Los Andres Copper Part II: Look at the Chart

My column yesterday on Los Andes Copper published at Diario Financiero sparked an intense debate. I appreciate the comments—many critical, several with arguments that deserve a serious response. Allow me to try.

The Criticisms

• “Disclosing the resignation was enough; the ministerial appointment was unnecessary.” This is the most repeated objection. The board’s fiduciary duty—several colleagues argue—was fulfilled by communicating that the CEO was leaving. His next professional step is not the company’s business. “Good corporate governance is not only about doing the right thing, but also knowing when to stop talking.”

• “A political appointment is not material until the President announces it.” From this perspective, the company reported as fact something that legally did not exist. The press release stated that Montt “has been appointed as Minister of Mines” when, strictly speaking, only the presidential announcement perfects such an appointment. The result: Los Andes Copper disclosed information that turned out to be false.

• “The press release was promotional, not merely informative.” The text did not limit itself to reporting the resignation. Chairman Eduardo Covarrubias (disclosure: he was a brilliant student in my engineering cohort at university; I hold him in high regard) took the opportunity to highlight that Vizcachitas is “the largest greenfield copper project in Chile not controlled by the majors” and an example of “how sustainable mining operations should be undertaken.” More than a material fact disclosure, it read like an investor pitch.

• “There was a third (or fourth) way.” The resignation could have been announced without mentioning the ministry. Or the timing could have been coordinated with the transition team. The board framed its decision as binary when less politically costly alternatives existed.

These are reasonable objections. But before responding to them, I invite you to look at the following chart.

[Chart: Los Andes Copper stock price in January 2026 compared with peer companies]

The Evidence No One Mentions

Los Andes Copper shares (TSX-V: LA) traded steadily between CAD 7 and 9 throughout 2025. In early January 2026—with no corporate announcements—they began climbing steadily until they exceeded CAD 17. After news broke that Montt had been dropped from the cabinet, they fell nearly 12%.

What does this pattern tell us? Three uncomfortable things.

1. That information about the ministerial appointment was materially relevant: it moved the stock price. Those who argue that “the CEO’s career destination is not material information” must explain why the shares doubled in three weeks without any corporate development to justify it.

2. That someone—or several people—consciously or unconsciously traded on privileged information before the official announcement. The January rally was not random. While some were buying with knowledge of the imminent appointment, others were selling unaware that their CEO was about to become the head of the ministry that would regulate the Vizcachitas project.

3. That the subsequent drop confirms the thesis: the market had priced-in a regulatory advantage that vanished with the last-minute change.

The Board’s Real Dilemma

Let us now return to the criticisms.

Was disclosing only the resignation sufficient? Under normal circumstances, yes. But when the board drafted its press release, the information was already in the market—not as corridor gossip, but as a factor moving the stock price. The question was not whether to reveal the ministerial destination, but whether to formalize information that some were already using to trade with an advantage.

Had the board simply said “resignation to pursue new professional challenges”, it would have delivered information they knew to be incomplete. And that, in a market where others already knew the ministerial destination, would have ratified—not corrected—the informational asymmetry.

Is a political appointment not material until officially announced? Formally correct. But markets do not wait for formalities: they trade on expectations. The shares rose because informed investors anticipated the appointment and its implications for Vizcachitas. That the appointment ultimately did not materialize does not erase the fact that, for weeks, some traded on information others did not have.

Was the press release excessively promotional? Here I concede ground. The Chairman’s statements (my apologies, Eduardo)—highlighting the project’s attributes and the outgoing CEO’s leadership—exceeded what was strictly necessary to disclose a material fact. A more austere release (“the CEO resigns to assume a position in the incoming government”) would have fulfilled the regulatory obligation without the celebratory tone that irritated the transition team. That was a questionable corporate communications decision.

Was there a third way? There was. A trading halt—a temporary suspension of transactions—while coordinating with the transition team would have been the technically optimal solution. That they did not pursue it may reveal inexperience in managing public affairs in emerging markets, but not bad faith or ignorance of their fiduciary obligations.

The Uncomfortable Question

The debate has focused on whether the board “said too much.” But the chart raises a different question: who bought Los Andes Copper shares in the weeks before the announcement, and with what information did they do so?

If the answer is “with material information the public did not have,” then the real corporate governance problem lies not in the January 20 press release, but in the weeks that preceded it.

That, I’m afraid, is a different matter altogether.