Overview
While the copper market has been affected by overall economic conditions, the metal is necessary for the long-term decarbonization movement. In 2023, Fitch Solutions revised its 2023 copper price forecast from $8,400 per tonne to $8,500 due to higher demand and weaker supply. Copper prices will also continue to increase each year to $9,100 per tonne in 2024, $9,400 per tonne in 2025, $9,800 per tonne in 2026, and up to $11,500 per tonne in 2031.
Latin America is a dominant player in global mining, leading in copper, silver and iron ore production. Codelco, the major Chilean mining company, is the largest copper producer worldwide. Additionally, significant partnerships with automotive manufacturers, such as Ford, create even greater interest in the region. Major players in Brazil’s mining landscape include Ero Copper (TSX:ERO), a high-margin, high-growth green copper producer with fully funded operations in Para, Mato Grosso and Bahia.
Alvo Minerals (ASX:ALV) is an exploration and development company focused on a district-scale opportunity in the underexplored Palmeiropolis region of central Brazil. The advanced-stage Palma project has produced exploration results that indicate high-grade copper-zinc deposits in a rich volcanogenic massive sulphide (VMS) district. The project is surrounded by active mines, including Lundin Mining’s Chapada copper-gold mine and Serra Verde’s REE project.
The Palma project was discovered in the 1970s, yet it has been idle for over 30 years. Once Alvo Minerals acquired the project, it became the first mining company to apply modern, systematic and aggressive exploration techniques to the project. A 2012 JORC inferred mineral resource estimate indicated 4.6 million tonnes at 1.0 percent copper, 3.9 percent zinc, 0.4 percent lead and 20 g/t silver. The company also recently released assays on the C3 deposit – with highlights including 7 meters @ 5.2 percent copper, 8 percent zinc and 7.4 meters @ 2.2 percent copper, and 23.1 percent zinc.
The district-scale project has identified two prospects with distinct characteristics: C3 and C1. The C3 prospect has completed phase 1 drilling, and assays indicate high-grade copper and zinc. The C1 prospect has undergone diamond drilling, and phase one intercepted significant polymetallic sulphides with higher quantities of high-grade zinc and lead than C3.
Phase 2 of the drilling campaign is ongoing, with approximately 16,000 meters of diamond drilling and 1,500 meters of reverse circulation (RC) drilling completed (at the end of 2022). Further testing will continue the program of drilling at C1 and C3, targeting significant extensions along strike and at depth to the high-grade VMS mineralization, with an updated MRE planned over these deposits for 2023. The company owns 80 percent of the district, which facilitates future exploration campaigns to discover additional deposits, with added support through a robust local infrastructure alongside strong political and community backing.
Drilling results identified 20 new prospects that will be systematically tested over the coming year, with the intention of confirming the Palma Project as a new VMS camp essential in global sources of copper, zinc, lead, silver and gold.
Regional geology and tenement holdings for Alvo’s Palma project area – Afla Project area in red hash
Alvo has signed a binding earn-in agreement on the highly prospective Alfa Cu/Zn Project with Afla Investimentos E Participações Ltda. The agreement further consolidates the broader Palma VMS belt. The Afla Project was partially covered by a VTEM survey, and multiple conductors have been identified which appear similar to conductors that host significant VMS mineralization at Palma. The earn-in transaction has no upfront cash payments and will utilize Alvo’s existing exploration team to deliver 1,000 meters of diamond drilling within 18 months of the agreement to earn the initial 60 percent of the project. The company can earn up to 100 percent of the project depending on additional exploration and contract milestones.
Alvo Minerals is led by a management team with robust exploration and mining experience in Brazil and around the world. Graeme Slattery, Alvo’s non-executive chairman, has extensive experience dealing with foreign jurisdictions and regulatory issues. Managing director Rob Smakman is a geologist with over 25 years of international experience highlighted by having successfully founded and listed Crusader Resources and initiated the company’s Brazilian entry and operations.
Company Highlights
- Alvo Minerals is an exploration and development company with a district-scale project in Tocantins and Goias states, central Brazil.
- Historic exploration programs have indicated high-grade copper-zinc deposits containing lead and silver. These results were confirmed in the 2012 JORC resource estimate that indicated 4.6 million tonnes @ 1 percent copper, 3.9 percent zinc, 0.4 percent lead, 20 grams per ton (g/t) silver.
- Alvo has acquired mineral rights over multiple areas covering more than 850 square kilometers, including more than 70 kilometers of strike covering the prospective geological sequence.
