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

Latin Metals (TSX-V: LMS)(OTC: LMSQF) CEO Keith Henderson on Drilling & JV Path Towards Production

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and CEO of Latin Metals, Mr. Keith Henderson. Keith, it's good to have you back on. You and I had the opportunity to chat in person at the Vancouver Resource Investment Conference, there's a lot going on. First and foremost, how are you today, sir?

Keith Henderson: Yeah, everything's great. It's about -10 degrees Celsius here. I don't know what that means to you. I don't know what that means in Fahrenheit, but I'll tell you it's really cold. But beautiful. Lots of snow and lots of sunshine.

Gerardo Del Real: It sounds beautiful visually, not so much so degree wise. I mean, we're at like 79 degrees Fahrenheit here in Austin, and I'm complaining because it's cloudy. So there's some perspective to be had for sure. But listen, I covered Latin Metals in one of the paid services, and I usually don't talk about the paid services on this format because the two businesses are completely separated. But in this case it's relevant because I've had a lot of shareholders write in and say, "Well, why did you hold Latin Metals for all of 2024 with the lull of news?" And what I tried to explain to subscribers this past month was that don't confuse the lull of public news for a lack of activity behind the scenes.

And now I think 2025 with $2,900 gold, $32 silver, copper over $4, what looks like an inflationary environment, what looks like an environment where the US is going to go back to QE here soon because of all the debt that's maturing this year. It looks like everything I wanted to happen in 2024 is finally starting to materialize in 2025. And I couldn't ask for a better way to kick off the year than the news that we received yesterday. You discovered visible gold at La Flora Project in Santa Cruz, Argentina. The other reason I kept the company in the portfolio, and we still own it, is the quality of projects that you have in one of the hottest regions for exploration, that being Argentina. So let's talk about Latin Metals in 2025 and why we're excited again.

Keith Henderson: We're excited because, you're quite right, suddenly things are happening. I would say I'm seeing unprecedented levels of interest from potential partners. That's mid-tiers in most cases. Sometimes it's cash rich juniors, believe it or not there are a few out there. And also major mining companies. And to your point, what looks like a dearth of news sometimes to people who are watching from the outside, I understand that can be a bit distressing, but the time that it takes and there's always so much going on and we’re no exception, and yet sometimes it takes us a while to get to the point where we're putting these news releases out. So I might have four or five companies coming to me looking at a project and I talk to all of them and I sign CAs and then they go and do site visits. And then we start to talk about commercial terms. And then maybe we get down to writing an agreement.

And the first thing that anybody that's watching from the outside hears about it is when we actually sign an agreement. And it's misleading to think that nothing's going on, it's just that it's a matter of what makes it into the news. And so it was a pleasure to put out some news this week on some actual exploration results. This project, Cerro Bayo, has been really interesting for us. Anyone who's been watching the company for a while will know that Barrick optioned this property from us for a couple of years. And if you remember, they terminated that option maybe about a year ago. And the termination of that option was really not a reflection of the project in any way, it was by no means nothing negative. It was purely a corporate decision taken by Barrick that resulted in them reducing drastically the number of exploration projects that they held for themselves.

And so our project didn't quite make it, that's fine. But the work that they did was excellent, and they were able to identify a whole bunch of targets for us, drill targets. And we have been going through the drill permitting process and we're finally getting there. Everything's kind of coming together for us. So the drill permit, everything is submitted to the government. Every tiny little piece of paper, every question answered, all the contracts for surface rights signed, contracts for water rights signed, absolutely ready to go. So that sits with the government right now. Anyone familiar with Argentina will know that January in Argentina can be kind of a quiet month. It's the middle of summer holidays basically so it's difficult to get too much done in January. But we're now in February and we're going to be getting this drill permit finalized, and we'll be hoping to put a news release out on that real soon.

That's great news because that means a partner coming in can really look to starting drilling. And this is the number one question I get from incoming partners when they come to look at a project is, "Is this drill permitted?" Because the companies that are looking in this commodity price environment, they want to get projects quickly and they want to be able to drill quickly. And so the very best thing that we can do is hand people projects that have got drill permits and that's what gets deals done. So we're highly, highly confident that that's going to be the case in Cerro Bayo. We've got the excellent news today, or this week, sorry. But let me just speak to that news actually because that's interesting.

The surface results from Cerro Bayo are not exactly spectacular, but that's for very, very good geological reason. When you look at these, and I'll maybe get a little bit technical here but only for a moment. When you look at these epithermal environments, they've got a limited vertical extent. So maybe they're 150 to 200 meters thick. If you're walking over these projects at surface and you're picking up 30, 40, 50 gram per tonne gold, you're already in the middle of that system. So your chances of finding a deposit are actually somewhat diminished because most of this deposit is probably eroded away and maybe there's just a few scraps at the bottom of the deposit, which are now sitting at surface. What Barrick liked about Cerro Bayo, and what we like as well, is that we predict that bonanza grade, based on what we're seeing at surface, we predict that the grade is going to be at 150 meters depth.

That means that we are above the system. That means that the system's preserved. And that means that if it's really there, it's all preserved and that makes us very happy. So that's why Cerro Bayo is set up in such a beautiful way. The La Flora Project, which is a slightly separate project up to the north, we'd actually never been to it before. It's a smaller property and it really wasn't our priority. But we went there and now we are picking up 82 gram per tonne gold at surface. That's interesting in the greater system because that means that the epithermal systems in this specific region are definitely creating bonanza grade gold. And that means that when we start to think about the drill targets at Cerro Bayo, we can have a lot more confidence that the bonanza grade is going to be there. And our existing model of where that's going to be at 150 meters depth still stands.

