All go at Gorno: Altamin’s key to unlocking Italy’s mineral wealth
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Special Report: Altamin has been laying the groundwork to bring its Gorno zinc-lead project into production with a $6.98m entitlement offer to fund activity currently before shareholders.
Funds raised from this offer will be used to conduct further diamond drilling and advance the project to a definitive feasibility study level.
More importantly for Altamin (ASX:AZI), the successful development of Gorno will serve to prove the path towards permitting and getting a mine up and running in Italy, an endgame that so so far has been met with scepticism in Australia.
“I think that is quite unjustified because a lot of the mines have succeeded in Europe and are operating. There are plenty of mines in Spain, Scandinavia and the UK,” managing director Geraint Harris told Stockhead.
“Mines fail or don’t get permitted for a reason. What we are doing here is proving that you can permit a mine in Italy, you just need to be attuned to the local population and what the stakeholders need to see and design the operation in the smartest way to suit the environment, orebody and stakeholders.
“Gorno’s going to be a huge proof of principle, also we have got a cobalt-nickel project that we want to be drilling this year and then we hope to soon have a couple of other copper-cobalt projects – all in Italy, to make best use of Alta’s unique advantages in this historical mining jurisdiction.”
Harris believes the company could pick up the choicest projects in Italy before other players have their attention drawn by a successful Gorno.
He adds that while all mines are different, the ability to show that the company possesses a team able to secure permits and get mines started is a very strong asset in new jurisdictions.
The Gorno project is a previously producing high-grade, underground mine in a historic zinc and lead mining province that has been idle since 1982.
It has a recently defined resource of 7.8 million tonnes grading 6.8% zinc, 1.8% lead and 32 grams per tonne silver that underpins a scoping study that outlines some very attractive numbers.
Project capex is estimated at US$114m ($159.7m) with payback estimated within 2.5 years and a mine life of nine years while post-tax net present value and internal rate of return – both measures of a project’s expected profitability – have been estimated at US$211m and 50% respectively
Harris says this is just the first plank in a project that can be scaled-up with future Capex largely funded from organic growth.
“We know we have kilometres and kilometres of mineralisation there because we can see it in the historical record,” he added.
“This will be a source of zinc for Europe for many decades to come.”
For Altamin, the non-renounceable entitlement offer of two shares priced at 6c each for every five shares owned to raise up to $6.98m is a key step in its goals.
Harris admits that while it is likely that the company would have a shortfall – a common occurrence with entitlement offers, it could place the remaining amount within three months if it wished.
Once financing is completed, the company intends to jump straight into drilling at Gorno where the first drill pads are ready, and the contractors available to start with just a few week’s notice.
“We now have a scoping study proving that we have an economic project, we want to add resources to make the economics even better,” he added.
“We have a bit of infill to bring the inferred into indicated and also we have some really interesting new areas where we are seeing repeats of the same mineralisation that we have been drilling so far.”
Altamin is not constraining itself to Gorno either with Harris noting that plans were in place to start exploration at its Punta Corna cobalt-nickel project in the summer.
“That’s obviously a really exciting project, the municipality of the project want to have the first cobalt mine in Italy and in fact the whole country sees the importance of what battery metals mean to Europe’s future,” he explained.
“In the meantime in the background we will be putting together the DFS for Gorno. That has already started with the metallurgical test work, the samples go to the labs this week and that is the first step in the DFS, which we hope to have finished by the end of the year.”
“We should be on track to make that development decision next year.”
On the development front, Altamin has already received a lot of interest from European banks in relation to funding the project thanks to the low political risk, good jurisdiction and the expectation of a simple and clean DFS.
“Offtake finance is always an option as well because we have a premium concentrate and we are not adverse to bringing on a strategic partner who can see the value,” Harris said.
He noted that while the market in general still didn’t see the value in zinc, quite a few major players have already started to see its growing role in the green economy.
Zinc has been placed on the US critical minerals list while South32 has also been bullish about the metal.
“I think there’s a lot more value in zinc right now because it has been overlooked and I always like base metals because they have got a fundamental market, the demand is absolutely rock solid,” Harris added.
“There aren’t that many new sources of zinc out there and a lot of older sources have closed or are closing down as well.”
He concluded that once the company proves that Gorno can be permitted, people would realise that Altamin’s value opportunity is “a lot more tangible than they are probably giving it credit now”.
This article was developed in collaboration with Altamin, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.