PAT: New Copper discovery extends to 5.5km target corridor... 18km from $860M Chinese copper mine

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 17,930,000 PAT Shares and the company’s staff own 750,000 PAT Shares. The Company has been engaged by PAT to share our commentary on the progress of our Investment in PAT over time. This information is general in nature about a speculative investment and does not constitute personal advice. It does not consider your objectives, financial situation, or needs. Any forward-looking statements are uncertain and not a guaranteed outcome.

You can't have an AI and data centre “global arms race” without the metals that carry the electricity.

Which is why we think copper and silver demand is going to surge once the trillions of dollars raised to build AI data centres is deployed and construction ramps up.

($7 trillion by 2030 according to McKinsey).

Copper carries the electricity - every AI data centre needs hundreds of tonnes of it just for wiring, cooling and grid connections.

(not to mention upgrading the power grid to bring in the electricity)

Silver helps carry the signal - it's in the chips, circuit boards and switches that make AI hardware actually run.

We Invested in Patriot Resources (ASX:PAT) for its silver project in Peru (and because we think the silver price is going higher).

That project has a 31.4M ounce silver equivalent JORC resource sitting inside a giant JORC exploration target of 559 to 774 million ounces silver equivalent.

(one of the largest undeveloped silver systems in the world if proven with drilling)

Two weeks ago PAT announced a copper discovery on its other project in Zambia.

PAT’s new copper discovery is ~18km from the Kitumba deposit being developed by Chinese conglomerate ~$8BN Sinomine.

(Sinomine recently raised $760M for African resources assets and there’s already a personal connection between PAT and Sinomine too... more on that later)

(source)

China is one of the two major players in the global AI arms race (the other is the USA).

China is well known for funding and buying African resource projects to fuel their global manufacturing and metals dominance.

China has spent the last few years quietly buying up copper, lithium and cobalt projects across Africa and South America - from Zambian copper mines to Congolese cobalt to Argentine lithium brines - and now controls around 79% of Africa's lithium production.

TODAY: PAT just revealed two new targets on its new Zambia copper discovery, mapping out a 5.5km corridor, on trend to the same fault zone that hosts the giant Kitumba deposit up the road.

Meaning PAT’s new copper discovery may not be a small isolated pocket of copper but could be part of a bigger structure...

So now for PAT we look forward to the first drilling on the silver project in Peru AND follow up drilling to expand on their NEW copper discovery in Zambia.

And copper just so happens to be near its all time highs:

(source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

Even a major prediction market’s platforms are about to allow gamblers to bet on the direction of the copper price based on the coming demand to build AI data centres...

AND precious metals prices too.

(a good sign for broader interest and awareness in two of our favourite macro themes).

Over the last 24 hours:

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Yes, we are in PAT for the silver project in Peru.

But this copper asset becomes more interesting the more work PAT does on it, and the more we look at it.

(and the more the copper price keeps moving up around its all time highs)

As we noted above, today, PAT announced two NEW drill targets at its copper discovery - which maps out a ~5.5km target corridor on geophysical data.

Next door to the US$600M copper mine $8BN Sinomine is developing.

So across the same structure we seem to have:

Kitumba (~109Mt deposit + US$600M smelter under construction)...

then Sinomine's Target H...

then PAT's Tonic discovery...

then PAT's new Block 1...

then PAT's new Block 2.

(source)

Both the new targets in PAT’s words (we are not geos) look like “IOCG targets”.

The type of target the most famous name in copper is looking for (and plenty of others in the entire industry).

Ever seen this guy before?

That’s Robert Friedland - arguably the most famous copper guy on the planet.

He is like the Elon Musk of mining...

Most guys are lucky to make one discovery (worth anything of value).

He was behind three massive ones:

1. Voisey’s Bay - a massive high-grade nickel deposit in Canada sold to Inco for C$4.3 billion in 1996
   
2. Oyu Tolgoi - a massive copper-gold discovery in Mongolia (check out his X post commemorating 25 years since the discovery hole here, and the original announcement of the discovery), and
3. His most recent (most relevant to PAT) - Kamoa-Kakula - one of the world's largest, highest-grade copper complexes with $16BN Ivanhoe Mines.

Ivanhoe Mines (Friedland’s company) explicitly mentioned it would go into Zambia looking for its next big discovery.

Friedland said this on the move into Zambia:

"...we believe there are plenty of new tier-one copper discoveries yet to be found under shallow Kalahari sands." (source)

Ivanhoe signed an MoU with the Zambian government to that effect in September 2024.

