Part of the Stock Digest group of websites: Visit Tech Stock Digest  

CEO Willem Fuchter: AbraPlata Resource Corp (TSX-V: ABRA) is a New Player in the Argentine Mining Scene with Real Opportunities for Success

May 22, 2017

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is President and CEO of AbraPlata Resource Corp (TSX-V: ABRA)(OTC: ABBRF), Mr. Willem Fuchter. Willem has over 25 years experience working in mines and exploration projects in Africa, Asia, North and South America, as well as Europe and the Middle East for both junior and major mining companies including Riofinex, Falconbridge Gold, Kinross, and Ivanhoe Mines. A long term permanent resident of Argentina, Willem has run major companies in Argentina, Peru, Ecuador, and Venezuela being largely responsible for project generation, general exploration management, reserve and resource reporting, and fundraising activities. All a skillset that I think will become very, very important for AbraPlata as it develops.

Willem, thank you so much for joining me today.

Willem Fuchter: Thank you, Gerardo. It's a pleasure to be here, and I really appreciate you inviting me to your show.

Gerardo Del Real: Well I provided a brief intro and I would love to just know a little bit more about your background and your experience, and just how you got involved with AbraPlata.

Willem Fuchter: Well, my father was a geologist and I grew up on mines and in bush camps throughout Africa, so it was pretty inevitable that I'd end up in the mining industry. Early on in my career, I worked as a mine geologist, and I think fundamentally I learned the difference between ore and waste. Perhaps more importantly, the difference between mineralization and minable resource. This was reinforced when I went to Canada and studied at Queen's University, where I took a mineral course, and that kind of reinforced the difference between mineralization and what could be mined economically. That's really helped me in making and evaluating various projects and properties throughout the world in my career.

Gerardo Del Real: So it runs in the family, so you came about this honestly.

Willem Fuchter: Well I hope so. It's a great industry to be in, and I've been fortunate to be able to work in many continents. I think that's really helped me as well. I've seen a lot of mines and a lot of deposits and worked on them, and as a consequence it's given me some kind of idea of what works and what doesn't work.

Gerardo Del Real: Excellent, excellent. Now given your substantial experience, why did you decide to get involved with AbraPlata? What motivated you to focus on a junior? You've worked for big companies, you worked for smaller companies on the junior side of it, you have a lot of experience and you obviously have a ton of contacts in Argentina. Why AbraPlata? What's compelling about this story?

Willem Fuchter: I co-founded the company which was one of the partners that resulted in AbraPlata, the merger between Huayra and Angel. And I was the co-founder of Huayra in August of 2010. We raised some $2 million dollars through Ed Flood of what was then Western Uranium out of Canada. We provided the management and put properties into what was going to be a SpinCo out of Western Uranium. Of course in 2011, 2012, the markets certainly indicated that that wasn't the way to go and we ended up with a good portfolio of properties but without any money. It was then that we were lucky enough to identify Angel as a possible partner, and what happened then of course was the two companies merged, and AbraPlata is the result of that.

Gerardo Del Real: Excellent, excellent. Now the junior space, like with major companies, it's all about the team, right? It's all about the people. Can we talk about the team in place? We talked a bit about you background and your experience, but could you share some of the people that are involved with AbraPlata?

Willem Fuchter: Absolutely, I think that's one of the main aspects of AbraPlata. We're very fortunate enough to have an excellent team with local and international experience. Our chairman, Hernán Zaballa, is Argentine. He's one of the top mining lawyers here in Buenos Aires and Argentina. He has worked for, or done legal work for, just about every junior mining company that's come through Argentina in the last 10, 15 years. And as well he has been the local representative and the Vice President of various companies here in Argentina like Barrick Argentina, Pan American Silver, Peñoles and many other companies like that. So he just about knows everyone that's anyone here in mining in Argentina and has got a lot of contacts both in the provinces as well as here in the federal capital of Buenos Aires.

Then we also have people like Dave Doherty on the board. Dave's a very successful fundraiser. He's raised a lot of money here very, very recently, but more importantly, he really understands the market and knows how to market AbraPlata, how to get us known and what we've got in a much wider audience.

