Behind every big-league success story in the mining business is a dynamic management team.
With this reality in mind, Aztec Minerals Corp. (TSX.V: AZT, Forum) has built an all-star board/management/exploration team.
To this point, the company’s founder, Brad Cooke, has recruited several distinguished geologists to his company’s board of directors –– all of whom have been integral to the discovery of world-class gold/copper deposits. More on this in a moment.
The reason the big guns came onboard is that the company has an “elephant-sized” gold/copper/molybdenum porphyry deposit within its crosshairs. Named Cervantes, this inaugural exploration project is located in geologically-fertile Sonora State in northwestern Mexico.
First, it’s worth discussing why these industry hotshots want to see if they can collaborate for the bragging rights of making one more epic, multi-billion-dollar discovery.
The Key to Success is Strong Management
Overseeing Aztec Minerals’ ambitious exploration program is company President and CEO Joey Wilkins.
A geologist with over 30 years of experience, his greatest expertise is in hunting down giant gold/copper porphyry deposits, especially in Mexico and South America.
Many of his professional accomplishments came during his 23-year career with Rio Tinto plc, which is the world’s second largest mining company. More specifically, he was a boots-on-the-ground gold/copper hunter with Kennecott Exploration –– a Rio Tinto subsidiary that specializes in finding and developing porphyry deposits.
While working in Mexico, Wilkins helped prospect the Penasquito deposit which went on to become the nation’s largest gold/silver mine. He also played a key role in evaluating other copper porphyry prospects.
Chairman of the Board Brad Cooke is no stranger to success in Mexico either. A longstanding exploration geologist, his biggest accomplishment to date is developing a silver start-up called Endeavour Silver Corp. (TSX: EDR, Forum) into a world-class silver miner. In fact, the company’s market capitalization has been as high as CDN $1.3 billion during headier times for silver prices.
Now listed on the New York Stock Exchange as well as Canada’s Toronto Stock Exchange, the mid-tier silver miner operates three mines and has at least two more advanced-stage projects in the pipeline to drive near-term production growth.
Cooke and Wilkins also recruited the expertise of fellow director Mark Rebagliati, who is a serious heavyweight among the ranks for the world’s top geoscientists.
An accomplished geological engineer and mineral explorationist, Rebagliati has a distinguished record of being integral to the discovery and development of several world-class porphyry copper-gold deposits.
In fact, over a 50-years-plus career, he has helped unearth and develop no less than 82.5 million ounces of gold and at least 65 billion pounds of copper. That represents many billions of dollars worth of buried mineralized treasure.
This includes the mammoth Pebble porphyry deposit in Alaska, which contains a jaw-dropping 70 million ounces of gold and 57 billion pounds of copper.
Having won multiple awards and been inducted into the Canadian Mining Hall of Fame, his nose for finding mineral riches makes him a major asset to Aztec Minerals.
Finally, the board has one more big-game hunter within its ranks. Geologist Patricio “Pat” Varas has impressive career credentials, too.
Among them was his role as project manager for Kennecott Canada Exploration during the discovery and development of the multi-billion-dollar Diavik diamond mine in Canada’s Northwest Territories.
Varas was also the leader of the exploration team that unearthed the large-tonnage Santo Domingo iron/copper/gold mine in Chile.
Most recently, he was a founder and former CEO of a mining start-up that developed the Milestone potash deposit in Saskatchewan into a multi-billion dollar asset that is now owned by a Chinese state-run company.
Commenting on his company’s Board of Directors, Wilkins says: “These guys are stepping-up to the bat for Aztec Minerals by being very hands-on. After all, they have tremendous collective experience and expertise in finding world-class mineral deposits.
“In spite of their enviable track records, they’re all still hungry to prove that they still have what it takes to hit the ball out of the park.”
So what’s ultimately at stake?
It’s a shot at an increasingly rare opportunity, not just in Mexico but virtually anywhere on the planet. Big tonnage gold/copper discoveries are the big winners of the mining business. Each of them can generate hundreds of millions of dollars of income per annum. Yet fewer and fewer world-class deposits have been found in recent years.
So as the quest gets increasingly harder, the best and brightest in the business are rising to the challenge.
That’s why Brad Cooke had no trouble in assembling a powerhouse team of mine-finders.