- Alvo completed 15,697 meters of diamond drilling and 1,467 meters of reverse circulation drilling at the Palma project up to the end of 2022, with an updated MRE expected in 2023.
- Palma is surrounded by active mines, including Lundin Mining’s Chapada copper-gold mine and Serra Verde’s rare earth elements (REE) project. There are also major nickel (Anglo American), gold, bauxite and phosphate operating mines within the district.
- The Palma project has excellent infrastructure including abundant hydroelectric power and strong community and political support.
- An experienced management team leads the company with the right equipment and funding to fully capitalize on its promising district-scale opportunity.
Key Project
The Palma Copper-Zinc Project
Alvo Minerals’ district-scale project includes an identified VMS formation, which contains clustered deposits of important minerals. Only two prospects have received exploratory drilling, while VTEM/FLEM and IP surveys have identified several others for future campaigns. A strong infrastructure and community support further emphasize the potential of the Palma project to become a significant producer in the region.
Project Highlights:
- Ideal Location and Infrastructure: Sealed roads, access to hydroelectricity and multiple rail options leading to ports and smelters create tremendous opportunities for low-cost growth for the project.
- Potential to Become a Significant VMS Camp: Volcanogenic massive sulphide zones are found worldwide and often become global sources of copper, zinc, lead, silver and gold. Palma contains the right geological formations to become a significant VMS camp with clustered mineral deposits.
- High-grade Copper within C3 Prospect: The C3 prospect within the Palma project remains open at depth and along strike. Phase one drilling intercepted deposits with encouraging results, including:
- PD3-001: 25 meters @ 1.79 percent copper, 14.08 percent zinc from 187 meters
- PD3-007: 23.15 meters @ 3.32 percent copper, 8.06 percent zinc from 258.85 meters
- PD3-014: 16 meters @ 1.81 percent copper, 14.23 percent zinc from 252 meters
- PD3-018: 15 meters @ 2.89 percent copper, 4.41 percent zinc from 71 meters
- High-grade Copper, Zinc and Lead within C1 Prospect: The C1 prospect returned assay results with higher grades of zinc and lead. The prospect also contains more silver and gold than C3. Exploration results include:
- PD1-019: 21.8 meters @ 1.86 percent copper, 8.68 percent zinc, 1.91 percent lead, 56.10 g/t silver and 0.12 g/t gold from 142 meters
- PD1-030: 8.9 meters @ 0.92 percent copper and 8.75 percent zinc 2.28 percent lead, 52.10 g/t silver and 0.04 g/t gold from 64 meters
- PD1-029: 6.2 meters @ 0.70 percent copper, 6.11 percent zinc, 1.64 percent lead, 42.65 g/t silver and 0.05 g/t gold from 105 meters
Management Team
Graeme Slattery – Non-executive Chairman
Graeme Slattery is a practicing corporate lawyer with over 20 years of experience advising companies in the mining and resource sector on all aspects of corporate and commercial law. He has extensive experience dealing with foreign jurisdictions and regulatory issues and serves on numerous international boards.
Rob Smakman – Managing Director
Rob Smakman is a geologist with over 25 years of international experience, more than 10 of which were in Brazil. Fluent in Portuguese, he successfully founded and listed Crusader Resources and was responsible for instigating its Brazilian entry and operations. Smakman sourced, negotiated, explored and built projects in Brazil and around the world and has raised more than US$100 million in capital (equity and debt) for multiple projects.
Beau Nicholls – Non-executive Director
Beau Nicholls is a geologist with over 25 years of international experience, including nine years in Brazil as the principal consultant for Coffey Mining- a leading international consulting firm (Beau is fluent in Portuguese). Nicholls is an executive director with ASX-listed Big River Gold and principal consultant for Sahara Natural Resources, specializing in exploration and mining services in Africa.
Carol Marinkovich – Company Secretary
Carol Marinkovich has over 25 years of experience in the mining industry. She has extensive experience as company secretary and in corporate governance practices both within Australia and Internationally working with companies in the ASX200, ASX300 and for other listed junior explorers. Marinkovich is a member of the Governance Institute of Australia and the Institute of Chartered Secretaries and Administrators in London.
David Warlond – Chief Financial Officer
David Warlond has more than 20 years’ experience gained in various financial and reporting roles throughout Australia, Indonesia and the Russian Federation. He commenced in audit and assurance at Price Waterhouse (PW), Melbourne and continued in audit and assurance in Jakarta and Moscow with PW and Deloitte CIS, respectively. Warlond holds a Bachelor of Business (accounting) from RMIT (Victoria University) and is a chartered accountant in Australia.
