Metals One (MET1) has invested C$500,000 into Fidelity Minerals Corp, a porphyry copper-gold junior that has assembled a portfolio of copper, gold and silver projects.

The investment is being made by way of a subscription for a total of five million shares at C$0.10 each in two tranches, as part of Fidelity's C$1.5 million.

This will result in Metals One owning approximately 13.61% of Fidelity. 

The first tranche of 3.5 million units has already settled, resulting in Metals One owning an initial 9.93% of Fidelity.

The second tranche for an additional 1.5 million units remains subject to regulatory approval.

Attached to each share is a one-half transferable warrant, with each full warrant exercisable at a price of C$0.20 per share. 

Metals One investee company Lions Bay Capital also participated in the placement, and will own 36.66% of Fidelity on completion of the second tranche.

Fidelity's flagship asset, the Las Huaquillas project, is an advanced-stage gold-copper-silver project in northern Peru, approximately 14 kilometres south of the Ecuador border. The project lies within the prolific Cajamarca metallogenic belt, host to several world-class deposits. 

Las Huaquillas boasts a historic, non-compliant resource of 6.57 million tonnes grading 2.12 grams per tonne gold and 25.2 grams silver, for a total of 446,000 ounces of gold and 5.3 million ounces of silver.

There is also considerable exploration upside at Los Socavones, Cementerio and San Antonio. 

Fidelity intends to use the net proceeds of its private placement to advance its Peruvian exploration and community relation programmes, and for corporate working capital purposes.

This includes renewal of the mining land use agreement with the landowners, gaining access to the adit for sampling, assays, and verification of historical geological data, conducting bulk industrial sampling with over 1 ton per sample, and securing approval for production with mining permits allowing up to 350 tons per day.  

Fidelity's executive chairman is John Byrne, the architect and former executive chairman of Western Canadian Coal, which had an initial market capitalisation of C$50 million when he started, and was subsequently sold for over C$3 billion in 2010.

"It's rare to find opportunities with pre-money market valuations around CA$2 million which provide meaningful exposure to such large-scale copper-gold-silver epithermal and porphyry systems in proven regional settings,” said Dan Maling, managing director of Metals One. 

“The opportunity for Fidelity, and therefore Metals One, lies in rapidly advancing the Las Huaquillas project through a formal resource definition of gold, silver and copper in northern Peru, and progressing it towards production. We look forward to exploring further opportunities with the team at Lions Bay and unlocking the underlying project values across the wider Lions Bay portfolio."

 

View from Vox

 

John Byrne cut a big figure in the mining and exploration work during the boom of the early part of this century, so it’s interesting to see him coming around again for another go. Metals One’s involvement looks like a useful bet. In a rising market for gold, silver and copper, investing in an undervalued but advanced stage project that provides exposure to all three metals makes sense.