The Chinese translation is being made; the original is shown for now.
Impulsa Mendoza received submissions for 80 mining properties following an open call for holders seeking to join the “Impulsando Exploraciones” Closed-End Investment Fund, a vehicle through which the province aims to channel capital from the domestic market into mineral exploration.
The portfolio is being assessed by geological consultancy G21, which uses machine learning tools to rank and categorise areas, projects and properties. The fund’s business plan will be developed on the basis of this ranking.
By Panorama Minero
Progress in the technical selection process comes as the investment vehicle, structured under the regulatory framework of the National Securities Commission (CNV), awaits final authorisation from the regulator and the markets.
The selection process has expanded in scope since its initial proposal.
In the middle of the year, eligibility was limited to projects located in Malargüe with an approved Environmental Impact Declaration, and Impulsa had launched a tender to contract geological assessment services.
The subsequent call expanded eligibility to the Malargüe and Mendoza Norte mining districts, with an initial submission deadline of 26 August, later extended to 11 September.
The pool of 80 properties was drawn from a much larger universe.
In the Malargüe Western Mining District alone, more than 250 projects have been identified, of which 65 have received legislative approval and 71 are undergoing environmental assessment. Meanwhile, more than 140 mining rights have been identified in the Mendoza Norte Mining District.
How the Ranking Works
According to Sebastián Piña, CEO of Impulsa Mendoza, G21’s tool combines historical information from the Argentine Geological and Mining Survey (SEGEMAR) with technical data provided by the property holders themselves.
The objective is to prioritise properties with the highest probability of success within the fund’s investment structure.
Piña clarified that the system is not a methodology equivalent to NI 43-101, nor is it intended to replace that standard.
Instead, it represents an investment by Impulsa to enhance the value of assets with the greatest geological potential while also characterising the province’s geology according to a unified set of criteria.
The selection process reflects the risk profile associated with early-stage exploration.
“The success rate is very low: you have to invest in 100 projects for one to turn out well,” Piña stated, identifying project selection as the determining factor in early-stage exploration.
The Investment Vehicle’s Structure
Impulsando Exploraciones was designed with a target size ranging from US$2 million to US$100 million, subscriptions denominated in US dollars and a long-term investment horizon.
The structure assigns Max Asset Management the role of fund management company, Banco Comafi that of custodian, and Impulsa Mendoza that of technical adviser responsible for identifying investment opportunities.
The fund may invest in projects through the acquisition of shares in the companies holding the mining rights, participation in special-purpose vehicles, the purchase of negotiable debt securities or loan agreements.
Its strategy is based on diversification across both the number of properties and geographical areas.
The approach of acquiring equity interests distinguishes the initiative from previous mining financing mechanisms used in Argentina’s domestic capital market.
Piña recalled that companies such as Minera Exar had already raised funds through negotiable debt securities and that financial trusts had also been used.
However, he emphasised that exploration presents a different challenge because it requires a base of investors and institutions with specialised expertise, such as those found in Toronto and Australia.
An asset that has not entered production does not generate the cash flow needed to service debt, making equity participation the mechanism adopted by the fund to invest at this stage.
“That will be our spearhead in the capital markets, demonstrating that exploration can be financed from Argentina, by Argentines,” he stated.
The Regulatory Process
When the province presented the fund at PDAC in March, CNV approval was expected during the first half of the year.
In June, Impulsa was working with the regulator on the final prospectus and the regulatory adjustments required for implementation.
Piña indicated that authorisation was approaching and described the process as a gradual adaptation by markets and regulators to an investment instrument without precedent in Argentina.
“It is a process of maturation. It moves forward step by step, and we must always take wise steps,” he explained.
The 80 properties under assessment, G21’s geological ranking and the structure established with Max Asset Management and Banco Comafi form the technical and financial foundation on which Impulsando Exploraciones will begin operating once CNV authorisation has been obtained.
The fund will therefore have an initial portfolio selected according to geological criteria before its first subscription.