SLM’s Chocolate project has four targets now

Today our Peruvian copper Investment Solis Minerals (ASX: SLM) announced promising exploration results from one of its four copper projects in the country.

Within this project, today we learned that SLM is working with four targets at the Chocolate project.

Two IOCG targets, and two porphyry targets.

Rock chip assays from those targets were as follows:

(Source)

And below are the targets for each of those different styles of mineralisation (IOCG circled in yellow and porphyry circled in white):

We take these results to mean that SLM ranks the Chocolate project highly in its exploration program, as it prepares to drill the following four projects this year (Chocolate highlighted in yellow, scheduled for Q4 this year):

(Source)

We’ve previously said how we like that SLM has a lot of “shots on goal” this year, as it attempts to make discovery across one or more of its four projects in what is the second largest copper producing country in the world:

Highlighted in orange above, are a couple major copper mines in the region.

We also note the presence of some important infrastructure that improves the viability of any potential discovery and ultimately a mine in the region.

This includes a smelter, a copper refinery, a port and a thermoelectric plant.

It all adds up to this being prime copper exploration ground at a time when the world is hungry for more copper as it pursues its decarbonisation and electrification goals.

Copper is the lifeblood of an electrified economy and major companies like BHP are making moves to secure long-term supply.

The copper price has moved up of late from the beginning of 2025, currently trading at ~US$4.56/lb:

(Source)

What’s next for SLM?

🔄 Additional exploration work to firm up drill targets

SLM plans to conduct further induced polarization (IP) surveys at another project, Cinto, to refine drill targets, with a first-pass drill program anticipated for 2025.

It will then start drilling across the four projects during 2025, noting that the order of the projects drilled could change depending on which projects have the best targets following this exploration work.

We pointed out in our last note the following risks…

The three main risks we are most conscious of for SLM right now are funding risk, exploration risk and permitting risk.

The first and most important risk is funding risk.

SLM had $1.58M in the bank at the end of November which we don't consider is enough to drill all four of its targets this year, especially given working capital needs.

As a result we expect to see SLM go to the market to raise some cash to fund drilling programs at some point.

With SLM planning 2x 5,000m drill programs inside this current quarter, the capital raise may need to happen before OR just after drilling starts this quarter.

Funding risk

SLM is a very early stage exploration company with zero revenue and is reliant on capital raises (or attracting a farm in partner) so it can undertake high-risk / high reward exploration programs. There is a risk that market conditions deteriorate and investors shun high-risk explorers like SLM, and SLM is unable to raise capital without significant dilution of existing shareholders.

Source: “What are the risks” - 9 July 2024 SLM Investment Memo

Second is permit delay risk.

SLM is waiting on a number of key permits to drill out its project.

Any delays to these permits and the expectations that SLM has set for when to expect them, may negatively impact the company’s share price.

Finally, exploration risk.

This risk will become more apparent as SLM starts to drill out its project.

Drilling may not deliver mineralisation, or any mineralisation found may not be economic.

Exploration risk

SLM’s projects are all considered early stage prospects. This means SLM is yet to make a discovery on the projects. Inherently there is a risk that drilling programs return results with no mineralisation and the projects are not considered valuable.

Source: “ What are the risks” - 9 July 2024 SLM Investment Memo

For additional risks we’ve identified with our SLM Investment Memo, see our SLM Investment Memo.