What has everyone excited is the Cervantes Project. This entails a large porphyry gold/copper/molybdenum prospect in geologically-fertile Sonora State in northwestern Mexico.
Why Cervantes Fits the Profile of an “Elephant”
Aztec Minerals is earning-in on an option to earn 100% ownership of the Cervantes Project. This is based on the kind of preliminary exploration results and geological sleuthing that get porphyry experts all fired-up.
First of all, the regional geology is of particular interest to Aztec Minerals’ team; it suggests that this could be elephant country for a big-league gold/copper discovery.
To this point, the project is located at the intersection of two prolifically-mineralized geological trends. One is a porphyry copper belt that trends south to north, extending as far north as Arizona. The other trend is a gold belt that runs east to west across most of Sonora State.
Of particular significance, the copper belt hosts one of the five largest copper/molybdenum porphyry mines in the world — the previously mentioned Buenavista del Cobre mine. Furthermore, it is located only about 265 kilometres away from the Cervantes Project.
Additionally, the gold belt that hosts Cervantes also encompasses Agnico Eagle Mines’ proximal, low-cost La India gold mine, as well as Alamos Gold's large, near-surface Mulatos gold mine.
Now here’s where things get really interesting: Cooke and his savvy associates postulate that the Cervantes Project may be analogous to a particularly thick cake with icing on the top. This entails a deep-seated, bulk tonnage copper deposit that is overlain by a shallow, sizeable, high-grade gold deposit.
Building on Early Exploration Success
So what’s next?
Aztec Minerals’ team is now hard at work interpreting all of the company’s exploration results to date in order to prioritize upcoming drill targets.
Drilling is expected to get underway in late summer when conditions are optimal. Subsequent to that, Aztec Minerals hopes to complete an initial resource estimate, followed by a preliminary economic assessment (PEA) — two big catalysts for higher share price valuations.
To date, Aztec Minerals has completed an extensive gold-in-soil sampling program which identified a large target area, now known as the California zone.
Additionally, the California gold-in-soil target is underlain by a large anomalous geophysical target beneath the surface that extends in several directions, most notably at depth.
Fortunately for Aztec Minerals, there’s already some proof-in-the-pudding at Cervantes. More specifically, there’s limited evidence of gold hidden close to the surface, as demonstrated by some small-scale exploratory drilling that was conducted 20 years ago by a past project operator. Notably, the gold was also shown to be encased in oxidized rock, meaning that it is amenable to low-cost heap leach mining.
This all suggests that the company’s geological model or hypothesis is measuring up nicely –– so far.
In fact, what may be emerging is a textbook, bulk-tonnage porphyry deposit, involving a gold/copper/molybdenum system that is outcropping at surface
Investment Summary
Aztec Minerals’ management and board of directors make for a star-studded team of big-game hunters in the quest for an elephant-sized gold/copper/molybdenum deposit.
Their geological expertise has led them to a big mineralized footprint –– one that speaks to Cervantes’ potential to be a company-maker.
This helps explain why Aztec Minerals’ recent $4 million IPO was over-subscribed. Coeur Mining Inc., which bought a 9.99% stake in the company,also sees the homerun potential of Cervantes.
Coeur Mining is certainly deep-pocketed enough to buy Aztec Minerals if a world-class discovery emerges.
Drilling later this year will go a long way towards determining the overall size potential of a prospective large-tonnage gold/copper/molybdenum discovery at Cervantes.
If anyone is going to find a new world-class discovery in Mexico, the odds favour Aztec Minerals’ accomplished team of geoscientists. They certainly have the necessary experience and track record for developing gold, silver, and copper discoveries into lucrative commercial success stories, especially in Mexico.
They are also in the process of selecting a second potentially high-impact exploration project–– an event that could become another important value driver for the company’s share price.
Meanwhile, unlocking the full value of a world-class exploration project at Cervantes, is the main focus of the management and shareholders of this dynamic new company.
About the Author: Marc Davis has a deep background in the capital markets spanning 25 years. He is also a longstanding financial journalist, having worked for leading digital financial news agencies in North America and in London’s financial centre. He is also a former business reporter for CBC Television.
Over the years, his articles have also appeared in dozens of digital publications worldwide. They include USA Today, CBS Money Watch, Investors’ Business Daily, the Financial Post, Reuters, National Post, Google News, Barron’s, China Daily, Huffington Post and AOL.