This company believes high-grade copper-gold in Colombia is the recipe for success
Advanced high-grade copper-gold projects located in attractive jurisdictions and geological settings do not grow on trees.
But that’s exactly what Andean Mining has put on the table in the form of its copper-gold (with silver and zinc) El Dovio project in Colombia as it seeks to raise up to $ 7 million through its initial public offering which is expected to close on December 9.
An ASX listing under the code ADM is expected just before Christmas.
El Dovio is a volcanogenic massive sulphide system with high-grade lenses contained in a well-developed and mineralized (albeit to a lesser extent) stockwork system that measures up to 68m wide, both exposed to the surface.
There is a significant amount of surface sampling and mapping, geophysics, diamond drilling, and extensive underground development that have combined to give the Andes a very good idea of ââwhat is present at the project.
Additionally, the shallow nature of the mineralization means that it is relatively inexpensive to drill a first JORC resource quickly while ensuring that any mining operation would be relatively inexpensive.
Talk to StorerManaging Director Willian Howe said the company acquired the project from Newrange Gold Corporation, which sold its Colombian assets to focus on North America.
âThe main draw was the amount of work that had been done before which all indicated a very high quality VMS system with copper, gold, silver and zinc,â he commented.
âGrade and progress have been a big driver for us and there are a lot of advantages over a number of other drill-ready targets.
âWe were in the right place at the right time.
Colombia’s growing appeal as a mining destination also played a major role in the company’s decision to acquire El Dovio.
Howe noted that the South American country has had a stable and conservative government for the past 25 years and has seen its gross domestic product increase tenfold during this period, from US $ 1,400 per capita to + US $ 14,000 per person. inhabitant.
âThat alone has generated enormous stability, as it has lifted huge numbers of people out of poverty,â he added.
This is supported by the Fraser Institute, which in 2020 ranked Colombia as its top mining destination in South America, and an incredible fifth in the world country by country.
Colombia is also geologically very attractive.
While mining investments have historically gone to Chile and Peru due to their incredible mineral endowments, Howe noted that Colombia is also rich in resources.
âIt is one of the largest metallogenic belts in the world and there is no reason why there are no major discoveries in Colombia,â he says.
El Dovio project
El Dovio is located close to other major mining projects such as AngloGold Ashanti’s 28 million ounce gold equivalent (AuEq) Quebradona project and Zijin Mining’s 12 Moz Buritica gold mine.
The region’s VMS potential can also be seen with other nearby projects such as the producing El Roble mine, which has mined ore and reserves totaling 3.89 Mt grading 2.77% copper and 2, 44 grams per tonne (g / t) of gold, and El Alacran (4.8Mt at 1.4% copper and 0.83g / t gold).
At El Dovio, trenching, drilling and underground development on the Sabana Blanca stringer zone identified high-grade polymetallic mineralization in a stockwork system up to 68m wide in outcrop and approximately 1km long .
Other targets ready for drilling include the Granizales and Sopetrana vein zones located 400 m to the south and in the lower wall of the Sabana Blanca vein zone respectively which have been identified at the surface.
This style of mineralization offers two possible development opportunities for the Andes.
The former focuses on the larger, lower grade stockwork system that will produce larger tonnages and longer mine life in exchange for much higher development capital costs.
However, the Andes favor the second option, which will focus on mining high-grade lenses like at the El Roble mine and whose development capital investment costs are also low.
“You are not looking for large tonnages, our view on a very good result for a start-up operation is around 1000 t per day for at least 10 years, which would make it the same size tonnage as the El Roble operation, âHowe explained.
âWe are talking about grades between 4 and 6 g / t gold and 2.5% to 3.5% copper, which represents about 95% of the value of the metal, plus zinc and silver.
The company’s metallurgical testing has also proven that 93.6% of the gold and 86% of the silver relates to copper concentrate rather than zinc concentrate.
âYou don’t want gold in the zinc concentrate because that will require you to process the zinc concentrate on-site to extract the gold, because buyers don’t pay for the gold in the zinc concentrate, which adds another layer of complexity and investment and operating costs. ,” he added.
These positive results, along with the same overall 95% recoveries that Newrange had historically achieved for all metals in separate concentrates of copper and zinc, combine into a positive result for the Andes.
âWe answered this question and performed all the grinding tests for the crushing and grinding for a future development of the plant, all of that work has been done. “
Andean also benefits from what Howe describes as well-rounded advice.
Howe himself has over 40 years of experience in the mining industry with a focus on mining operations and has lived in South America for 14 years, including four years in Colombia.
Independent Director Paul Ingram is a geologist with extensive experience in managing exploration programs around the world.
âThe other two directors – Chairman Dr Phillip Wing and Non-Executive Director James Green – of the Board of Directors bring long-standing legal and financial skills and have been associated with the mining industry for a long time,â he said. he adds.
In addition, the acquisition of the Newrange subsidiary which owned the El Dovio project was also supported by a team of people on the ground in Colombia.
“So we have a team that covers the administration, legal and technical that we inherited in Colombia, giving us the opportunity to operate successfully in Colombia.”
IPO and upcoming activity
Andean’s IPO is currently underway and seeks to raise a minimum of $ 6 million and a maximum of $ 7 million through the issuance of shares at a price of 20 cents each.
The company plans to spend between $ 4 million and $ 4.9 million on exploration, subject to the full amount raised by its IPO.
The major part of this sum will be devoted to a 15,000 m drilling program which will focus on the definition of a JORC resource in the Sabana Blanca zone and should allow Andean to carry out a scoping study and possibly a feasibility study.
Holes will also be drilled at Granizales, Sopetrana and Brazo 1, Howe noting that the latter represents contact between volcanic rocks and sediments likely to host the main VMS system.
âWe have also designed a very large exploration program to cover the rest of the buildings. So we’ll be doing a lot of surface, trenching, sampling, geophysics, geochemistry and geological mapping, âHowe added.
“There are a number of other areas that will receive some of this drilling, but a large part of the drilling will go into Sabana Blanca to define a JORC resource.”
This article was developed in collaboration with Andean mining, a Stockhead advertiser at the time of publication.
This article is not advice on financial products. You should consider getting independent advice before making any financial decisions.