GOLD & COPPER TARGETS WITH BILLION-DOLLAR PRECEDENTS
Disseminated on behalf of Questcorp Mining Inc
GOLD & COPPER TARGETS WITH BILLION-DOLLAR PRECEDENTS
QUESTCORP MINING INC – CSE: QQQ.CN | OTC: QQCMF
This communication is not an offer to buy or sell securities nor is it to be construed as personal investment advice. Nothing contained in this communication should be relied upon as a promise or representation as to future performance.
Questcorp Mining Inc. (CSE: QQQ.CN | OTC: QQCMF) is a Canadian junior exploration company focused on high-potential mineral projects, with its flagship La Union Gold Project in the prolific Sonora Gold Belt of northern Mexico and the North Island Copper Property (NICP) in British Columbia, Canada.
This investment thesis emphasizes the tightly held share structure, the de-risked La Union project with its world-class carbonate replacement deposit (CRD) potential, and the strategic partnership with Riverside Resources Inc. (TSXV: RRI).
The Sonora region’s history of major discoveries and acquisitions, combined with the high-grade CRD geology, positions Questcorp for a potentially transformative discovery that could attract significant buyout interest from major mining companies.
Spartan’s Technical Analysis
QUESTCORP MINING INC – CSE: QQQ.CN
- Spartan’s Idea: Long Speculation $0.15 – $0.18
- Spartan’s Stop Loss: $0.10
- First Resistance: $0.27
- Second Resistance: $0.38
OTC: QQCMF
- Spartan’s Idea: Long Speculation $0.10 – $0.13
- Spartan’s Stop Loss: $0.065
- First Resistance: $0.22
- Second Resistance: $0.30
Flagging in the daily, curling back above ema support and room back to the recent range highs in my opinion. Will continue to watch volume to see if spec money flows in before results.
KEY QUESTCORP HIGHLIGHTS
Tightly Held Share Structure Enhances Upside Potential
Share Structure: Questcorp has 72.81 million shares outstanding, a float of 66.09 million, and a market cap of CAD $10.54 million. Post-financing, the fully diluted share count would be 120.44 million, raising approx. an additional $5 million CAD.
Ownership Concentration: The float is tightly controlled, with 58% held by U.S. advisors, 10.1% by management, 9.9% by Riverside Resources, 2% by European investors, and only 20% by retail investors. This concentrated ownership aligns insider and institutional interests with shareholders, reducing selling pressure and amplifying potential share price gains as exploration milestones are achieved.
Implication: The tightly held float positions Questcorp for significant re-rating upon positive exploration results, as limited available shares could drive rapid price appreciation in a discovery scenario. Institutional ownership signals strong confidence in the company’s prospects, particularly for La Union.
La Union Gold Project: De-Risked and Poised for a Major Discovery in the Sonora Gold Belt
Sonora Gold Belt: The Sonora Gold Belt is one of the most prolific mining regions globally, hosting multi-million-ounce gold and silver deposits and world-class CRD and porphyry systems. Notable examples include:
- Fresnillo’s La Herradura: 5.5M oz Au (proven + probable) and 6.7M oz (measured + indicated), one of Mexico’s largest gold mines.
- San Francisco Mine: 1.4M oz Au (measured + indicated), operated by Magna Gold.
- Frisco Mining: One of Mexico’s largest carbonate-hosted mines, exemplifying the region’s CRD potential.
- Alamos Gold’s Mulatos Mine: A multi-million-ounce gold producer, showcasing the region’s scalability. The belt’s history of major discoveries and acquisitions (e.g., South32’s $400M Hermosa project buyout in Arizona, a comparable CRD) underscores its attractiveness to majors. La Union’s location at the edge of this belt positions it ideally for a significant discovery.
Carbonate Replacement Deposit (CRD) Potential
La Union is a 2,604-hectare, road-accessible, high-grade CRD project targeting gold, silver, zinc, and copper. CRDs are renowned for world-class grades and large-scale deposits, as seen in peers like MAG Silver’s Juanicipio (high-grade silver-gold CRD) and South32’s Hermosa.
