PROSPECT GENERATION IN SOUTH AMERICA
TSX-V: LMS | OTC: LMSQF
Multiple Gold Projects Underway with
Barrick Gold & AngloGold Ashanti
Latin Metals Inc. (TSX-V: LMS)(OTC: LMSQF) is an exceptionally well-run junior mineral exploration company focused on advancing its impressive suite of early-stage gold-copper and gold-silver assets in mining-friendly jurisdictions in South America — specifically Argentina and Peru.
The company operates via an investor-focused prospect generator model, which brings certain potential advantages to shareholders, including exposure to the discovery upside of multiple projects with the majority of exploration expenditures borne by the option/joint venture partner companies.
In this Special Report, we’ll be exploring the key flagship properties being advanced by Latin Metals along with a close look at the prospect generator model, which is being brilliantly deployed by the highly-adept team at Latin Metals.
Led by CEO Keith Henderson — who brings 25-plus years of experience in the global resource sector including with majors — Latin Metals is executing the prospect generator model to a “T” with definitive option agreements underway with two of the world’s largest gold mining companies: Barrick Gold and AngloGold Ashanti.
Few prospect generators can claim successes on that level.
Much credit also goes to geologist Eduardo Leon who serves as exploration manager for Latin Metals and who brings a high level of in-country expertise having held technical positions with a number of mining firms throughout South America.
In executing the prospect generator model — upon the acquisition of a mineral property, the LMS team will typically initiate the early stages of evaluation through cost-effective exploration to establish initial drill targets with the ultimate aim of securing a joint venture partner to fund drilling and advance the property toward production.
Once a joint venture is entered into, the JV partner then funds the cost of exploration going forward, including the very expensive business of drilling.
For its part, Latin Metals receives cash and/or shares while also retaining a minority interest in the properties it options out, allowing it to have exposure to multiple projects across a variety of metals at any given time.
Current partners, as noted, include definitive option agreements signed with majors Barrick Gold (NYSE: GOLD) and AngloGold Ashanti (NYSE: AU) — plus a third option agreement with fellow junior explorer Libero Copper & Gold (TSX-V: LBC).
In essence, the idea is to have multiple shots-on-goal via a wide portfolio of exploration projects at various stages of development with minimal dilution to shareholders.
With the vast majority of exploration expenditures on other peoples’ dimes, the company is able to attract increasing levels of investment capital in the projects it options out — all at a minimal burn rate.
Currently, the LMS property portfolio spans 16 projects — whereby the company is seeking additional JVs — plus 2 royalties. Drilling is expected to commence at three of the company’s projects before year-end.
With multiple definitive option agreements already cemented with major producers, the company’s aim is to ultimately get to a situation where it can have investment coming in upward of C$25 million each year — translating to roughly 75,000 meters of partner-funded drilling per annum.
Management sees this happening within the next five years as the groundwork continues to be laid in the form of accretive partnerships on exciting mineral exploration projects.
As you’re about to discover, Latin Metals is off to an impressive start with its focus on early-stage gold-copper and gold-silver exploration via several partner-funded projects at various stages of exploration (see below).
In viewing the above chart, the left side can be looked at as a “pipeline” of new projects perpetually coming into the stable. To the right, you’ll note the “progression” of projects into partner-funded exploration and, ultimately, to potentially viable mineral discovery under JV.
Let’s start by taking a closer look at the co-flagships along with next-steps in the advancement of those projects.
Argentinian Co-Flagships:
Definitive option agreements underway with Barrick Gold and AngloGold Ashanti
Latin Metals — which boasts an established history of advancing projects through agreements with larger companies, including prior JVs with industry stalwarts such as Newmont and Yamana Gold — has assembled a robust portfolio of exploration properties in South America.
The current feather-in-the-cap for the LMS team are the two definitive option agreements (highlighted in the project map above) underway with Tier-1 partners Barrick Gold (NYSE: GOLD) and AngloGold Ashanti (NYSE: AU).
Barrick is the world’s largest gold mining company with production of 4.4 million ounces in 2021. AngloGold Ashanti is a top-five global gold producer with production of 2.5 million ounces in 2021.
