Looking at the markets with David Moadel
welcome to looking at the markets with David Moadel. Today my very special guest
is Mr. Vince Sorache now Mr. Sorache is a mineral exploration and mining
entrepreneur with over 25 years of international business and capital
markets experience currently mr. Sorachi is the CEO of Cuchillo copper which is
traded in Canada under the ticker symbol KC and in the United States under the
ticker symbol des rrf so mr. Sorachi thank you so much for joining me today
on looking at the markets thank you David nice to be here yeah I
really appreciate your time I know you're a busy man but I wanted to talk
about certain things especially precious metals I'm so excited about precious
metals and about the opportunity that your company kucho copper may offer to
investors who want to get in on a ground-floor opportunity but first let's
talk about the macro environment in precious metals you know I like to look
at the silver markets the copper markets the gold markets but copper seems to be
an underrated precious metal because people focus so much on gold and silver
what is your outlook for precious metals and for copper in particular well you
know in the for centuries you know gold has always been the go-to asset amongst
investors worried about all sorts of financial risks and you know it looks
like you know we're coming into an inflationary environment in the US and
with global economies really beginning to to fire and you know when consumer
prices accelerate copper tends to rise three times more than gold copper is
more sensitive dude inflation and the dollar because of its uses and its
growth within the economy so you know from me from a money-making perspective
I think in this in this environment right now copper copper is the commodity
you want to be in absolutely now I wanted to talk about employment or
unemployment and inflation in the US economy at least we've seen low
unemployment relatively speaking record high confidence levels Millennials
hitting peak earnings you know the tax cuts are going to probably be instituted
very soon does all this lead to the possibility of inflation hitting us
really hard what do you think well I mean I'm and I'm not going to profess to
be an expert on you know what's happening in the in the US economy and I
kinda read what everyone else does but you know it looks like the US and is on
a trajectory of some you know constant rate hikes here and it looks like yes
there are concerns about inflationary pressures coming into the US and and I
would I would also guess you know other markets around the world so as I
mentioned earlier I think with with that on the rise with the big proposed
infrastructure spend in the US and and China is just another place I mean China
is a very big player obviously in the copper space and I was just looking at
some data the other day that you know it's China's going to continue its
infrastructure spending through 2018 which is expected to be among the you
know the biggest drivers of economic growth in the coming years in China as
well so you know I believe all of that plays out very well for for copper yeah
absolutely I mean if there were ever a time to get into precious metals to take
a position and copper you know why not do it now we've seen nine years of low
inflation the central banks are not going to be accommodating necessarily as
much as they have been the natural course probably is going to be increased
inflation and that means commodities can really outperform in the coming
years you know now why would somebody choose copper in particular if they're
going to get into commodities you know copper I think coppers uh set a pretty
exciting space right now you've got one as we've been discussing
a good good hedge against inflation that you know copper itself offers that
upside potential but to with all that's going on in the world with regards to
electric vehicles you know people have been playing playing a lot of attention
to you know the lithium and the cobalt stories and their play in that market
but you know you know copper is a significant aspect of what's happening
with regards to the EVs you know these these new vehicles will
use two to three times the amount of copper in them than the conventional
combustion engine vehicles do right now you're gonna remember that copper is you
know when you're talking about infrastructure build outs you know
copper is is wire in the sky it's it's the it's the traditional electric
generation but it's also a significant component to all the renewable
technologies in the world so wind turbine solar panels energy storage
you know copper plays that role and you know as we see our planet moving towards
more renewable text I just you know see the demand and copper continuing to rise
on the flip side you know we've got you know I think demand increases coming but
you know you also you look at the copper market and you know you've got annual
copper discoveries have been on a significant decline in the past decade
you've got global copper producer reserves which have been on a
significant decline from 2003 when you know reserve grades were around 1% to
you know being less than half of that right now in 2016 so you know the supply
side looks like it's starting to kind of you know Windell a little bit from that
perspective so I think it's just it sets up for for a very very good future in
the metal yeah with the potential for increased demand
possibly limited supply the price really can only go up as far as I'm concerned
and copper has so many uses you touched upon electric vehicles solar I mean it
just goes on and on now I wanted to talk about an interesting topic here Wheaton
precious metals there's a tie-in with the kucho copper in in particular so who
is Wheaton precious metals so Wheaton precious metals is is the world's
largest silver and gold streaming company if they have a current market
capital about 12 billion dollars they've got a fantastic management team
and and one of the best technical teams on the street so Wheaton Wheaton has
been very particular about the streaming deals that they've been doing I mean we
basically I think we are the third streaming deal that they've done in the
past seven or eight years sorry in the past three years I check that but I
would the only equity investment that they've made in a junior development
developer since 2008 so you know Wheaton's Wheaton's um except a highly
technical conservative group that you know takes on the best the best
companies only as far as their streaming transactions so you know we were we were
excited to have them you know come on board it's it's a good validation of the
project from a group like Wheaton not only to you know on the streaming side
but for them to do you know a four million dollar equity private placement
and then on top of that they did a twenty million dollar convertible loan
into us which they've never done before in a junior development stage company so
you know Wheaton's after the silver and the gold component in our project which
sets up really well for us our primary commodities are copper and zinc so it