Historical production at La Union (1950s) averaged 7-20 g/t Au, 300 g/t Ag, 10-20% Pb, and 5% Zn, with recent grab samples showing exceptional grades (up to 83.2 g/t Au, 4,816 g/t Ag, 30% Zn, and 5.34% Cu).
Geological Advantage: The project’s carbonate host rocks (black and grey limestone units, 150-250m thick) are ideal for high-grade mineralization, forming classic chimney-manto systems. CRDs often overlie larger porphyry copper systems, as seen in nearby Cananea and Hermosa, offering dual discovery potential.
Speculative Upside: The carbonate geology and untested deeper porphyry potential suggest La Union could host a world-class deposit. A significant discovery—particularly of high-grade CRD or underlying porphyry—could mirror the success of MAG Silver or South32’s Hermosa, making Questcorp a prime acquisition target for majors like Fresnillo, Fortuna Mining (3B market cap), or even Northisle Copper and Gold Inc., which is exploring nearby in British Columbia.
De-Risking Efforts: Riverside Resources has invested over $2.5M, consolidating seven properties with past production and conducting extensive surface work, geophysical surveys (gravity and EM), and an upcoming IP survey.
Eight target zones have been identified, with three drill-ready targets:
- Plomito: 83.2 g/t Au, 176 g/t Ag, 19.8% Zn, 5.34% Cu.
- La Famosa: 59.4 g/t Au, 833 g/t Ag, 4.2% Zn.
- La Union: 9.9 g/t Au, 53.6 g/t Ag, 2.5% Zn.
The 2024 Phase I program includes no more than 4-6 drill holes (for approximately a total of 1,500m) to test these targets to hone in on the right stratigraphy, with results expected in Q3/Q4 2025. This systematic approach minimizes wasteful drilling and maximizes discovery potential.
Infrastructure Advantage: La Union benefits from drive-up access on a private ranch, secured permits, and available power and water (trucked from nearby sources). This infrastructure reduces operational costs and eliminates community or regulatory risks, making it cheaper and easier to operate compared to remote projects.
Speculative Buyout Potential: Given the Sonora region’s M&A activity and La Union’s CRD and porphyry potential, a significant discovery could attract immediate interest from majors. The Hermosa project’s $400M buyout is a direct comparable, while Fresnillo, Fortuna, and Alamos Gold’s regional presence increases the likelihood of a competitive bidding process. A discovery of scale could value Questcorp’s assets in the hundreds of millions, far exceeding its current $10.54M market cap.
Strategic Partnership with Riverside Resources
Proven Expertise: Riverside Resources Inc. (TSXV: RRI), holding a 9.9% stake in Questcorp, has operated in Mexico for over 20 years, with a track record of major discoveries, including Alamos Gold ($3.5B market cap) and Ocampo ($2.2B sale). Dr. John-Mark Staude, Riverside’s President, CEO and Founder / Director, brings deep regional knowledge and operational experience.
Operational Continuity: Riverside’s role as program operator leverages its seven years of exploration at La Union, including USD $700,000 spent consolidating properties and identifying targets. This partnership enhances execution efficiency and credibility.
Spinout Rarity: La Union was destined to be one of only two spinout deals Riverside has executed, the other being El Capitan (now ~$100M market cap). This selectivity underscores La Union’s high potential, as Riverside has a history of backing only the most promising projects.
Implication: Riverside’s involvement and stake align interests and increase the likelihood of a successful discovery, making Questcorp an attractive partner or acquisition target for larger players.
Sonora Gold Belt: A Hotbed for Discoveries and M&A
Regional Context: The Sonora Gold Belt’s rich history includes over 15 million ounces of gold and significant silver production across mines like La Herradura, San Francisco, and Mulatos. The region’s carbonate-hosted and porphyry deposits have drawn majors like Fresnillo, Fortuna Mining, and Alamos Gold, as well as recent M&A activity (e.g., South32’s Hermosa).
