Report Highlights

• DLP’s second key asset, the Esperanza copper-molybdenum project, is situated southwest of Peru’s copper belt. This region hosts numerous giant porphyry copper deposits, including Freeport-McMoran’s (NYSE: FCX) Cerro Verde mine, Southern Copper’s (NYSE: SCCO) Cuajone and Toquepala mines, and Anglo American’s (LSE: AAL) Quellaveco mine. Management is planning a ground geophysical survey in 2025 to identify drill targets.
• The company is in a healthy cash position, with $4M in the treasury at the end of July 2024. Management, board, and founders own 28% of DLP’s equity, aligning their interest with investors.   
• With copper trading near record highs, we anticipate an increase in M&A activity over the next 12 months, as larger companies target juniors to grow their portfolios. 
• We anticipate that the upcoming maiden resource estimate at Aurora will be a key near-term catalyst for DLP.

Risks

• Commodity prices
• No NI 43-101 compliant resources or economic studies
• FOREX, permitting, and exploration
• Access to capital and potential for share dilution
• No assurance that the company will be able to advance all of its projects simultaneously 

Portfolio Summary

Seven pre-resource stage projects in Peru and Canada. Two Cu-Mo-Ag projects in Peru. Peru is the second  largest copper producer in the world. Five projects in B.C. 

Aurora Copper-Molybdenum-Silver Project

This 8,900-ha property, located in the Calca province of southeastern Peru, consists of 8,500 ha 100% owned by DLP, with an additional 400 ha under option from a private company.

Project Location

Located 65 km north of Cusco. Lies along the northern end of an underexplored porphyry belt. Access to paved and dirt roads, water, and power 

History and Mineralization 

In 2022-2023, DLP completed a diamond drill program consisting of 13 holes totaling 9,910 m, all of which intersected Cu-Mo-Ag mineralization. Notable results include 460 m of 1.01% CuEq, and 701 m (from surface) of 0.92%.

Before DLP's involvement, the property was underexplored, with historic drill holes failing to test the oxide and primary copper zones at depth. The mineralized zone measures 1.1 km long x 0.95 km wide x 1.0 km deep, and remains open in multiple directions

The project hosts alkali-feldspar, rhyolite-granite porphyry molybdenum mineralization, which typically contains higher molybdenum grades than those found in conventional porphyry molybdenum deposits. Preliminary metallurgical tests reported high recoveries of 95.8% Cu, 86.4% Mo, and 89.3% Ag.

Two mineralized zones identified – a near-surface Cu-Ag zone, and a Cu-Mo zone directly below. We note that the project has the potential to host relatively high molybdenum grades (>0.20%)

A 2024 step-out drill program (10-13 holes/10,000 m) designed to test additional Cu-Mo targets is underway. 

We estimate that the 2022–2024 drill results reflect a weighted average grade of 0.54% CuEq

To date, 32 holes have been drilled on the project, covering 18,964 m across a 0.8 km² area

Preliminary Speculative Estimate (FRC Estimate)

Based on our review of the 2022-2024 drill results, we believe the deposit could host 5+ Blbs CuEq (Range: 3.2 to 9.7 Blbs). 

Potential to host a large copper-molybdenum porphyry deposit, with higher CuEq grades than typical porphyry deposits

Management is currently focused on expanding the known Cu-Mo mineralization zones, and plans to complete a maiden resource estimate by Q1-2025. In addition, several copper oxide (CuOx) showings in the northeast and southeast areas of the project remain untested

Esperanza Copper-Molybdenum Project (100% ownership)

This 4,600-hectare property is located southwest of Peru’s copper belt, a region that hosts several major copper porphyry deposits, including Freeport-McMoran’s Cerro Verde mine, Southern Copper’s Cuajone and Toquepala mines, and Anglo American’s Quellaveco mine.

Located 35km southwest of Freeport-McMoran’s Cerro Verde mine, and 10 km south of Element 29’s (TSXV: ECU) Flor de Cobre project. Adjacent to Rio Tinto’s (NYSE: RIO) claims, and south of Minera Pampa de Cobre’s Chapi copper mine

History and Mineralization 

Previous exploration, which included mapping and sampling, identified copper-molybdenum mineralization in two distinct alteration zones.

Access to paved (62 km) and dirt (35 km) roads, power (within 10 km), and water (within 12 km). Prospective for copper-molybdenum porphyry deposits. Sampling has delineated a 4 km x 2 km mineralized 

Upcoming Catalysts 

• Aurora: Pending results from 2024 drilling, followed by a maiden resource estimate
• Esperanza: Management is planning a ground geophysical survey in 2025 to identify drill targets.

