Gold and Copper Surge: Building Sustainable Value in La Serena, Chile

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Gold and copper have been increasing over the past five years.

Like most industries, the mining industry fell when COVID first put a halt on the world but looking back at the year and five-year charts, an upward projection is being noticed.

Altiplano Metals Inc. (APN) (TSX-V.APN, OTCQB: ALTPF, Forum) is a Canadian mining company focused on developing and acquiring near term cash flowing assets, and projects of significant exploration scale.

The main project that Altiplano possesses is their Farellon mine which was acquired in 2017.

Most recently Altiplano is making steps to head into a greener direction when it comes to extracting materials. One purchase they made was a magnetic separator and tailings dewatering circuit which hopes to minimize the company’s environmental footprint.

It seems Altiplano is consistently pushing to adapt itself in this ever-changing world and is making little moves to ensure it continues to climb, no matter what the world may throw at it.

Stockhouse Editorial recently caught up with Altiplano Metals CEO, Alastair McIntyre, to learn more on what lays ahead, why Altiplanos stock has jumped 175 percent over a six-month period, and why Q4 2020 was the strongest quarter in the company’s three-year history.

TRANSCRIPT BELOW:

SH: For people who may be new to the mining sector and are looking to invest in Copper. Can you explain what Altiplano metals does?

AM: Altiplano is a junior mining company, headquartered in Canada, that focuses on near term production potential and cash flowing assets in copper and gold. We are establishing ourselves as a revenue generator model where we reinvest in the further development of our assets, acquire new projects, and also use profits to fund quality, scalable exploration projects. This unique model allows for growth and provides blue sky upside potential important to mining investors without generating significant dilution evens often suffered by our peers.

Farellon showed positive copper output from your recent 2020 Q4 results, including an expansion of the underground development. Can you share some details about how this will impact your overall output?

Farellon operates under the small-scale licensing in Chile. Our plan is to continue development to the west and to further depths to access additional copper-gold mineralized material. We have observed encouraging copper grades in these new zones and at depth. Currently we are operating on 6 working headings which will be increased to 8 as we move further in depth to the next working level at the 370 m access point. Working on multiple levels improves efficiencies and grade control and ultimately improves our bottom line.

SH: Your new mill is well underway and is a large milestone achievement for Altiplano. I understand you will be cutting your logistical costs quite significantly. Can you expand on the cost effectiveness around the Mill and the expected completion timeline?

AM: We are in the final permitting process at the mill site where we have now completed the majority of the Civil Work required in advance of the final construction phase. Completion is expected sometime midyear 2021. The civil work includes 10 hectares of land preparation, installation of a security perimeter fence, installation of power and water, and pouring of concrete bases to support the equipment and plant.

Operating our own plant 15 kms from Farellon will save approximately 75% in trucking costs and 33% on processing costs. In addition, producing our own concentrate will provide greater control of our payable metals contained within the contrate. Finally, we have also purchased a tailing dewatering facility which will output dry tailings and reduce our freshwater consumption by 75%. Also, the installation of a magnetic iron separator will afford us the opportunity to capture high value iron concentrate and reduce our tailings output by 45%. The addition of this equipment not only improves our efficiency but reduces our environmental footprint.

After re-negotiated your JV profit arrangement at Maria Luisa, you said your intention is to generate cash flow quickly from the sale of the gold-copper mineralized output to local processors. Can you update us on those plans?

We are in the final review of the engineering process needed to begin our underground work. Our design, through a decline access, outlines recovering 2,000/tonnes per month in a 2–3-month horizon and 4,000 tonnes in six months from an expected start date in about 2 months. We are excited with this process as Maria Luisa hosts grades at 6.85 grams per tonne gold and 1.89% copper from previous historical production.

SH: Can you let us in on any potential partnerships that are in the works?

AM: Altiplano is a growth company where we focus on acquisitions and the expansion of assets. Farellon sits within a highly prolific mining region where there are greater than 100 projects within a 100 kms radius. The projects are similar to Farellon and the region is ideally placed for consolidation. We are in the process of reviewing a number of these assets to bring into the mix. Having said that, we will review any project that brings value to the company, within Chile or other parts of the world.

Our revenue generator model focuses on reinvesting to create value and growth. In late 2020 we entered into an agreement to acquire a quality and potentially large-scale gold exploration project in San Pedro, Nicaragua. With this type of project, we can re-invest profits into the exploration and avoid dependence on the capital markets to fund the program. Currently, we are working on finalizing the transaction where we can immediately begin the exploration plan which includes developing a maiden resource estimate.

SH: What are your thoughts on the copper and gold market prices late into the 2020 year and early into 2021?

AM: 2020 proved to be a record-breaking year for the gold price, spurred by low interest rates and government stimulus packages used to mitigate the impact of Covid-19. Monetary stimulus pushed bond yields to their lowest levels ever thus attracting gold to investors and central banks. Massive amounts of USD stimulus put pressure on the dollar and with gold priced in USD, it has a natural tendency to rise. As economies need to reflate to get back to post COVID-19 employment and GDP levels, I see yields remaining low keeping pressure on the USD and therefore the outlook on gold remaining positive.

We are witnessing a similar recovery for Copper as we did during the SARS outbreak in China in 2003 and the 2008 GFC. Chinese fiscal stimulus packages - actual spending policies - are currently fuelling record growth in copper demand. I expect the West will also see an increase in demand for copper as new fiscal stimulus programs begin to take hold. In addition, the green energy movement requires copper to rebuild infrastructure. The supply shortages as a result of the pandemic and the forecasted increase in demand for copper, in my opinion, will continue to drive a bullish market for copper.

SH: Your Q4 report came out a couple weeks ago. It showed a strong December, and it was also the highest quarter in Altiplano’s three-year history. What was needed to line up in order for this to happen?

AM: We are beginning to see the positive results of our underground development. Management’s focus on grade control and optimization at Farellon has led to very positive results. These efforts will continue as we move towards the commissioning of the mill. Farellon as a sustainable high-grade operation with its own processing facility and in a high metals price environment, has a great future to look forward to.

SH: Lastly, Altiplanos stock is up 175% in the past 6 months. What do you credit that to?

AM: Investors are ultimately focused on good management and good assets. We have demonstrated good returns and growth at Farellon, and we have also made good progress with the development underway at our new El Peñón mill site. In addition, we have a number of additional potential revenue generating assets such as Maria Luisa. These cash flowing assets act as a revenue generator model which creates the opportunity for us to self-finance development, acquisitions, and exploration activities.

This model is different and generates interest as we take a unique approach of focusing on two aspects: revenue generation and exploration upside. Altiplano share price has been steadily increasing, so investors recognize that this model is currently undervalued in this constructive copper gold market environment.

For more information, visit apnmetals.com