Barry FitzGerald: Sunstone Metals finally has its Ecuadorian licence to drill
Mining
Mining
Garimpeiro opened 2019 with the claim that ASX-listed junior Sunstone Metals (ASX: STM) could be the exploration success story of the year.
The caveat was that Sunstone first needed to put its three high-priority gold-copper targets at its Bramaderos project in southern Ecuador to the ultimate test with the drill bit.
Sunstone was a 2.9c stock back then and it has since moved higher to 4.5c in anticipation of the drill bit starting to turn at Bramaderos in coming days.
It has taken a lot longer than originally expected because of delays in Sunstone receiving the required drilling permit, or environmental licence as it is referred to in Ecuador.
But it is all systems go now, with the first of the drill holes to get underway any day now. As the 55% share price gain since Garimpeiro’s last look at the stock reflects, the drilling program has been highly anticipated.
There are a number of reasons for the interest, not the least of which is Ecuador’s status as a global exploration hotspot following a number of big discoveries, including the Cascabel porphyry copper-gold discovery by the Brisbane-based and London-listed SolGold.
Cascabel’s latest resource estimate ranked it at 8.4 million tonnes of copper and 19.4m oz of gold.
That was at Cascabel’s Alpala deposit alone, with more deposits in the area expected to be uncovered.
The world-class status of Cascabel is why Aussie majors Newcrest and BHP have taken up positions on the SolGold share register, with Newcrest holding 14.5% and BHP 11%. The Cascabel find also saw Andrew Forrest’s Fortescue and Gina Rinehart’s Hancock Prospecting take up exploration ground in Ecuador.
Like all juniors that have developed strong followings, Sunstone’s fan base has much to do with its managing director, Malcolm Norris.
He has history of being involved in finding giant porphyry deposits, including a period at SolGold when it first secured the Cascabel ground, and a stint with the company that discovered the 2 billion tonne Tujuh Bukit porphyry deposit in Indonesia.
Punters in the stock are hoping some of that success rubs off on at Sunstone at Bramaderos.
In this week’s March quarter report Sunstone confirmed that the initial 5,000m drilling campaign will first test the Limon target where porphyry-style mineralisation “daylights’’ at surface. It has never been drilled before.
Earlier surface trenching returned 97m grading 0.71g/t gold and 0.23% copper which in the world of big tonnage-low grade porphyry deposits, is about as good as it gets in terms of encouragement to bring in a drill rig.
The next prospect to be tested with the drill bit is Bramaderos Main where the aim is to start to extend the vertical dimensions of porphyry mineralisation encountered in historic drilling (248m at 0.56g/t gold and 0.14% copper).
The West Zone prospect will be the third prospect to be tested by the drill bit. It is an epithermal target with its potential high-grade gold (surface trenching returned 15.6m at 6.1g/t gold) presenting as a possible early development opportunity for Sunstone.
First assay results from Limon are expected in late May or early June so it’s not a long wait now to know if the first of the high-priority Bramaderos targets has got what it takes to excite the market or not.
In the meantime, Sunstone has been busy tidying up its non-Ecuador interests. It recently sold its Viscaria copper project in Sweden to the Stockholm-listed Copperstone Resources for cash and shares.
The deal has built Sunstone’s cash to $4.8m, with another $3m due from Copperstone in July.
Sunstone is now the biggest shareholder in Copperstone with a 38% holding, currently valued at $16.3m.