Title: The Billion-Tonne Copper Project Nobody Knows About - Yet. Show: VRIC Media (host Jay Martin) Guest: Charles (Charlie) Cryer, CEO of Oroco Resource Corp (TSXV: OCO); formerly RFC Ambrian Date: 2026-09-15 URL: https://youtu.be/DHelEN_dYBg Length: 26:24 Note: YouTube auto-transcript pasted by Stephen. Fillers (um/uh/you know) and stutters removed; wording otherwise verbatim. Auto-caption name errors corrected: Arokco/Aroka/Aroko/AOKO = Oroco, Sansas/Sansmass/Stomas/Santaas/Santa Tamas = Santo Tomas, Grassburg = Grasberg, RFC Ambrean/Amrian/Ambrien = RFC Ambrian, Moreni = Morenci, Canaa = Cananea, Koulia Khan = Culiacan, Trokes = Choix, porta pambo/top of Pambo = Topolobampo, Canacle = Canaccord, Amalo = AMLO, "moose canal stra"/"straight of hormones" = Strait of Hormuz, SXEW = SX-EW, pfrey/porefree = porphyry, pea = PEA, all body/or body = orebody. "Bman Engineering" (the 1994 PFS author) and "Elsal" (the nearby closed gold mine) left as spoken. ISSUER INTERVIEW: the guest is Oroco's CEO promoting his own company, and the host says he is a shareholder.
00:00 It's a supply side issue, [music] the price of spot metal. But you can also see that in the treatment charges that smelters are charging miners for access [music] to material. And we've seen those go from sort of plus $90 a ton to now negative $150 a ton in some areas. So smelters are paying miners.
00:16 So that just tells you how tight the physical [music] market is. >> This is Jay Martin. Charlie, it's great to have you in the studio. Thanks for making the time. >> Thank you very much for having me. >> Okay, there's a ton of things I want to unpack today. A few different directions that I want to go with this conversation, but where I'd like to start is I feel like main street and mainstream finance has suddenly begun to wake up to the copper crisis that we've been talking about for the last 15 years. And we're just seeing that in the
00:53 price appreciation of the raw material. I want to start here. This is our first conversation. I'm looking forward to getting to know you. I want to understand your perspective. So, walk me through your thesis on the copper market right now. What are you paying attention to? What matters like smoke and signal? >> It's obviously a very exciting time in the copper market and you can see that in the price of copper itself and the performance of some equities in most recent history. But I think it's the confluence
01:17 of three things. At the moment, I think it's a cyclical change. It's some short-term issues which won't be here forever by their very nature. And there's some structural issues. Obviously, you can see it's a supply side issue, just the price of spot metal, but you can also see that in the TC/RCs, the treatment charges that smelters are charging miners for access to material.
01:40 And we've seen those go from sort of plus $90 a ton to now negative $150 a ton in some areas. So, smelters are paying miners to receive material. So that just tells you how tight the physical market is >> and I think that's being driven by cyclical issues which we've seen particularly Chile is experiencing those and we've seen a downturn in Chile's production this year certainly in the first half and those cyclical issues are really reflected across the industry, lack of capital expenditure over the last 20
02:10 years. So we're seeing aging infrastructure, declining grade, more expensive mining operations to extract the same material. That's underlying that. And then on top of that, I think we've also seen on the supply side some specific shorter term issues, particularly from Grasberg where we've seen a decline in production for specific issues that that mine has had.
02:31 And maybe they've been slow to come back or they've been slower than the market was expecting in terms of coming back online to full production. Clearly those shorter term issues will go away at some point but the cyclical issues will take a lot longer to work out and the industry is going to have to spend a lot more money to work through those.
02:52 On the demand side I think we've also seen a sea change really and it started off I think some time ago really with decarbonization of the energy supply chain with renewable energies and electric vehicles and so on and they've really only started to really ramp up electric vehicles in the last say six years. In my previous role, we at RFC Ambrian, which is an Australian corporate advisory natural resources specialist, we put out a big copper report in 2018.