These are companies with very deep pockets… both intellectually and financially… that have the technical excellence and wherewithal to take projects from initial discovery all the way to production.
What’s more, companies of this stature tend to focus on large deposits in the range of several million ounces up to 10 million ounces-plus, which lends credence to the idea that they see potential for large-scale discovery in the properties they’ve optioned out from LMS.
The two aforementioned option agreements with majors were signed in Q1 and Q2 of 2022 with both progressing toward potential JVs.
Importantly, both projects are situated in mining-friendly Argentina, which has established itself as a global leader in mining and mineral exploration with annual mining exports forecast to reach US$10B by 2030.
Furthermore, it should be noted that it is quite rare for a junior miner to be able to secure option agreements with multiple majors, especially within the same calendar year.
For a quick comparison, Latin Metals has a miniscule market cap around US$10 million, while Barrick and AngloGold — two of the world’s biggest gold producers — sit at an eye-popping US$30B and US$8B, respectively.
It’s truly a testament to the LMS team’s ability to find and advance quality projects at a level of geological merit to attract and ultimately secure option agreements with global producers of such magnitude.
Importantly, since the bulk of exploration expenditures become the responsibility of the option company, all of the option agreements — and JVs — Latin Metals has or will enter into are essentially non-dilutive to shareholders… meaning there’s no cap on how many projects the company can have going at any given time.
Latin Metals CEO Keith Henderson explains further:
Organullo Gold-Copper Project, Argentina:
Definitive option agreement with AngloGold Ashanti
AngloGold Ashanti has commenced exploration at the Organullo gold-copper project located in Salta Province, Argentina, with Latin Metals expecting to receive initial exploration results soon.
AngloGold holds the option to earn up to an 80% interest in Latin Metals’ Organullo, Ana Maria, and Trigal gold projects (“the Organullo project”).
The option agreement is with AngloGold Argentina Exploraciones S.A. (“AngloGold”), a wholly-owned subsidiary of AngloGold Ashanti Ltd. (NYSE: AU). AngloGold will be spending up to US$10 million on the project over the option term.
AngloGold has quickly advanced the Organullo project — which is characterized as having large alteration and mineralized footprint with targets across 10 km of strike length — to the point where it now has an initial set of drill-ready targets.
The AngloGold team has at its disposal a large dataset of historical exploration information from Organullo, including over 10,000 meters of drill data to draw from.
An Environmental Impact Assessment (EIA) has been submitted to provincial authorities in preparation for drilling by AngloGold, which is projected to commence in Q1/Q2 2023 subject to the availability of drill rigs and the receipt of permits.
Latin Metals CEO Keith Henderson commented via press release:
“AngloGold initiated exploration at Organullo only two weeks after signing the definitive option with Latin Metals in mid-2022, and it has advanced the project quickly to the point where it has drill-ready targets. The main advantage of working with major mining companies is the technical excellence and experience that they bring to a project. AngloGold has assembled an experienced technical team, and its exploration approach has resulted in the definition of new targets for drill testing at Organullo.”
Additionally, AngloGold has received permits to complete a helicopter-borne magnetic and radiometric survey at Organullo ahead of planned drilling.
A drill permit application has been submitted for up to 39 drill holes across upward of 11,900 meters on the Breccia Hill, Axel, and Nemo targets (see below).
Marking a significant step forward at Organullo, the targets shown above represent three adjacent advanced argillic footprints over a 6 km strike length — none of which has seen any previous drilling.
AngloGold’s 2023 exploration agenda for Organullo includes 7,000 meters of Phase-1 drilling to be completed via two drill rigs subject to permitting approval.
Cerro Bayo Gold-Silver Project, Argentina:
Definitive option agreement with Barrick Gold
Latin Metals has entered into a definitive option agreement with Barrick Gold whereby Barrick has the right to acquire up to an 85% interest in the Cerro Bayo project, which is located in Santa Cruz Province, Argentina.
