Tactile Fund LP / Alluvial Capital Management, LLC on Grupo México SAB

Tactile Fund initiated a significant position in Grupo México, focusing on the conglomerate's mining and rail assets. Through Southern Copper and ASARCO, the company controls some of the world's largest and lowest-cost copper reserves, with Southern Copper benefiting from exceptionally low production costs and long-lived reserves. The fund believes copper's supply outlook is attractive because economically viable discoveries have been scarce and reserve quality at major producers has deteriorated. Grupo México also owns strategically important rail infrastructure in Mexico and the United States. Valuing Southern Copper at its publicly traded market value and the rail assets at a 20% discount to US rail majors produces an estimated net asset value more than 60% above Grupo México's share price. The fund also expects net asset value to grow as Grupo México develops and potentially acquires additional high-quality physical assets.