Acquisition Precedents: The Hermosa project’s $400M buyout by South32 highlights the value of CRD deposits in the region. Similarly, Riverside’s past successes with Alamos and Ocampo demonstrate the belt’s potential for transformative deals.
Speculative M&A Scenario: A significant CRD or porphyry discovery at La Union could position Questcorp as a takeover target for majors seeking to bolster their Sonora portfolios. Nearby players like Fresnillo (world’s largest silver producer) or Fortuna Mining (3B market cap) could view La Union as a strategic fit, especially given its high-grade potential and infrastructure advantages. The tightly held float would further drive premium valuations in a buyout scenario.
North Island Copper Property (NICP): Complementary Upside
Location and Potential: NICP, located near the past-producing BHP Island Copper Mine (1.2B kg Cu, 35,268 kg Au), targets copper-silver skarn and porphyry copper mineralization. Historic drilling intersected 0.078% Cu over 56.39m, with grades increasing at depth, and a planned 3D IP survey will guide further drilling.
Regional Interest: Northisle Copper and Gold Inc., exploring 15-31km away, could view NICP as a strategic acquisition target due to its proximity and complementary polymetallic potential.
Infrastructure: The property benefits from highways, logging roads, and a hydro line, supporting cost-efficient exploration.
Implication: While La Union is the primary value driver, NICP adds diversification and potential for additional discoveries, enhancing Questcorp’s overall appeal to investors and acquirers.
Experienced Management Team
Leadership: Founding Director, President & CEO Saf Dhillon has over 20 years of experience in public company development, including U.S. Geothermal’s growth from USD $2M to a $200M sale. Advisor Paul Larkin, with 42 years in corporate finance, has guided multiple resource startups including being a Founder of U.S. Geothermal Inc. to success.
Technical Expertise: Director R. Tim Henneberry (P.Geo) brings 43 years of international exploration experience, ensuring robust project execution.
Implication: The team’s track record in exploration and M&A enhances Questcorp’s ability to deliver on La Union’s potential and navigate acquisition discussions.
Valuation & Market Opportunity
Current Valuation: Questcorp Mining Inc. (CSE: QQQ.CN | OTC: QQCMF) $10.54M market cap is significantly undervalued relative to peers like El Capitan ($100M) and Fortuna Mining ($3B). The tightly held float and low market cap create a low base for substantial re-rating upon exploration success.
Comparable Valuations: South32’s $400M Hermosa acquisition and MAG Silver’s Juanicipio success highlight the premium valuations for CRD discoveries. A major discovery at La Union could value Questcorp’s assets in the $200-500M range, based on regional precedents.
Catalysts:
- IP survey results (expected within weeks) to refine drill targets.
- Phase I drilling at La Union (1,500m, Q3/Q4 2025) targeting high-grade CRD zones.
- NICP 3D IP survey and follow-up drilling.
- Potential M&A interest following a discovery, driven by Sonora’s active deal environment.
Speculative Buyout Scenario: A significant CRD or porphyry discovery could catalyze a buyout, with valuations potentially exceeding $400M, as seen with Hermosa. Majors like Fresnillo, Fortuna, or even Northisle (for NICP synergy) could compete for Questcorp’s assets, leveraging the tightly held float to drive a premium offer.
Conclusion
QUESTCORP MINING INC – CSE: QQQ.CN
- Spartan’s Idea: Long Speculation $0.15 – $0.18
- Spartan’s Stop Loss: $0.10
- First Resistance: $0.27
- Second Resistance: $0.38
OTC: QQCMF
- Spartan’s Idea: Long Speculation $0.10 – $0.13
- Spartan’s Stop Loss: $0.065
- First Resistance: $0.22
- Second Resistance: $0.30
Flagging in the daily, curling back above ema support and room back to the recent range highs in my opinion. Will continue to watch volume to see if spec money flows in before results.
Spartan (aka ‘Chris’)
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