Pakiya Funds coverage of Oroco OCO.v

Oroco put out a press release discussing the terms of acquisition of Altamura (which owns rights to Santo Tomas). Oroco will end up with 81% ownership of ST after spending $30M of expenditures.

ST has historical studies showing 7B pounds of copper. Recent research report has shown the valuation of copper assets are 7 cents/lbs for m&a and juniors typically trade at 2.5-3 cents/lbs. So the 81% ownership puts a valuation of $140M – $400M. The company currently sports a $20M market cap, a huge discount to fair value.

There are still legals that need to be resolved. But based on this acquisition and recent comments from the CEO, the legals are close to getting resolved.

There is also huge upside to the 7B pounds of copper. John Thornton is a consultant working with Oroco on the ST asset. Prior to working to Oroco, John was geologist that was working for Fierce (the previous owner of ST). John published this research report discussing the ST asset and the potential resource size. In there he mentions there is likely 2B tonnes (around 14B pounds) of copper. That is a huge upside and would make this asset extremely desirable to the majors. So potential upside value is close to $1B.