Categories: Base Metals / Mining Stocks
Topics: General Base Metals / Copper Stocks

Aldebaran Resources (TSX-V: ALDE)(OTC: ADBRF) CEO John Black on Potential M&A, Collaboration with Nuton, & Drilling at the Altar Copper-Gold Project

 

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's been a bit. It's great to have you back on. How are you today, sir?

John Black: Doing great. We're here at PDAC with a few thousand more of our peers here. It's a fun time here.

Gerardo Del Real: Well, listen, I think it's going to get even funner. We have record highs in the gold price, currently trading at right around the $2,141-an-ounce level. Copper, seemingly, is starting to catch a bit, at $3.85 a pound. I think the second half is going to be a phenomenal, phenomenal run for the copper price, and Aldebaran Resources has one of the largest copper-gold resources in the entire space. And it happens to be in a top-notch jurisdiction that is red-hot for attracting capital right now.

So I thought we'd have you back on and talk about the agreement with the Rio Tinto Venture. I want to talk about drilling. I want to talk about upcoming catalysts. A lot going on, too, as I said, what is already a really, really robust copper-gold resource.

John Black: Yeah, absolutely. As you mentioned, our Altar project is already quite large. Our resource that we reported now almost two years ago was approximately 1.4 billion tonnes. It's just a little bit less than half a percent. So a project that's already of the size that attracts the eyes of the majors, which is our business strategy, is to completely drill out a project, de-risk it, and then ideally monetize it by selling it to a major company.

Despite having a large deposit, it's about to get notably larger. So the news that we've been developing over the last two field seasons is that we have identified a brand-new zone called the Altar United Zone. We use that term because the deposit was previously known as Altar East and Altar Central, two separate zones that are captured in the same pit. But we've discovered this brand-new zone that unifies those two zones together, and over the past two seasons, we've drilled nearly 50,000 meters more of drilling, beyond what we used for the last resource calculation. We've been reporting multiple long runs of better grade than what we've reported in the previous resource pit.

So with this campaign, we're drilling with four rigs right now. The season will go to about May or June, and that will provide us the data necessary for us to do an updated resource, which we anticipate will be in the latter part of this year, around October, November of this year.

Gerardo Del Real: That's a lot of news flow. And you're at PDAC, John. I have to believe that there are likely a lot of conversations and increase in conversations regarding Aldebaran, given the scale of the resource and the jurisdiction that I mentioned.

Can you speak to what you kind of see happening here in the second half of this year? It's an important one for the company, but I think we're probably due for a wave of M&A in the space, in anticipation of higher copper prices and along with record-high gold prices.

John Black: Absolutely, and with the results we've been putting out, and the fact that we'll have that resource update, the large companies can see that that will be a substantial increase. And that will lead into a PEA, the first economic analysis of the project, which we anticipate we'll have done in about a year. We'd love to have it out for this time. Next year's PDAC, we should be talking about the first PEA on the project.

And what's interesting for me is that it's almost like I live in two worlds right now. We interact a lot with the major mining companies to evaluate what we're doing and keep an eye on the project. South32 is an equity investor into the project already. They provide us the funding to move forward. They have nearly 15% interest in the project as a strategic partner on the project, and we've recently signed an agreement with Rio Tinto Nuton, a division of Rio Tinto, to test some technology they have that could make the project even more attractive, in terms of how to develop the project moving forward. We can talk more about that in a moment.

So we have drawn the interest of several major companies. Those ones I can talk about because we have agreements with them, but there are many others that are taking a look at us. Most of my time here at PDAC is interacting with major companies right now that want to learn more about what we're doing and monitor what we're doing. So we see that bullishness from the major companies that are clearly needing and evaluating how they can acquire additional copper prospects. It's very, very positive in that space.

But when I mentioned almost like two worlds when we talk to the retail investors, there's still some hesitancy. I think there's general recognition of the opportunity with copper and that it's very likely to take off, but everybody's waiting for it to happen right now. And I view it as a coiled spring at this moment. I've rarely seen in my experience, which is a few more decades than I probably care to admit to, that so many people in agreement that it's going to happen and it's going to be there, but not quite taking that step yet.

So there's still time to position yourself in copper stories, and I think you'd be well rewarded for that. Rather than chase something that's already boomed, it's probably the time to get in early on copper right now, before it takes off.

