Thursday, July 7, 2011

Peregrine Metals (, a value copper explorer

So I get this mail about copper juniors this morning and rather than answer via mail, here's the thought in blogerated form for mailer TG. The question was about copper (yep, I like the sector, have been generally bullish Cu for moons and it must be very frustrating to be a Cu bear right now...he says giggling at the idiots with their spideysenses) and where to look for a value exploration play and my best answer is one I've followed for a while now. What I like about Peregrine Metals ( is:

  • Its size. We're already in the multibillion Lb Cu category here and its main Altar deposit shows every sign of getting bigger. If 10Bn lb Cu + is considered the world-class size of deposit, that's what you're looking at here, no sweats.
  • The close-by satellite targets are looking very promising, with more than intriguing gold intercepts already reported. 
  • The location is remote but pretty good infrastructure wise, with lots of room to build a mill, water unlikely to be a problem, electricity lines due to be strung a few Kms away soon, roads in good shape, environmental footprint of a plant will also be lower than in many other areas.
  • Management is of the no-nonsense, no pushyhype, professional get-on-and-explore variety, the kind of people to look for to create longer-term value instead of shorter-term BS.

The potential drawbacks are:

  • In Argentina, because it would already be triple its current price if the borderline between Chile and Argentina were set just a few clicks further East.
  • Most of the resource is inferred, which is normal for this type of early stage exploration but does mean there's decent money left to be spent on drilling.
  • The enargite found may become an issue in the event that you actually mine Altar and produce a concentrate. I don't consider this a big fat red flag right now, but it's one thing to keep an eye on as the project is moved forward.

So that'll do for a start, go DYODD if you think this one has legs. Disclosure: I'm long at roughly current prices, have held through the recent up-then-down and I'm in for the medium to long haul. It's also been reco'd to IKN Weekly subscribers.