doesn't it doesn't encumber the primary commodities in our project
I said Wheaton's interesting the silver and gold so there's a very very good
marriage there for us and the project and Wheaton so you know all in all you
know the Wheaton financing package if you will have you take into account the
equity the the and what they're going to provide us
part of the streaming deal it exceeds a hundred million dollars so no we're
we're very excited to have Wheaton as partners with us on this project and
moving forward yeah I understand they've taken talking about wheat and precious
metals have taken a stock equity position with you I mean talk about a
huge vote of confidence now you mentioned the project what can
you tell us about the project itself yeah I guess we should talk a little bit
about the kucho project so you know we are a advanced stage development stage
project it's a high-grade copper zinc deposit in northern British Columbia
it currently has probable reserves of ten and a half million tonnes grading
about two percent copper and three percent zinc or just under three percent
copper equivalent the project is approximately 100 kilometers east of
Dee's lake in BC but more importantly it can be accessed by airstrip and by
seasonal Road via highway 37 for those that want to look at a map of BC you
know the project demonstrates very robust economics and this was very
appealing to us in the beginning and and it importantly it demonstrates robust
economics at 275 copper and 110 zinc that was where the prices we used in our
and our pre-feasibility study that we posted in midsummer so current commodity
prices at 320 plus copper and dollar 50-ish zinc increased the value of the
project dramatically you know this is for us too there's not many copper
projects out there that show the robustness and on the economic side at
275 copper you know this this thing would still be a mine at 250 copper and
there are very very few copper projects out there that can I can demonstrate
that so with those economics in place we've got a very manageable capex and
most importantly a significant low-risk upside potential you know our goal is to
double the size of this project in a very within a very low risk environment
if you will you know as I said we have currently 10
a million tons and probable reserves we're looking to get that up closer to
20 million tons over the work that we're going to do over the next 12 months so
that's where there's a additional significant upside potential you know we
were in a part of British Columbia where many development projects have been
recently permitted and mines are in current currently in production as well
yeah that sounds like huge potential for growth here with the project and with
the company itself now as for me when I invest in stocks I
look for undervalued stocks things that yeah I don't want to jump on the
bandwagon that everybody has already jumped on OK I like to be first to the
party not last to the party how undervalued do you believe this stock in
this company is compared with your peers well you know this this project has we
acquired it from capstone mining and so it's been sitting in capstone for about
7 years so it's been a bit of a sleeper I said in there if you will so we we've
been working on the acquisition for the past six months
Cuchillo Copper just came trading a couple of weeks ago so in essence it's a
very very new story to the market and you're able to invest in this standalone
asset just recently as the last couple of weeks and we came out at and we
financed this at what I felt to be very very good multiples right now the
project is currently trading at today's prices and against current commodity
prices at a boat up point to three times net asset value our peers averaged about
a point six times that asset value so there's a lot of room in there for a
price appreciate price appreciation right and none of that takes into
account what I mentioned earlier about the expansion potential and our goal to
double the size of the project yeah so this would be appealing to both value
investors as well as traders who like a growth stock because there is so much
growth button yeah now I also like to invest in
companies that have their milestones set for the the year ahead
so for 2018 what are the milestones for Cuchillo copper so 2018 will be a very
very busy year for us you know it will be there will be a lot of milestones lot
of news coming to market you know primarily around we are going to be
conducting robust robust metallurgical program to optimize recoveries we think
there is room for optimization which plays directly into the economics of the
project we think that we will be significantly advancing the permitting
process and de-risking the project from that perspective we'll be conducting
over 30,000 meters of of exploration and resource expansion drilling over the
year and you know we will be providing updated resources and reserves on the
project showing that growth potential through the work that we've done
throughout the year and and you know in addition we will always be looking for
additional opportunities to add guy to Kujo either through M&A and or other
strategic initiatives throughout 2018 now I wanted to talk about the team at
kucho copper because there's no company without a great team so can you tell us
a little bit about who's involved in the project yes of course and I believe
wholeheartedly and having your having a very good team wrapped around a project
and kucho copper has got a team that I believe is tailor-made to the future
success of the project we have a fantastic technical team with a immense
experience and these types of deposits and the work required to complete the
feasibility study we have a permitting team led by Allison rip and Armstrong
who is one of the premier community and environment people in the field
alongside her we have Bill Bennett on the board who was the BC mines Minister
who just resigned from government last summer and obvious benefits to
you know with regards to being NBC and being in Bill's backyard
Stephen Quinn who's the current CEO of Midas Gold Stephen was the former CEO of
fair wood copper that owned this asset in the mid-2000s Stephen was always a
big believer in kucho always believed that it should have been put into
production and that path changed when Sherwood and cash don't merged so you
know we've got we've got a significant I think advantage on the permitting side
on the technical side and and the rest of the team fills in really nicely with
regards to corporate and capital markets so again I think we've got a fantastic
team to drive this this project in this company forward
yeah sounds fantastic and I believe it's a fantastic opportunity a ground-floor
opportunity for people who want to and who like to invest in companies that are
undervalued that have growth massive growth potential and that have a great
team and great leadership such as mr. Sorachi who have been interviewing today
if you want to learn more about kucho copper I definitely recommend you check
out the website which is www.hyken.com
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