Mexico’s new president, Claudia Sheinbaum, is creating a sense of optimism in the country’s mining sector. With her pragmatic approach, she is ending the restrictive licensing policy of her left-wing populist predecessor, Andrés Manuel López Obrador. Since the beginning of 2025, Mexico has already approved several new mining projects, with 50 more approvals in the pipeline. This opening was certainly not foreseeable in 2022, when the founding team behind Axo Copper Corp. (TSXV: AXO), Brad Langille (GoGold Resources), Glenn Jessome (Silver Tiger Metals) and Jonathan Egilo, signed the agreement to acquire the La Huerta claims in Mexico. Under the agreement, Axo Copper committed to purchase two claims in the well-known Sierra Madre Belt covering 113 km² for a total of US$11.1 million in cash over a period of approximately five years. In addition, the seller, a Mexican family, was to receive 5.0 million shares of Axo Copper, of which 2.0 million shares have been issued to date. From today’s perspective, the deal appears visionary, and the founders could hardly have wished for a better time for Axo Copper’s IPO, which – not coincidentally – is the first commodity IPO on the TSXV this year. In addition to the CAD 15 million from 2022 and 2023, the company will receive approximately CAD 10 million in fresh capital from the IPO. The stock is expected to start trading on Wednesday.

Compelling investment thesis

The investment thesis behind Axo Copper can be summarized as follows: Since 2019, the previous Mexican owner has successfully conducted small-scale mining at the open pit project to a depth of 50 meters, advancing along the high-grade copper vein. At the time, it was able to save on costly exploration because the highly mineralized magmatic fissure extends directly to the surface and can be traced there for several kilometers. From the perspective of (future) industrial mining, the family-owned company has essentially produced an extensive large-scale sample that, in addition to small yields, has provided valuable information regarding metallurgy and copper content. According to the private company’s records, ore with an average copper content of 4-5% was mined and processed.

Drilling Confirms High-Grade Copper Intersections up to 5% over 13.7 Meters

Axo Copper has now confirmed significant intersections of 5.0% Cu over 13.7 meters; 9.50 meters of 6.63% Cu; 7.60 meters of 7.37% Cu; 7.35 meters of 5.00% Cu and 7.4% over 7.6 meters during initial exploration work on the La Huerta trend. With the fresh capital from its IPO, Axo Copper now intends to further define the near-surface mineralization along the La Huerta trend over at least a 1.3-kilometer section and explore the mineralization at depth. The restart of drilling for Axo Copper’s second drill round is imminent. The majority of the drilling is planned for the Las Marias area (historical mining). Trenching and sampling are continuing. In addition, the company plans to make new discoveries in a little-explored area, particularly the La Huerta South prospects and the northern edge of the known La Huerta trend.

CEO Jonathan Egilo sees himself as a company builder, following in the footsteps of his two prominent co-founders: “We are looking to build a company.” In his view, the high copper grades represent a decisive competitive advantage for La Huerta. Unlike a porphyry project, for example, Axo Copper is not looking for the largest possible tonnage with low grades. Such projects are a godsend for large corporations due to their excessive investment costs. Instead, La Huerta offers a good opportunity to develop the asset itself up to production. Ideally, scaling could later be financed from cash flow (following the GoGold model). Egilo refers to this as an “asymmetric risk.” This is because geologists definitely see the potential for a deeper porphyry deposit at La Huerta. Not only do copper dykes often occur in swarms over large areas, they can also be used as guide structures for exploring the mineralized source below. La Huerta would then not only be a “fast-tracked cash flow” story, but a whole new “growth story” in Mexico. That is why exploration at La Huerta is so exciting.

Conclusion: Timing plays a greater role in the success of investments than many are willing to admit. The founders behind Axo Copper have established unique access to Mexico, where they have brought four (silver) mines into production over the past 25 years (GoGold and Silver Tiger are numbers five and six). Without this special history and without the established circle of strong financial supporters, a deal like Axo Copper would be almost unimaginable. Who else would have had the courage to invest in a copper story in Mexico in 2022, still under the left-wing populist Obrador? Thanks to its extensive preparatory work, Axo Copper can now hit the ground running after its IPO. High-grade copper projects are few and far between given the dominance of porphyry deposits. Experts at Wood Mackenzie have long warned of a supply shortage due to insufficient investment in the sector. They estimate the supply gap by 2030 at 8.2 million tons per year! Only rising copper prices could stimulate investment in the sector. Axo Copper could perhaps benefit from the expected higher copper prices much earlier and finance its growth as a copper producer itself. We will continue to follow this story.