03:17 The title was The Cupboard Is Nearly Bare. And that basically took a look at the copper supply for the next 20 years and where were the copper projects because the industry was not spending capex. Exploration was not being successful. No big new mines were really being found. [snorts] So there was obviously a supply crunch coming at some point and the demand picture at that time was electrification and electric vehicles coming through to bump the demand and so you could see there was a deficit that was going to materialize on the horizon
03:44 sort of in the 2030s. Sitting here today, in the last 18 months on top of that we've had AI >> and huge changes in AI and my understanding is the constraint in AI is not access to semiconductors, it's power generation >> yes >> hugely copper intensive >> so I think those structural changes on the demand side, they are structural changes and they're here for the long term.
04:10 So you've had the impact of cyclical issues, the lack of capex and exploration expenditure and success, structural change in the demand picture which we're also seeing, and immediately now on top of that you've obviously had issues of Middle East war which is impacting export of sulfur through the Strait of Hormuz and >> the inputs that are required to turn the oil.
04:33 So, issues for the SX-EW producers, they're clearly going to go away, but the structural change is here for longer. Most expensive words in investment history, as JP Morgan said, are it's different this time, but I think you can sort of generally make a story that for the copper market certainly, we're going to see higher prices for longer and we haven't really got to the crunch yet, >> right? And that's kind of key.
04:54 We haven't really gotten to the crunch yet. This is almost like the foreshadowing to it. Absolutely. I think the structural thing is becoming apparent to everybody. If you underinvest, mines are like melting ice cubes, right? Every day they're in operation, they're worth less because they took some of the value out and sold it.
05:09 If you don't replace that, it is a diminishing resource. Mining has simultaneously been one of the most demonized and vilified industries in the world. For the last 20 years, if you wanted votes, you had to come forward with a strategy to decouple your economy from the extraction industries. Well, okay, fine.
05:25 Right? 20 years later, turns out you needed that stuff. Now we're in this AI race and the capex that everybody is following that just keeps going up now like 760 billion just last year. 60% of those dollars, we talk about like build the data centers and the infrastructure. We think about labor and all this stuff.
05:43 That money, those hundreds of billions of dollars, 60% of it goes to raw materials. That's what they need to build that stuff. And that comes back to, well, where does it come from? If it wasn't grown, it needs to come from the ground another way. And that's where we land. And then as you described some near-term events, we got just basic geopolitical disruption accented right now by the Strait of Hormuz.
06:04 >> That's not just an energy story. That's fertilizers, but it's also the sulfur and sulfides that are the inputs required to turn raw ore into usable metal. And there's a fight going on right now. And I think a lot of mines are having to reduce production to compensate for the lack of supply of those.
06:22 It's like another thing creating this like perfect storm as you put it. I agree with you. We're just seeing the crest of this wave right now and it's going to be really interesting to watch how the world's major economies get very creative to secure the supply of the things they need because clearly we're not sharing like we used to. >> Absolutely.
06:38 And that's an additional factor, right, is that we've got [bifurcation] of the supply chain >> that we now got sort of two supply chains to fill, sort of west and east if you like. >> Yes. >> Which sort of doubles the problem or compounds the problem. So absolutely and we are in the foothills of those. We haven't really seen the deficits yet, but we're getting very close to it, but they're suddenly going to be upon us.
06:59 >> Yes. >> And then to build new mines is going to take you 15, 20 years. That's a lot to make up, right? So, >> so walk me back. So, 2018, you put out that report with the firm you're at at that time, The Cupboard Is Nearly Bare >> and this was forecasting the outlook for copper.
07:15 Sounds like over a 10-year time period, right? We're kind of landing in the bare cupboard today. Love to know your personal journey from there to where you sit today. Oroco Resources, billion tons of copper in Sinaloa, Mexico, near surface. We're going to unpack all of this, but you just took the seat, CEO of Oroco. So, walk me through that path, Charlie.
07:33 >> Okay, so part of why I mentioned the report from 2018, apart from its relevance obviously to the copper market, we were an investment [boutique] and we were looking for investment opportunities. So, we thought, okay, what are the projects that are going to fill that supply gap? So, we listed all the global exploration projects.
