Mineros' Strategic Acquisition of La Pepa and Its Implications for Gold Exposure in Chile

Strategic Expansion and Growth Pipeline
Mineros S.A.'s acquisition of the remaining 80% stake in Chile's La Pepa Project for $40 million marks a pivotal step in its evolution as a mid-tier gold producer. By securing 100% ownership of the project, the company eliminates joint-venture complexities and gains full control over a high-grade gold system in the prolific Maricunga Gold Belt. The project's resource base—1.15 million ounces in measured resources and 1.039 million ounces in indicated resources—positions it as a cornerstone of Mineros' growth pipeline.

The acquisition aligns with Mineros' strategy to diversify its asset portfolio by acquiring earlier-stage projects. La Pepa's porphyry-style gold system, characterized by disseminated and epithermal mineralization, offers scalable potential for open-pit mining and heap-leaching operations. A preliminary economic assessment (PEA) based on the 2021 resource estimate will likely refine the project's economic viability, particularly as gold prices trend higher.

Regional Diversification and Jurisdictional Strength
Chile's mining-friendly regulatory environment and established infrastructure make it an attractive jurisdiction for exploration. By entering Chile, Mineros diversifies its geographic exposure beyond Colombia, where it operates the San Matías and La Colosa gold projects. This move mitigates regional risk and taps into Chile's historical production of over 10% of global gold output. The La Pepa Project's location—800 km north of Santiago and 110 km east of Copiapó—ensures proximity to logistical hubs, reducing operational costs and enhancing scalability.

The acquisition also underscores Mineros' ability to capitalize on cross-border synergies. With a 100% stake in La Pepa, the company can streamline exploration and development without diluting equity through joint-venture partners. This control is critical for advancing a project with inferred resources (366,000 ounces) that require further drilling to upgrade to indicated or measured categories.

Alignment with Long-Term Gold Price Trends
The resource estimates for La Pepa were calculated using a long-term gold price assumption of $1,650 per ounce—a figure that appears increasingly conservative given recent market dynamics. Gold prices have surged to multi-year highs in 2025, driven by inflationary pressures, geopolitical uncertainty, and central bank demand. Mineros' acquisition timing is strategic, as higher gold prices improve the project's net present value (NPV) and justify capital expenditures for a PEA and eventual feasibility study.

The project's cut-off grades (0.20 g/t for oxides, 0.26 g/t for sulfides) are conservative, ensuring that even modest gold price increases could unlock additional ounces. For context, if gold prices stabilize above $2,000 per ounce, the project's inferred resources could transition into economically viable reserves, accelerating development timelines.

Risk Considerations and Forward-Looking Outlook
While the acquisition strengthens Mineros' portfolio, investors should remain mindful of exploration risks. The 2021 resource estimate remains unupdated, and no new drilling data has been disclosed since 2020. A PEA will be critical to validate the project's economics, particularly for heap-leaching operations, which are capital-intensive and sensitive to metallurgical recovery rates.

Regulatory and environmental hurdles are currently minimal, with no material issues flagged in the technical report. However, Chile's evolving environmental policies and community engagement requirements could introduce delays. Mineros' management, led by CEO David Londoño, has emphasized its commitment to sustainable practices, which should mitigate such risks.

Investment Thesis
Mineros' acquisition of La Pepa is a calculated move to enhance its gold exposure in a high-potential jurisdiction while aligning with favorable gold price trends. The project's resource base, combined with Chile's mining infrastructure, offers a compelling growth catalyst. For investors, the key metrics to monitor are the PEA results, gold price trajectories, and the company's ability to execute on its exploration plans.

Recommendation
Given the strategic value of La Pepa and Mineros' disciplined approach to asset acquisition, the company presents a long-term growth opportunity for investors with a 3–5 year horizon. However, near-term volatility in gold prices and exploration outcomes warrant a cautious approach. A buy recommendation is justified for those who believe in the sustained strength of gold and Mineros' ability to convert La Pepa's resources into a producing asset.

Note: This analysis is based on publicly available data as of August 2025. Investors should conduct further due diligence and consult financial advisors before making investment decisions.