Copper Explorer Hits 88 Meters of 1.6% CuEq, Makes New Skarn Discovery in Mexico

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• Algo Grande's step-out hole AG-CG-PH2-003 discovered a new, gold-rich skarn at its Adelita project in Sonora, Mexico, which the company has named the Margarita Skarn.
• The hole returned a combined 139.81 meters of 1.3% CuEq from three separate intervals, including 87.98 meters of 1.6% CuEq at the Cerro Grande 2 zone.
• The Margarita Skarn returned 14.37 meters of 1.1% CuEq, including 1.01 meters of 6.0% CuEq with 4.98 g/t gold, along a fault the company had not previously recognized at Adelita.
• CEO Enrico Gay said the result supports the company's view that Adelita hosts a cluster of skarns, and this hole is the first to support its model of northwest-trending faults as pathways.
• Assays are pending for six more Cerro Grande holes and two at Las Trancas, and Gay expects the next results in the coming weeks.
• Copper is trading near record highs as demand from AI data centers meets tight mine supply.

Algo Grande Copper Corp. (ALGR:TSXV; ALGRF:OTCPK; KM00:FSE) has discovered a new, gold-rich skarn at its Adelita project in Sonora, Mexico, after step-out hole AG-CG-PH2-003 kept drilling past its original target, according to an October 28 release. The hole returned a combined 139.81 meters of 1.3% copper equivalent (CuEq) from three separate intervals at Cerro Grande and the new zone, which the company has named the Margarita Skarn.

The discovery sits along a fault the company had not previously recognized as a control on mineralization at Adelita.

Chief Executive Officer Enrico Gay said that matters as much as the grades. "It's the first time we essentially discover a brand-new skarn on top of the one we already have," he told Streetwise Reports.

Gay said the result supports the company's view that Adelita hosts more than one skarn body.

"The big thing here is that we think we have a cluster system of skarns, and this is the first time we test a new fault, a new structure, and we hit a new skarn," he said. "So it's a pretty good batting rate so far."

The hole was first planned to reach about 450 meters to test an expansion of the main Cerro Grande skarn, Gay said. It hit that target, returning 87.98 meters of 1.6% CuEq from 196.35 meters at the Cerro Grande 2 zone. That interval graded 1.03% copper, 47.1 grams per tonne (g/t) silver, and 0.35 g/t gold, and it included 7.4 meters of 5.2% CuEq and 1.95 meters of 9.8% CuEq.

"But then we decided to keep the drills turning because we were continuing to see the right rocks," Gay said.

Deeper in the hole, the drill cut four mineralized skarns across a 109.71-meter span starting at 473.09 meters, which the company calls Cerro Grande 3. That extends Cerro Grande to about 485 meters of vertical depth.

About 40 meters below that, the hole hit the Margarita Skarn, returning 14.37 meters of 1.1% CuEq from 624.47 meters, including 1.01 meters of 6.0% CuEq with 2.1% copper and 4.98 g/t gold. Margarita lies at about 530 meters of vertical depth and about 250 meters from Cerro Grande 2 mineralization in a Phase I hole.

Vice President of Exploration João Rocha called the find "a major breakthrough," describing Margarita as a different style of skarn that is richer in gold. All intervals are downhole lengths, and true widths have not been determined.

The company now believes a series of northwest-trending faults, which it labels F1NW through F4NW, acted as pathways for the skarns to form. This hole is the first to support that model, and Margarita appears to follow the F3NW fault, which still needs more drilling to test. Reprocessed geophysics and mapping also suggest a porphyry system may exist at depth.

The 5,895-hectare Adelita project lies in the Arizona-Sonora copper belt, and geophysical continuity at Cerro Grande extends for more than 7 kilometers. The company says the property remains open for discovery beyond the Cerro Grande footprint.

Gay said the latest hole is the company's biggest yet, but not its last. "This is a pretty significant drill hole. We have more coming," he said. "So this is by no means the end." He said the company expects its next results in the coming weeks.

More than 4,000 meters of the planned 7,200-meter Phase II program have been drilled. Assays are pending for holes PH2-004 through PH2-009 at Cerro Grande and for two holes at Las Trancas, and drilling continues at both. A ground gravity survey began on October 22 to help identify more targets.

