A Strong Team Pursuing a Major Copper-Polymetallic Discovery

Metrics	Value
Current Price	CAD $0.16
Fair Value	CAD $0.7
Risk	5
52 Week Range	CAD $0.12-0.25
Shares O/S (M)	119
Market Cap. (M)	CAD $19
Current Yield (%)	N/A
P/E (forward)	N/A
P/B	13

Report Highlights

Cupani is advancing its 100%-owned Blue Lake copper-nickel-platinum-palladium project in Quebec.
Management and board have extensive experience in the resource sector. Douglas MacQuarrie, a director and industry veteran, recently purchased shares in the open market, acquiring an 18% stake in the company. He founded Asante Gold Corporation (CSE: ASE/MCAP: $511M) in 2011, leading it from explorer to producer, and has been involved in successful deals like PMI Gold (acquired for $180M). CEO Brian Bosse, the largest shareholder with a 31% stake, previously worked as a portfolio manager at Dundee Corporation.

The Blue Lake project hosts massive sulfide mineralization across five major zones spanning over 500 km2 (Blue Lake, Cancun, Anticline Lake, Doublet, and Extension). The Blue Lake zone hosts a relatively high-grade, historic resource. Recent exploration has identified multiple priority targets beyond the historical resource envelope, and uncovered 9 km of surface mineralization in the Cancun zone, located 16 km from the historical resource.
Two key positives of the project are its potential for near-surface mineralization, and access to Quebec’s hydroelectric power, both of which could result in low OPEX.
We believe there is potential for a large discovery, though the project is in its early stages. Based on our review of available data, and speculative assumptions, we believe the project could host 3+ Blbs of CuEq, positioning it as a potential major polymetallic play yet to be recognized by the market. A major success story in recent times is Power Metallic Mines (TSXV: PNPN; formerly Power Nickel), a junior under our coverage that made a significant polymetallic discovery in Quebec. In just 12 months, its MCAP increased from $30M to over $360M.
While early-stage projects are inherently speculative, a key advantage of Cupani lies in its multiple promising targets. We anticipate that the company will require at least two years to conduct initial testing on all primary targets, providing several opportunities for discovery.
Management’s immediate goal is to expand the historic resource estimate by testing additional targets at the Blue Lake zone, and the newly discovered Cancun zone. The company has applied for drill permits.
Cupani is trading at $0.006/lb of CuEq vs the comparables average of $0.022/lb, a 73% discount. With gold and 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.

Price Performance (1-year)

	YTD	12M
CUPA	3%	725%
CSE	-4%	-28%

Blue Lake Project (100% interest)

The property, spanning over 49,655 hectares, is located 65 km northeast of Schefferville, Quebec.

In 2023, the Fraser Institute’s survey of mining and exploration companies ranked Quebec the second most attractive mining jurisdiction in Canada

Excellent infrastructure in place, including access to railway, and hydroelectricity

The project is located on the traditional territory of the Naskapi Nation of Kawawachikamach. Naskapi Nation representatives conducted a site visit in 2024. Management reports maintaining a positive relationship with the Nation, which we note is very crucial for project development.

Mineralization, History, and Resources

The Blue Lake copper-nickel-platinum-palladium project is situated along the 1,600 km long x 160 km wide Labrador Trough, a prolific region that has produced more than two billion tonnes of iron ore, and hosts multiple copper-nickel mines, deposits, and prospects.

Mineralization on the property has been known since the 1940s. In the 1950s, the Quebec government granted the Iron Ore Company of Canada exploration rights for 30 years, leading to a historical resource estimate in 1991. A 2015 government survey of samples with grades of >200 ppm delineated a >500 km2 copper anomaly within the area. Management spent the past 10 years consolidating this land package, which was previously held by private parties

Cupani has identified multiple copper hotspots, indicating near-surface mineralization, over an 80 km strike. Mineralization at this project is comparable to Vale’s (BVMF: VALE3) operating Voisey’s Bay mine in Labrador, and Glencore’s (LSE: GLEN) Raglan mine in Quebec

The image on the right shows at least seven copper hotspots, with the red rectangle outlining the historical resource. The most intense hotspot, the Cancun zone in the southwest, is outside the historical resource

The property hosts massive sulfide mineralization spread across five major zones (Anticline Lake, Blue Lake, Cancun, Doublet, and Extensions) spanning over 500 km2.

Management has categorized the zones alphabetically (A–E). Exploration to date has identified 36 prospects within the five zones

The Blue Lake zone, one of the five mineralized zones, hosts several deposits with historical, relatively high-grade resources totaling 4.83 Mt at 0.85% Cu, 0.52% Ni, 0.84 g/t Pt+Pd.

Attractive grades

In 2024, 100 chip samples were collected, including several from a 200-ton unprocessed bulk sample taken in 1987 from the Blue Lake zone.

Independent lab assays confirmed the grades of the historical resource. Grab samples returned bonanza grades of up to 7% Cu

Current Exploration

Recent gravity surveys have delineated multiple priority targets within the Blue Lake zone, located outside the historical resource.

We believe there is significant resource expansion potential at the Blue Lake zone as several targets remain untested

In addition, recent prospecting, sampling, and field surveys at the Anticline Lake and Cancun zones have yielded promising results, confirming mineralization over a 9 km stretch at the Cancun zone.

