As a Junior exploration company one of the key questions is how much transparency do you have with the investing public. How well can investors digest news coming out of drill results if those drill results don't contain wide intersections of high grade mineralization? In baseball it doesn't matter if you got two strikes before hitting a homerun with the bases loaded. In exploration it doesn't matter if you drilled a series of dusters before drilling a discovery hole into a giant high grade ore body.
Is this news release is a glass half full or glass half empty news release? Copper and pathfinder minerals from those holes vector towards a high conductor from recent helicopter geophysics; that's glass half full. 6 holes and 1891 meters with no reportable mineralization; that's glass half empty. If you estimate $300 US per meter that is half a million dollars worth of holes in the wrong places.
As an investor I like that Aurania gives lots of disclosure rather than too little. Releasing all the news good or bad as soon as possible helps build trust in the management not hiding anything. Successfull explorers are going to have lots of bad news along the way, it's just the nature of the business. It's appreciated to see the bad news coming out as fast and with as much transparency as the good news.
This is also a study in advancing technology. November 2017 Aurania had MPX Geophysics fly a helicoper based magnetic survey. January 2018 Expert Geophysics introduces MobileMT. January 2021 Aurania announces results from MPX Geophysics flying helicopter based MobileMT survey. I'm no geologist but if I had the conductivity map from their recent MobileMT survey even I might have not drilled their first 6 holes where they did. I'm guessing this is why their press release includes the fact that they will be flying more MobileMT. And why they put out another press release with updated N1 targets.
I'll likely do a whole article on airborne geophysics. But a short version is I am very impressed with MobileMT's potential. I think this also upgrades the likelyhood of targets from other companies using this technology like Adventus.
This confirms earlier plans, but it's still nice to see these assets moving forward.
Separately they also raised $6,500,200 CAD to accelerate drilling on their 100% owned properties. Looks like the private placement was at current market prices for their stock with no warrants and a 4 month lock-up. This gives credence to my suspicion that some larger money would like to invest in Salazar but couldn't because of trading volume being so low. This investment equates to approximately 176 days of trading volume.
That's a lot of meters of economic grades from surface. This is very likely to be an economic project. The number of drilling rigs is increasing from 3 to 6. At this point I just assume their drill results will be impressive. What I'd like to see coming out of Solaris are more positive news releases around social license with the Shuar beyond the Warints and Yawi villages.
If it looks like a duck and quacks like a duck, maybe it's a duck. "La Pata" translates to "the duck" in English.
I initially dismissed Atico's "La Plata" ("The Silver" in English) project after the 2019 PEA showed an after tax NPV8 of $39 million. The IRR (24%) and payback (3.5 years) were OK, they looked like a duck; but $39 million is a small project, it didn't quack like a duck (it didn't "cua cua" in Spanish).
Since that 2019 PEA Atico have drilled a lot of holes that expanded the two lenses (North and South), showed continuity between lenses, infilled the lenses, discovered a third lens (Guatuza), showed continuity to the third lens, etc. It's becoming pretty clear the feasability study is going to have a much bigger resource than the PEA used. Current spot prices for all the metals are also considerably above the prices used in the PEA.
This "La Plata" project is starting to look and sound like a duck. So I'm going to start calling it "La Pata" ("The Duck" in English) as a term of endearment and acknowledgement that I was wrong about the chances of it becoming a mine. It's chances of becoming a mine are high. Or maybe "La Pata Plata" ("The Silver Duck" in English) I get so very few chances to make puns in Spanish and I'm not going to pass this one by.
With so much previous exploration on Copper Duke Titan could have just drawn some circles on the map and started drilling. I like to see this instead, get your own data and draw your own conclusions. Don't skip steps, do the work. It's not sexy but it's doing exploration the right way.
Somebody should regulate the use of "bonanza grades" in press releases. Because even on Sunstone's 0.4 meter reporting thicknesses I didn't see any grades I would call anything other than "meh". Can we all agree use of the term "bonanza" on anything less than 1 oz/ton (28g/ton) gold equivalent isn't acceptable? This press release is at best misleading, and Sunstone should be embarrassed. I think they owe a public apology.
The ASX market regulator also was confused by the press release, and made a formal inquiry. The kind you have to reply to or have your trading halted. Sunstone's response is telling. It's also nice to see the ASX firing a warning shot across the bow of a Junior explorer as a warning to all the other Junior explorers. This sector has a history of acting shady with no oversight.
I don't know management, so we'll give them the benefit of the doubt, call this an honest mistake, and move forward.
Luminex (not to be confused with Lumina who is also doing exploration in Ecuador) had previously flown geophysics (ZTEM), done geology mapping, and done some grab sampling over their copper/moly target "Shakai" at their Cascas property. Now they finished grid soil sampling over the entire Shakai target making it drill ready.
As a bonus the southwest side of their grid sampling for "Shakai" turned up anomolous gold. The unexptected gold plus the geology is "interpreted to be low sulphidation epithermal in character". Luminex will have to do some more geophysics and grid sampling to map out this area off their current work.
Old News I Missed
With few mines in production in Ecuador seeing one of them increasing production is good for the mining sector overall. The resulting revenue going into the local economy improves the social license for future mining operations. The improved investment returns increase the interest for new investments in the country.