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STM - SUNSTONE METALS LTD


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  • 3 years later...
  • 2 weeks later...

borrowed from elsewhere :unsure: from fosters stockbroking, i understand

 

Avalon Minerals Limited (AVI.ASX)

 

Market cap $50m and cash $11m

Recently raised $10.4m through a placement/rights issue to fund the BFS on the flagship Viscaria Cu-Fe Project in Northern Sweden, which currently has a resource of 66Mt at 0.9% Cu for >600ktpa contained copper across three primary zones.

Viscaria is well located with respect to infrastructure and LKAB has a large 20Mtpa Fe concentrate operation nearby.

Met test results have indicated that copper concentrate and magnetite concentrate can be expected to be produced from Viscaria with Cu recovery of 90% with concentrate grade of 25% and magnetite grade of 69.5% Fe with low impurities. The magnetite will be recovered and processed from the flotation tailings and is expected to be sold at mine gate to LKAB.

A PFS has previously been completed highlighting a 'development case' of a 3Mtpa open pit operation for 10 years assuming additional discoveries are made this year. That would result in forecast production of ~19ktpa Cu and ~750ktpa of Fe concentrate.

Forecast C1 cash costs are US$0.61/lb, capex is estimated at ~US$160m and the NPV based on the development case is US$126m, which compares favourably to the current market cap of <$50m.

Results of the BFS are expected late 2011 prior to financing and development in 2012. Production will begin in early 2013.

Drilling results are expected to be ongoing throughout 2011 from the three zones at Viscaria where the company is targeting an additional 30-50Mt. Regional drilling will commence later this year following a geophysical program.

Experienced management and Board with David McSweeney (ex MD and founder of GBG, current Chairman of AKM), Andrew Munckton (ex GBG) and Stephen Stone (MD of AZM).

AVI is the cheapest ASX listed copper stock within our ASX listed copper universe on an US$ EV/lb resource basis.

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  • 10 years later...

Sunstone Metals Ltd (STM) formerly Avalon Minerals Limited, is an exploration and mineral development company, listed in 2017. Current Market cap is about $85 million.

 

It is focussed on creating value for shareholders from the Bramaderos Gold Copper Project in Ecuador and the Southern Finland Gold Project.

 

Sunstone, like many other companies, has been impacted by the global COVID 19 pandemic resulting in management being unable to travel to Ecuador from March 2020. Fortunately the exploration team in Ecuador has stepped up and have implemented exploration programs under the direction of the Australia based team, and under strict operating procedures to responsibly manage the risks associated with COVID19. As such we have had an active year with a considerable amount of drilling at our Bramaderos project in Southern Ecuador and early exploration activities in the lead up to drilling at El Palmar in the north.

 

Drilling is now under way at El Palmar where we are targeting a significant copper-gold porphyry system with coincident circular magnetic and soil geochemical anomalies. El Palmar is located in northern Ecuador in the vicinity of the 1.0Bt Llurimagua copper molybdenum porphyry deposit, and in the same regional structural belt that hosts the 2.6Bt Alpala copper-gold deposit within the Cascabel project. The ongoing drill programs at the Brama porphyry target continue to deliver good broad gold copper intervals highlighting the potential for Brama to host a substantial gold copper porphyry system.

Significant silver and gold mineralisation was also identified at the Espiritu epithermal target on the Bramaderos project. It is still early days in the exploration of this system, and we are still developing models for the style and geometry of mineralisation, which will enable better targeting of the higher grade areas in future drill programs on the other epithermal targets that have been identified within the Bramaderos concession.

 

The Company has built a team in the junior resource sector that we believe is second to none. The teams previous work in Ecuador and overseas has led to significant discoveries and shareholder value growth, and the Sunstone team will work towards repeating that success at Bramaderos and El Palmar.

During the year, the company monetised a portion of its investment in Swedish listed exploration company, Copperstone Resources AB (listed on Nasdaq Sweden First North) which realised cash of approximately $17 million through sale of shares and agreeing to an early payout of an at risk contingent portion of consideration in the original purchase agreement. At the end of the year the Company held $12.2 million in cash and the value of our remaining interest in Copperstone was $11.6 million, providing a very healthy balance sheet for the Company.

 

As well as divesting some then adding further leases in Finland earlier in the year, Recent price action, seeing the SP double from 2.3c to 4.8c in the last week has been driven by news out of Ecuador:

Strong first assays confirm El Palmar is a significant gold copper porphyry discovery

Extremely wide intersections and mineralisation runs from surface

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