So those are just two of the people that we've got there. On the ground here we've got an extremely experienced Argentine team that's been working together for well over ten years. We're also fortunate enough to have a team of geologists that have spent almost ten years on our principal property, the Diablillos silver-gold property that we will talk a little bit about now. And our modus operandi really is to try and use local teams as much as possible, and then to import the technical and intellectual horsepower from wherever, whenever we need it.

So for example, we've got some experts in the porphyry and epithermal fields that come from Australia. We've got RPA who does all the auditing and estimation of the resources for us, they come from Canada. So we've got a host of experts coming from all corners of the world.

Gerardo Del Real: Wonderful, wonderful. Now quality silver deals. You mentioned the Diablillos property in Salta province Argentina. Quality silver deals are hard to come by, and quality silver deals frankly with a major strategic shareholder are even harder to come by, and you happen to have both. The Diablillos property has an indicated resource of 27.7 million tonnes, grading 91.2 grams per tonne silver, and 0.85 grams per tonne gold. That contains 81.3 million ounces of silver and 755,000 ounces of gold, also in the indicated category.

And then of course you have Silver Standard as a 19.9% shareholder. Can you tell me about the resource at the Diablillos property, and the exploration upside that I know you're wanting to unlock there?

Willem Fuchter: First of all, the property's pretty large. It's about 80 square kilometers, or I guess that's about 50 square miles if I'm correct on that. But I think one of the most important things about the Diablillos property is that in an existing mineral district, which includes Taca Taca, which is owned by First Quantum, which is a large porphyry system just a few tens of kilometers to the northwest of us. On top of that there's Lindero and Arizaro that are owned by Fortuna. There's also Regulus' Rio Grande porphyry deposit, our own Samenta porphyry moly deposit, and you've got a host of other Lithium and Borax mines in operation in the area.

So the infrastructure's pretty good, and it's a great geological area to be in. Now within this 80 square kilometer property that we have there, we've got nine mineral occurrences. One of these occurrences is the Oculto deposit, and that's the one that contains all the resources known today. The 30 million tonnes grading 90 grams per tonne silver and 0.85 grams per tonne gold. So that one has received a hell of a lot of drill holes and while it's open to the south, we expect most of the other mineralization potential on the property to come from the eight other mineral occurrences.

What we're going to do next is we're going to be drilling off the mineralization at Fantasma, which is eight hundred meters to the west of Oculto where we've got mineralization sitting at surface, as intersected in trenches, and four drill holes. So the idea is to drill that off and get additional resources before we fix the parameters for the updating of the existing PEA that we've got for the property.

On top of that, there's a copper-gold porphyry occurrence about 1200 meters to the north of Oculto deposit, and mineralization's been detected in two holes on that mineral occurrence, and we're going to be investigating that further. And if that turns out to be a large porphyry system, then of course that's a real game-changer for the Diablillos property. So what we really see is Diablillos has got the possibility, the potential, to grow from an existing 1.9 million ounces gold equivalent, or 155 million ounces silver if you want to recast it like that, in to something that's going to organically grow within the next number of months from nearly two million ounces gold equivalent to possibly two and a half million ounces gold equivalent.

So there's a lot of organic growth on the property, as well as a game-changing occurrence, the Cerro Viejo Este, which would really add significantly to the project.

Gerardo Del Real: Excellent. Now this property, you mentioned the Oculto deposit. It's seen a lot of drilling, I think it's 85,000 meters worth of drilling in 448 holes, and I think over $33 million US has been spent on the property, is that correct?

Willem Fuchter: Absolutely, there has been 85,000 meters drilled on the property, the majority of course in Oculto, and that's where all the resources are. As I mentioned to you earlier on, there are some holes, two holes at Cerro Viejo Este for example, and four holes at Fantasma to the west of Oculto, and a couple of holes here and there on some of the other mineral occurrences, but the great majority of the 85,000 meters is of course on Oculto.

Gerardo Del Real: Excellent. And that drill campaign starts this month, is that correct?

Willem Fuchter: We've awarded the contract and the drillers are moving onto the property on Monday. So we hope to be drilling by the end of next week.