The 2024 sampling program traced a U-shaped, mineralized zone along a 9 km EM anomaly

Preliminary Speculative Target (FRC Estimate)

Based on our review of available assays, projected dimensions of the five zones, and geophysical anomalies, we are introducing our preliminary/speculative resource estimate for the project. We have utilized Leapfrog Geo, a 3D geological modeling software program, for our estimate.

Potential for hosting a high-grade/large tonnage polymetallic deposit. We are arriving at a preliminary, speculative estimate of 126Mt @ 1.6% CuEq, reflecting 3.1 Blbs of CuEq

Upcoming Plans

Management aims to confirm and expand the historical resource within the Blue Lake zone, while also testing the Anticline Lake and Cancun zones in the near term. A gravity survey is planned in H1-2025, prior to generating drill targets.

Drill permit applications submitted for the Blue Lake and Cancun zones

Management and Directors

Management and board own 52% of outstanding shares, reflecting their strong conviction. Three out of five directors are independent

Director Douglas MacQuarrie founded Asante Gold Corporation (MCAP: $511M) in 2011, which successfully transitioned from an explorer to a producer. MacQuarrie also served as the CEO of PMI Gold, which was acquired by Galiano Gold (TSX: GAU) in 2013 for $180M. CEO Brian Bosse was a portfolio manager at Dundee Corporation, and held senior management roles (CFO & COO) at Zentek Limited (TSXV: ZEN) from 2018 to 2023, during which the company achieved a peak MCAP of $900M.

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

Brian Bosse – CEO and Director

Mr. Bosse has served as CEO of the company since March 15, 2018. He is an investment professional with two decades of experience in commodities, as well as private and public equity. Mr. Bosse has served as a business turnaround specialist for a number of Canadian investment firms. Commencing with Byron Securities and concluding with Société Générale, he spent a decade of restructuring equity sales and trading departments, as well as proprietary investment decisions. Mr. Bosse has a Bachelor of Arts in Economics (Honors) from Wilfrid Laurier University’s School of Business and Economics. He became a CFA charter holder in 2001.

Douglas R. MacQuarrie – Independent Director

Mr. MacQuarrie is a consulting geologist/geophysicist specializing in gold exploration in West Africa. Most notably, he is responsible for the acquisition and/or discovery of significant gold deposits in Canada and Ghana, including former CEO of PMI Gold Corporation, the development of the 5 Moz Obotan gold deposit in Ghana (now the Galiano Gold Mine). He is also formerly the Non-Executive Chairman, founder and Director of Asante Gold Corporation, a Ghana based gold producer that owns and operates the Bibiani and Chirano gold mines that have produced more than 8 Moz of gold. Mr. MacQuarrie received a combined Honours degree in Geology and Geophysics from the University of British Colombia in 1975.

Bryan Loree – CFO and Director

Mr. Loree was previously CFO of the company from June 2018 to April 2019. He is the CFO and director of Cannabix Technologies Inc., a technology company listed on the CSE, and the CFO and director of Max Power Mining Corp., a mineral exploration company listed on the CSE. He has held various senior accounting roles for public and private companies in various industries including, renewable energy, exploration, and construction. Mr. Loree holds a Chartered Professional Accountant, CMA designation, a Financial Management Diploma from the British Colombia Institute of technology, and a Bachelor of Arts from Simon Fraser University.

Veronica Hirsch – Independent Director

Ms. Hirsch was a co-founder of Integrated Asset Management Corp., and served as Vice President and/or Portfolio Manager of Prudential Insurance Co. of America, AGF, Fidelity and most recently Arrow Capital. She is a highly regarded Canadian equity manager with over 25 years of experience. Ms. Hirsch holds a Bachelor of Commerce degree from McGill University and is a fellow of the Life Management Institute.

Elliot Beutel – Independent Director

Mr. Beutel became a director in June 2022. He started his career working in mortgage underwriting for a Canadian bank before attending the University of Toronto’s Rotman School of Management where he received his MBA in 2018. Since then, he has working at Oakwest Corporation, as an analyst and junior portfolio manager. Mr. Beutel holds a BA from Queens University.

Financials

$1.4M in working capital at the end of September 2024

FRC Valuation and Rating

CUPA is one of the most undervalued copper juniors on our list, trading at just $0.006/lb, a 73% discount to the sector average of $0.022/lb. CUPA’s average grade is significantly higher than the sector average (1.6% vs 0.6% CuEq)

We note that higher-grade juniors trade at a significant premium, $0.055/lb vs $0.016/lb for lower-grade juniors. Applying the sector average EV/lb of $0.055 for higher-grade juniors to our speculative estimate on Blue Lake, we arrived at a comparables valuation of $0.70/share

We are initiating coverage with a BUY rating, and a fair value estimate of $0.70/share. We believe Cupani presents a compelling early-stage opportunity, driven by significant polymetallic potential across multiple targets, experienced management, strategic share acquisitions, and the anticipated increase in M&A activity within the sector. We believe our preliminary/speculative estimate provides insights into Blue Lake's potential. While early-stage projects are inherently speculative, Cupani's multiple prospective targets represent a key advantage.

Risks