Management and Directors

Management, board, and founders own 28%  

Brief biographies of the management team and board members, as provided by the company, follow:

James Stypula – Executive Chairman & Director

Mr. Stypula is a businessman with over 30 years of experience and a former investment advisor and financier of mineral exploration and development companies in North and South America. He was a founding director of Far West Mining Ltd. that discovered a significant IOCG deposit in Chile.  Far West was purchased by Capstone and Korea Resources Corporation (KORES) for ~$900M.

Ian Gendall – CEO & President

Mr. Gendall is an Exploration Geologist with a M.Sc. Exploration Geology degree from Rhodes University in South Africa. He has over 32 years’ experience in mineral exploration. He has led exploration teams for companies such as Gencor, Billiton, Anglo American, Antofagasta and more recently OceanaGold. Mr. Gendall and the Billiton Exploration team were credited with the major porphyry copper discoveries in Ecuador which was “farmed out” to Corriente Resources, subsequently taken over for $679M in 2010. 

Scott Davis – CFO

Mr. Davis has 20 years of experience working with junior exploration public companies and has held several CFO positions with companies listed on the TSX Venture Exchange. He is a partner of Cross Davis & Company LLP Chartered Professional Accountants. 

David Pighin  – Project Geologist

Mr.  Pighin has been actively involved in the industry for 53 years. He started his career with Cominco Ltd. (now Teck) as a professional Prospector and was promoted to Geologist in 1977. Since 1989, he became a consulting geologist and has worked for numerous junior exploration companies. He has discovered the following significant exploration properties: Fors property (Pb, Zn, Ag), Cedar property (Tungsten), Vine property (Pb, Zn, Ag, Au), Streamboat property (Pb, Zn, Ba), Cross property (kimberlite pipes), Fen property (rare earth metals), and the Boulder property (Au).

Richard Zimmer – Director

Mr. Zimmer has a degree in Mining Engineering and an MBA and has over 40 years of Canadian and international mining experience. He has served as: President and CEO of Far West Mining Ltd.; VP and Project Manager for Teck’s Pogo project in Alaska and General Manager of Teck’s Tarmoola gold mine in Australia; Mine Manager of Teck’s Afton copper-gold mine in British Columbia. Mr. Zimmer currently serves as a director of Ascot Resources Ltd., and a former director of both Capstone Mining Corp., and Alexco Resource Corp.

William Bennett – Director 

Mr. Bennett was formerly a government MLA in British Columbia (“BC”) for 16 years in the Riding of Kootenay East. Mr. Bennett was named BC Mines Minister three separate times over his 16 years. He led the BC government’s efforts over many years to restore BC’s competitiveness for exploration investment, including having improved the BC Ministry of Energy & Mines permitting process and helping to launch BC’s First Nations mine revenue sharing program. Mr. Bennett also sits on the board of directors of Ascot Resources Ltd., Kutcho Copper Corp. and Eagle Plains Resources Ltd.

Carol Li – Director 

Ms. Li is a Canadian Chartered Professional Accountant with over 20 years of financial and executive management experience, of which 14 years in mining. She was appointed as CFO of Ascot Resources in 2017. Ms. Li was formerly Vice President, Finance for KGHM International Ltd. from 2012 to 2017 and Corporate Controller for Quadra/QuadraFNX Mining Ltd. from 2004 to 2012. 

Our net rating on the company’s management team is 3.9 out of 5. Three out of four directors are independent

Financials 

Strong balance sheet

FRC Valuation 

We are valuing DLP conservatively, using the lower end of our speculative resource estimate (3.2–9.7 Blbs CuEq).

DLP is one of the most undervalued juniors on our list of copper exploration companies. DLP is trading at just C$0.007/lb vs the sector average of C$0.02/lb 

Applying the sector average EV/lb of $0.02 to our speculative resource estimate on Auora, we arrived at a comparables valuation of $0.56/share 

Following our review of the company’s portfolio, and management’s strategy to advance its projects, we are initiating coverage with a BUY rating, and a fair value estimate of $0.56/share. We believe our preliminary/speculative estimate will offer insights to the market ahead of Aurora's maiden resource estimate. We anticipate the stock will gradually align with our fair value as investors become more aware of Aurora’s potential.

Risks

We believe the company is exposed to the following key risks (not exhaustive):

• Commodity prices
• No NI 43-101 compliant resources or economic studies
• FOREX, permitting, and exploration
• Access to capital and potential for share dilution
• No assurance that the company will be able to advance all of its projects simultaneously