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Generating a Genuine High-Grade Copper & Gold Mining Opportunity

Dave Jackson Dave Jackson, Stockhouse
2 Comments| September 22, 2020

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(Click image to play video)

It’s one of the world’s most prolific and historic mining jurisdictions, but is also an unknown commodity to many metals & mining investors. But Chile’s copper-rich IOCG belt offers immense opportunity in an established mining district with great expansion potential.

Altiplano Metals Inc. (APN) (TSX-V.APN, OTCQB: ALTPF, Forum) is a Canadian mineral development company focused on acquiring projects with significant potential for advancement from discovery through to production. Altiplano’s goal is to grow into a mid-tier mining company through developing a portfolio of near-by production and cash flowing assets focusing on copper, gold, and silver. Management has a substantial record of success in capitalizing on opportunity, overcoming challenges, and building shareholder value.

In this exclusive video podcast, Stockhouse Media’s Dave Jackson was joined by Altiplano’s CEO Alastair McIntyre to discuss the their intriguing Project Generator business model, an update on their Chilean Farellon mining operation, and a look forward to what the APN has in store for shareholders and investors.

SH: To start off, Alastair, can you update our investor audience and your Altiplano shareholders on the what the company’s accomplished this summer in conjunction with the COVID-19 pandemic?

AM: Thank you for the introduction Dave and it’s a pleasure to be here. Clearly this summer will be one to remember. COVID – 19 has brought in many challenges and it is heartbreaking to see so many people effected both health wise and financially. On the mining side, I suspect that many people were surprised how busy they were over the summer as the metal prices moved up and deal pipelines expanded. For us, Pandemic or not, we continued our mandate to improve output at Farellon and focus on new acquisitions. The main challenge for companies looking at acquistions during this time is the aspect of conducting due diligence on prospective sites. We’ve been fortunate with strong in country team in Chile to support our business where we were able to get two transactions completed.

SH: The Company has certainly been busy as of late – your purchase of a processing plant for Farellon, a revenue sharing JV agreement at historical Maria Luisa gold-copper mine in Chile and completing an underground sampling program at the nearby Rosario project with positive results. Can you tell us a bit about these deals and what are some things we should be looking out for moving forward?

AM: Altiplano’s main focus has been/is Farellon, an underground Iron Oxide Copper Gold asset near La Serena, Chile. Acquired in 2017, we have focused on grade control and cost improvement and as a result have generated 7 straight quarters of positive cash flow from the operation. In the last year, we’ve seen grade improvements with May highs at about 2.5% copper and currently grading over 2% - overall the average grade has been about 1.8% Cu. Earlier in the year we extended the underground where we are now working off of 4 faces and soon to begin two more as our under underground development expands. Overall we’ve extracted over 2.4 mm pounds of copper from Farellon.

The next phase of Farellon is to put a mill and processing plant on site. For the past couple of years we have been toll milling, which has been beneficial, but our own mill will further reduce processing and trucking costs. We been reviewing a number of opportunities offshore and in Chile to suit our needs and fortunately we found a plant that meets specifications. The civil work has begun on site and we will soon begin construction – after that we will produce our own concentrate that we can sell locally or internationally where we can leverage the value of the contained metals.

Soon after the mill acquisition, we negotiated a profit JV on Maria Luisa which is located in Incahuasi about 100 kms north of La Serena. The project is an historic gold/copper mine that has consistently yielded significant gold grades. Recent selective mining from 2013 to 2015 generaed over 600 tonnes yielding an average grade of approximately 6.85 (g/t) Au and 1.89 % Cu. With the current infrastructure in place, and the nature of the deposit, we are looking to begin extraction through an expansion of the historical workings and a deline access.

Finally, we completed an underground sampling program at the historic Rosario Copper Gold mine located about 600 meters from Farellon. This project also has historical underground workings where we ran a channel sampling program underground over a strike length of about 180 m. We obtained good results including 5.22% Cu and 1.4 g Au/t over a 1.5 m cross section of the vein structure. On average the program yieded 2.88% copper and 0.37g Au/t. These results at Rosario are similar to the early results underground sampling and drill results obtained at Farellon, with the exception of the higher gold content at Rosario which is encouraging. Our plan in the short term is to review the engineering studies to move forward on restarting the operation.

SH: For investors not entirely familiar with mining in Chile can you break down the pros and cons of this jurisdiction?