(source)

Then in April last year they kicked off what it called a "giant copper exploration program":

(source)

Ivanhoe's licences are in Zambia's North-Western Province - a different part of the country to PAT, BUT...

We will take the “Elon of mining” selecting Zambia as the place to focus in on finding his next tier-one copper discovery as a good sign PAT’s in the right place.

Especially when it's Ivanhoe’s “largest ever” exploration program.

Explicitly going after the same type of discovery PAT declared a week ago and has now extended the target area of... an iron-oxide-copper-gold (IOCG) system.

PAT’s new copper discovery - what is it, and how big could it be?

Two weeks ago, PAT surprised everyone (including us) with a greenfield copper discovery in Zambia - hitting 17m at 0.41% copper, 4.7g/t silver starting at a depth of ~29m.

We covered the discovery in detail in our last PAT note here.

Now after some ground magnetics and IP surveys (geophysics) PAT has one target ~2.5km to the southeast of its discovery and another ~5km southeast.

(🎓 IP surveys run a current through the ground which lights up areas that could contain copper sulphides - the output to us non-geos are those colourful blobs you see on ASX announcements)

Importantly, the two new targets sit on the same regional structure as PAT’s discovery (the Mumbwa Fault Zone).

Meaning PAT’s find might not be a small isolated pocket of copper but could be part of a bigger structure:

(source)

There is a precedent for that structure hosting big copper deposits too

That regional structure also matters because the Mumbwa Fault Zone is the same structure that hosts $8BN Sinomine's Kitumba asset, weighing in at ~109.2Mt at 0.96% copper.

It sits about 18km northwest of PAT's new targets.

(source)

Sinomine’s project was the first recognised IOCG-style copper deposit in Zambia.

And now, Sinomine is building a US$600M processing facility and copper smelter there - due to be commissioned this year.

(source)

If you zoom in on the map in PAT’s announcement - Sinomine, at its closest point, has a target ~7km away from PAT’s discovery too - again on the same structure.

So we have the Kitumba deposit + US$600M smelter under construction.

Then Sinomine's Target H...

Then PAT's Tonic discovery...

Then PAT's new Block 1...

Then PAT's new Block 2.

(source)

We went into this in detail in our last note - but being next door to an existing discovery with infrastructure is a very solid setup for any junior explorer.

It de-risks a discovery, and can even make “marginally economic” discoveries, which would maybe be too small or too low of a grade to justify building infrastructure - economically viable.

This is because the big CAPEX is done by the mine owner next door, who then just views the discovery next door as a cheap way to get feedstock through its plant.

(In most cases, cheaper than going exploring again and more often than not finding nothing).

OR maybe Sinomine might just buy it from PAT... just speculating here, but PAT’s chairman Hugh Warner does have a positive history with Sinomine.

It looks like they are already talking - PAT’s discovery announcement also confirmed that Sinomine had already offered access to its infrastructure IF PAT were to find something economic in the ground:

(source)

The PAT - Sinomine connection

So PAT is working on a new copper discovery 18km up the road from Sinomine.

PAT’s chair Hugh Warner dealt directly with Sinomine before as co-founder of Prospect Resources. Sinomine participated in share placements and 2 offtake agreements at Prospect Resources.

Prospect picked up the Arcadia lithium project in Zimbabwe, made the discovery, and sold it to a Chinese major (Huayou Cobalt) for US$378M.

(source) (source)

Prospect went from a $6M market cap micro-cap to delivering a US$378M cash payday to Prospect shareholders under that team.

Arcadia is now the largest operating lithium mine in Africa.

So we have:

• PAT’s Chairman with a direct track record of building African mineral assets and selling them to Chinese majors at scale
• A PAT copper asset sitting 7km from a Chinese major (Sinomine) ramping up its own Zambian copper development
• Sinomine having dealt directly with PAT’s chair during his time at Prospect Resources.

There’s no guarantee anything happens between PAT and Sinomine - but the set-up is conveniently similar to the kind of playbook Hugh has run before.

Just quietly... All of this is happening for PAT as copper is the best performing commodity of 2026

We did a deep dive on the copper macro setup in a recent article on one of our other Investments here.

Before you read that, it would be rude not to plug Robert Friedland’s “Dawn of the copper age” presentation from earlier this year:

(it’s hard to not be bullish copper after watching this one - so watch at your own risk - but also keep in mind commodities markets are hard to predict, and anything can and will happen)

(source)

We are still here for PAT’s silver project

Yes, the copper asset has managed to pitch a tent in a part of our brains rent free (a big one).