07:50 We >> like prospective projects. Yeah, >> we looked at all of them. Where are they? What's real? What's the significant project? Could they come online? What are the problems? What are the issues? And we ended up with a short list of projects that were in independent hands of significant scale that could answer the world's copper problem. One of those is Santo Tomas.
08:09 We also felt very likely >> this is Oroco's flagship asset. Exactly. We felt that Santo Tomas given its characteristics was going to be near the top of those assets that would be available for M&A for the copper producers to refill their cupboard. Oroco became a client of ours. So I got to know the story.
08:31 We did some more due diligence on the story, some technical due diligence on the asset as well, because RFC Ambrian, we were full of geologists and engineers. So we had a technical perspective as well as an investment perspective on it. RFC >> Ambrian >> Ambrian, core mission of RFC Ambrian. >> Sorry, yeah, they are, well certainly were, the preeminent independent corporate advisory boutique in Australia specializing in natural resources.
08:55 >> Yes. So yeah, DNA, yeah, mining. So Oroco became a client of mine based in London >> and I introduced Oroco to the investment community, gave them some profile in London and Europe. So I got to know the guys, really liked them, really enjoyed working with them. And so we had a working relationship for sort of three or four years, helping them with their capital markets access and so on.
09:19 Earlier this year, I got a phone call from the chairman who said the previous CEO had resigned and the company had changed and was looking more at a market-facing role and would I like to put my name forward. So that was an opportunity that was too good to say no to. >> You had been working with the company beforehand.
09:36 You knew what they had from an asset standpoint. We'll dig into this today, but it's a curious disparity between what's in the ground and what the valuation says. Sure. Right. >> Love to know your thoughts on that. Why? Maybe that's why you're here, right? >> Well, partly why they called you, right? Part >> maybe.
09:53 And I haven't known the team for a while as well and this has been >> some conversations we've had that like we've been focused on building out the asset, finding it, what's down there. Nobody knows what we're doing and that's become a big problem. >> Yeah, absolutely. >> Especially in this perfect copper storm environment.
10:06 So Santo Tomas is in Sinaloa. It's in Mexico. It's near surface. We'll dig into the PEA. You've done two PEAs on this project. We'll focus on the most recent one today. >> Love to unpack those numbers. Maybe let's start there. If someone's walking into the story, Charlie, for the first time, they have no idea what Santo Tomas is.
10:22 What are we looking at? What is it? >> It's a billion ton resource situated in the Laramide copper belt, which is one of the world's three most prolific copper producing provinces. I think the Laramide belt has been responsible for 80% of North America's copper production or maybe even higher than that. >> 80% of North America's copper production over history.
10:42 The history goes back 120 years of copper production or something like that. And in the Laramide belt are some of the world's most globally significant copper assets, for example Resolution, Morenci, Cananea, all these mines which produce 300,000 tons of copper a year plus, that sort of number. Yes, >> globally significant copper operations.
11:02 So, we're in a good neighborhood. We've got a good address. So, we're at the southern end of the Laramide copper belt in northwestern Mexico on the northern border of Sinaloa and Chihuahua. >> Yes. >> The Santo Tomas asset actually was first discovered in I think in 1968. So, we didn't discover it.
11:21 There was a PFS done on it by Bman Engineering in 1994. It's a billion ton copper porphyry. It runs on a strike which is roughly north south, running strike of 5 km. It's up to a kilometer wide and it's about 500 m deep. So it's a slightly strange porphyry because it's at surface and it's sort of essentially flat lying, which is great because it means it's easily accessible.
11:46 We did a PEA on the asset in 2024 which describes a 100,000 ton per annum copper operation for a 23-year mine life with an NPV of $1.48 billion US and a capex of a billion dollars and that was done at $4 copper. That's really important to know. >> 40% beneath today's price. >> Correct. So, it's one of the very few, I mean literally a couple of handfuls of billion ton copper assets still in independent hands globally.
12:15 We're in a great location. We're in a rare party of a few of us. >> It's a small club. >> It's a small club in the billion. >> It's a small club. >> Yeah. >> And we think because of the characteristics of the orebody, and as my predecessor I think quoted a lot, it's that we feel it's the most buildable copper development project in North America.