Gerardo Del Real: Fantastic. Now you made reference to some of your other projects. In addition to Diablillos, you also have the Cerro Amarillo project, the Samenta project, and the Aguas Perdidas projects. Now those three assets, they provide great exposure to copper, gold, silver, and molybdenum if I'm not mistaken. Is there a plan in place to develop those as well, or is the focus right now on the flagship Diablillos property?

Willem Fuchter: Obviously, the focus for the next few months is definitely going to be on the Diablillos. We want to update the PEA on Diablillos and then from there slide into the pre-feasibility and full feasibility over the next 18 to 24 months. So we're pretty much focused on getting that done at Diablillos. However, the potential of Cerro Amarillo is astounding. Cerro Amarillo's located on the southern part of that mineral district which hosts the El Teniente copper mining project, the Los Bronces project in Chile, the Los Pelambres project, also Chile, and Altar. That mineral district and its deposits is a mineral district of behemoth projects, not giant projects but behemoth projects.

For example, El Teniente has got 170 billion pounds of copper. So these are huge, huge deposits. And our Cerro Amarillo project is right on the southern part of that tertiary belt. Now, it's got the same geology as El Teniente, it's got the same age of rocks as El Teniente, and like El Teniente and all these other behemoth projects, it's not a single porphyry, but a cluster of porphyries. We've identified five individual porphyries on the property, four of which we've mineralization at surface, and we've managed to get in some geophysical equipment up on the property and we've looked at two of these intrusions and we've got chargeable material below mapped copper mineralization at surface.

So we're really excited about that, and that project alone can really, really be a company maker for us. However, as you know, porphyry projects are expensive to explore for. We've done three campaigns there in the past, and we're looking for a senior partner to help do the heavy lifting in terms of moving it to the next stage.

Likewise to Cerro Amarillo, Samenta which I alluded to little bit earlier in your program, that too is a porphyry copper moly project very close to the Taca Taca project, which as you probably know was acquired by First Quantum in 2014 for $418 million US dollars. Again, like Taca Taca, it's a high level intrusion, and it's a cluster of two. So it's not just a single porphyry, it's actually two porphyries on the property. We want to do some deep penetrating geophysics on that, because it is a high level and we expect that most mineralizations will be at depth on that. And then look for a senior partner to assist with further development of that as well.

Then on our epithermal project Aguas Perdidas, $2 million dollars has been spent on the property in the last number of years, a lot of geophysics, IP, mag, a lot of trenches, and a lot of sampling of the epithermal veins at surface. That's drill ready, and later on this year, we hope to do a first stage drilling to test a number of targets on that property. So we are on to an exciting, and to my mind an exceptional, portfolio of really good properties underpinned with good geology, and I think that the company's got a lot of depth as a consequence.

Gerardo Del Real: Absolutely, absolutely. So just to summarize there, the focus, the immediate focus obviously is going to be at Diablillos. We're looking at a resource updated internal PEA if I'm not mistaken, and then leading into a pre-feasibility study, is that correct?

Willem Fuchter: Absolutely, we should have the drilling done by the end of June, and we'll be of course disseminating our results as we get them in from the laboratory.

Gerardo Del Real: Wonderful. The deposit that exists, the Oculto deposit, how's the metallurgy there?

Willem Fuchter: There's been quite a bit of metallurgy test work that's been done on the property, and in the earlier PEA that I alluded to, the one that we want to update, what was looked at was two possible production scenarios. One was an open pit heap leach scenario and the other one was an open pit, and then crush, grind, and agitated vat leach. Now the metallurgical work that's been done to date suggests that if we go the open pit heap leach route, the recoveries are fairly modest. 47% for silver, and in the mid to late 60s, high 60s for gold. Whereas if you go the open pit crush grind and agitated vat leach, your recoveries really go up quite considerably and significantly so, into the lower 80s for silver and mid to high 80s for gold.

So we want to get that confirmed as well as adding additional resources to the existing resource picture, and start looking at how that'll look like going forward in a production scenario.

Gerardo Del Real: Excellent, excellent. So that's the plan at Diablillos, the two of the three projects, the Samenta project and Cerro Amarillo, you're looking for senior partners. I imagine you're in discussions for that?

Willem Fuchter: Absolutely. We've had two large companies request confidentiality agreements and we're swapping various drafts with those two companies. So we should have some news on that in the coming weeks.

