Alvo attracts $4.2m strategic investment at a 25% premium for copper-zinc and rare earths drilling

Alvo Minerals secures $4.1m strategic investment from Brazilian natural resources private equity group
Ore Investments, which has deep technical expertise in Brazil’s resources sector, now a 19.9% shareholder
Proceeds from the placement will fund drilling of high priority regional exploration targets at the Palma Cu-Zn Project and Bluebush REE Project
Alvo plans to update the JORC 2012 Inferred Resource of 4.6Mt @ 1.0% Cu, 3.9% Zn, 0.4% Pb & 20g/t Ag in Q2, incorporating all diamond drilling since its IPO in October 2021.

Special Report: Alvo Minerals has received a clear sign of confidence in its Brazilian critical mineral projects after Brazilian private equity group Ore Investments made a firm commitment to invest $4.1m in the company.

Highlighting just how confident Ore Investments is in the company’s Palma VMS copper-zinc project and Bluebush ionic adsorption clay-hosted rare earths project, the placement of 23.3 million shares is priced at 17.5c per share – a 25% premium to the 30-day volume weighted average price of 14c.

Alvo Minerals’ (ASX:ALV) +850km² Palma project sits within a known VMS districts and has an Inferred JORC Resource of 4.6Mt grading 1% copper, 3.9% zinc, 0.4% lead and 20g/t silver, for contained resources of 44,000t copper, 179,000t zinc, 20,000t lead and 3Moz silver. Alvo anticipates updating the Palma JORC Resource in Q2 to incorporate all diamond drilling since its IPO in October 2021.

The resource estimate covers just two of the five prospects that have been historically drilled at the project, which was left largely idle since its discovery in the 1970s until the company took over.

Bluebush is adjacent to the massive 911Mt at 1,200ppm total rare earth oxide (TREO) Serra Verde ionic deposit – the only Tier 1 ionic REE project in production outside China.

Testing has already proven that REE mineralisation at Bluebush is indeed ionic in nature, which lends itself to low cost extraction.

This is the second time this month that South American interests have made a strategic investment in an ASX-listed company, indicating that companies with quality projects in the region are attracting the right type of attention.

Strategic investment

The clear strengths of the Palma and Bluebush projects led Ore Investments to subscribe for $4.1m worth of shares, which will give it a 19.9% interest in ALV.

This also grants the natural resources private equity group the right to appoint a director to the company’s board, which could allow it to tap Ore Investments’ deep technical expertise in Brazil’s resources sector.

Separately, existing substantial shareholder Strata Investment Holdings will invest $125,000 under the same terms, taking the total raised up to $4.2m.

Proceeds from the strategic placement will be used to drill test high priority regional exploration targets across both the Palma and Bluebush projects.

“On behalf of Alvo’s board, I am delighted to welcome Ore Investments as a new strategic shareholder of our company. The investment is a win-win for our current shareholders and Ore Investments as the placement metrics highlight the shared belief that we can deliver significant value through exploration success,” managing director Rob Smakman said.

“Following an extensive due diligence process, the investment is a testament to the hard work of our team and the exceptional exploration potential of our critical minerals’ projects.

“The funds will focus on drilling new prospects across the Palma Copper and Zinc Project as well as the Bluebush Ionic REE Project.”

Current and upcoming activity

ALV is progressing electromagnetic and induced polarisation surveys on regional targets at Palma and is also carrying out geochemical sampling across known exploration targets within the project.

Results are also pending from drilling at the C4 prospect at Palma and remaining auger and diamond drilling at the Bluebush REE project.

The company will soon start follow-up auger drilling at Bluebush and expects to both deliver a maiden resource estimate for the C4 prospect at Palma and updates to the existing resource at C1 and C3 during the current quarter.

Other work to come this quarter includes maiden diamond drilling at high-priority untested regional targets across Palma and maiden auger drilling and soil sampling at the Ipora REE project.

This article was developed in collaboration with Alvo Minerals, 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.