12:35 The most buildable copper deposit in North America. And if I were to think that, so I'll go first on why I like it, why I'm a shareholder. And partially is you're surrounded by infrastructure. There's highway and rail takes you to port. There's power. Arguably a billion dollars of capex already sunk into the infrastructure that you could use, right? You don't have to concern yourself with that.
12:55 You talked about near surface, easily accessible, right? And I think in the PEA the strip ratio was like 1.38 to 1. And for context, the average is like around three. >> Yeah. >> All that means is 3:1 means you have to remove three tons of dirt for one ton of valuable metal, right? Obviously, the less dirt you have to remove, the less money you have to spend, which just brings your cost down.
13:18 And when I look at Santo Tomas today with that cost basis, the copper price could fall by 50%, it's still a profitable mine. It looks like it could be. Now, I don't want to get into that situation, but it's good to know. >> What are your thoughts? So the objections you might hear from investors I suppose would be Mexico is a bit volatile, Sinaloa specifically, right? Let's start there. What's your take on that, Charlie? >> Yeah, there's no getting away that Sinaloa, we all know, has had serious issues with cartel activity and
13:47 security. I would say that, as I said before, we're on the northern part of Sinaloa, which is the least economically successful part of the state >> okay >> but also with the lowest amount of cartel activity. If you look at a heat map of where activity happens, most of it is centered around Culiacan, about 5 hours drive to the south of us.
14:10 >> Sure. >> We're on scrub land. We're not on any route through or a trafficking route. So we're sort of in a quiet neighborhood stuck in the corner. We're sort of not relevant in that sort of cartel picture. We're in the wrong place. It's an issue that we take extremely seriously.
14:30 We are very active in the way we manage it, but we do manage it. >> Let me ask you a question because I know your project Santo Tomas has been accepted into the Plan Mexico program. Love you to unpack that a little bit for somebody who doesn't know what that is. There's a lot of these infrastructure programs happening globally right now.
14:47 Most developed countries have their version, whether it's the special projects office in Canada, all manner in the United States mainly led by the critical metals list. We need to find a way to secure our supply over this and bring infrastructure back home. In Mexico, it's called Plan Mexico.
15:04 >> I think there's 40 projects that they are >> fast-tracking regulation, maybe providing capital. There's one mining project. That one's yours. >> Correct. >> Walk me through that and then I'm curious like how that may incentivize security around the project. I'm totally guessing, but I'm curious.
15:20 But what is Plan Mexico? How did you get included in that small club with only one mining company? >> We're very proud of it, I should say, to start with. So, Plan Mexico, as you say, is the national economic development strategic plan from the Mexican government. Primarily it's designed for employment and the growth in the Mexican economy.
15:39 And I think the sort of headline number is to move Mexico up the GDP global ranking tables from I think 13th now into 10th place. Okay. So, it's a $320 billion sort of investment package over the next six years. As you say, there are 40, it's across all sectors. It's not just a critical minerals list like elsewhere.
15:57 It's across all sectors of the economy from big chemical operations to also supply chains and so on. But we are the only mining project on that list of 40. Each state has a plan which combined become Plan Mexico. So obviously we're in Sinaloa, so we're part of Plan Sinaloa and we are named as the primary economic development investment for the future economic growth of Topolobampo, which is, talking about infrastructure earlier on, a deep
16:31 water Pacific port which is right next door to us. So we're key to the state and I mentioned we're in a slightly poorer part of the state. So we're viewed as very key for the economic development of that state and of that region and anchoring into that port, Topolobampo. So with Plan Mexico we have state and federal visibility.
16:53 There's expedited permitting that comes with that. That doesn't mean at all that there's any shortcuts one can take to get permitting. It just means I think that you're getting attention from both state and federal level authorities as a matter of national interest. >> We're a national strategic project. So I think that gives us visibility and attention, which is great. Fantastic.
