Anatomy of a copper-gold discovery

San Matias is a name rapidly penetrating the copper and gold universe, and one all eyes are following. Paul Harris reports from Colombia
Anatomy of a copper-gold discovery Anatomy of a copper-gold discovery Anatomy of a copper-gold discovery Anatomy of a copper-gold discovery Anatomy of a copper-gold discovery

Cordoba Minerals has some 27,000ha of mining concessions and applications to its name at San Matias


With one in a thousand exploration projects finding something interesting, and of those, one in a hundred finding something economic, there is the growing expectation that San Matias could be one of these rarities, and more, a potential major district discovery.

That feeling has led project operator Cordoba Minerals to the top of the copper stocks this year, rising a meteoric 319% since January from C$0.16 per share (US$0.12/share) to C$0.67/share. Drilling is ongoing and an initial resource is expected in the June or September quarter.

The story of how San Matias got to this stage is an example of the grueling effort, diligence, determination, deal brokering and management needed to build a discovery into a world class project.

When CEO Mario Stifano and his team began looking for projects the Cordoba department of Colombia was of interest because of its relatively flat lying terrain and the fact it is near operating openpit mines.

The company found significant outcrops of Cu-Au mineralisation and the existence of artisanal alluvial miners, but there had been very little drilling in the area; some in the 1980s and more recently by Ashmont Resources at Alacran.

“Our view was to consolidate a region highly prospective for Cu-Au so as not to have to worry about acquiring more in the future. We wanted to lock up a district. We didn’t just want to be a first mover. We wanted to be the only mover,” said Stifano.


San Matias could easily not have happened at all. While the potential of the area has been recognised for a long time, several companies had looked and left, frustrated at being unable to piece it together.

With a potentially large prospect, it has to be packaged together for exploration to make sense. In the case of San Matias, that meant bringing together four separate companies and working through their conflicting and sometimes inflated demands.

Whatever the outcome of the exploration project, Stifano and his team has done a great job of piecing it together to allow wide-scale exploration to happen.

The players were Minatura International, Simon Ridgway, Grupo de Bullet and Ashmont Resources.

Minatura was a private explorer led by Paul Dias and Todd Turley that at one time was listed on the US pink sheets. It had several projects in Colombia and Africa but had burned through US$50 million without really having a lot to show for it.

Renowned exploration geologist and mining entrepreneur Simon Ridgway was in the area through the original Cordoba Minerals.

Then there was Robert Allen’s Grupo de Bullet, another explorer with history in Colombia, which like Minatura had staked ground in many parts of the country, but never really had the capital to explore. Bullet, together with Ari Sussman’s Continental Gold, formed Sabre Metals, which was led by Mario Stifano.



“We wanted to lock up a district. We didn’t just want to be a first mover. We wanted to be the only mover”


Finally, at the centre of the main initial area of interest, was Ashmont Resources, a private junior that had the titles for the Alacran gold-copper deposit.

The consolidation question was always ‘when’ not ‘if’, but it needed a special talent to put together, requiring equal measures of carrot and stick to find common ground and wrangle a group of astute, stubborn exploration entrepreneurs into a deal.

Enter Stifano, a chartered professional accountant who has raised over US$700 million to explore and build gold and base metal mines. His resume includes being chief financial officer position of Lake Shore Gold, which developed two gold mines in Canada producing over 180,000 ounces of gold annually, and leading the finance division of Ivernia, a company that discovered and brought into production the world’s largest lead mine.

It was the patience and negotiating skills of Stifano that, through countless meetings, gradually brought all the parties together to agree on bringing all the concessions – bar Ashmont’s Alacran deposit – together under one company in March 2014. “The merger was an eight-month process to get three companies together and consolidate the ground,” said Stifano.

“Consolidation of the land package has been the obvious upside on everyone’s mind since the beginning. Sabre’s Montiel East artisanal pit exploits a well mineralised intrusive just 900m east of [Cordoba’s] Montiel West showing and they may be connected at depth. The copper potential is right up there with gold but until we drill we won’t really know whether it’s a copper-gold system, or gold-copper system, or how grades are distributed,” said former Cordoba president Peter Thiersch at the time.

Cordoba and Minatura brought the larger part of the land package to the table plus the public listing, while Sabre brought an experienced management team and access to capital, including early stage funding that proved instrumental in Sabre, under Stifano, taking operational control of the merged entity. Following the merger and before subsequent financings Minatura shareholders held 36% of the company whilst Cordoba and Sabre shareholders held 32% each.