The Cerro Bayo earn-in with Barrick comprises the Cerro Bayo, Cerro Bayo Sur, and La Flora properties (“the Cerro Bayo project”).
Under the terms of the earn-in agreement, Barrick is now obligated to incur at least US$1 million in exploration expenditures on the properties by the second anniversary of the Effective Date. Latin Metals has received its initial US$150,000 cash payment due from Barrick at signing.
Over the option term, Barrick will be spending up to US$5 million on the Cerro Bayo project.
To complete the 85% earn-in, Barrick will be required to satisfy the following:
First Option - 70% Interest Earned through:
- Cash payments to Latin Metals totaling US$750,000
- Exploration expenditures totaling US$5,000,000
- NI 43-101 Preliminary Economic Assessment
Second Option: additional 15% Interest Earned through:
- Cash payments to Latin Metals totaling US$425,000
- NI 43-101 Prefeasibility Study
Upon the exercise of the First Option, Latin Metals and Barrick will form a JV for the continued exploration, development, and, if warranted, mining of the properties with Barrick as operator.
The initial participating interests of the parties in the JV would be Barrick, 70%, and Latin Metals, 30%. If Barrick exercises the Second Option, the interests of the participants will be Barrick, 85%, and Latin Metals, 15%.
Latin Metals CEO Keith Henderson added:
“Barrick is a good partner who brings considerable technical and financial capability to the project. Assuming that the Earn-In Agreement runs to full term, Barrick’s investment of around US$8.5 million will include payments to the underlying vendor, payments directly to Latin Metals and funding of work on the ground; all of which will help to limit dilution to Latin Metals’ shareholders. The Earn-In Agreement is consistent with the Company’s prospect generator model, and the work contemplated, if successful, would advance the projects considerably, while Latin Metals will retain a minority interest.”
To date, under the definitive option agreement, Barrick has completed a substantial amount of surface exploration at Cerro Bayo, including a 1,000-line-km ground magnetic survey, geological mapping, rock sampling, and spectral analysis.
The ground magnetic survey covers approximately 95% of the property and confirms an important property-wide northwest trending structural fabric, which is potentially favorable to hosting gold-silver mineralization.
Favorable structures for mineralization — including veinlets, brecciated veins, and fault breccias — have been recognized.
The mapping demonstrates that northwest-trending structures are controlling gold and silver mineralization along with the presence of intrusive and subvolcanic bodies, which may provide a heat source for hydrothermal fluids at Cerro Bayo.
Upcoming exploration activities will include efforts to hone in on the below-ground source, or “feeder zones” to the near-surface mineralization that’s systematically being mapped out at Cerro Bayo.
Esperanza Copper-Gold Project, Argentina:
Option agreement with Libero Copper & Gold
Latin Metals has optioned its Esperanza copper-gold project to fellow junior miner Libero Copper & Gold (TSX-V: LBC) wherein Libero can earn-in up to 70% of the project.
Libero has submitted an EIA to provincial authorities for planned exploration activities at the drill-ready project; work is expected to begin in due course.
Libero has also submitted its application for drill permits for Esperanza.
Latin Metals previously drilled the property in 2018 prior to becoming an active prospect generator. Drilling was deemed successful and produced a highlight intercept of 0.57% copper and 0.27 grams per tonne gold over 387 meters.
The hole was considered the third best copper intersection in the world during that time.
Importantly, the intercept started at surface, which lends potential for Esperanza hosting a near-surface copper-dominant deposit with significant gold credits.
Exploration at Esperanza will continue as Libero awaits the receipt of drill permits.
Peruvian Projects
Peru is ranked as the No. 2 global copper producer with over US$60B of development-ready mine projects established… and, hence, it’s no surprise the Latin Metals team has decided to plant its flag there.
Latin Metals commenced its first exploration activities in Peru way back in 2019 and has since completed the acquisition of a number of 100%-owned copper exploration projects meriting further advancement.
Chief among those properties is the Para copper-molybdenum project (see property map above).
Para Copper-Molybdenum Project, Peru: 100%-owned
In Q1 2023, Latin Metals announced the discovery of two zones of high-grade copper mineralization at its 100%-owned Para copper-molybdenum project, situated in Peru’s prolific Coastal Copper Belt.
