The push for renewable energy and the electrification of road transport systems worldwide has many observers casting a worrying eye on potential supply constraints in copper markets. Vancouver-based junior NGEx Minerals (TSXV: NGEX) is working to tap into a bullish outlook for energy metals by advancing its exploration work in Vicuña, an emerging copper-gold-silver district in the Andes mountains with potential multi-billion tonne holdings.

Straddling the Argentina-Chile border in a geologically intriguing gap between the Maricunga belt to the north and the El Indio belt to the south, Vicuña has been controlled by Canadian resource powerhouse the Lundin Group for more than a decade. Critical early exploration work by the group’s original holding company, NGEx Resources, outlined three major porphyry metal discoveries — Los Helados, Josemaria, and Filo del Sol — all within about 15 kilometers of each other.

In 2016, NGEx Resources spun off their Filo de Sol holding into Filo Mining (TSXV: FILO) to highlight the potential of this project, recalls Wojtek Wodzicki, the current CEO of NGEx Minerals who helmed NGEx Resources at the time of the spinout.

“With junior companies, investors like to see focus,” says Wodzicki. “If you have too many projects, it’s difficult for people to decide which one to value the company on. We had a lot of faith in Filo del Sol, but it needed more exploration.”

In terms of value creation, the spin off was a hit. On the back of several drill results showing high-grade copper assays and long intercept lengths, Filo’s market cap soared to around $2.8 billion by the end of 2022.

Hoping to repeat their success, the Lundin Group completed a second spin out in 2019 that turned the Los Helados project and some early-stage exploration assets into the new NGEx Minerals. NGEx holds about 69% of the project and is the operator subject to a joint exploration agreement with Nippon Caserones Resources.

“Los Helados is the biggest resource in the district,” says Wodzicki. “We drilled around 10,000 metres last year and we’re planning to drill something similar this year. We need to understand the extent of the high-grade zones and the drilling is focused on that.”

Los Helados contains at least three distinct high-grade zones hosted within well-defined structural corridors that crosscut the large breccia body hosting the deposit. On January 26, NGEx reported some of the highest grades intersected at Los Helados to date that broadened the extent of these high-grade zones (Alicanto, Fenix and Condor).

Hole LHDH083, drilled 90 metres to the east of a previous discovery intersection in the Alicanto zone, returned 122 metres at 1.05% copper-equivalent (CuEq) (the copper concentration adjusted for additional fractions of gold and silver). The finding was within a broader mineralized intersection of 626 metres at 0.59% CuEq. The tests also detected elevated molybdenum grades in the zone, averaging 190 parts-per-million.

Drilled to intersect the northern flank of the Fenix zone below an established high grade copper and gold zone, hole LHDH081 intercepted 220 metres at 0.72% CuEq from 1144 metres, with the rest of the drill hole returning 1169 metres at 0.43% CuEq from 436 metres. The site’s third zone, termed Condor, was tested through two holes exploring depth and boundary extensions of high-grade copper and gold mineralization.

For 2023, NGEx has four drills at Los Helados to better define the size and geometry of the Alicanto and Fenix Zones. Geophysical surveying techniques including magnetic-sensing drones are also being deployed to spot possible targets.

“Over the past year, we’ve performed a geological reinterpretation that really helped us focus on what was controlling the highest-grade portions of our deposits,” notes Wodzicki. “That’s transformed our thinking about that project. Last year we intersected one of the best holes in the copper space hitting 1290 metres at 0.74% CuEq, and this year we’re going to try and add as much high-grade material to that as we can over the next three to four months.”

A 2019 updated resource estimate showed that Los Helados hosts an indicated 2.1 billion tonnes grading 0.48% CuEq, for 17.6 billion lb. contained copper, 10.1 million oz. gold and 92.5 million oz. silver. All resource figures assume a 0.33% copper-equivalent cut-off grade.

In early January 2023, NGEx announced it had kicked off its maiden exploration program at Potro Cliffs, the largest untested hydrothermal system in the Vicuña District. The firm plans to take advantage of a 700-metre elevation difference between holes drilled in the cliff plateau and the valley below to spot the same structural trend that controls the Filo del Sol deposit, located about 7 km to the south and Los Helados, about 10 km to the north.

“With Potro, we’re talking about developing a district here,” says Wodzicki. “It has the same sort of alteration and surface footprint we see at the at the Filo system. It’s one of these targets where I think it’d be exciting anywhere, but the fact that it’s in a district where we know there’s a lot of metal kicking around — that makes it particularly interesting.”

With the Andes mountains home to some of the largest and most productive copper mines in the world, including Escondida in Chile and Cerro Verde in Peru, a new giant metal district in the region is a “Holy Grail” for the mining industry, according to Wodzicki. He cautions though that unlocking the economic portion of a mineral deposit is not always straightforward.

“When you look at giant districts, they can deliver discoveries over time as you learn more about the geology,” says Wodzicki. “The key thing is to recognize the scale, recognize the metal content and then give yourself time to uncover it.”

Adam Lundin, the director of NGEx, notes that large districts are foundational for many major mining companies today in terms of value generation and cashflow. “Giant districts allow those entities to grow and turn into the world class companies,” says Lundin. “That’s what we see at the Vicuña district, and that’s what gets us so excited about its potential.”

“Being part of the Lundin Group, with its history of being able to raise money in all markets, is a huge part of the success here,” adds Wodzicki. “There’s going to be a premium put on projects like the ones we have in the Vicuña district that are already through a lot of the exploration and pre-development process — NGEx at its current market cap is still a really good value play and I think investors recognize that.”