Categories: Base Metals / Precious Metals
Topics: General Base Metals / General Precious Metals

Aldebaran Resources (TSX-V: ALDE)(OTC: ADBRF) CEO John Black on Having a Copper-Gold Tiger by the Tail

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Aldebaran Resources, Mr. John Black. John, I'm going to ask you how you're doing, but I have to believe after today's news you're doing pretty darn well. How are you?

John Black: Doing great. It's been a fun morning talking to people about our new results here.

Gerardo Del Real: Well, let's get right into it. The stock is up some 12% on very good volume. You hit 951.2 meters of .60% copper equivalent. That included a higher grade hit of 645 meters of .70% copper equivalent. This of course, from the Altar Project in San Juan, Argentina. Not just the length of the mineralization and the grade, but where you're hitting it, I think is going to be critical for our audience to understand and the implications for that. I'll let you provide the context, but I'd love to get into that.

John Black: Yeah, I think you've hit it right on the nose here. What we're doing is we're consistently delivering long runs of very good grade mineralization as we test a very large conductivity anomaly that we revealed last year. So, it's a geophysical technique that we use to look to depth in a system like Altar. And when we applied it to this system, we realized that our drilling up to last year had perhaps only really kind of touched the upper portion of the deposit, and there was much more to be revealed at depth. We announced a long hole into it late last year that confirmed that geophysical anomaly was matching mineralization, and this is now the third hole that we've announced this season that has produced nearly one kilometer intercepts of very good mineralization. And, these are very widely spaced holes. Hole 225, the hole we're talking about today, fills a gap of over 400 meters between holes 223 and 224, both of which had really nice runs of mineralization as well. So, it's clear that we're drilling out what will be a very significant extension to the known mineralization at the Altar Project.

Gerardo Del Real: You clearly believe that you're onto adding a lot of tonnage really, really quick, right? I mean when you're talking about filling a 400 meter gap between 223 and 224, and then I see the quote saying that you think you may have found a hotspot within a very, very large system. Can you speak to that a bit?

John Black: Absolutely. With a large porphyry system like this is, and we're into true porphyry style mineralization, so it's predominantly potassic alteration with disseminated copper mineralization in it. And, in the grades of the average grade mine from these type of deposits today is about a half percent copper, so anything above that starts to get even more interesting and what we're seeing is a sea of that sort of half percent copper. And then within that we see zones where our grades go 0.6, 0.7 and even higher than that and there will probably be multiple hotspots within a large system like this. And, we believe that today's hole that we've announced is helping us vector into another one of those hotspots.

Gerardo Del Real: I understand that you're still drilling with four rigs, is that correct?

John Black: Yes, that's correct. And, we're nearing the end of the season right now. Keep in mind, we're in South America, so the seasons are opposite. We've already had our first few snowfalls and we'll continue to drill as long as we safely can drill before the snow gets too deep. We anticipate we'll be able to go another couple of weeks and finish up the holes that we're on right now, which will give us quite a number of holes. We'll have approximately eight more holes to announce over the course of the next few weeks and months, and about the time we finish announcing those holes, we'll be starting up the next field season, which we'll plan to get back in the camp in September and be drilling by October on what we anticipate will be an even more aggressive program next year.

Gerardo Del Real: We've had a slight pullback in the copper price below $4 a pound. Anyone that watches the space and knows the copper supply and demand fundamentals, I think gets that this is a very temporary pullback,, and probably a heck of an opportunity to look at companies that the majors like to look at. So I say all that to say that I have to believe Aldebaran is fielding calls from majors that look at what's already pretty, pretty large scale copper/gold resource that looks to me to be quickly growing. How are the conversations, if you can comment at all, with the majors and the companies that are looking to replenish those depleting reserves?

John Black: You've hit right on the pulse of what's happening. We can't be specific about who we're talking to. Those type of conversations are under confidentiality agreements, but we haven't seen a lull in the interest by the majors at all. They're clearly monitoring opportunities like this. We've arranged for people to get in and see the project right at the end of the field season before the snow flies, and we have other groups that will have to wait until the end of the year when we get back to spring in South America and we can get them back in early next year. But, we were clearly getting good interest from most major copper companies and including some gold companies who are increasingly interested in having more copper exposure. And, keep in mind, parts of the Altar Project do have pretty significant gold associated with them, so there's very clear interest.

I think we're into a clear M&A situation with this, and it's kind of a typical pattern where we see in early M&A, we see the majors acquiring producing assets, or consolidating districts that they're working in, buying out partners. That's because you get instant production when you do that. That will typically mature into groups beginning to look for acquiring opportunities that they can develop new projects, and we couldn't be happier to be delivering a project of the magnitude of Altar into what I think the market's going to be set up in the next couple of years here.

Gerardo Del Real: We talked a bit at PDAC and we talked a bit the last time about the potential for Altar United as opposed to Altar East and Altar West, right? Essentially, in my non-geologist simplified version, one big blob of a bunch of copper and gold all over the place. Is that still the operating term here that we're using? Is Altar United the new phrase?

John Black: Yeah, absolutely. What the drilling we're announcing is filling in that gap between the Altar East and Altar Central. As we originally envisioned the project, it was two distinct zones of mineralization, which slightly overlapped and could be modeled in the same pit on it, but that, in an intervening zone on there, we'd always speculated there might be a third pulse of mineralization in that area. It's clear that that's the case right now, and effectively, have a coalescence of all zones and I think Altar United's the better term to use here.

Gerardo Del Real: I think that you mentioned one time to me that you really, really think Altar is a better project than some of the assets you've monetized in the past in this part of the world, assets that were monetized for half a billion dollars approximately. Where is the market cap right now for Aldebaran, even after the 12% surge today?

John Black: We're just slightly over a hundred million Canadian, actually, for market cap, so that's a key point. This project is already larger in terms of contained copper than the Antares Project that we sold with one of our previous companies for $650 million at the time. So, when you look at large copper assets like this, there are a number of our peers that have very good projects, but they also have very high market caps on, and the value's already been realized. There's plenty of room for them to still go, but I think it's important to take a look at an opportunity like Altar where we're just emerging right now, and the leverage is much greater. The potential return on investment is arguably significantly greater on catching a story like ours just as it takes off rather than once it's already made a good run.

Gerardo Del Real: Rigs are turning, assays pending, and it looks like the team at Aldebaran has a tiger by the tail. John, always a pleasure. Thank you for the time and the context.

John Black: Thank you very much, and look forward to future reports in the not too long from now.

Gerardo Del Real: Can't wait. Thanks again.

John Black: Okay, thanks. Take care. Bye.