The north-south trending belt has produced a number of significant metals discoveries over the last 15 years and hosts a variety of favorable deposit types including porphyry, epithermal, VMS (volcanic massive-sulfide), and IOCG (iron oxide copper gold).
The newly-identified mineralized zones at Para were delineated from an initial sampling program of talus material for a total of 56 geochemical samples.
Anomalous copper analysis ranged from 251 ppm to a peak of 1,505 ppm copper with supporting molybdenum mineralization up to 46 ppm.
The largest zone came in at approximately 2,000 x 1,000 meters with geochemical anomalies open to the northwest wherein the company has subsequently staked an additional 1,300 hectares in that direction for a total of 1,900 hectares.
Next steps for the Para project include extending the talus survey to include the newly staked land followed by a program of detailed rock chip sampling and geological mapping with additional surveys slated for Q2 2023.
Auquis Copper-Molybdenum Project, Peru: 100%-owned
Also within the Coastal Copper Belt, Latin Metals is advancing its 100%-owned Auquis copper-molybdenum project in southwestern Peru.
At Auquis, surface sampling has returned anomalous mineralization grading up to 5.8% copper and 236 ppm molybdenum across a core area of high-grade mineralization measuring 1.5 km by 1.5 km.
The LMS team plans to complete a ground magnetic survey at Auquis covering the main copper-molybdenum anomalies for a total of approximately 60-line-km.
The survey is being deployed to determine the dimension of the porphyry target mapped on-surface and the potential skarn mineralization to the west.
As you can see… there’s lots and lots happening with a multitude of shots-on-goal for LMS shareholders in 2023 and beyond — in fact, far too many to detail here — all at a ~US$10 million market cap.
Exclusive Interview with Latin Metals CEO Keith Henderson
As promised, our own Gerardo Del Real of Resource Stock Digest and Junior Resource Monthly recently caught up with Latin Metals CEO Keith Henderson to go over the plans and process for delivering value to stakeholders via the company’s intelligent and systematic deployment of the prospect generator model in key mining centers in South America. Please enjoy!
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Latin Metals — Mr. Keith Henderson. Keith, it's great to have you on. How are you today?
Keith Henderson: I'm super, thanks. Great to be here as well. Thanks very much.
Gerardo Del Real: Let's get right into it. Latin Metals is a company that I had followed for quite a bit, and then you and I were able to have a really good thorough conversation at the New Orleans Investment Conference.
And the more I dug into the share structure, the insider ownership, the partners you've been able to bring in, the model, the jurisdictions that you're working in, and the commodities that you're exploring for, the more I asked myself… ‘Why is Latin Metals trading at the market cap that it's trading at?’
And so I'm glad that you're on. I'm glad that we're having this discussion. Let's get right into it. Can you provide a brief overview of the company and the prospect generator model that it operates under?
And then, we can get into the share structure and the asset base and the many, many catalysts that you have coming up here.
Keith Henderson: Sure, yeah… easy stuff. We're a prospect generator, and we are doing it properly. And I say that because a lot of companies kind of start off as a prospect generator and then manage to do it a different way, and they manage to dilute their shareholders.
We're so, so focused on lack of dilution. We're running the company cheap. We spend something on the order of C$1.3 million to C$1.5 million each year. That's it. We're using that money to create a huge amount of value in acquiring projects really cheaply. We add value to those projects by doing very, very cost effective surface work. We don't do any drilling because it's really expensive and really dilutive.
And once we have a project with great targets, we go and find a nice partner, someone that we think will add value to the project, someone that we think has the capability to spend the right money in the right places. And then, we let those projects go. We always maintain a minority interest. We always maintain the right to revert to a royalty if we want to.
Royalty companies do very well, and having royalties is extremely valuable — and that's how we roll. We just don't get into dilution at all. We're huge shareholders ourselves. We've got 49% of the company sitting with management and board. I think that's critically important for investors to understand.
