Having positioned Fortuna Silver Mines Inc. (TSX: T.FVI, Stock Forum) for sustainable growth in Latin America, Fernando Ganoza and his Peruvian mining family are aiming to achieve a similar feat with Atico Mining Corp. (TSX: V.ATY, Stock Forum), Atico CEO Fernando Ganoza said recently .
Three years ago, Atico secured an option to acquire a 90% interest in the operating El Roble mine in Colombia and a surrounding land package of 6,679 hectares.
Since then, the company has completed 11,740 metres of diamond drilling and identified numerous prospective targets for Volcanogenic Massive Sulfide VMS deposits on the property.
Exploration has also outlined high-grade copper and gold mineralization below the 2000 level, the lowest production level at the mine.
Within this mineralization is a National Instrument 43-101-compliant inferred mineral resource of 1.58 million tonnes, grading 4.45% copper and 3.17 grams per tonne gold, material that remains open at depth and along strike, the company has said.
Atico is operating on a theory that since VMS deposits typically occur in clusters it is bound to find more in the area.
But even if that doesn’t happen, Ganoza said the company can look forward to at least eight years of healthy cash flow from El Roble, money that can be applied to other projects, Atico hopes.
“The upside is that we find another five to 10 million tonnes of high grade ore,’’ said Ganoza, during an interview with Stockhouse, during the Prospects and Developers Association of Canada Conference in Toronto.
Success on that front would be in keeping with the Ganoza family’s plan to build Atico into a mid-tier gold and copper producer by acquiring near-term, high margin assets. CEO Fernando describes himself as a fourth generation member of a mining family, which is based in Lima, Peru.
Fortuna co-founder Jorge Ganoza is Chairman of Atico. Luis Ganoza is also a director. Jorge Ganoza, a former vice-president of operations at Fortuna, is President of Atico and has a seat on the board. The family currently owns about 18% of the company's outstanding shares.
For now, the El Roble mine continues to operate at approximately 320 tonnes per day, processing ore at the upper levels.
However, a key goal is to scale up the El Roble mill to 650 tonnes per day by the third quarter of 2014, said company spokesman Igor Dutina.
Construction of a new tailings dam is expected to be completed as originally planned in the second quarter of 2014.
In addition, the company is doing underground development work to access the recently discovered resources, including a new five-by-five metre adit at the 1,880-level.
“We are very pleased to have reached the new high-grade ore ahead of schedule, achieving an important milestone in our optimization and scale-up plan for El Roble,’’ Ganoza said.
The adit is designed to be 830 metres long and will be the main point of extraction for the recently established mineral resource.
In November 2013, Atico said it had exercised the option to acquire 90% of El Roble. The company also said it has closed an US$8 million senior secured debt financing facility.
On Monday, Atico was trading at 79 cents, leaving a market cap of $77 million, based on 97.5 million shares outstanding. The 52-week range is $1.04 and 44 cents.