Aldebaran CEO hopes Altar copper project in Argentina can be the next Haquira

What started off as a discussion over a “beer night” in Santiago, Chile, half a decade ago, has turned out to be John Black’s next big sales target. 

The CEO of Aldebaran Resources (TSXV: ALDE), whose previous company, Antares, sold the Haquira copper project in Peru to First Quantum Minerals (TSX: FM) for $650 million in 2010, hopes for a similar outcome for Aldebaran’s Altar copper-gold project in San Juan, Argentina. 

“We are a company that specializes in identifying projects that have very large copper or copper-gold deposits,” Black said in an interview. “We typically drill those projects out … and then position it so that when major mining companies are looking to acquire these projects, it’s an interesting opportunity.”  

When Stillwater first acquired Altar from Peregrine Metals in 2011 for US$487 million, there had been roughly 100,000 metres drilled on the project.  

“It was known as a very large deposit, but low grade with some potential arsenic,” said Black. “But later on, they [Stillwater] began to encounter some zones which were very different in nature … notably higher grade [above 1% copper] with gold associated with them and mineralogically clean without arsenic.”  

Stillwater began to report these results informally in soft forums in Santiago where explorers met over pints of beer and that’s when Black first got interested in the project.  

Eventually, Sibanye purchased Stillwater and the new company Sibanye-Stillwater (NYSE: SBSW; JSE: SSW) considered Altar a non-core asset, allowing Black and his team to make their move on the project.  

In 2018, Aldebaran signed an option agreement with Sibanye-Stillwater to acquire 80% of Altar. At that point, Sibanye-Stillwater had already spent about US$550 million on the project, including the US$487 million price they paid to acquire it.  

The deal required Aldebaran to pay US$15 million cash up front, issue 19.9% of Aldebaran’s outstanding shares to Sibanye and spend US$30 million on the project over five years to acquire the first 60% interest. To acquire the remaining 20%, it had to spend another US$25 million. 

Black says Aldebaran is expected to earn 60% of the project by the end of this year. 

Aldebaran is Black’s third company after Antares and Regulus Resources (TSXV: REG). It was formed in 2018 as a spin-out from Regulus with the latter’s assets in Argentina. 

 “We did not intend to run two companies at one time, but this was a really good opportunity,” said Black. “The reason we structured [the deal] this way is because it fit within the size of the company we are and because of the access to capital.”  

Altar has four zones (Altar East, Altar Central, QDM Gold and QDM/Radio) and in the last two years has drilled eight holes.  

The QDM/Radio zone was the main reason that compelled Black and his team to get involved in the project and highlights from that zone have included drillhole QDM-21-42 which returned 111 metres grading 0.92% copper,0.63 gram gold per tonne and 4.4 grams silver per tonne (1.40% copper-equivalent) starting at 717 metres and QDM-21-43  which intersected, 707.1 metres grading 0.36% copper, 0.19 gram gold per tonne and 1.61 grams silver per tonne (0.51% copper-equivalent) starting at 203 metres downhole.  

The company also released drill results from its QDM zone, located above QDM/Radio in late February. Highlights from the zone included 14.9 metres grading 19.08 grams gold per tonne,  12.28 grams silver per tonne and 0.23% copper starting from 240.10 metres in drill hole QDM-22-45.   

This year, the company plans to drill 15 holes (about 20,000 metres) and complete an initial resource estimate for the QDM/Radio zone.  

Black expects to finish a preliminary economic assessment by the end of 2023 and says he believes that he can interest prospective buyers by the time the company completes a prefeasibility study. 

“We think the prefeasibility study is the sweet spot,” he said. “Our previous success with Antares and the Haguira deposit sold as soon as we completed the PEA … this was 2010 and people were aggressively looking for deposits, I think we are moving into that kind of a situation right now with the copper price, the way it is.”  

As someone who has spent about 30 years working in South America, Black believes the timing is right to own mining projects in Argentina.  The country has “recognized the potential to develop a major mining industry” at a time when it has become harder to find projects in neighbouring countries like Chile, Peru, Colombia and Mexico, he said.  

“The geological potential was always there, but at times it wasn’t the easiest country to work in. It’s a safe country, but their fiscal policies and regulations were a bit complicated and it was easier to find a project in Peru or Chile,” he said.  

“But Argentina right now, has become one of the more promising places. … The country risk moves over time and right now in San Juan there are five big copper projects and we are just one of those five.”