I know it's a very big position but it means that we are completely and utterly aligned with shareholders, and we care about the shareholders, and we care about the share price much more than we care about picking up a salary.
Gerardo Del Real: Let's get right into the projects, and, listen, it's been an impressive 2022 for a company that hasn't received the attention that I think it deserves. You've secured, just in Q1 and Q2 of 2022, up to — and correct me if I'm wrong — but I believe it's up to C$15 million in exploration expenditures between two partners on two projects; one partner being Barrick, and the other partner being AngloGold Ashanti.
That doesn't get into the up to C$2 million in exploration expenditures that you secured back in 2021 at a copper-gold project and your other Mina Angela gold project as well, which you have.
But let's talk about the projects that I have to believe are your flagships, right, which are the Cerro Bayo and the La Flora projects [option with Barrick] and the Organullo and Ana Maria gold projects that you've partnered with AngloGold Ashanti. Can we speak to those and the commodities that you're looking to find and discover there?
Keith Henderson: Yeah, look, we focus on gold and copper for the most part in this company because we understand those commodities really well, and they've got long-term value for shareholders. We've got three projects under option in total. In total, the agreements that we have in place account for up to C$35 million of investment over the coming years.
And you start to look at that compared to the small amounts of money that we're actually spending, and you see how much value we create — and that's really just the beginning. We hope to continue finding good partners. We hope to continue partnering other projects and, over time, our aim, ultimately, is to get to a situation where we can have investment coming in of around C$25 million each year.
And that translates into roughly 70,000 to 75,000 meters of drilling. Drilling is where it's at. If you don't drill projects — you don't find something!
If you don't have a lot of projects, you minimize your chances. We have a lot of projects; we're going to have a lot of meters drilled on them. That increases our chances of success many, many times over compared to other companies. And it can be statistically shown that prospect generators do a much better job of finding significant deposits.
The partners you're speaking about, Barrick and AngloGold, we really believe in; we want partners who’ve got big yellow trucks driving around and big mineral deposits and companies with very significant revenues. They're companies that have the financial capability to see these projects and these agreements through to the end.
They have the financial capability to develop these projects if they find something, and, probably, most importantly for investors, their hurdle rate in terms of what they're looking for is so, so high.
These companies don't do very many deals. Everyone thinks that junior companies are doing deals with big companies all day long. When you start to look at these early-stage prospect generator type projects, big companies don't do these deals very much. A Barrick might do two or three deals in a year, and AngloGold might do one or two deals in a year.
They’re rare things, and we've done two of them this year so far, and we are extremely proud of that. What they're looking for is what the investors need to think about. A company like AngloGold, a very major gold producer, the third biggest gold producer in the world, they're not looking for half a million ounces. They're looking for projects where they think they've got a chance to discover 5 to 10 million ounces.
These are really major tier-one deposits, the kinds of deposits that actually don't come along very often. But they're looking at our projects, they've done their due diligence, and they think there's a chance that they could find something on our projects.
And that, for me, is a huge piece of reassurance, really, for an investor and investors who are looking at projects all day long. They get bombarded with news releases from all kinds of companies, and every company's got ‘the best project in the world,’ apparently, if you read the news releases.
But when you look at the projects that companies like Anglo are picking up, these are good projects and, in the sense these companies are doing due diligence, it's almost a proxy for the due diligence that an investor would like to do but really would never be in the position to do.
Gerardo Del Real: I think that's an important point. The amount of due diligence and the technical expertise that a Barrick or an Anglo brings to optioning these projects is gruesome — is how it's been described to me! And so I think it speaks to the caliber of the assets.
Let's talk about the jurisdictions you're working in. The agreement with AngloGold is a project in Argentina which is seeing a lot of investment capital right now. The agreement with Barrick, the joint venture there with the definitive option, is in Peru.
[Editor’s note: both flagships are in Argentina.]
Can you speak to those two regions and how it's been working there? I know you've been there for quite some time. How are things in each of those countries? And I know they're two separate places, obviously, with different dynamics. Let's start out with Argentina.
