Aldebaran Resources (TSX-V: ALDE)(OTC: ADBRF) CEO John Black on Setting Up For a Massive Copper Bull Market


Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of one of my favorite copper-gold plays, Aldebaran Resources, Mr. John Black. John, we just chatted a week or so ago. You mentioned that we'd probably be chatting again soon. More good news. How are you today, sir?

John Black: Doing well, and it's nice to have a good steady flow of drill results coming out from our project.

Gerardo Del Real: Well, let's get into the headline. The headline reads:

Aldebaran Intercepts 565.60 m of 0.60% CuEq, Including 329.60 m of 0.80% in Hole ALD-23-228: Drilling Has Recommenced to Deepen Hole as it Terminated in High-Grade Mineralization

  We talked a bit off-air. I mentioned it to you that I think your timing to be proving up the scale and continuity of this new deeper, higher grade zone couldn't be better given some of the conversations going on in the copper space right now and given your track record of monetizing these big, big assets. Can you provide some context on this latest release and tie it in together with the previous couple?

John Black: Absolutely. As we've discussed in previous conversations, what we're doing is we're drilling off a new zone at Altar. At the Altar project, we already report a large resource. We have about 1.2 billion tonnes of approximately 0.5% copper equivalent mineralization that falls into a pit that includes two zones, Altar East and Altar Central. And new geophysical data we got in last year supported some geologic theories that we had that there may be more mineralization at depth between those two zones and accessible in the current pit we have by slightly deepening the pit, and that's really playing out.

This new zone, we refer to as Altar United. It's very coincident with a large conductivity anomaly that we have from our deep-looking 3D geophysical surveys. And over the past three or four news releases, we've been consecutively putting new holes into this zone and each one's hitting. So it's demonstrating potential for a very significant increase in size to the mineralization that we can report and remarkable continuity of the mineralization, as well. So we're very pleased with that.

The two holes that we put out today are holes that are 200 meter step-outs from previously-reported drill holes 223 and 225B. Both of those holes had good mineralization, and both of the new holes we reported today did pretty well, particularly drill hole 228, which is the one you just mentioned. Not only did we have those long runs of mineralization, but it bottomed in 0.96% copper equivalent, dominantly copper, just a little bit of gold. Moly contributing to that, as well. And that hole's open, so once we realized how strong that mineralization was at the bottom, we deployed one of our rigs to extend that hole a bit deeper before we hit the end of the season here.

Gerardo Del Real: The tonnage that you're adding is impressive, the pace of it. But there was something in the release that I don't know that the market appreciated, but I certainly did. You mentioned how the upper portions of holes 227 and 228 both drilled through rhyolite host rocks, and you mentioned in the release that while they didn't return exceptional grades, it demonstrated that even poor host rocks can be mineralized in the system. Can you speak to that a bit and how that ties into the upcoming resource estimate, the cutoff grades, and the potential to contribute to a very, very favorable strip ratio, the reduction of the strip ratio, with those poor host rocks?

John Black: Absolutely. What we're seeing in the system is that the mineralization is associated with an intermediate composition of a diorite intrusion that is bringing in most of the mineralization. But the mineralization extends out into the wall rocks that surround that intrusion or series of intrusions that we have on the project. And some wall rocks are much more receptive to being mineralized. If we have andesites or more intermediate volcanic wall rocks, they have a lot of iron in them and they produce stronger mineralization. But the rhyolite host rocks that we see in the upper portions of some of the holes are not a particularly receptive host rock, but we do see low grade mineralization.

And the importance of that is that particularly when we begin to model a larger open pit to capture as much as possible of this new mineralization, we'll have to move a lot of that rhyolitic rock. If that rock has above a low grade cutoff, typically 0.15 or so copper mineralization, that pays for itself to move that rock. So it converts it from just pure waste rock that needs to be removed into payable rock on that, and it helps us on the strip ratio and the overall economics of the project. So we're beginning to pay more attention to that because that'll become pretty critical as we produce the next model for how large this deposit could be.

Gerardo Del Real: You already have in hand one of the largest undeveloped copper projects in the world. What comes next, John?

John Black: Well, we'll finish off this season. We're getting right to the very end of the season right now. We have predictions for a major snowstorm in the next few days, and so a lot of our attention right now is focused on getting our people safely off the hill and the equipment safely back down into camp and well stored so we can start quickly next field season. So that's where our focus is on safety of our team, first and foremost. And then, as I mentioned, we'll have a number of additional drill results to release. We've got four more completed holes as well as we have three of the four rigs are still drilling on holes right now. So we have quite a bit more information to report over the next few months as we get that out.

And then once we have all this information together, we'll take a look at that. We can model internally to see what the implication of the drill campaign this field season is, and if it makes sense to put out an interim report on the increase of the size of the deposit, we will by no means have defined the full size of the project. That will require one more strong field campaign to get the system drilled out at approximately 200 meter spacing. So look for the rest of the drill results from this year. Look for a possible interim resource update towards the end of the year. And by the time we're done reporting the results from this year, we'll be in a position to start talking about how aggressive the program will be next year in terms of total meterage and total number of rigs. We're right in the midst of beginning that planning right now.

And then the ultimate goal of this will be towards the end of 2024, after we complete the next field season. We'll put out a more complete resource on the full size potential of the Altar, United Altar, East Altar, Central zones, and then follow that up with a PEA, which will be the first look at the economic evaluation of the project, and then we can begin to see the true value of the project at that time.

Gerardo Del Real: You mentioned true value, and I mentioned that you already have one of the largest undeveloped copper projects in the world. How are you trading relative to your peers? Because as much as I love the scale of the project, the commodity mix, the area in which you're working, which is red hot right now and attracting a lot of investment capital, I really love the fact that you're trading at a discount to your peers. You probably not so much, but me being a contrarian, it presents a pretty compelling entry point or average down point for a lot of speculators that may be new to the story or are looking for more copper-gold exposure. How are you trading relative to your peers right now?

John Black: We're trading at a much lower valuation than many of our peers, and some of that is due to some of our peers have projects that are a little more advanced, they've more fully defined their resource, or they're moving towards a PEA or pre-feasibility study. And some of it's just people haven't really picked up on the story yet and understand it well. So you hit it right on the head here. This is an excellent entry point for people to come into the project, and I really feel the company's like a coiled spring right now. We have a lot of information already out. You have the security that there's a large deposit already defined, and in very good evidence it'll become substantially larger over the course of the next 18 months. And in that period of time, I would be very surprised that we don't see a strong adjustment to our valuation given on what we know is coming with the project.

Gerardo Del Real: I couldn't agree more. John, thank you for that thorough update. Appreciate your time as always, and we'll be chatting again soon, I suspect.

John Black: I think so. Okay. Well, thanks very much and we look forward to talking about more news as it comes out.

Gerardo Del Real: Likewise. Cheers.

John Black: Cheers.

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