General Base Metals
General Precious Metals
Aldebaran Resources (TSX-V: ALDE)(OTC: ADBRF) CEO John Black on Hitting Kilometer-Long Intervals of Copper-Gold Mineralization at Flagship Altar Project, Argentina
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, it was great catching up at PDAC. How are you today?
John Black: Doing quite well. It's kind of fun to be coming off such a big show and a lot of interest in our sector right now.
Gerardo Del Real: Listen, let's get right into it. Some takeaways from the show is there are a lot of gold companies that are now lithium companies! But another major takeaway for me was a lot of smart money really starting to get aggressive and allocating substantial capital to positions that provide exposure to copper.
Aldebaran provides phenomenal copper-gold exposure. And so I want to get into the latest release where you drilled 1,167.5 meters of 0.48% copper equivalent; that included 418 meters of 0.67% copper equivalent. This was on a major step out from known mineralization, and I think it's a game changer. I want to talk about why.
But before I get into that, for those that may not be familiar with the Aldebaran story and your past success, can you tell us a bit about some of your background and why you love working in this part of the world and why you are very, very good at monetizing large-scale assets like this?
John Black: Absolutely. Well, I'm an exploration geologist by background. I spent most of my early career working for major copper companies. And when the opportunity came to set up a junior company — Kevin Heather and Mark Wayne and myself, who formed our first company — had to determine what type of a company we'd be.
And we felt it was best for us to leverage off of our experience and knowledge of South America to set up a company that specializes in identifying projects. It can be very large copper or copper-gold deposits; acquiring those projects and drilling them out, de-risking those projects. And then, in our business model, ideally, we monetize those projects by selling them to a major mining company when they're looking for those types of projects going forward.
So we're looking for projects specifically that are big enough and economically robust enough to be of interest to a major company. And also, long life-of-mine; the type of projects that they like to have in their portfolio.
Aldebaran is actually the third company that we've managed within our group. Our first was Antares Minerals where we had the good fortune to discover and drill out the Haquira deposit in Southern Peru, which we monetized by selling for C$650 million to First Quantum in 2010.
From that, we've spun out Regulus Resources, which is working on a very interesting copper-gold project in northern Peru and Aldebaran which is working on an equally interesting copper deposit in west-central Argentina — the one we'll be talking about today.
Gerardo Del Real: Argentina has become a bastion of stability and just a great, great destination for capital in the resource space here the past several years. The jurisdiction has become top-notch. I want to get into the asset because you just made what I consider an absolutely game changing discovery. But this is on top of what's already a massive, massive copper-gold treasure that Aldebaran is sitting on.
Can you speak about the current resource as it stands today? And then, let's talk about why that's going to grow really, really quickly here.
John Black: Yes, absolutely. The Altar project, which is our flagship project in Aldebaran, is a project that has had quite a bit of drilling already. When we acquired it, we had over 100,000 meters of drilling in it.
We've added to that since, and we've put out our initial resource on the project, which consists of just short of 1.2 billion tonnes at a little bit less than a half a percent copper grade with an additional 200 million tonnes of Inferred. So the 1.2 billion tonness is at the Measured & Indicated (M&I) level — so a high degree of confidence.
So it's quite a large deposit; well over a billion tonnes of mineralization to start with. But, as we'll discuss, it has potential to be much larger as we continue to work on it.
Gerardo Del Real: Let's talk about that potential. Let's talk about that latest release and then let's talk about what comes next. We met at PDAC. I spoke to several people that are now calling the area between Altar Center and Altar East, possibly, Altar United — which I absolutely love. Tell me about that latest release and why it's so important.
John Black: Well, the resource that we have in hand that I mentioned, it consists of the Altar Central and Altar East zones; two separate porphyry centers. And we began exploring it really thinking we had two distinct centers on that. But late last year, as part of our effort to gather more complete datasets and more fully understand the district, we completed a deep-looking 3D IP resistivity survey, and we got a very encouraging result out of that.
It identified a large geophysical anomaly, a resistivity anomaly, that not only coincided extremely well with our existing mineralization but we realized that a large portion of that anomaly had been untested.
Late last year, we had a hole that had already been sighted when we received the survey that was going through it. And that confirmed that the anomaly was closely mimicking — or proxying — mineralization.
The hole that we drilled late last year to hole 221 came in with a little over a thousand meters of 0.4% CuEq, mostly in the wall rock of the intrusion through that. And our first hole that we've put out this year in the release that went out a little over a week ago was a 500 meter offset from that drill hole. And that came back with well over 1,000 meters of almost 0.5% CuEq mineralization in that and more in the causative intrusion.
So we're clearly confirming that this large geophysical anomaly that's largely undrilled is representing mineralization. When you have two holes of greater than a thousand meters of ore-grade material separated by 500 meters apart — the potential for additional volume here is extremely noteworthy.
