Altius spins out copper play Aethon Minerals

Aethon's Arcas copper-gold project in Chile. Credit: Aethon Minerals.Aethon's Arcas copper-gold project in Chile. Credit: Aethon Minerals.

Newly formed copper explorer Aethon Minerals (TSXV: AET) is adding to its already large Chilean land package with an option agreement to acquire full interest in the Llanos de Llahuin copper-gold project, located in Chile’s Region IV, close to the city of Illapel and 250 km north of Santiago.

The property hosts the 4 sq. km Gomila copper prospect, which Aethon says may contain a buried porphyry intrusion. The property is 4 km southwest of Hudbay Minerals’ (TSX: HBM; NYSE: HBM) Llahuin copper project and 3 km northeast of Pucobre’s El Spino copper project, in an area rife with small-scale miners.

Aethon is optioning the property from Sociedad Legal Minera la Florida de Canela for an initial US$100,000 payment. To acquire a 100% interest it will have to complete staged payments totalling US$6.3 million over four years. The optionor will keep a 2% net smelter return royalty that Aethon can buy back for US$4.5 million.

The company says it will launch a first phase of exploration — including mapping, chip and channel sampling, and induced polarization surveys — to define targets for a 1,000-metre drill campaign it aims to complete in the first six months. It expects to drill four holes at 250 metres apiece spaced 300 metres apart in an east–west line across the known mineralized system.

Mineralized quartz-barite vein at Aethon's copper-gold project. Credit: Aethon Minerals.

Mineralized quartz-barite vein at Aethon’s Arcas copper-gold project. Credit: Aethon Minerals.

Altius Minerals (TSX: ALS; US-OTC: ATUSF) spun out Aethon in the second quarter of 2018 as a pure copper play in Chile. According to Aethon president and CEO Robert Davies — who was hired last September to get the company listed and put a team together — Aethon’s inception in some ways goes back to February 2014.

“Altius hired a geology team to start putting together a copper land package in Chile,” Davies says during a telephone interview with The Northern Miner. “They put together about 100,000 hectares, with the idea that when the market stabilized, they could do a copper spin out.”

Altius made a similar move when it spun out Adventus Zinc (TSXV: ADZN) in January 2017. The company is working towards a 75% interest in Salazar Resources’ (TSXV: SRL) Curipamba polymetallic project in Ecuador by funding exploration and development totalling US$25 million over the next five years. The project has 8.8 million indicated tonnes grading 1.62% copper, 2.42% zinc, 2.34 grams gold per tonne and 48 grams silver. The company also has projects in the Republic of Ireland and Newfoundland.

Aethon Minerals’ Arcas copper-gold project in Chile. Credit: Aethon Minerals.

Aethon Minerals’ Arcas copper-gold project in Chile. Credit: Aethon Minerals.

Aethon’s land package totals 130 sq. km in northern Chile across 12 properties, with little to no exploration history. Altius looked for land next to properties with active mining, like Freeport-McMoran (NYSE: FCX) and Codelco’s El Abra mine, just southeast of the company’s Arcas concessions.

El Abra is an open-pit copper-mining complex that began operating in 1996. It could operate until 2029 and contains 344 million proven and probable tonnes grading 0.48% copper for 2.1 billion lb. copper, as of the end of 2017. 

Eight of Aethon’s properties are in Chile’s Antofagasta region and four are in its Maricunga region. In Antofagasta, the Arcas, Quiltro, Lia and Timon copper properties comprise Aethon’s focus: its 66.8 sq. km Arcas copper-gold project.

The Arcas project is 245 km northeast of the city of Antofagasta and has 13 prospects for either copper porphyry mineralization or intrusion-related gold mineralization.

Davies says the company will spend $500,000 over the next year to explore Arcas. It could bump its budget up to $750,000 over the next year and a half if a “phase two kicks in, and we think it’s prospective.” Aethon will begin exploring as soon as September 2018.

In Maricunga, Aethon scooped up land near major projects like Kinross Gold’s (TSX: K; NYSE: KGC) La Coipa. It has collected 820 rock samples across its four Maricunga properties, with assays grading as high as 3.55 grams gold per tonne and 146 grams silver.

Aethon's Maricunga gold asset. Credit: Aethon Minerals.

Aethon’s Maricunga gold asset, where Davies says the company would like to form a partnership with a major. Credit: Aethon Minerals.

Kinross says it will begin a feasibility study on La Coipa in mid-2018. The project has 15.6 million proven and probable tonnes grading 1.7 grams gold for 844,000 oz. gold.

The company wants to form partnerships with majors, particularly in Maricunga. It is open to joint ventures, but would consider selling some of its more gold prospective assets to focus on copper.

“It’s about what makes sense for a junior exploration company,” Davies says. “Juniors start spending big bucks on high-altitude, difficult-to-raise projects, and they run out of funds. We certainly are looking for the opposite. We are looking to create value in the short and mid-term.”

The company is attempting what Davies calls a two-tier business model. The first tier involves joint ventures, project generation and royalties. At the same time it would look for near-development projects with feasibility studies, or old ones that need updating, that it could “kick into production.”

It still looks to acquire more land, and Davies says in the last six months the company has met with at least 40 landowners.

“There’s a lot of land in private hands that is now second, third generation,” Davies says. “They’re keen on doing something with it, whether it’s selling it or joint venturing it, because the children or the grandchildren are not interested in mining.”

Aethon has $8 million in cash. Its shares are valued at 58¢, within a 52-week range of 55¢ to 85¢. The company has a $16-million market capitalization.


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