17:13 And we got there really not through our own efforts necessarily but, and it sounds slightly trite to say it, but through the local community. Choix, which is our nearest town, is an old mining area. Elsal, which was a gold mine which shut down in 2014, is sort of 30 km away. So there's mining history in the local area and the local people, some of whom we employ, are aware of what Santo Tomas is doing and they wanted to move faster and so they were sort of lobbying their local politicians and so on to get us
17:45 included. So yeah, we're extremely pleased. I think it's a pretty big deal and it's a bit of a game changer because as you sort of alluded to earlier on, part of the issue that Oroco has had is this perception of mining in Mexico, and for good reason. Previous governments, the rhetoric was terrible and talked about closing down any open pit operations and so on.
18:05 None of which was actually enacted in legislation but there was nevertheless a lot of rhetoric around that. So to be included in the national plan as the only mining company I think is a huge achievement >> makes sense you get the local support when you look at the billion dollar capex. Yes. Right.
18:19 There's a lot of jobs there for >> for 23 years or more. >> And then the mine life. Yeah. In a somewhat ignored, quieter part of Sinaloa. When I think about Plan Mexico, because when we hear the stories about re-industrializing America and bring that industry back home as an American story, it's a fallacy, right? It's not going to hold up on its own, >> frankly, because most Americans can't afford to buy American anymore.
18:40 But if Mexico can play a key role in bringing a lot of that industry back to the shore, back to the continent, the story begins to make a lot more sense, right? And I believe that's part of the momentum behind Plan Mexico or the incentive to move this forward and bring a lot of that industrial base back to the West.
18:56 What's next for Santo Tomas? What can prospective shareholders expect to hear from you? You've just taken the seat, new vision, new strategy. I got some ideas, but I'd love to hear from you first. >> Okay. I mean, I think the vision is still the same. I think we've got a world-class orebody and a world-class mine that we need to get in a sufficient state of development that we're going to attract [acquirer] interest.
19:19 >> Yeah. >> So, that's the path we've been on. That's the path we're still on. >> You're going to try to attract interest, I assume. >> Yes. Sorry. Yes, because Oroco is not going to mine it. That's not going to happen. >> We're not going to mine it. And we think the PFS, which will be finished and completed at the end of Q2 Q3 2027.
19:36 We're already getting people sort of knocking on the door of course >> but I think we can crystallize that with the PFS in hand. That's a point of leverage in discussions. We are halfway through a drilling campaign, 20,000 meter drilling campaign today, that will contribute to the production of that PFS.
19:53 That drilling campaign will be completed by the end of this calendar year, pre-Christmas. >> The drill campaign. Okay. Yeah. >> So the drill campaign will basically upgrade the resource numbers to the correct category that we can then include it in the PFS >> because right now this billion tons is about half inferred and half indicated. >> Correct. Yeah. Okay.
20:10 >> Correct. And the inferred part which we're trying to upgrade to indicated, that's basically the southern zone. Northern zone, southern zone. Yeah. >> So, we're upgrading that, which will result in a new resource statement in about end of February, and then we'll be going into the rest of the PFS engineering studies and so on, which will then be published in June.
20:31 So, we've got a number of milestones that are happening between now and next summer. And some of the work that we're doing in the drilling campaign is not only just upgrading the resource numbers. We've already indicated from some of our most recent releases, we found mineralization that extends beyond the 2024 PEA pit design. Yes.
20:52 >> So we've got additional material. We found localized higher grade areas and these are incremental things, but combined together they potentially make a material difference. So we're excited about what the drilling campaign is going to allow us to analyze and look at in the PFS. >> Okay.
21:12 Okay. So most recent PEA was 2024, >> correct? Yeah. that came out with net present value of 1.4 billion. >> Yeah. >> Notable copper price was about 40% lower at that time. >> Capex was a billion. Some of those costs have likely inflated as well. Right. There's been some adjustments to cost everywhere. And I think what's the average cost inflation between the PEA and the PFS, like maybe 15 to 25%.
21:32 >> Yeah. >> Somewhere in that range. Somewhere in that range. >> And it's been a wild world for the last two years. But in the next 10 months, what we can expect from you is to wrap up that drilling campaign this calendar year >> before January 1st. >> That will be followed, sounds like immediately in Q1 2027, as quickly as you can go with an updated mineral resource estimate.