“It took well over a year to negotiate the consolidation with Minatura, Simon Ridgway, Cordoba and Sabre. It came down to valuations as all parties recognised the significant potential of the district and so it was a case of working out who got what in the resulting company. There were some payouts as we unwound some prior earn-in agreements, and this all had to come together simultaneously at once; it was all-in or all-out,” said Stifano.

Wrangling various mining entrepreneurs to reach an agreement they all saw as mutually beneficial may have been tough, but arguably Stifano’s greatest coup was raising C$15 million in January 2014 to fund exploration at a time when no one else could raise any cash without a resource to their name.

Access to capital is an essential part of exploration success and the involvement of Stifano and Sussman early on (fresh off the back of the Buriticá discovery success that propelled Continental Gold to a C$1 billion market capitalisation) meant the incipient company had the funds to work with.

The final piece of the consolidation was put in place in October 2015 when Cordoba entered into an option agreement with Sociedad Ordinaria de Minas Omni (OMNI) to purchase 100% of Alacran, a missing, but integral, piece of the puzzle. “The acquisition of Alacran is an important step forward for CDB as it adds another high quality project to our portfolio of Cu-Au exploration assets in Colombia,” said Stifano.

“Robert Friedland always reminds me that it took 150 holes and 800,000m of drilling and US$115 million to discover Oyu Tolgoi, so I need to remind my shareholders it is about patience, time and technology”

Social network

Colombia is not the easiest jurisdiction in which to work and Cordoba’s social team has been a key element in its progress so far.

Lawyer Claudia Herrera came from Minatura and, among other things, leads the company’s corporate social responsibility programmes allowing the company to enjoy open and constructive community relations. This has been key to obtaining access to explore and in keeping nefarious elements at bay.

Despite there being two openpit mines in the area (Grupo Argos’ Carbon del Caribe coal mine and South 32’s Cerro Matoso nickel mine), there is poverty and social needs in Cordoba, in addition to a past history of paramilitary and guerilla activity. The community recognises mining provides an economic future and the possibility of development and wants the project to advance to unlock these. The community understands the benefits that can flow and has rebuffed advances from illegal miners from Segovia to enter the area.

It is this backdrop that has allowed Cordoba to generate a healthy working relationship with the miners and obtain access where previous operators failed.

HPX advantage

With Cordoba starting to generate interesting exploration results suggesting its hypothesis for a large copper-gold district had some merit, at a time when markets were trending downwards Stifano understood it would be difficult for a junior to raise the funds necessary to explore it thoroughly and so began looking for a partner.

“It was not obvious at the start that we would need a partner but when we began drilling the market started to decline rapidly and I recognised that to continue work on the project I would have to dilute my shareholders significantly. This, and the amount of technical expertise required for porphyry exploration, meant we needed a partner,” he said. 

The company received advances from many established large-scale mining companies and received offers from several of them.

A serendipitous turn of events led to Cordoba soliciting interest. Prior to Stifano beginning his search, AngloGold Ashanti announced a significant discovery at its Quebradona project, which it was looking to sell. This brought many majors to Colombia to kick the tyres.

While AngloGold eventually decided not to sell, the process opened the eyes of majors to Colombia’s prospects for hosting high-grade copper deposits, leading lead them to Cordoba’s door.

The favourable geology, and fact Cordoba had locked up the district was attractive to them as it came with high-grade scale. “Looking at the airborne magnetics is like being hit across the head with a two by four. The companies recognised there is potential for a tier one world class asset,” says Stifano.

While observers thought that Cordoba would partner with someone like BHP Billiton or Anglo American, the decision to go with Robert Friedland’s HPX initially surprised many. It could turn out to be Stifano’s masterstroke.

“We decided that it is better to dilute at the project level than the corporate level as shareholders benefit in the long run from having HPX as a partner. Every large Cu-Au miner wanted to come to site, but HPX, was clearly the right decision. Robert Friedland has made multiple world class discoveries including copper and gold,” said Stifano.

Cordoba would probably have aroused the attention of Friedland eventually but a chance encounter with him in at the BMO Mining & Metals conference in February 2014 gave Stifano the much fabled “elevator pitch” opportunity.  “I told him I really admired what he had achieved and in 30 seconds told him about Cordoba and got him hooked,” said Stifano.

