It’s not often that mining investors have an opportunity to see the direct, positive impact that the industry can have on underprivileged people and communities. Last week, I had the opportunity to travel to Mocoa, Putumayo, Colombia to visit Libero Copper (TSX-V:LBC, OTC:LBCMF) Libero has hired more than 100 people in Colombia, over 90% from Putumayo and has quickly become one of the largest employers in the town of Mocoa in the Putumayo Region of Colombia. Not just unskilled labor, but also it was refreshing to see young professionals working for Libero Copper; geologists, project engineers, environmental engineers, boasting their pride to be able to work in their career in their hometown.
From left to right: Emily Narváez, professional from Mocoa, Administrative Coordinator of Mocoa Project, Claudia Cardoba, Social Professional from Mocoa, Social Coordinator of Mocoa Project, Yhurany Gomez, Social professional from Montclar, professional of Mocoa Project Social Team.
The story begins with B2Gold following up on Colombian government geochemical surveys from the 1970s, then conducting two drill programs in 2008 and 2012. When Libero acquired the asset in 2018 an inferred resource based on B2Gold’s drilling was produced, totaling 4.6 billion pounds of copper and 511 million pounds of molybdenum at an average resource grade of 0.45% copper-equivalent (0.33% copper and 0.038% molybdenum). The fact that such a large resource was generated with relatively limited drilling (less than 30,000 meters) demonstrates the richness of the Mocoa deposit, and the ample room for expansion that still exists.
Between 2012 and 2015, B2Gold not only ran into a slump in base metals prices and a bear market in the mining sector. It also came up against significant pushback from the local community around Mocoa. In fact, B2Gold took a mostly hands off approach to community involvement at Mocoa, and even used the Colombian army to provide security for its last drill program at Mocoa in 2012. The optics of a foreign mining company using the army for security is terrible. Furthermore, it serves to upset the community and create a deeper separation between the company and local inhabitants.
Despite its rich geological endowment, B2Gold gave up on advancing the Mocoa Project around 2015. In 2018, Libero Copper & Gold saw an opportunity where B2Gold had given up and Libero acquired the Mocoa Project and its four Colombian mining titles for 10,400,000 Libero shares. B2Gold still holds all of its Libero Copper shares, in addition to a 2% NSR on the core Mocoa Deposit area.
Libero didn’t do much with Mocoa in 2019 and 2020, due to its focus on its Big Red Project in BC, Canada and the obvious pandemic challenges that existed throughout most of 2020. However, in January 2021, the appointment of Ian Harris as President and CEO of Libero Copper & Gold changed the course of the company and ensured that Mocoa would soon be the company’s flagship project. His major goal, establish the license to operate at Mocoa.
Harris is a mining engineer who has spent most of his career in the mining industry in Latin America. He was Senior Vice President and Country Manager of Corriente Resources through feasibility, initial engineering, and commencement of construction at the Mirador mine in Ecuador. He successfully led the push to reactivate Corriente’s mining projects in Ecuador by building national and local support and navigating through a new constitution and a new mining law, leading to the sale of Corriente for $690 million. Mirador became the first large-scale and first open-pit metal mine in the history of Ecuador, paving the way for other well-known projects in the country.
He is bilingual in Spanish and English, having lived and worked in Venezuela, Ecuador and Colombia. In mid-2021, I became extremely encouraged when I learned that Harris was moving to Colombia with his fiance in order to become more intimately involved in community relations around Mocoa. For the last few years, the market has treated Libero as if Mocoa did not exist. In the last few months that has changed as it became evident that Libero has made tremendous progress on the ground, both in terms of community relations and understanding the geology of the project.
Let’s begin with the geology, then I will delve into the relationship with the community and the ESG aspects of the project. The Mocoa deposit is located in the department of Putumayo, 10 kilometers from the town of Mocoa. Libero Copper’s core Mocoa project acquired from B2Gold of 87 square kilometers has been extended to a district scale holdings covering over 1,000 square kilometers encompassing most of the Jurassic porphyry belt in southern Colombia. This porphyry belt hosts some of the largest copper deposits in the world including multiple deposits that host more than one billion tonnes of ore (Warintza, Mirador, Panantza-San Carlos, etc.).
