Barry FitzGerald: Titan’s Ecuadorian gold and copper beasts are getting too big to ignore

“Garimpeiro” columnist Barry FitzGerald has covered the resources industry for 35 years. Now he’s sharing the benefits of his experience with Stockhead readers.

It was a cold night and Melainie Leighton was battling a heavy cold. But the Titan Minerals (ASX:TTM) boss had a message to deliver to the crowd at the Melbourne Mining Club’s “Cutting Edge’’ showcase for junior explorers.

Leighton’s message was that there was a disconnect between what Titan has achieved in Ecuador on the gold and copper front since 2020 and the company’s market cap of $88 million (34c a share).

“When you think about the gold resources we have established (3.1Moz) and the joint venture we have done (with Gina Rinehart’s Hancock Prospecting), clearly there is a fairly large disconnect there,’’ Leighton said.

The disconnect is a common lament for junior explorers operating overseas. And as Leighton suggested, in Titan’s case it could well reflect a lack of knowledge or appetite by ASX investors for projects in Ecuador or South America more generally.

That could well be the case. But there comes a time when projects reach a scale that become too big to ignore, which is a pathway Garimpeiro reckons Titan’s projects are headed down. If the local market doesn’t buy in to the story, it could well be a takeover bid that closes the disconnect.

That’s because gold and copper development assets of scale are becoming increasingly rare. South America generally and the emerging mining industry in Ecuador have the lion’s share of what is available.

It’s why BHP and Rio Tinto have gone to South America in recent times to fill their development pipelines with copper/gold and lithium assets. Apart from high level prospectivity, there is the attraction of low energy and labour costs, and the rise of pro-mining sentiment.

What lies beneath? Answer: plenty

In ASX terms, Titan’s 3.1Moz gold and 22Moz silver resource at its Dynasty project is a big deal, not that the current market cap reflects that status. The epithermal gold and silver system is set to get bigger, too.

“We have just completed a 10,000m resource growth program at Dynasty and we are now undertaking a 6,000m resource conversion program to feed in to a (project) de-risking study,’’ Leighton said. A resource update is planned for late this quarter.

“We know we have got 3.1Moz in the top 400m but what could lie beneath and laterally?’’

Leighton answered her own question: “We are looking to grow to 5m oz plus at Dynasty.’’

Dynasty also has a copper leg as three large-scale porphyry targets have been identified by Titan which will be tested in time. And regionally, the 100% owned Copper Duke porphyry prospect will be drilled in coming months.

It is the big-time porphyry copper potential of Titan’s ground in southern Ecuador that attracted the interest of Hancock Prospecting which is also busy in the north of the country .

A deep-pocketed delve into Andean copper

Titan became a 45c stock in September last year when it signed up Hancock Prospecting subsidiary Hanrine to an earn-in agreement under which Hanrine could spend up to $US120 million to earn an 80% stake in Titan’s Linderos copper project.

Linderos is an early stage copper-gold project initially worked up by Titan drilling as a target worthy of a lot more drilling by an incoming party with deeper pockets.

There are various earn-in milestones in the joint venture agreement. Hanrine started drilling in November last year and has already met the stage one and two commitments to take its interest in the project to 30%.

Drilling results to date have been typical Andean porphyry copper type stuff – 398m at 0.24% copper equivalent and 735m at 0.23% copper equivalent. So the scale is there. Now to zero in on better grades.

Hanrine is now in stage 3 of the earn-in agreement which requires it to drill another 15,000m to take its ownership to 51%. Assay results are likely this quarter. So it could be a case of if it’s not the gold that fires up investor or a predator’s interest in Titan, it could be the copper. Or both.