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

Avrupa Minerals (TSX-V: AVU) Director Mark Brown on Joint Venture with OZ Minerals at Alvito IOCG Project

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me is Director of Avrupa Minerals (TSX-V: AVU)(OTC: AVPMF) and President of Pacific Opportunity Capital, Mr. Mark Brown. Mark, thank you for joining me this afternoon.

Mark Brown: Hey, Gerardo. Great to be here. Thanks for having me.

Gerardo Del Real: I wanted to have you on. You're a Director of Avrupa Minerals and you had some pretty exciting news this morning. “Avrupa options the Alvito IOCG Project to OZ Minerals,” and I wanted to get your take on that because it's a pretty robust agreement.

Mark Brown: Yeah, I mean we've been involved with Avrupa since it was set up and we've managed to do a deal every year in this company. It's been fantastic and this is another great deal. It's over in Portugal, and have you been over there, Gerardo? You been to Portugal?

Gerardo Del Real: I have not, but I'm looking forward to getting out there.

Mark Brown: We’ll have to get you over there. It's a real mining area. I mean, it's been historic mining there since Roman times. So there's a real history of mining most people don't know about it. There's also a belt there called the Iberian Pyrite Belt, which has got several big, big mines on it, mines that have a billion dollars of revenue a year.

So that's where we are. We're just on the side of that. And for this Alvito project, I thought I'd kind of drill down for you on it. The project is 300 square kilometers big. Within that is a 24 - I know it's quite big - 24 kilometer long, 4 kilometer wide belt where there is a lot of copper and gold occurrences. And this is all in our project. So we identified 16 prospects there and we sent our guys out the last few years and they took 274 rock chip samples and of those 105 of them were greater than 0.1% copper.

Gerardo Del Real: Wow.

Mark Brown: 40 were greater than 1% copper. 32 had 0.4 to 6.4 grams per tonne gold. So you can see there is a mix of copper-gold there. And then you ask yourself as a geologist, what kind of deposit is this? And it didn't fit a lot of models so they've actually said it fits really well this iron oxide, copper-gold model. Have you heard of that kind before?

Gerardo Del Real: Absolutely and you’re obviously in the right place for it. That's elephant country in that part of the world.

Mark Brown: Well that's exactly the point. These IOCG deposits are known to be very, very large. I mean, Olympic Dam is one of the biggest ones in the world in Australia.

Gerardo Del Real: Correct.

Mark Brown: And they were talking about doing a $30 billion dollar expansion there just a few years ago. So revenues are many, many times bigger than that. What we did is we found these samples. And then we went and drilled about 30 holes in the area, just 10 to 20 meters deep, just to kind of get through the soil and test the bedrock down below. And they were drilled all over the place. And 22 of those holes actually hit visible copper with some magnetite in it, again more indications of this IOCG type model. So, all very good and now we've got these targets identified and OZ Minerals looked at this and it's similar to one of their producing mines in Australia. And OZ is a decent company, they are a big miner. They've got 600 million cash in their bank right now, 370 million in profits last year, very successful, and they're looking for more deals.

Gerardo Del Real: Well I assume that the fact that this is a similar looking project to their current mine is the reason why they were so aggressive because it's a pretty aggressive deal. I mean the terms here, OZ minerals may earn up to 75% over 2 and a half years by spending 4 million. Can we talk about the details there a little bit, Mark?

Mark Brown: Yeah, I mean the first step is for them to spend a million dollars to earn in. And basically in talking to the guys, they're no nonsense guys. I love the Australians. They're going to get in there, they're going to do some initial work. We hope they'll be drilling by August, September and if they hit something they're going to go big on it. They're going to spend another 3 million bucks to see if they can delineate something big. That's their target. A big target, going fast, no messing around. We've got two and a half years of a window, which coincides with the license period. And of course you can extend the license after that, if you’re successful and want to do that.