Libero just drilled the first hole at Mocoa in ten years, intersecting 557 meters grading 0.89% copper-equivalent (0.62% copper and 0.083% molybdenum) in a hole designed to infill a ‘blank zone’ in the deposit. In addition, Libero was able to demonstrate that some of the existing resource areas could be ‘upgraded’ with higher grade material being intercepted between 200 meters and 500 meters from surface. A product of perhaps a product of an overly premature resource estimate where grade drops off as distance between holes increases, a function of drilling mostly off a single ridgeline, the hole demonstrated significant potential to increase the average grade of the resource. A hole which from top to bottom of 1228m averaged 0.58% copper-equivalent (0.42% copper and 0.047% molybdenum) which is higher than the entire resource grade of 0.45% copper-equivalent points clearly to this point.
When I visited the Libero core shack near Mocoa, I was able to visually confirm the extent of the potassic alteration that is present in most of the higher-grade sections of the deposit. Furthermore, several core samples had visually apparent chunks of molybdenum embedded within the potassic alteration:
Significant sections of chalcopyrite and potassic alteration in hole MD-043
Large chunks of molybdenum within core samples exhibiting potassic alteration
Libero intends to resume drilling at the end of June with the plan to drill 100 meter step-outs to the east of the core deposit area. When listening to Libero CEO Ian Harris speak about the potential size of Mocoa, it’s hard to not get really excited about just how big this project could eventually be. A resource was made for Mocoa on the back of valuing an acquisition. However, Harris believes there is so much more room for growth that it was premature to publish an inferred resource based on less than 30,000 meters of drilling.
In a news release dated May 3rd, 2022, Libero gave some strong indications of the potential that the company sees on its four core mining titles within the immediate area of the Mocoa Copper-Molybdenum Porphyry Deposit. Most notably, an airborne magnetic and radiometric survey flown at the end of 2021, combined with all sedimentary, rock, and soil geochemistry sampling on the project, has helped to identify an apparent clustered porphyry system. In the graphic below one can see some important details including two areas of Jurassic granite with strong potassic alteration labeled ‘1’ and ‘2’:
Potassic alteration is significant because the highest-grade intervals in hole MD-043 exhibited significant potassic alteration, which is characteristic of a more recent event that may have been responsible for much of the molybdenum mineralization in the area. The entire scale of the hydrothermal demagnetization normally associated with the periphery of a porphyry intrusive, really shows the overall scale potential of the project.
Strong potassic alteration continues for more than 500 meters to the northeast from the main deposit area, and Libero’s plan is to drill 100 meter step-out holes to follow this area of alteration and potentially expand the mineralized footprint of the Mocoa Deposit. Stepping out to the east and testing the two large anomalies to the south (1 and 2) will keep Libero busy for most of 2022. However, Harris doesn’t keep it a secret that Libero would like to eventually scale up to three drill rigs in order to have one rig focused on infilling around the main deposit area, one focused on resource expansion drilling in the proximity of the main deposit area, and the third testing high priority regional targets on Libero’s 87 square kilometers of granted mineral concessions.
After seeing the project with my own eyes and studying the data for the last few months, I am confident that Mocoa is a world class copper/moly porphyry cluster that could contain more than 10 billion pounds copper-equivalent. Suffice to say, the geology is the easy part and Mocoa is so richly endowed that it could eventually be mined by either open pit or underground mining techniques. Or perhaps using both methods depending upon which area of the project is being mined.
The primary challenge that Libero faces is the impression that Mocoa is a dead in the water project that cannot be advanced due to community opposition. It was this ESG and community relations aspect of the project that was the primary focus of my visit to Colombia.
Over the span of one year, Libero has formed a formidable team on the ground in Colombia that numbers more than 100 people. At the Libero office in Mocoa, the company has focused on community relations including educating children about geology, and the key role that copper plays in the electric vehicle revolution. I was able to witness a STEM (science, technology, engineering, and math) class for the local children in one of the communities near the project.
Children from the Las Toldas community (one of 12 communities closest to the Mocoa project part of the STEM+ A program) are learning how to construct a robotic bird using Legos
Professor Elliott Abdala (founder of Imaginate a company focused on teachers to incorporate STEM activities into curriculums, and inspiring future scientists and engineers) working with some of the children in the Las Toldas community near Mocoa, Colombia
Each month, Professor Elliott Abdala travels from Bogota to spend a week visiting local communities around Mocoa to teach STEM classes to the children. Libero CEO Ian Harris explains that Libero is committed to educating the children of Mocoa in order to improve their quality of life, and to help develop the future workforce that will harness the mineral endowment of the area for decades to come.
In Libero’s corporate presentation there is a slide that illustrates the company’s “good neighbor” operating philosophy and values of respect and responsibility:
With many junior mining companies, such a slide would likely be mostly for show and lack any real substance. In Libero’s case, the company walks its talk. Several months ago Libero needed boots and uniforms for its employees and drill crew. Instead of ordering from China or Bangladesh, Libero figured out a way to create a win/win situation through sourcing what they needed locally. A local garment maker who worked by herself and had few prospects for new contracts was suddenly empowered to hire a dozen other single mothers to create hundreds of uniforms for Libero.
