‘Garimpeiro’ columnist Barry FitzGerald has covered the resources industry for 35 years.

ASX-listed junior explorer Sunstone Metals could be the exploration success story of 2019. But it won’t know if that’s the case until it drills three high-priority gold-copper targets at its Bramaderos project in southern Ecuador.

And it can’t start drilling until it receives an environmental licence (drilling permit) from Ecuador’s Ministry of Mines – something that has been in the pipeline for the last couple of years, but with no cigar.

But as the recent wriggle higher in Sunstone’s (ASX:STM) share price suggests, investors are backing home the idea that the recent shake-up in the Ministry of Mines and the Ministry of Environment means Ecuador’s permit backlog is finally being tackled.

Sunstone shares last traded at 2.9c for a market capitalisation of $35 million. While the share price is down from 4.5c in mid-2018, the stock is now 45 per cent higher than its starting point for 2019 of 2c a share.

Permits are a’comin

It seems that investors are positioning themselves in the stock ahead of the drilling permit finally being issued.

They got comfort on that score from Sunstone this week in its December quarter report.

Sunstone said that it now expects the drilling permit to be issued next month. It said following recent discussions, the Ministry of Mines remained “committed to increasing the level of mineral exploration in Ecuador and streamlining the permitting process”.

“Once issued the permit will allow for drilling across the entire concession giving the company the ability to test the numerous porphyry and epithermal gold targets it has identified, as well as providing flexibility to test additional targets on the concession in the future,’’ Sunstone said.

Sunstone will hit the ground running as it has spent the downtime waiting for the drilling permit to put in access tracks to the three initial drill targets – the Bramaderos Main and Limon

porphyry copper-gold prospects, and the West Zone epithermal gold prospect.

Ecuador is the place to be

Ecuador has become something of a global exploration hotspot thanks to the Cascabel porphyry copper-gold discovery of the Brisbane-based and London-listed SolGold.

Cascabel currently stands at 8.4 million tonnes of copper and 19.4m oz of gold at the Alpala deposit alone, with more deposits in the making.

SolGold is the company that Newcrest (14.5 per cent) and BHP (11 per cent) have taken shareholdings in to get their foot on Alpala and what else unfolds at Cascabel.

This is how you find giant porphyrys

Interestingly, Sunstone managing director Malcolm Norris knows all about finding giant porphyry copper deposits.

After 23 years with WMC Resources (now part of BHP), Norris held roles at SolGold and Intrepid Mines, the company that discovered the giant Tujuh Bukit porphyry in Indonesia (now owned by Merdeka Copper Gold).

Norris told Garimpeiro that a drilling contractor was already to go on the drilling permit being issued.

“We will mobilise the drill rig as soon as possible and it should only take three or four days to be on site – and off we go,’’ Norris said.

Future plans are in action

About 5,000m of drilling is planned in the first campaign across the two porphyry targets and the epithermal target.

The first to be drilled will be the Limond porphyry target. It has porphyry mineralisation at surface plus a lot of altered rock. It has never been drilled before.

The drilling rig will then move to Bramaderos Main which has been drilled previously.

“We’re going to go back in and drill near some of those holes and start to extend the vertical dimensions of the porphyry system,’’ Norris said.

Then it will be the turn of the outcropping West Zone epithermal prospect.

It is a potential high-grade early development gold opportunity compared with the bulk-tonnage porphyry targets where grades of 0.6g/t gold and 0.2 per cent copper would be welcomed (Cascabel’s Alpala grades 0.29g/t gold and 0.41 per cent copper).