Full Warrant Acquired in Cordoba Minerals Financing

Full Warrant Acquired in Cordoba Minerals Financing

As per my last blog post, I’ve been on the hunt for warrant exposure in my portfolio.  And with that, I’ve just acquired some full warrants as part of my participation in the Cordoba Minerals (TSXV – CDB) financing.

The placement was done at $0.10 with a full 2-year warrant at $0.12 – that’s right, a full warrant at only a 20% premium to the financing price.

There’s been a good amount of “full warrant” financings in the first part of 2019 and I’ve looked at most of them.  Ultimately, full warrant or not, I need to like a company before I take a position.

Cordoba is what I call a private-public company.  I-Pulse, owns 71.9% of Cordoba – 74.9% if it exercises its warrants.  I-Pulse is the brainchild of Laurent Frescaline, an electrical engineer and overall great guy from France.  Along with Robert Friedland’s backing, Laurent uses I-Pulse to commercialize pulsed power technology.  I-Pulse’s board is jammed full with Friedland guys such as Peter Meredith, Ian Cockerill, etc.

One of I-Pulse’s subsidiaries is HPX – High Power Exploration.  And in the case of Cordoba, it is using HPX’s Typhoon data system – a very accurate and powerful IP and electromagnetic geophysical survey technology – to help with its exploration.

Initially, Cordoba focused its work on the San Matias project in Colombia.  But just recently, it signed a JV agreement with Bell Copper where Cordoba can earn an 80% stake in the Perseverance copper project in Arizona.

This where it gets interesting for me.  As you can see from the picture below, a large magnetotelluric resistivity low target that has been identified but never drilled at Perseverance.  K19 would have hit the target flush if it went deeper.  And K20 was suspended at 1045 meters, just short of hitting the target on its flank.  Cordoba announced yesterday that it would extend K20 to a depth of 1250-1400 meters.  Results will be interesting and will probably determine if Cordoba follow-ups with a deep hole in the vicinity of K19.

After the 2nd tranche of their financing closes, Cordoba will have some 302 million shares out – quickly moving towards the share structure of an ASX listed company.  Add some 64 million warrants and another 11 million options, and the fully-diluted number gets close to 400 million.  But at $0.10, I feel like I have limited downside.  And if the large MT resistivity low target bears fruit, the $0.12 warrants will be a nice upside kicker to the share price gain.

Philip O'Neill
Philip O'Neill
poneill@mp1capital.com