Gerardo Del Real: Excellent, and then just to finalize there, Aguas Perdidas will be drilled later in the year, and you said that's a walk-up drill target, is that correct?

Willem Fuchter: Absolutely. That's ready for drilling, not much more work has to be done. We've got to get our permits in place, and we're working on that as we speak, and we should be looking at drilling that probably in October this year.

Gerardo Del Real: Well it sounds like a very busy rest of the year. What does the share structure and the cash position look like? You obviously have a lot of catalyst.

Willem Fuchter: Our share position at the moment, we've got close to 60 million shares outstanding. I can't tell you the exact amount of warrants outstanding, but somewhere probably in the region of three to four million warrants outstanding on that. So that's the capital structure of the company. We're well funded, we just raised close to $4 million US dollars in two private placements. As well as we exercised some previous warrants. So we're well funded and certainly looking forward to getting a lot of work done this year.

Gerardo Del Real: Excellent. And shares are currently trading on the US side over the counter at around 36 cents, is that correct?

Willem Fuchter: That's correct, about 49 cents Canadian on the Canadian market.

Gerardo Del Real: Got it. So sub-22, 23 million Canadian market cap, fully diluted. That's swell.

Willem Fuchter: That's correct.

Gerardo Del Real: That's tiny for the catalyst and the properties that you have. I know Silver Standard owns 19.9%. Does management have skin in the game? Are you participating there?

Willem Fuchter: Absolutely. Management has got around about 14% participation in the company. And as founders of the company, we're very much involved and very much committed.

Gerardo Del Real: Excellent. So between the nearly 20% of Silver Standard and the 14% that management has, obviously the float’s about 65%. I imagine that a good percentage of that is taken up by people friendly to the company, so a pretty tight share structure, a lot of catalysts, a good cash position. It sounds like an exciting story.

Willem, is there anything else you'd like to add?

Willem Fuchter: I think just to quickly summarize, AbraPlata is a new player in the Argentine mining scene, but with real opportunities for success, as heard on your program we've got an excellent startup project at Diablillos, our principal project, and we're about to start on our copper-gold moly projects with solid geological underpinnings. We've got a respected board that's been successful in business in the past. We've got an experienced team on the ground and I think the last thing that we should mention is the fact that there's renewed interest in investment in mining, and of course we've had a change of administrations here in Argentina, and I think all these things are coming together very nicely. So we're really looking forward to being able to report success in the next short while.

Gerardo Del Real: Well I look forward to visiting here in the next several months. I know we talked about that a bit off the air, but I definitely look forward to getting out there and gaging the jurisdiction and just how things are changing there in Argentina. I know you've spent a lot of your time there, you're a permanent resident, I imagine there's a pretty big difference now as compared to times in the past, would that be correct?

Willem Fuchter: Absolutely, and thanks a lot. It’s really positive here. Argentina, I think you might have seen in your news, is certainly taking its place again as a leader in South America.

Gerardo Del Real: Excellent, excellent. Well, Willem, you're going to have a lot of news the rest of the year, I hope to have you back on as the catalysts materialize. I want to thank you very much for your time today and again hopefully you can come back on as you secure some of those partnerships on the other properties and as drilling commences there at Diablillos.

Willem Fuchter: Thank you, Gerardo. It's a pleasure being on and I look forward to being back with you soon.

Gerardo Del Real: Thank you for pronouncing my name correctly.

View Interview Archive

Subscribe to the RSD email list and get the latest resource stock activity directly to your inbox, for free.

MARKET SUMMARY

INDICES

Name Last Change
DOW 22997.40 0.18%
S&P 500 2559.36 0.07%
NASDAQ 6623.66 0.01%
TSX 15816.90 0.09%
TSX-V 791.08 0.00%

Resource Commodities

Name Last Change
Gold 1286.50 0.10%
Silver 17.04 0.00
Copper 3.22 3.27%
Platinum 935.14 0.23%
Oil 51.87 0.81%
Natural Gas 2.95 1.83%
Uranium 20.45 N/A
Zinc 1.51 0.00%

@RSDigest ON TWITTER

Part of the Stock Digest family of websites
Small Cap Stock Digest