Libero was very pleased by the quality of the uniforms, which led to a dozen single mothers having a new employment opportunity at significantly higher wages than they would otherwise receive. Libero also contracted a local shoemaker to make boots for Libero’s entire team. Once again a win/win situation was created that benefited all parties involved. Libero needs to supply work uniforms and safety equipment on a continuous basis by law in Colombia, providing a solid client for local suppliers to grow their business.
The good neighbor philosophy permeates everything that Libero does in Colombia and reflects a commitment to doing good for people and making a positive difference in the community. Libero’s attitude and way of doing business in and around the Mocoa community surprised some people who were previously not in favor of mining or mineral exploration in the area. I had the opportunity to speak with the municipal leaders of Montclair who expressed their initial skepticism of Libero because of the experience with B2Gold ten years ago. However, upon meeting with the company and better understanding Libero’s intentions and commitment to being a good neighbor, the community leaders took a cautious but more open approach with Libero. Today, several residents of Montclair are employed by Libero and the community is supportive of Libero’s exploration work at Mocoa.
Any site visit report on Libero would be incomplete without discussing the company’s news release dated April 22nd, 2022 that addressed an order for the suspension of exploration work on mining title FJT-131. It’s important to emphasize that Libero has four valid mining titles at Mocoa, and the main deposit area is on FJT-141:
Libero drilled hole MD-043 on FJT-141 and the company has not touched the FJT-131 area. It is also important to emphasize that The Ministry of Interior is the competent authority for certification, authorization, supervision, and participation in prior consultations with indigenous communities within the area of impact of projects. Libero Copper has already received the "Certificacion No 1025 de 31 de diciembre de 2019" from the Ministry of Interior. The certification states that no indigenous communities are within the exploration plans of the company and therefore, no previous consultation is required.
Libero submitted its official reply regarding the injunction on April 21, 2022, which includes the receipt of certification along with additional supporting details. When Libero resumes drilling at the end of June, the company is planning to drill on FJT-141 and has no plans for the FJT-131 area at this point in time. While the company has no plans to conduct exploration in the FJT-131 area, the company is working closely with members of the Inga Indigenous Tribe and remains committed to being a responsible neighbor.
The upcoming presidential election is creating a heightened political environment with significant police and military presence in the area. However, there didn’t seem to be any anti-mining protests. In fact, Libero staff were walking the streets of town in their uniforms with an open-door office in the center of town. Libero Copper seemed to be a test punching bag and faced a few legal obstacles most appearing to be frivolous, they still seem to be a distraction. The injunction on the mining title not currently under exploration until previous consultation with local indigenous communities was complete, was contested by the National Mining Agency, the Ministry of Interior, and National Agency for Environmental Licenses, even the National Agency for Legal Defense of the State. The legal process appears to be moving swiftly. However, it seems intelligent that Libero is keeping its head down low until after elections.
In the long run, Libero Copper has demonstrated a key commitment to maximizing local benefits and engaging locally. As a result, they appear to have significant support already established in the populace. This is clearly the key to establishing long term political will to advance the project.
The first round of presidential vote is around the corner, and the second round in June. Front runner Federico Gutiérrez (Fico) is expected to maintain the status quo that has been highly supportive of diversification of the mining sector, especially copper. The other candidate Gustavo Petro, a leftist, has committed to ending all oil exploration in support of a green energy and electric vehicle that should be highly supportive of copper. With 60% of Colombia’s exports being coal and oil, the potential of copper and metal mining in the country supports a transition.
Overall, I was impressed with my visit to Colombia. It was well worth the trip to see Libero’s progress with my own eyes. I’ve been on many site visits over the years, and to be completely frank, this was the first one where I felt like the mining industry is making a positive impact in the world and helping people’s lives. I know that mining is essential, and metals help to power everything in the world, however, most of what we care about as investors is the bottom line and results. Not much time is spent actually trying to see and understand why we do all the geophysics, soil sampling, drilling etc. and how it can make a difference to improve people’s lives.
I am a Libero shareholder and I have used the broader market weakness of the last couple weeks to increase my position. After the visit to Mocoa I must admit I have a soft spot for this area of Colombia and the people I met. I look forward to visiting Mocoa again next year to be able to assess Libero’s progress with my own eyes.
Disclosure: Author owns LBC.V shares at the time of publishing and may choose to buy or sell at any time without notice.
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