Sunstone Metals Ltd (ASX:STM) is well cashed up to fund its active work programs at both the Bramaderos and El Palmar projects in Ecuador, according to financial services firm Taylor Collison.
Taylor Collison has a Speculative Buy recommendation for Sunstone which is operating two rigs at Bramaderos and one at El Palmar for the foreseeable future, which will provide steady news flow.
Sunstone recently delivered the initial mineral resource estimate and exploration target for Bramaderos, which is “a solid result, and provides a firm base to build on”, according to Taylor Collison.
The following is an extract from the research update:
Our View
Sunstone Metals’ (“Sunstone” or “the Company”) has recently announced the initial Mineral Resource Estimate (“MRE”) and Exploration Target (“ExT”) for the Bramaderos Project in Southern Ecuador.
The MRE delivered 156 Mt @ 0.53 g/t AuEq, for 2.7 Moz of AuEq, with the ExT tonnage ranging from 255 Mt to 360 Mt, with contained metal ranging from 3.3 Moz to 8.6 Moz AuEq.
Although not well received in retail trading on the day of the announcement, our view is that this is a solid result, and provides a firm base to build on. It needs to be noted that the MRE is only from the Alba and Brama prospects, is pit constrained, and with considerable upside from the associated ExT.
The mineralisation defined to date is shallow, outcrops on a hill, and thus would have a very low strip ratio in any mining scenario. Also, preliminary metallurgical test work has demonstrated good recoveries through flotation and leaching of tails, in addition to the gold heap leach potential of the enveloping lower grade “mineralised waste”.
The Company will now drill test several other quality prospects at Bramaderos, two of which, Limon and Melonal, have ExT’s, and all of which have the potential for a significant high-grade discovery and also to add significantly to the current MRE – like many porphyry projects globally, Bramaderos comprises a cluster of mineralisation porphyries, with this being highlighted by the work to date.
A similar situation exists at the El Palmar Project in Northern Ecuador, close to Solgold’s major Alpala deposit. Ongoing activities have identified several epithermal and porphyry targets in addition to the main T1 prospect, which has been the focus of most work to date – ongoing drilling is now concentrated on the other targets.
The Company is well cashed up to support the active work programmes at both projects – two rigs will operate at Bramaderos and one at El Palmar for the foreseeable future, which will provide steady newsflow.