21:57 Eyes on taking the half of that billion tons that's inferred and moving it up to indicated. So that's what you can show the market. It's got to be indicated to be in the right to contribute to your PFS economic study >> more detailed which will be a more detailed economic study. Absolutely. >> Yeah. >> Yes. Okay. Got it.
22:20 And that could be expected by June of 2027, right? Q2, Q3. >> Yes. >> Okay. Got it. How's the treasury today? Do you anticipate a raise between now and then? And what's that look like, Charlie? >> The last published cash position of the company, I think, was in February actually, which, that was an $18 million number.
22:40 We did a Canaccord bought deal in January and raised $23 million. So, clearly, we've been spending money since February, but that's the last published number. Our drill campaign is funded, but I think we will require some more capital to finish off the PFS. >> You know, when you took the seat, I looked at the resume and I wondered if this was a go-to-market strategy.
23:00 So, it's like they've got the banker in the seat now. Drill campaign will be finished soon. That'll be followed by the updated mineral resource estimate and the prefeasibility study and that's what you're going to want to take to the market. Getting back to your 2018 report, The Cupboard Is Nearly Bare. What's the answer to the deficit? Right? There's not too many projects out there that can answer that call.
23:22 >> Fewer still that are in the really attractive billion ton plus category. Yeah, billion ton category, but with a billion dollar capex. >> With a billion dollar capex >> because there's a few billion ton projects. A lot of them have a $3–4 billion capex >> and higher extraction costs, deeper deposits. Yeah. Okay.
23:41 >> I like the jurisdiction. I like the proximity to the American market. I know some folks are scared of whatever volatility in Mexico, but it's like, look globally, where do you not see volatility right now? I think proximity to a hegemon is important right now and it provides sort of direct access to a market who's going to support you in the path forward.
24:02 There's a lot of countries right now that are trying to strike that balance between their relationships with the west and their dependency on markets in the east. Where do they land in this trade dispute? The answer is a lot more obvious for countries that are adjacent to one of those markets, and that certainty is good for investors.
24:16 I think that's my opinion. I'm looking forward to the MRE. I think that's the next big milestone from my perspective that I'm looking forward to. Anything that we've left out today that you feel like prospective shareholders need to know, need to hear from you? >> No, I think we've covered most of the ground.
24:35 We've got a world-class orebody with the right commodity, a very compelling economic case, and I would argue a very undervalued share price. And I think that's a pretty heady investment mix in a very bullish copper environment. Let me ask you about that actually because NPV in 2024 was 1.4 billion >> yep >> significantly lower copper as we discussed, market cap of the company today is >> 170 >> 170, why? >> Mexico is the short answer >> because of what we talked about earlier, the AMLO Mexican government, very anti-mining rhetoric, no
25:08 open pits going to happen, that stuff we talked about earlier. I think a lot of the market is sort of slightly stuck with that and hasn't really recognized the change that's happened in the mining industry, with new permits, open pits being permitted in Mexico. We've seen that this year.
25:26 That's a reality that's happening. And on top of that, our place in Plan Mexico as a project of national strategic importance. I think that really hasn't been reflected in our share price. So, I think that is the issue why we trade at a discount on an NPV basis to the competition. I would argue it's an incorrect assessment of the address.
25:45 It's a legacy effect, not reflecting what's happening today. Sure. And it's change that's exciting for investment, right? And that's where the opportunity is and that's what we're seeing, change in Mexico. >> Yes. Okay. I think I agree with you. I'd love to do an update >> post drill program, ideally around MRE.
26:03 >> Actually my conference in January, former President Felipe Calderon will be joining us on stage. He's been on the podcast a couple times. >> Very friendly guy. So he'll be giving us his take on the current Mexican administration. And around that time, it'll be great to get you back on the show.
26:18 And >> yeah, that'd be very interesting. Yeah, I'd love to do that. >> I'm grateful for this and I look forward to the next one. >> Fantastic.