These guys are no nonsense guys and the other key thing is they understand these kinds of deposits. Our guys are pretty good, we have a great geological team there in Portugal. They've made discoveries before. But the oversight by a group that's actually operating a mine of this kind is also very, very key for us and just adds to the whole intelligence and wisdom of the group over there in deciding where to put drill holes.

Gerardo Del Real: Excellent, so you anticipate and hope for a drilling program in August. I imagine in the meantime there is going to be mapping and sampling and geophysics? Is that correct?

Mark Brown: That's exactly right. We’re going to get going. We've got a lot of data and a lot of work already done. We are going to compile that and really the idea there is to get to the targets, refine them, and come into agreement with OZ. You know they're funding it so they've got a lot to say about it and that's fine with us. But we've got to present drill targets to them that make sense and we will probably tweak those a few times and then we will be busy doing that. So that'll be fantastic to have another drill program going this year.

Gerardo Del Real: Excellent, excellent. Stepping back a little bit, Mark, and just looking at things on a macro perspective, you are involved obviously with a lot of resource companies. What do you see as far as exploration. Do you see that picking up? Do you see the spending picking up?

Mark Brown: I'm seeing companies get their warrants exercised so they can do more work on the ground. I'm seeing companies that have been sitting on cash, now actively looking for acquisitions or drilling projects. And we're starting, it's still early, but we are starting to see some good results in these things. Of course, I'm also director of Almaden and Almadex and one put out a PFS and one put out a fantastic drill hole the other day. So, you're seeing things happening, a lot of activity going on, more financings. That is what happens in the beginning of the good market and metal prices are creeping up, which is nice. And then what you really want to see though is those discoveries being made because that's really what makes it exciting for the investors and that's what we are trying to do here.

Gerardo Del Real: Absolutely. And where I was going with my question, Mark, are you seeing mid-tier companies be more receptive was the word that I was looking for. Do you see them being more receptive to funding exploration deals? Because they're obviously not doing a lot themselves and you deal with a lot of early stage companies and some not so early stage like Almaden right, which put out like you mentioned an excellent PFS but the Almadexes of the world, companies of that nature. Are you seeing the mid-tiers looking to strike more deals with the early stage exploration companies?

Mark Brown: Absolutely, there is a lot of deal activity going on right. We look at a lot of stuff here, we are talking to a lot of people. I know one prospect generator that has, I think, eleven confidentiality agreements signed with anywhere from mid-tier to major companies.

Gerardo Del Real: Wow.

Mark Brown: They're looking at its projects. Yeah, that's a change. A year ago it was hard to get anything signed and you don't know if you're going to get deals from that. That's a sure indication that these guys are active. You know after a long period of very little exploration they're all kind of going, "Okay metal prices are moving, we've got to get moving now." And they're behind the eight ball a little bit and they're coming to guys like us with good projects saying we've got to get going.

Gerardo Del Real: Excellent, excellent. What else do you like out there in the market, Mark?

Mark Brown: There's a few things. I mean I'm a big shareholder and director of Alianza so I'm always very biased towards that. Otis Gold is one of my other favorite companies. I really like what they've been doing. Craig Lindsay is a great guy running that. They've been hitting some pretty good holes there in Idaho.

Gerardo Del Real: Agnico recently invested some money into Otis Gold if I'm not mistaken, right?

Mark Brown: That's absolutely right, they put 5 million in at 35 cents. Great deal done by Craig Lindsay again. You know Steve Quin and Midas Gold’s also in Idaho, another fantastic group there. They're fully funded through development so that's a safe bet. They've got a big, big gold deposit there as well. Lots going on, I just became an officer of both Redstar Gold and Adamera Minerals as well so another couple of companies we are just starting to get involved with. And you will be hearing more about those ones as well.

Gerardo Del Real: Fantastic. Well, Mark, I want to thank you so much for coming on. I'm a bit under the weather so excuse the hoarse voice back here but thank you for your time. Hopefully we can have you back on and we can have Paul on from Avrupa as the targets are developed.

Mark Brown: We’ll do that soon. Thanks very much, Gerardo.

Gerardo Del Real: Thank you, Mark.