Gerardo Del Real: 2023 presents for Aldebaran and shareholders what's going to be, I believe, the most aggressive drilling campaign this project has seen. Can you speak to what comes next, John?
John Black: Well, we're working with three drill rigs right now. We're actively trying to source additional rigs. It's a wonderfully busy exploration scene in San Juan right now. There are over 60 drill rigs active between ourselves and other projects around us. It's very difficult to find additional rigs. And probably the only thing that's more difficult to find are good drillers to operate those drill rigs right now.
So quite a hotbed of exploration. I would argue it's one of the most active areas in the world for porphyry copper exploration right now. So that's quite exciting as we move forward. We'll get as much drilling done as we can this year.
We're fortunate that we're in the high Andes. So, traditionally, there have been some restrictions on the length of field season in this area. But Glencore, who has the El Pachón project 25 kilometers to the south of us, pioneered in a major low elevation road, which gained better access to our project area as well. And so we're now able to extend our field season to approximately eight or nine months a year.
So we'll drill up to June, at least, weather permitting, going forward on this. We’ll probably take a short break over the winter months, which, in South America, is June, July, and August. And then, we’ll get back to it as soon as we can, beginning in September.
So we will complete the drilling we're on right now, evaluate those results at the end of the season, and launch right into a very aggressive program as quickly as we can beginning in Q3 of this year.
Gerardo Del Real: You have a market cap right now — and this is what makes it so compelling to me — of roughly C$120 million. I don't believe that this project ends up being sold for anything less than C$500 to $600 million. And I may be conservative on that depending on what the drill bit continues to deliver.
Can you speak to some of your major shareholders? I think it's really interesting, the names that have decided to take a stake in Aldebaran. And I don't think it's by coincidence. And I do think that there's a clear path for an eventual buyout given where we all see copper headed.
John Black: Absolutely. We're very fortunate that we have three strategic partners on this project going forward. We're earning in to an 80% interest in the project from Sibanye-Stillwater — the group that had the project. It didn't fit particularly well with them being mostly a PGM or precious metals producer.
So we can earn into an 80% but they're an active participant both in terms of having a portion of the project and also having an equity position within our group. So they've been good supporters for us moving forward. And we fit into the battery metals initiative that they have wherein they'd like to gain more exposure to copper or other battery metals going forward.
We also have Route One, a large hedge fund out of San Francisco. Route One have been long-term supporters of our efforts. They like the style in which we work. They did well on our first project with Antares and helped provide us the capital we need to move forward.
And then, the most recent news on the strategic front is that, late last year, South32 came in as a 9.9% equity position to support the project. South32 — for some of your readers that might not know about them — are a spinout from BHP.
So they’re essentially a BHP SpinCo that came out with assets from BHP, and they're very interested in increasing their copper presence throughout the world. They've recently purchased approximately half of the Sierra Gorda deposit in Chile where they operate now, as well as having several joint ventures in Argentina.
So fantastic partners for us. We're thrilled to have them on board both in terms of the financial support they bring to us but also very good technical partners to help us move the project forward and potential acquirers of a major interest in the project in the future.
Gerardo Del Real: It's a world-class asset… you have a world-class team… you're in a phenomenal jurisdiction… you have world-class shareholders. How's the treasury, John?
John Black: We're in pretty good shape right now. We have funds that’ll allow us to complete the drill program that we're on right now. We will, at some time later this year, probably need to take a look at how we stock up funds to complete an even more aggressive program next year. But we have a lot of data that we'd like to put on the table before we get to that point.
Gerardo Del Real: Checks all the boxes for me. I think it's going to be a fun 2023. I'm looking forward to chatting again. I know we have assays pending, rigs turning, more rigs, it sounds like, potentially on the way. A lot to like! Thank you so much for your time, John. Anything to add to that?
John Black: No, I couldn't be more pleased that we have our hands on a fantastic copper asset right when these types of assets are going to be increasingly sought after. And that's hard. We're not the only group that's specialized in trying to find these types of projects and drilling them out and selling them to majors.
There have been a number of us… Ross Beaty’s Lumina Copper Group, the Lundin family, Richard Warke, and others that have been doing this over the years… that it's becoming increasingly difficult for us to find these types of projects.
And the world is going to need a lot more copper in the coming years to move forward. So we couldn't be more pleased to have our hands on a great asset at exactly the right moment.
Gerardo Del Real: I couldn't agree more. John, thank you so much. Appreciate your time as always, sir.
John Black: Great, thanks, Gerardo. Look forward to keeping up with you as we roll out more results shortly.
Gerardo Del Real: Alright, chat soon.
John Black: Okay, thanks.Click here to see more from Aldebaran Resources