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Ross Beaty is the first to admit it – he is an incredibly lucky guy. Thanks to an epic financial crisis and the hard work of an outside company, Mr. Beaty’s Lumina Copper Corp. has stumbled into the biggest new copper discovery in years. The Taca Taca project in Argentina seems to add more pounds of copper by the week, and Mr. Beaty’s favourite hobby these days is just keeping track of it.
He keeps a giant wall map of Taca Taca in his office. Each day, he receives a report from the property and plots it out on the map. Despite being a veteran of many copper discoveries, the results from this project continue to amaze him.
“Just this morning, today, we had a hole that could add 800 million pounds to the size of this project,” the famed Vancouver mining entrepreneur and founder of Pan American Silver Corp. said in an interview in February. “It’s just ridiculous.”
Anyone who knows Mr. Beaty’s history can guess what he plans to do with Lumina: Sell it at a big premium. He expects to complete a deal later this year, though the timeline could be pushed back if the company makes a transformational new discovery at Taca Taca.
During a year in which investors were shedding volatile stocks and junior miners performed horribly, Lumina Copper was the best performing copper stock in the world, rising 171% in 2011. And so far, 2012 has been even better; the shares have nearly tripled since October.
Despite the fact that Taca Taca is a very early-stage discovery, Lumina now boasts a market value of more than $600-million. No one is enjoying Lumina’s meteoric rise more than Mr. Beaty, 61, who controls about 25% of the company.
The rise of Lumina Copper adds an unexpected final chapter to Mr. Beaty’s lucrative foray into the copper sector, which began in 2002.
Copper prices were trading around US80¢ a pound at the time, and there were plenty of experts saying it would never go higher. Mr. Beaty thought otherwise, and started buying all the copper deposits he could find.
The acquisition binge came to an end when prices started to jump in 2003 and 2004. But by then, Mr. Beaty owned 10 deposits. As prices kept rising, he turned his attention to selling them. The original Lumina Copper was split into four companies: Regalito Copper Corp., Lumina Resources Corp., Northern Peru Copper Corp., and Global Copper Corp. Over the next few years, those assets were sold for about $1.2-billion, an incredible return on an investment of just $80-million.
The Taca Taca project is the last of the 10 deposits still in the group. It was a part of Global Copper, but the buyer of that company (Teck Resources Ltd.) had no interest in that asset.
So Taca Taca reverted back to Mr. Beaty’s group in 2008 and was spun out as Lumina Copper.
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