Keith Henderson: Yeah, you're quite right. Those are the two countries we're working in. Actually, both of those projects that you spoke to, Barrick and AngloGold, are in Argentina. Argentina is seeing a huge amount of investment right now. I've been working in Argentina since the early-2000s, off and on, and have a lot of experience there.
It's had a mixed history. There's been times when Argentina wasn't necessarily the best place in the world. But I can tell you right now, every single major company and many, many of the mid-tier companies are looking for investments in Argentina… and suddenly it is the place to be. Can I explain exactly why that is?
Gerardo Del Real: Absolutely… I would like for you to get into it. There's a reason why there's so much capital going in, right?
Keith Henderson: Yeah, for example, BHP invested US$100 million in the Filo del Sol project, and that's essentially their first investment in the country. They weren't there before. Imagine just turning up someday and that's your investment… that's your entry into the country… and you can imagine that they're going to be getting busy looking for other projects as well.
Anglo and Barrick are both producing in the country. They've both got significant revenue. They're deploying a good deal of that revenue towards exploration for additional projects. It's just a really fantastic place to be. One has to be careful where you work in Argentina. Some provinces are a little bit more favorable to mining than others.
We obviously focus our efforts in those provinces where we know we're going to get a good political reception for the mining industry and for exploration in general — and it's just really a great place to work.
Peru is another place that I've worked for many, many years. We entered in there probably about two and a half years ago. And at that point, strangely, there were not that many people actually working on early-stage projects in the way that we wanted to. And so, as we identified projects that we wanted to acquire, we found that they were basically available for staking, which is just the best possible result for us.
It's so cheap. You can pick up ground… you don't have to go and pay some guy that already owns it, and you get in there for 100% ownership for a minimal investment. And from there, you do your work at surface and you develop those properties the best you can — and we've been really successful in doing so. I hope our luck never runs out.
The first two projects that we've looked at have been really good… it's as close to being a full on discovery as you can find without drilling holes. We've done everything at surface. It looks really fantastic. We've had fantastic trench intersections, rock sampling, etc., and that's gone really well with excellent relationships with the communities.
It's a very integral part of what we do. And with that, we believe that we are very, very close to getting a drill permit. We think that we'll be able to find a partner for this project in the next, kind of, three to six months.
We've got a second project called Auquis, which is just a little bit earlier stage. We're not quite finished with the surface work but it's looking just as good — if not better. And again, I think we're going to be able to walk into a partnership on that one pretty quickly.
And of course, having the partnerships we already do, Gerardo, it really helps. People look at this small little company called Latin Metals and go, ‘Who are these guys?’ And, ‘Oh, they're working with Barrick; they're working with AngloGold… maybe they've got something… maybe they know what they're doing.’
And it just gives you a little bit of credibility, and it means that suddenly people want to look at your other projects.
Gerardo Del Real: The projects optioned to Anglo and Barrick and Libero are all in Argentina, and I don't think that's a coincidence right now with some of the political volatility that's going on in Peru. But with that being said, you have some very, very attractive projects that you're conducting active exploration on and are ripe for joint venture.
Can you speak to the Peruvian part of the portfolio because there's a lot of copper-gold projects there that I really like.
Keith Henderson: Yeah, we're focused on copper-gold. We've got projects that are ready to go for partnerships. It's been going really, really well. We've picked them up through staking. We're delighted with that.
You mentioned that Peru is politically not the hottest place right now. That might be true but it's still a very, very significant producer of metals. It's the second biggest producer of copper in the world. This is an economy that relies very, very heavily on mining, and politicians come and go.
We are with early-stage projects; we're getting into early-stage exploration and drilling on those projects with our partners. The political environment, the exact political regime at any point in time, particularly at this point in time, is not terribly important to us. It's important if you're a producing company; you've got to care about the politics right now.
But for us, discoveries are a few cycles out in terms of government so as long as the country remains pretty focused on mining, we're in a pretty good place and we think those are the great opportunities to go and pick up ground.
Gerardo Del Real: Agreed. You have, as you mentioned, up to C$35 million in potential commitments there. Where's the market cap today?
Keith Henderson: We are around US$10 million.