Typhoon 1 hits the ground

The project was under the nose of BHP Billiton for decades as it operated Cerro Matoso, but unfortunately Cerro Matoso was operated by the major’s steel additives division, so regional exploration for copper was never on its agenda.

The Friedland name has been sufficient to get the project onto the radar of many in the mining sector given his track record for discovery. More importantly, it means there is funding through to feasibility study and access to HPX’s Typhoon high-powered induced polarisation (IP) geophysics technology (pictured) that can take readings up to 2km deep which Cordoba needs to shed light on its copper district hypothesis.

“They [HPX] are looking for the big one and we are pretty confident that it is there. The funding commitment through to feasibility study is important as it will cost at least US$50 million to do this for a porphyry deposit,” Stifano said.

Unlike common IP, Typhoon has three main advantages: the power of the system that enables it to penetrate deeper; its accuracy that means greater interpretive capability; and the speed at which it can cover large areas of ground.

HPX made a strategic investment in Cordoba and formed a joint venture to earn up to a 65% interest in San Matias by funding it through to feasibility study. HPX has taken an initial 37.3% stake in Cordoba and will fund an initial C$2.5 million of exploration work over 18 months. It can then earn up to a 51% in Cordoba’s subsidiary Minerales Cordoba that holds San Matias by spending an additional C$16.5 million in exploration. It can increase this to 65% by funding a NI 43-101 compliant feasibility study.

HPX has shown its belief in the project through giving Cordoba access to its leading team and technology, and shipping in its general counsel Sarah Armstrong from Singapore, for example. HPX is on the verge of completing a C$6 million spend to earn an initial 25% interest in San Matias and at current spending rates, it will reach the phase two milestone to earn a 51% interest (requiring an additional C$10.5 million) relatively quickly.

Friedland’s HPX has been a heavy stock buyer as well, bringing him to a circa 37% ownership stake in Cordoba, which means that HPX takes the project to FS he will have circa-84% of the project.

Critics might argue Cordoba has allowed its partner to obtain a sizeable stake too quickly. However, having HPX obtain its phase one and phase two earn-in rapidly means that Friedland’s group is firmly committed to the project at a time when there is still considerable uncertainty in the sector.

Location, location

Geographically, San Matias is situated in the lowland plains and the northern tip of the Andes mountain chain in Colombia and at the head of the Middle Cauca Belt, a region where there is little forest cover and excellent infrastructure. The mining concessions and applications cover around 27,000ha underlain by volcano-sedimentary rocks containing several known areas of porphyry Cu-Au mineralisation, Cu-Au replacement or skarn-style and vein-hosted, Au-Cu mineralisation.

Hole DDH-004 in 2014 put the project on the map and confirmed the discovery. A 101.10m intercept averaged 1.0% Cu and 0.65g/t Au (2.37g/t gold equivalent).

Initial exploration was carried out through rotary air blast drilling, a technology often used in dry environments like Chile and Australia, but seldom used in Colombia. Australian project geologist Chris Grainger saw it as a rapid and cheap way to test a number of prospects to prove up the district hypothesis while exploration teams undertook stream sediment sampling and mapping to better understand the geology.

In April, Cordoba released the initial Typhoon IP results that indicated multiple large and potentially significant sulphide chargeability targets, highlighting tier one, district-scale copper-gold porphyry potential. This followed diamond drilling result, which included a 111m length grading 1.01% Cu and 0.38g/t Au in hole ASA051 in the same area.

The Typhoon system is now based in Colombia where Cordoba will be giving it an extensive workout over the rest of the San Matias project area. “We have only covered 7.5km2 of a 200km2 land package so we have just scratched the surface. Within that 7.5km2 we have 26-28 targets. The trend that we have identified continues to the north and south and so we will expand the Typhoon [coverage] to the north and south as an immediate priority, and then cover the rest of the district,” said Stifano.

Company geologists, including special advisor Charles Forster who managed the team that made the Oyu Tolgoi discovery in Mongolia, are currently planning the drill programme for the next 12 months to advance Alacran, where a maiden NI 43-101 resource estimate is planned for release this quarter, while also searching for porphyries.

Even with resource estimates in the pipeline, Stifano is well aware of what he and his team has ahead of them at San Matias.

“Robert Friedland always reminds me that it took 150 holes and 800,000m of drilling and US$115 million to discover Oyu Tolgoi, so I need to remind my shareholders it is about patience, time and technology.”

*Paul Harris is Latin America editor for Mining Journal. For more indepth coverage of the region, go