Bob Moriarty of 321gold.com has followed Algo Grande since its early days, and he flagged the hole behind today's news well before its assays came out. In a September 14 commentary, written after the first Phase II results, he noted that holes 003 through 005 had been completed and visually showed long intervals of copper mineralization. "When those assays are reported, it could blow the lid off the price of the shares," he wrote.

"I have believed since I was first informed about the company that they had the potential for a giant discovery," Bob Moriarty wrote. 

At the time, Moriarty was reacting to the first reported Phase II hole, which included a high-grade core of 3.55 meters of 5.26% copper, 311.8 g/t silver, and 2.22 g/t gold.

Combined with the Phase I drilling and results from the project's prior operator, he said, it showed "a system with district-scale potential."

"I have believed since I was first informed about the company that they had the potential for a giant discovery," Moriarty wrote. He added that everything since had led him to believe the company is "absurdly underpriced."

He also pointed to the project's location. Sonora produces about 80% of Mexico's copper, and Moriarty sees growing demand for the metal. "The world needs more copper. A great deal more," he wrote in June.

Copper is trading near record highs as demand from artificial intelligence (AI) runs up against tight mine supply. The metal traded at about US$6.61 a pound on Wednesday, up about 28% from a year earlier and not far below its record of US$6.85 set in September, according to Trading Economics. Prices have swung with sentiment around the AI trade this month, along with U.S. tariff uncertainty and labor strikes at major mines.

AI is a big part of the demand story. Data centers use roughly 27 to 33 tonnes of copper for every megawatt of capacity, according to industry estimates reported by Tom's Hardware, and AI campuses are routinely designed in blocks of 50 to 150 megawatts. That's before counting the grid upgrades needed to power them.

Supply isn't keeping up. Global primary copper supply could face a 25% deficit by 2035 under current policies, the International Energy Agency said in a July report, according to the Times of Oman. Average ore grades have fallen 40% since 1991, and only 5% of the copper deposits found over the past 35 years were discovered in the last decade. That scarcity of new discoveries is what makes finds like Algo Grande's matter, especially in a region like Sonora, which already produces most of Mexico's copper.

Gold adds another layer to the story, since the Margarita Skarn is richer in gold than Cerro Grande. Gold traded at about US$4,060 an ounce on Wednesday morning ahead of the U.S. Federal Reserve's rate decision, according to Yahoo!Finance, holding well above where it traded just a few years ago. Central banks keep buying, adding 288.9 tonnes in Q2 alone, according to World Gold Council figures reported by Upstox. Bank of America has said US$5,000 an ounce remains within reach once the Fed's tightening cycle ends, according to Reuters. For an explorer finding both copper and gold, that's a strong backdrop.

Algo Grande's market cap is CA$32.2 million. It has 50.44 million shares outstanding, with a 52-week range of CA$0.35 to CA$1.00.

Institutions own 10.9% of shares, while management and insiders own 33.4%. The remainder is held by retail investors.

What did Algo Grande's latest hole find?

Hole AG-CG-PH2-003 returned 87.98 meters of 1.6% CuEq at Cerro Grande 2, cut four skarns at Cerro Grande 3, and discovered the new Margarita Skarn, which returned 14.37 meters of 1.1% CuEq. The combined 139.81 meters of 1.3% CuEq is the total of three separate intervals, not one continuous intercept. True widths have not been determined.

What makes the Margarita Skarn different?

Vice President of Exploration João Rocha described it as a different style of skarn that is richer in gold. It sits along a fault the company had not previously recognized as a control on mineralization, about 250 meters from Cerro Grande 2 mineralization in a Phase I hole.

Why does the new fault matter?

The company believes a series of northwest-trending faults acted as pathways for the skarns to form, and this hole is the first to support that model. Gay said it's the first time the company has tested a new fault and hit a new skarn. The F3NW fault still needs more drilling to test.

What comes next at Adelita?

More than 4,000 meters of the planned 7,200-meter Phase II program have been drilled. Assays are pending for holes PH2-004 through PH2-009 at Cerro Grande and two holes at Las Trancas, and a ground gravity survey began on October 22 to help identify more targets.

Where is the Adelita project?

The 5,895-hectare project is in Sonora, Mexico, in the Arizona-Sonora copper belt. Sonora produces about 80% of Mexico's copper.