AM: Chile is one of the great mining durisdictions outside of Canada and Australia. Chile has an abundance of mineral endowment producing ¼ of the worlds supply of copper and in fact the Chilean Peso trades highly correlated to the copper price much like the Canadian dollar with oil. In addition, the country understands the importance of mining and supports both small miners and large corporations. This helps with the administration and regulatory approvals within the permitting process and infrastructure to support operations. Finally, Chile as an investment destination, has climbed 4 places on the Institute of Management Development competitive scale to 38th place in the first half of 2020 with a 53% increase in direct foreign investment, suggesting growing confidence in Chile.

SH: The Company has enjoyed a very nice share bump over the past few months – up about 250% since mid June. To what do you attribute this to?

AM: I think the market has been supportive on a number of fronts. Gold, in particular has, lead the way pushing over $2000 and generated eyes on the mining sector in general. Investors in the summer were taking a risk on approach and junior mining benefited from this sentiment. In addition, the copper price began to show signs of support and; with the benefit of the overall capital markets, and also with a number of positive initiatives through our new release cycle we were able to capitalize on this momentum. Specifically, grade and tonnage improvements at Farellon and our acquisitions.

SH: Can you tell us about any of these other projects that Altiplano has in development that may be of interest to investors, and what’s on the horizon this fall and through to 2021?

AM: We’ve had good success at Farellon based on the nature of the asset and our focus on cost control. These are the assets we like. High grade copper and gold, easily accessible to extract and process for a profit with minimal capital expenditures. This is why we like Maria Luisa. We feel we can be processing gold/copper material quickly by driving a decline into the mineralized zones. In addition, we’ve seen good resutts out of the Rosario where we go back underground and leverage the infrasture proximal to Farellon.

Going forward we see great potential within a 100 km radius of La Serena and Farellon where there are numerous small operations that we can look to acquire and consolidate the region. Our focus is to build a company with a portfolio of cash flowing projects. Farellon was the test and we’ve proved it possible.

SH: What should investors and shareholders be looking for in regard to copper and gold trends in the not-too-distant future?

AM: I’ve been saying since March that the copper market will recover. Sure GDP has taken a hit where copper correlates but a reduction in GDP this time is different as we’ve turned off the economic tap rather than the tap running dry. We also saw this during SARS in Asia in the early 2000’s, where I was living at the time. Metal prices initially fell but recovered within 3 months mainly due to massive monetary policy initiatives in China where over 50% of demand ends up. We are seeing this again in China where record demand numbers, combined with COVID related supply disruptions and warehouse inventory at record lows, are driving higher prices. Also, copper is gaining much support as the new battery metal, considering the growing interest in green energy. Copper will be in focus for rebuilding electical grids to support the demand for electricity.

WRT to Gold, we all know the story here. Low treasury yields, creating high negative interest rates combined with aggressive fiscal policies has put gold on the offensive. This has fired up the gold market and the gold bugs has put gold back on the front burner. I like the fact that insttutions are once again taking exposure to gold and gold equities.The real question for highesr prices will be how long will the government stimulous packages be needed. In my opinion, low rates are here for sometime and this will benefit the gold market

SH: Can you tell our audience a little bit about your corporate management team of the Metals Group Inc., along with the experience and innovative ideas they bring to the metals & mining space?

AM: Altiplano along with Benchmark Metals, Cortus and others are part of the Metals Group. The Metals Group (Formerly Discovery Group) and its Principals and Key Members are specialist in the mining capital markets. The Group has led equity and debt financings totaling in excess of $500 million over the past 20 years, and over $75 million within the last two years. The group has founded, acquired, restructured or taken over management of more than 20 publicly listed companies, building value through its initiative, expertise, work ethic and innovation to identify, develop and monetize geological opportunities.
This expertise helps us identify and manage opportunities and also provides top notch resources internally to analyse opportunities and manage risk not often available to junior companies.

SH: And finally, Alastair, what can you tell our investor audience regarding the current valuation of your stock and why you think it’s a good value buy right now?

AM: I think Altiplano provides good exposure to the copper and gold markets which are two of the most important metals markets globally. These metals trade with the highest liquidity, transparency and price discovery unlike many of the other metals. And encouragingly, these metals have strong price fundametals both in the short term and long term. But equally important, APN is a growth story around cash flow. We position ourselves differently than the typical exploration story who are raising money to drill holes and hope that effort will produce results that motivates investors to buy into a strory that may or may not happen.

At APN, we focus on delivering results around finding assets that have near term cash flow opportunities and provide a return based on our ability to generate value from these assets and find more. Farellon has demonstrated this for a couple of years and now our focus is on growth. I think the next couple of years will be very exciting, especially considering the underlying equity and metals markets are showing signs of sustainbilty which has been absent for some time.




FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.


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