
A bunch of your viewers are going to say, well, that’s equity dilution, I’m going to wait until that happens. Long-suffering shareholders are going to get diluted more and we have many options to achieve that $30 million and turn that in quite a positive for shareholders. So that includes additional debt financing, maybe additional streaming, sale of an asset, M&A.
We’re well into that and we hope to make a decision in conjunction with that May 1 mobilization.
TMO: I know the company has the $241 million secured financing deal with Wheaton Precious Metals and Trafigura. Where does that stand right now?
Kargl-Simard: Those are fully committed funds. We’ve drawn about $18 million of that $241 million so far and the rest is available to us, but we can only start drawing on that money once we have the full capital arranged or in the bank to build the project.
So as mentioned, we’re short a bit, but that money is definitely there and that covers the lion’s share of the capital costs.
TMO: And with the year fully ahead of us. Is there anything else that you would like investors to know or anything you would like to loop back to at this point?
Kargl-Simard: With all the things I just mentioned, the highest grade undeveloped copper project in the world, the next one to be built, we have a construction team in place. We’ve got the majority of the capital costs arranged.
For us to be trading at less than a $0.25, call it 20 per cent of our net asset value seems ridiculous as we’re way ahead of our peer group in terms of being at that stage.
Once in production, we’re looking at the following kind of quick calculation to determine our annual EBITDA: We produce 50 million pounds of copper equivalent a year. Our all-sustaining costs are $1.70 a pound, so choose your copper price and then you can calculate our EBITDA, which will be multiples of where we’re trading at today on an annualized basis. So, it’s difficult to find a cheaper, very late stage development stage company than Adventus.
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