Episode Details

Interview with Dan Barnholden, CEO, Luca Mining

Our previous interview: https://www.cruxinvestor.com/posts/luca-mining-tsxvluca-three-pillar-growth-plan-targets-200k-ounce-gold-equivalent-production-8374

Recording date: 25th September 2026

Luca Mining Corp. (TSXV:LUCA, OTCQX:LUCMF) is a Mexico-focused polymetallic producer with two operating mines, Campo Morado in Guerrero and Tahuehueto in Durango. In September 2026, the company announced two acquisitions designed to reshape its scale and commodity mix. The larger of the two is the proposed purchase of the Cozamin underground copper mine in Zacatecas from Capstone Copper Corp. (TSX:CS).

Luca has signed a definitive agreement to pay up to US$385 million for Cozamin. The upfront component is US$290 million, split between US$275 million in cash and US$15 million in shares. A US$35 million deferred payment falls due 12 months after closing, payable in cash or shares at Luca's option. Capstone can also receive up to US$60 million in copper-price participation payments if average LME copper prices reach set thresholds in 2027, 2028 and 2029. Closing is expected in Q4 2026, subject to approval from Mexico's Federal Antitrust Commission and the TSXV.

CEO Dan Barnholden describes the price as roughly two times cash flow. Capstone recapitalised Cozamin from 2020 using a US$150 million Wheaton stream, investing in new paste backfill and dry-stack tailings infrastructure. The mill has capacity of 4,400 tonnes per day and processes around 3,700 tonnes per day. Barnholden estimates mine-site free cash flow at US$140-150 million a year at current commodity prices. Because the economic effective date is 31 October 2026, cash flow accrues to Luca ahead of closing.

The investment case centres on exploration rather than optimisation. Capstone spent only US$2-3 million a year on exploration at Cozamin in recent years. Luca intends to spend US$7-10 million a year to extend a reserve base that currently runs to around 2030. Barnholden expects the programme to add at least five years of mine life, pointing to Cozamin's two-decade record of replacing depleted reserves.

Funding comes from a US$300 million package that includes term debt from Taurus and Macquarie, a bought deal led by National Bank of Canada Capital Markets, a private placement with Wheaton and Taurus, a new Wheaton silver stream and an equity backstop from Trafigura. Pro forma debt is about US$126 million, and the facility requires hedging of 25% of Cozamin's copper output from 2027 to 2029.

The second acquisition, El Barqueño in Jalisco, comes from Agnico Eagle Mines. Agnico drilled around 225,000 metres there over a decade. Luca has re-engineered the project as an underground mine targeting 50,000-75,000 ounces AuEq a year, funded by Cozamin cash flow. A change in state land-use designation means 12-18 months of legal work before drilling can resume.

At the existing mines, Luca is transitioning Tahuehueto from cut-and-fill to longhole mining and expects new technical reports by year-end. Barnholden says the stock trades at under three times next year's operating cash flow.

Investors should watch deal completion, the year-end technical reports, early Cozamin drilling results under Luca, debt reduction progress and El Barqueño permitting. Together, these will determine whether the market narrows the valuation gap that management describes.

Learn more: https://www.cruxinvestor.com/companies/luca-mining-corp

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