Interview with Ben Pullinger, Senior VP Exploration of ATEX Resources Inc.

Our previous interview: https://www.cruxinvestor.com/posts/at...

Recording date: 15th March 2024

ATEX Resources (TSXV:ATX) is a Canadian exploration company focused on advancing the Valeriano copper-gold project in Chile. With a large, high-grade resource already delineated and recent drilling pointing to significant expansion potential, Valeriano is emerging as one of the most exciting new copper discoveries in recent years.

The project boasts a resource of 1.4 billion pounds of copper at an average grade of 0.7%, including a higher-grade core, positioning it as one of the largest and highest-grade undeveloped copper projects globally. Importantly, recent drilling has intersected a continuous zone of high-grade "early porphyry" mineralization, demonstrating potential to substantially grow the resource.

ATEX has already completed over 30,000m of drilling at Valeriano and is currently executing a fully funded 15,000-20,000m follow-up program aimed at expanding the resource and advancing the project to a Preliminary Economic Assessment (PEA). The company is targeting a multi-billion tonne resource with a higher-grade underground component, pointing to robust economics.

Valeriano is situated in a well-established mining district in central Chile, benefitting from excellent access and infrastructure. The project is located adjacent to several major copper mines and development projects, highlighting the potential for consolidated infrastructure and operational synergies.

ATEX is led by an experienced management team with a track record of exploration success and value creation. The company is well-funded, with approximately C$10M in cash and a strategic partnership with Glencore, providing access to additional capital and technical expertise as the project advances.

The company's timing appears ideal, with the copper market projected to face a severe supply deficit over the coming decade. Copper demand growth is poised to accelerate, driven by the global energy transition and electrification, while a lack of new mine development threatens to constrain supply. As a result, copper prices are forecast to exceed $5/lb, more than double the incentive price required for most new projects.

In this context, ATEX offers a compelling investment opportunity - exposure to a rare, Tier 1 copper development project in a top jurisdiction, substantially de-risked and poised for significant near-term growth. With a market capitalization of just C$70M, the company's valuation does not yet reflect the scale and quality of the asset.

As ATEX continues to deliver drilling results and advance the project over the coming months, the company appears well-positioned for a re-rating towards the valuations of more advanced development peers. Longer-term, the Valeriano project will likely require additional capital and technical expertise to develop, positioning the company as a highly strategic acquisition target.

The main risks to the investment thesis include volatility in commodity prices, operational challenges in an isolated and high-altitude setting, and potential delays or increased costs in permitting and development. However, these risks appear well-managed and are more than offset by the project's compelling upside potential.

In summary, ATEX Resources offers investors a unique opportunity to gain exposure to a world-class copper discovery in a top mining jurisdiction. With a large, high-grade resource, exceptional exploration upside, and a favorable macro backdrop, the company is well-positioned to create significant value as it advances the Valeriano project. For investors seeking exposure to the copper sector and the energy transition theme, ATEX warrants a closer look.

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