Gerardo Del Real: That's a heck of a disconnect.
Keith Henderson: It is. We keep very careful track of peer companies; companies that we consider are doing what we are doing and doing it well… companies that have been around for a little bit longer. And we track the performance of those peers so that we can show and speak to what value we think we should be or could be in the company just based on what we have right now.
And we believe that, in a decent market, what we've got on our plate right now with the catalysts that we have ahead, we think that a company like Latin Metals could potentially support a market cap of C$45 million to C$50 million. That's certainly what a lot of the peer companies have been supporting over the last couple of years.
That speaks to value today. And the value is what the value is… but you know what everyone's in this for and it’s for a re-rating. Everyone is in this for a discovery. And when you have the kind of quality of projects that we have and the right partners doing the exploration, you have to hope that there's a potential for a big discovery there.
And if that happens, then, obviously, you also hope you're going to get a complete re-rating on the stock.
So yeah, we're a US$10 million company today. We're relatively new to the market. I know we've been around for a few years but it takes real time and effort to pull together portfolios of properties to get the work done, to get you to partnerships, to get those partnerships signed up.
And so we didn't focus on marketing over the first, kind of, two to two and a half years of our history. Now that we're kind of there and we're moving forward and we're in the right place now — we are marketing. That's why you met me at the New Orleans conference, and we're doing a lot of that marketing… and I think that's the right thing to do.
Many people are saying, ‘Well, it's not a great market right now; why would you even bother?’ But when people get around to thinking about investments, when things turn around and everybody's in the mood to invest, we want them to be thinking about us… we want them to know who we are… and nobody ever invested in a company they’ve never heard of.
Gerardo Del Real: You have a tiny market cap, you have some major league heavy hitting partners, you have a great technical team. You've been very, very prudent in selecting the projects. And, again, some of these projects have already delivered spectacular results. When do you anticipate we'll see some drills turning and results from some of these projects, Keith?
Keith Henderson: So all three of our option agreements in Argentina, in all three cases, we've got partners who are aiming to drill in Q1 next year. The exact timing is obviously out of my control, and, in a sense, it's out of everyone's control. There are always some steps; there's some permitting. Everyone's got to have a drill permit; everybody's got to be ready to go.
But let's hope that they're being conservative in their estimates… worst case scenario, some of these projects will be drilling in Q2. So this is very, very imminent. We've got lots of really good news flow coming. And remember that, with all of these partnerships, we get data from these companies on a quarterly basis.
So going forward, each one of these partnerships generates news and catalysts and news flow on a quarterly basis. We've carefully planned out the year in terms of the news that we know is going to be coming, the news that we hope is going to be coming in terms of drilling, and the news that we hope is going to be coming in terms of additional acquisitions and additional partnerships.
And we've really sat down and thought about what the next 12 months looks like, and we think we've got about 30 news releases ahead of us, recognizing that some of those are just not quite under our control.
But if things go well, that's what we're going to be delivering to market. And that's what people love to see is just consistent news flow so they know what's going on. They can feel they can rely on the company and that the company is doing what it's supposed to be doing.
Gerardo Del Real: Look, I have to say, Latin Metals is as much of a no-brainer in the space as there is right now. Again, like I said, it's major partners, it's a lot of commitment to spending, it's the right commodities — copper-gold. Argentina is on absolute fire. You have a great portfolio in Peru.
I know you're busy behind the scenes with other potential partners that have been seeking you out. It's a lot to like for a company with a tiny market cap of just around US$10 million.
Keith, thank you for your time. I know this was a bit more involved than we anticipated but I thought it absolutely merited the attention. And I'm really looking forward to, hopefully, having a continuous dialogue on all of the projects here with Latin Metals. Anything to add to that?
Keith Henderson: Absolutely… I look forward to talking with you again. Let's do this regularly, and, yeah, we've got a lot to talk about… so look forward to talking to you again.
Gerardo Del Real: Looking forward to it! Thanks again.
Keith Henderson: Thanks, Gerardo.
