NGEx Minerals' Breakthrough Drilling Results at Lunahuasi: A Catalyst for Copper Equity (CuEq) Value Expansion

The recent drilling results from NGEx Minerals' Lunahuasi project in Argentina have ignited significant investor interest, positioning the company as a key player in the surging copper market. With high-grade CuEq intersections, expanding mineralization zones, and a strategic focus on capitalizing on global demand dynamics, NGEx is poised to unlock substantial value for shareholders. This analysis examines the geological, market, and valuation implications of these developments.

Geological Breakthroughs at Lunahuasi

NGEx's Phase 3 and Phase 4 drilling campaigns at Lunahuasi have delivered transformative results. In hole DPDH054, the company intersected a 94.00m interval at 8.99% CuEq, including a standout 21.70m segment at 31.92% CuEq (with 25.21 g/t Au). Similarly, hole DPDH048 returned a 22.85m interval at 14.26% CuEq, while DPDH046 highlighted ultra-high-grade gold-silver mineralization, including a 1.55m interval grading 504.00 g/t Au. These results underscore the project's polymetallic potential and the presence of multiple mineralization styles, including porphyry, high-sulphidation, and quartz vein systems.

The expansion of mineralized zones to a minimum of 1,100m x 1,200m x 1,200m suggests a large, economically viable deposit. Such scale, combined with high-grade intersections, positions Lunahuasi as a Tier 1 exploration target in a region with limited new discoveries.

Strategic Alignment with a Copper-Driven Market

The global copper market is undergoing a structural transformation. According to a report by BloombergNEF, demand is projected to rise by 24% by 2035, reaching 42.7 million metric tons per annum (Mtpa) from 28 Mtpa in 2025, driven by the energy transition, AI infrastructure, and industrialization in Asia. The energy transition alone requires an additional 2 Mtpa of copper over the next decade, while AI-related data centers could add 2,200 TWh of electricity demand by 2035, further straining copper supply chains.

Supply constraints are exacerbating this imbalance. Mine production growth is forecasted at a mere 1.4% in 2025, with closures like Cobre Panamá and logistical bottlenecks in refining creating a structural deficit. The London Metal Exchange (LME) price for copper has surged to near-record highs, with analysts predicting an average of $10,500 per ton in 2026. NGEx's Lunahuasi project, with its high-grade CuEq potential, is strategically positioned to benefit from this tightening market.

Valuation Implications and Financial Flexibility

NGEx's market capitalization of $1.2 billion CAD reflects its strong resource base of 2.5 million ounces of gold equivalent and the recent drilling success. The company's decision to spin out royalties on flagship assets, including Lunahuasi and Los Helados, provides additional liquidity and shareholder value. A C$175 million private placement in 2025 further strengthens its balance sheet, enabling continued exploration and development.

Analysts highlight a valuation disconnect: while NGEx trades at a price-to-book ratio of 34x, a discounted cash flow model suggests the stock may be undervalued from a cash flow perspective. This discrepancy arises from the market's underappreciation of the project's long-term potential, particularly as Phase 4 drilling continues to expand the resource envelope.

Conclusion: A Catalyst for Value Expansion

NGEx Minerals' breakthrough results at Lunahuasi represent more than a geological success-they are a strategic catalyst in a copper market primed for growth. The combination of high-grade CuEq intersections, expanding mineralization, and a favorable macroeconomic backdrop positions the company to capitalize on the energy transition and AI-driven demand. With robust financing and a clear path to resource expansion, NGEx is well-positioned to deliver outsized returns as the global copper deficit deepens.