Gerardo Del Real: Yeah, I couldn't agree more. I'm doing so aggressively, personally, and I'm advising subscribers and readers of mine to do the same.

I want to talk about the agreement with Nuton because it's an interesting one. You don't need the sulfide leaching aspect of Altar to work in order for the project to be massively economic and to have a massive scale. However, should this work and prove to be what everybody hopes it is, it has massive implications for the potential economics of the project. Can you speak to the agreement and the technology that you're looking into and why that's a worthy endeavor for you?

John Black: Absolutely. Rio Tinto, as many copper companies, have been exploring the possibility of how they might be able to process copper ores, particularly porphyry copper ores, by leach technology, rather than milling and concentration. And in copper, there are two styles of mineralization, in a simple sense. There's secondary mineralization, which is weathered and redeposited on the upper portion of deposits. That style of mineralization, due to the mineralogy, has been able to process that with heap leach technology. So you just crush the rock, put it on leach pads, leach it with a sulfuric acid solution, and produce pure copper cathode on-site.

Low cost makes an operation much more profitable, but the bulk of the mineralization in big copper deposits is primary copper sulfide mineralization, and that requires milling and concentration and sending a concentrate to a smelter. So a much more capital-intensive process and a much more involved process, but it's been the best way to move forward.

Rio Tinto believes that they've developed some new twists, some proprietary twists they have to leaching technology that would allow that primary mineralization to be processed by heap leach. And if that works, what it does is it dramatically lowers the capital cost for a project, which makes it easier to develop and more profitable to develop. And it also has some very interesting potential benefits in the ESG sense, in that it uses much less water. It uses notably less power. It's fantastic that copper is now viewed as a green metal and a metal that's essential for us to move towards a lower carbon-emission world going forward. But the process of mining it still could be carbon-intensive, so if you can develop a mine that uses much less energy and much less water, it's very attractive to the major mining companies.

So we've entered into the agreement with Rio Tinto to test it. They don't have an equity position in the company, but they're testing our material to see if their techniques will work. They're also working at Los Azules, a project very close to us in Argentina, with McEwen Mining. They're pretty advanced on their test work there, so we're watching that closely. We have a strong relationship with Rio Tinto, that’s primarily because of an agreement we have with our sister company. We have a company called Regulus Resources that's also exploring a major copper deposit in Peru, and we've been working with Rio Tinto on this new technology for some time there. We're very excited about it. We believe it'll be a game-changer in the space, to be able to make mines more profitable, more easily developed, and more socially responsible projects, as well, moving forward.

So as you mentioned, we don't need this technology to make the project work, but if it works well, it could be a substantial benefit to the project moving forward. So quite excited about that. It means we're very busy here at the show. We are spending less time than I'd like to at the booth because it's primarily because we're interacting with a lot of companies, with meetings that they'd like to have with us right now.

Gerardo Del Real: Well, listen, you have a history. You and the team have a history of monetizing assets in this part of the world for hundreds of millions of dollars, half a billion dollars plus. Aldebaran's market cap, I think, is extremely, extremely depressed, relative to the metal in the ground. That number is growing by the day. Tell me what comes next, John.

John Black: Well, as I mentioned, it's a good news flow of drill results coming out over the next few months. We'll drill until about May, and then by the time we get all of those out, we should be pretty close to putting out that new resource update. Look for that in October, November of next year, and then that will lead into a PEA.

So those are all substantial milestones in the space. Drill results are not drawing a lot of attention in the market right now, but more important studies, like a resource update or a PEA, particularly if we move into a more robust copper price, I think, will receive the attention they deserve.

So a lot of news on this. We're also seeing a lot of news coming out of other companies working in Argentina right now. With the strong changes that new President Milei is making on this to make it more attractive for us to make a major investment into Argentina, we anticipate we'll see news about go-ahead decisions for similar large copper projects in the country. And I think that'll be a very good signal for Argentina and for the copper space there.

Gerardo Del Real: A lot to like. I think Aldebaran right now, trading where it trades, is a phenomenal speculation if you're bullish on copper and gold, and I don't see how you cannot be bullish on copper and gold. John, it was a great, great update. Thank you so much for your time.

John Black: Great. Thanks so much, Gerardo. Look forward to catching up again.

Gerardo Del Real: All right, chat soon.

John Black: Okay, thanks.