The Opportunity
Latin Metals Inc. (TSX-V: LMS)(OTC: LMSQF) is laser-focused on building shareholder value through the intelligent and systematic deployment of the prospect generator model in key mining centers in South America.
The LMS team has put in the hard work these past few years to get to the point now where it has a robust and growing project portfolio, multiple projects under option with reputable companies, and drilling on tap for multiple projects in 2023.
You heard directly from Latin Metals CEO Keith Henderson. He says:
“...our aim, ultimately, is to get to a situation where we can have investment coming in of around C$25 million each year. And that translates into roughly 70,000 to 75,000 meters of drilling. Drilling is where it's at. If you don't drill projects — you don't find something!”
With the incredible number of projects in the LMS portfolio and the amount of exploration and drilling forthcoming, Latin Metals expects to have upward of 30 news releases this year alone.
A lot of that news flow should be forthcoming from the company’s two Argentinian flagships, which we covered in detail: Organullo with AngloGold Ashanti and Cerro Bayo with Barrick Gold.
AngloGold’s 2023 exploration plans at Organullo include 7,000 meters of Phase-1 drilling to be completed via two drill rigs subject to permitting approval.
At Cerro Bayo, Barrick has completed a substantial amount of surface exploration, including a 1,000-line-km ground magnetic survey, geological mapping, rock sampling and spectral analysis.
In all, the company anticipates upward of C$30 million being spent on its properties over the next few years at a current burn rate of only around C$1.5 million per year.
In addition to seeking out joint venture partners for its other projects, the company, which has a current market cap of ~US$10 million, is continuously on the acquisition hunt for new mineral properties with robust geological prospectivity.
Latin Metals has also proven highly successful in selling off its non-core assets as demonstrated by the recent sale of its 100%-owned El Quemado lithium project to South American Lithium (“SAL”) for C$900,000 in cash and shares.
Latin Metals’ core focus, as noted, is on precious and base metals; primarily gold, silver, and copper — and, thus, the sale of the El Quemado lithium project makes a lot of sense for the firm.
And true to the prospect generator model, Latin Metals will retain a 2% NSR royalty on any future production from the project, half of which can be repurchased by SAL for US$3,000,000 in cash at any time prior to production.
Keith Henderson, CEO, added:
“This transaction is consistent with Latin Metals’ strategy to monetize non-core assets, like El Quemado, while retaining a royalty interest, in this case, the 2.0% NSR Royalty on future production from the project. Consideration of $900,000 provides the Company with $400,000 of non-dilutive cash as well as $500,000 in securities which provides Latin Metals with exposure to the project’s future success…”
So lots to look forward to in 2023 and beyond for current and potential LMS shareholders with numerous 100%-owned and partner-funded projects at various stages of development.
Structure wise, the company has just 70 million shares outstanding with nearly half of those shares controlled by management and board members.
Latin Metals operates the prospect generator model as efficiently as possible with a miniscule burn rate, as mentioned, of well under C$2 million per annum.
Contrast that with upward of C$35 million of investment under existing contracts with its partners with a focus on finding additional partners and, henceforth, increasing the amount of investment dollars coming in.
Latin Metals has outlined a 5-year plan with the aim of averaging upward of C$25 million of partner investment per annum, which is on par with ~75,000 meters of drilling per year.
Very, very few juniors drill that type of meterage in any single year.
In other words, now is a perfect time to start looking into Latin Metals as it advances multiple 100%-owned and partner-funded projects in Argentina and Peru with drilling at multiple projects just around the corner.
A great place to start is the LMS corporate website where you can learn more about the properties and the team, view the 2023 corporate presentation, and sign up to receive updates directly from the company’s IR department.
Also, click here for more of our ongoing coverage of Latin Metals, including additional late-breaking interviews with upper management as developments arise.
Latin Metals Inc. trades on the Toronto Venture Exchange under the symbol LMS and on the US OTC Bulletin Board Exchange under the symbol LMSQF.
For more information on Vancouver-based Latin Metals, be sure to contact Ms. Elyssia Patterson at the company’s IR department at 604-638-3456 or via email at info@latin-metals.com.
— Resource Stock Digest Research