THE CRITICAL INVESTOR

In a time where a surprise attack of Hamas rocked Israel and pretty much the rest of the world, Israel reacted by bombing Palestina back to the stone age it seems, the Russia invasion continues and the Fed seems to be hinting at one other rate hike before year end, metals following the world economy like copper are trading somewhat subdued. GSP Resource (GSPR.V) isn’t impressed the least and recently raised C$250k, which enables them to explore their brownfield copper mine project called Alwin Mine, located in Southwestern British Columbia, Canada. The idea is to prove up left behind historic resources, and further drill continuing high grade copper zones, beyond the extent of historic workings. The upcoming drill program is planned to commence soon.

All pictures are company material, unless stated otherwise.

All currencies are in US Dollars, unless stated otherwise.

Please note: the views, opinions, estimates, forecasts or predictions regarding GSP Resource’s resource potential are those of the author alone and do not represent views, opinions, estimates, forecasts or predictions of GSP or GSP’s management. GSP Resource has not in any way endorsed the views, opinions, estimates, forecasts or predictions provided by the author.

After GSP Resource closed a C$360k PP @ 12c with a full 3y warrant at 20c on June 19, 2023, the company raised another C$250k @ 21.5c with a half 2y warrant at 30c, although this last financing was a flow-through financing, and a non-brokered one as well. A flow-through implies more tax advantages for investors, so management could ask for more. The company was approached by certain interested parties for a small financing, so CEO Dyakowski didn’t have to think very long here, as average sentiment isn’t exactly positive for small explorers. Besides this, the golden rule in junior mining land is always: when you are offered the money, just take it. With a topped up treasury, GSP Resource can advance with their 2023 drill program very soon, with drilling expected to commence over the next few weeks.

The objectives of this drill program are described in the update from September 11, 2023:

• Drilling a minimum of 1,200 m and up to 1,500 m of diamond drilling to test 4 to 6 targets (200 to 300 m per drill hole, Figure 1), subject to available funds.

• Confirmation drilling of the 5 historic zones (Zone 2 to 6) to infill 2008, 2020 – 2021 drilling, testing down-dip and lateral extensions of mineralization.
• Drill test three new potential copper zones: Northwest, South and Deep zones (see the Company’s news release dated August 24, 2023).
• Collect structural data using oriented drill core, and ground truthing of historic surface drill hole locations to continue to develop the 3D mineralization model.
• Advance the 3D mineralization model towards completion of a potential Mineral Resource Estimate for the Alwin Mine Project during 2024.

Depending on results, metal prices and overall sentiment in the markets, the idea is to raise more and follow up with more drilling.

As a reminder, the flagship Alwin Mine Project is a 575ha brownfield project adjacent to a large active open pit mining operation, the Highland Valley Mine (owned by Teck Resources) in BC, which actually is the largest open pit porphyry copper-molybdenum mine in Canada. The Alwin Mine is a small, past-producing copper mine (total production 155kt @ 1.54% Cu until 1981) with lots of underground development, and most importantly, considerable unmined mineral zones, left behind because of low metal prices, and exploration potential for more. A small historic resource reported 390kt @ 2.5% Cu, and the company is looking to prove that up for starters.

The goal for GSP is to generate an open pittable and/or block cave resource, with a combination of high grade ore surrounded by low grade halos of bulk tonnage material. With a number of copper mines in the vicinity, like of course Highvalley but also New Afton or Craigmont, the potential ore of Alwin could be trucked to nearby mills, without having to build the entire mill and plant, which would be a huge capex saver.

A 2020 drill program returned results like 20m @ 3.0% Cu, 6.4m @ 4.66% CuEq, 14.1m @ 1.29% CuEq, 3.95m @ 3% CuEq, 22.6m @ 0.81% CuEq, 47.35m @ 0.31% CuEq and 61.7m @ 0.313% CuEq. The 2021 drilling program delivered various results, ranging from short, high grade intercepts like 1.6m @ 1.24%Cu, 10.4g/t Au and 16g/t Ag to potential bulk tonnage results like 164.6m @ 0.61% CuEq, 176.7m @ 0.14% CuEq and 229.7m @ 0.21% CuEq.

A very global back-of-the-envelope estimate based on the visualized volumes and results could indicate mineralized potential of several to tens of millions of tonnes @ 0.5-0.7% CuEq with most of it open pittable, which would be very decent for a tiny C$4.3M market cap. (to be abundantly clear this is my own estimate, not reviewed or endorsed by the company, which has no NI43-101 compliant MRE at the moment).

GSP management thinks all potential mineralization but especially the high grade mineralization at Alwin would provide nice feedstock to blend in, increase average head grade and thus make High Valley more economic. Alwin isn’t large, but with grades up to 10 times the High Valley head grade you don’t need much to make a difference.

Conclusion

With another well-priced FT raise of C$250k, GSP Resource has enough money in the treasury to commence a small drill program at Alwin over the coming weeks.  Raising small amounts at increasingly higher prices when advancing the project has always been the plan of management, keeping dilution for investors at an absolute minimum. The overall concept is to raise enough money to show the world the copper potential of the Alwin Mine project, which in turn could be of interest of nearby copper mines like the adjacent Highland Valley Mine of Teck, as they could use higher grade ore of Alwin to blend into their own operation. Let’s see what kind of drill results can be generated by the upcoming drill program. Stay tuned!

I hope you will find this article interesting and useful, and will have further interest in my upcoming articles on mining. To never miss a thing, please subscribe to my free newsletter on my website www.criticalinvestor.eu, in order to get an email notice of my new articles soon after they are published.

Disclaimer:

The author is not a registered investment advisor, and currently has a long position in this stock. GSP Resource is a sponsoring company. All facts are to be checked by the reader. For more information go to www.gspresource.com and read the company’s profile and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.