The Gold Report: Interview Tobias Tretter likes Atico:
"TGR: What are some companies in the fund that you think the retail investor should know about?
"If you follow the right management teams, you can make a lot of money."
TT: Atico Mining Corp. (ATY:TSX.; ATCMF:OTCBB) is a company that nobody has heard much about and it's one of the bigger positions in our fund. Atico was founded by Fernando and Jorge Ganoza, who are quite famous in the mining industry. They were also instrumental in building up Fortuna Silver Mines Inc. (FSM:NYSE; FVI:TSX; FVI:BVL; F4S:FSE), a silver producer out of Mexico. The Ganozas are applying the same business model they used on Fortuna Silver on Atico but not in Mexico. Atico has an underground copper project underway in Colombia. It was previously run by a family there and Atico is using modern techniques to operate the mine in a better way and to find the right new ore sources to expand the mine.
Atico has drilled a couple of really good holes. One of the latest was 120 meters (120m) of 6.8% copper and 6.2 g/t gold. That's a phenomenal drill hole. I haven't seen that many good drill holes in the last couple of years. Even so, the market barely responded and I was a little surprised that you still can buy the company for its $35M market cap. It also has $10M cash. Everything is in place. The company has good infrastructure. The mill is already there. It will have to be refurbished before commercial production can start. Atico doesn't put out any official numbers, but if you do your own math, I think Atico will make at least $20M cash flow per year for a company with a market cap of $50M.
TGR: You said early-stage drilling success has barely moved the share price. Will future drill results be able to move the share price?
TT: Yes. I think we will see a lot of additional good drill holes at the El Roble mine. Until now, Atico has been focused on the existing ore body, but there are a lot of additional targets. Once the company hits new ore bodies I think some speculation, some blue sky, will open up and the share price can go up quite heavily in a short time.
TGR: What's the best way to invest in Atico?
TT: I would say invest half of the amount now and the other half a little bit later. The drill results will not be the big thing for the share price in the next little while. Everybody's waiting for Atico to go back to the market to finance the project to refurbish the mill. I think the company will need about $15M. I expect the company to do most of it through debt. That's a little bit of an overhang right now. Other than that it's more a production story than a pure exploration story. Just production potential alone justifies a share price that is way higher than the share price is now. The blue sky is an addition to it."
https://www.theaureport.com/pub/na/15313
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