And so that means that these drill targets are now highly prioritized for us. And I think anybody looking at the project who's a geologist, who's familiar with these technical matters, will look at that and go, yeah, this is great. So that combined with the fact that the drill permit is coming, it means that this is a really high priority project and I think we'll have just about no issues getting a deal done with somebody to advance this project.

Gerardo Del Real: Well, listen, I know shareholders always want to retain as much of a potentially high grade project as possible, especially when we're talking about a high grade gold and you're getting high grade silver. And look, what I really have liked about the exposure we get with Latin Metals is we get multiple commodity exposure. We get it in a phenomenal jurisdiction to work in in Argentina. And we get it across many, many projects and that gives us many, many shots on goal. Not to mention the fact that you have a partner at one of your projects, a deal struck with a company that seems hell-bent on getting to production and making sure they maximize the sweet spot of this rising price environment. Can you speak to some of the other projects in the portfolio and what we can expect here in 2025?

Keith Henderson: Yeah. So we've got a company called Moxico who have optioned the Esperanza Project for us. Esperanza is a copper, gold porphyry system. It's been drilled, it's got some spectacular drill results already so it's kind of a more advanced project. I think the best intersection was close to 400 meters from the surface with 0.57% copper and 0.27 grams gold. So a very, very significant intersection and open at depth. And the project generally open. So Moxico have come into this project in October, I would say they are by far the highest quality partner that I've ever had the pleasure of working with. They're doing everything right. It's hard to describe. Everything that they said they were going to do, they're doing. They have a permit for surface work and they've been in the field.

Gerardo Del Real: That's rare in our business.

Keith Henderson: Oh, I know, it's great. But they've been on the project since November. They took a break at Christmas. They're back in the field now. They're doing mapping, they're sampling. They've got plans for an IP survey. They've got plans for a very big regional airborne magnetic and radiometric survey, which will cover Esperanza the surrounding property, Huachi, and some of the regional area around it. All of that is great. With a view to getting to the drill permit, they've embarked on a fairly significant groundwater survey. And these are the kinds of things that really help you get a permit done, they make the government feel comfortable doing all the right environmental work. So they're going to be doing that over the next few months. They're also even doing a social study, which is they hire a professional company to go and speak to the households. So they'll go and visit 400 households and they'll ask people what their attitudes are towards the projects.

They'll get generally positive results from that. And that helps us to go back to the government and go, "You know what? This is a project that really has support locally." And that's always the key to getting a permit. Funny enough, politicians don't want to give you permits if they think it's going to damage their own careers, right?

Gerardo Del Real: Imagine that. No way.

Keith Henderson: So you really have to work hard to make sure the politicians understand that the people in the area want these things to happen. And that's what we understand. So it's just a matter of going through these processes. So I've never been more confident on this project, both in terms of the work that's being done, the way it's being done, the peripheral work that's being done on the permit. And just absolutely delighted. They're really fantastic. 

Up to the north in Santa, we've got Anglo Gold. And existing shareholders or anyone that's been listening to you over the years, will know that this project's been looking for a permit for a little over a year.

We're just going through some final community meetings right now, and we just had one on January 31st, just a few days ago. What I understand from Anglo Gold is that that went really well. And so, again, we're kind of feeling levels of confidence and optimism here and hoping that that project will get its permit in the next couple of months as well. So we're not going to be putting news releases out on this kind of stuff. We just let these processes continue. And then once we have the permit, we'll let everybody know. And I know that as soon as Angle Gold had this permit, they'll be rolling the rigs on there.

They've been drilling another project in Santa over the last few months as far as I understand, and they've got just another couple of thousand meters to go. So what we're hoping is that just as they're finishing that project, we'll already have the permit at Organullo and they'll be able to just roll that rig along from one project to our project and get started. And that would be really great news for us as well. So a lot of pretty specific reasons to feel happy about all of these projects and the partners that we have on them.

Gerardo Del Real: Well, let me be absolutely clear. The tiny market cap that you have to begin 2025, I suspect will not be the same kind of market cap that you end 2025 with. There's going to be multiple partner funded drill programs. There's multiple deals you're working on behind the scenes. You're in a hot jurisdiction. The commodity environment seems to be risk on, as we speak, and more people seem to be taking that attitude. The juniors, especially the explorers, are coming from a baseline where there's just a severe disconnect between the commodity price and the commodities that these juniors give you exposure to if a significant discovery is made. So all stars seem to be aligning. We thought that last year, we had a few hiccups. Sentiment wasn't there last year. Feels very different to me in 2025. Keith, thank you so much for the update. Anything to add to that?

Keith Henderson: Just one thing is that, yeah, we've got a whole suite of projects in Peru as well which we haven't had much occasion to speak about recently. That's another place where partners are kind of coming out of the woodwork and looking for projects and coming to see our projects. So that's been another new development. So this kind of renewed exuberance coming from the mid-tiers and the majors, it doesn't seem to be limited to Argentina, it seems to be kind of going through the Peruvian projects as well. So I expect to see some progress on both of those countries over the next few weeks. And, yeah, we can talk about those things as and when they happen, and I'll be happy to expand on that a bit later when we've got deals in place.

Gerardo Del Real: No, listen, looking forward to that conversation. Peru has done a really good job here the last six to 12 months of getting back on track and permitting companies that are acting responsibly and exploring and developing responsibly. That is a welcome development in an area that's geologically just rich and ripe for discovery and development. So look forward to that conversation, Keith. Thank you so much for that update.

Keith Henderson: Thank you so much. Cheers. Bye-bye.

Gerardo Del Real: Cheers, now.

Click here to see more from Latin Metals