But we are still here for PAT’s silver project in Peru.

As mentioned earlier, the project already has a 31.4M ounce silver equivalent JORC resource estimate.

Sitting inside a giant JORC exploration target of 559 to 774 million ounces silver equivalent.

(potentially one of the largest undeveloped silver systems in the world)

(source)

$42BN Teck Resources spent four years collecting data on this project before pivoting the whole company to copper and letting it go - we told that full story in our April note here: Our Latest Investment: Patriot Resources (ASX: PAT).

Next on that project, we are waiting on drill permits.

Ultimately, the silver asset is still central to our PAT Big Bet as follows:

Our PAT Big Bet

"PAT re-rates to a $150M plus market cap by proving up the size and scale of its Peruvian silver asset"

NOTE: our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is no guarantee that our Big Bet will ever come true. There is a lot of work to be done, many risks involved, including development risk, country risk and commodity price risk - just some of which we list in our PAT Investment Memo.

Success will require a significant amount of luck. Past performance is not an indicator of future performance.

What’s next for PAT?

Drill and update the current silver resource

We want to see PAT drill its silver project in Peru and confirm the existing 31.4M ounce silver equivalent JORC resource estimate.

With the first drill campaign, we want to see the previous results confirmed with infill drilling.

Here are the milestones we are tracking for that program:

• 🔲 Drilling permits
• 🔲 Phase 1 drill program (mostly infill drilling)
• 🔲 Assay results from phase 1 drilling

Drill follow up holes on the copper discovery

We want to see PAT drill out and extend its copper discovery in Zambia.

Interestingly, PAT’s discovery announcement said “several of the holes terminated in mineralisation or ended before their planned target depth”.

So it could be that the discovery is bigger than what PAT has defined on the project so far.

(source)

What are the risks?

The two main risks for PAT in the short term are “commodity price risk” and “funding risk”.

We laid out these when we first Invested in April 2026.

Commodity price risk

PAT, as a silver exploration company is exposed to movements in the silver price. Silver prices are currently near all-time highs - should silver prices fall, this could hurt the PAT share price significantly. A silver price correction from current levels is a real and meaningful risk.

Source: “What could go wrong” - PAT Investment Memo 13 April 2026

We are seeing this play out now with silver retreating from its all time highs to its current US$57/oz.

PAT had $2.7M cash at 31 March 2026 plus the $500k we Invested into the company post-quarter end. (source) (source)

PAT’s silver project has a giant exploration target which will require a big drilling program with several deep holes.

PAT is a pre revenue small cap explorer and is reliant on raising funds to support the advancement of its exploration and development.

Funding risk / dilution risk

PAT is a pre-revenue explorer and so it is always reliant on access to fresh capital to fund drilling and exploration.

Further capital raises will be needed, and these may take place at a discount to the prevailing share price, diluting existing shareholders.

PAT’s silver project also has deferred cash payments attached for up to US$3M over 30 months, so PAT may need to raise to fund these payments also. There is no guarantee PAT can access capital on favourable terms.

Source: “What could go wrong” - PAT Investment Memo 13 April 2026

Other risks

Like any early-stage exploration company, PAT carries significant risk, here we aim to identify a few more risks.

Operating assets across both Peru and Zambia exposes the company to dual geopolitical and regulatory frameworks, which could stretch management's operational bandwidth thin across different time zones.

While the silver exploration target in Peru is exceptionally large, there is a statistical probability that upcoming drilling programs may fail to convert these conceptual targets into defined mineral resources.

The commercial viability of the new Zambian copper discovery currently heavily relies on the proximity and cooperation of a third party, meaning any changes to Sinomine's infrastructure access or corporate strategy could stall development.

Additionally, managing a polymetallic discovery in Africa alongside a massive silver system in South America could each have potential metallurgical and processing complexities that may affect future project economics.

Investors should consider these risks carefully and seek professional advice tailored to their personal circumstances before investing.

Our PAT Investment Memo

You can read our PAT Investment Memo in the link below.

We use this memo to track the progress of all our Investments over time.

Our PAT Investment Memo covers:

• What does PAT do?
• The macro theme for PAT
• Our PAT Big Bet
• What we want to see PAT achieve
• Why we are Invested in PAT
• The key risks to our Investment Thesis
• Our Investment Plan