Sunstone Metals Ltd (ASX:STM) is a well-funded Ecuadorean focussed copper-gold-silver explorer that looks to have made a major discovery at El Palmar, according to broker Taylor Collison.
The company’s El Palmar and Bramaderos projects are highly prospective (as confirmed by work to date) and located within the cordillera of Western South America, currently the world’s largest copper producing region.
The following is an extract from Taylor Collison’s research update:
Our View
Sunstone Metals Limited (“Sunstone”) is a well-funded Ecuadorean focussed porphyry and epithermal Cu-Au-Ag explorer, with two properties in the highly prospective Cretaceous to Tertiary arc rocks of the Western Cordillera. Work on both properties, El Palmar and Bramaderos, has confirmed the prospectivity, with, at El Palmar, the Company recently making what could be a major discovery.
Initial drilling (assays from the first three holes to date) by the Company at the more recently acquired El Palmar property (in Northern Ecuador) are very positive, delivering three relatively shallow + 1.0 g/t AuEq intersections of up to 160 m. These are within broader intervals (including 480.85 m @ 0.66 g/t AuEq) and also include internal intervals of up to 1.59 g/t AuEq. Our view is that grades of +1 g/t AuEq are an important discriminant in the quality of, and market perception of porphyry copper deposits.
Also, the drilling to date at El Palmar has identified a mineralised footprint potentially on par with that of the nearby 2.6 Bt Alpala deposit within SolGold’s (LON: SOLG, market cap of ~A$1.1 billion) Cascabel project (refer Figure 7). As for Cascabel there are several other porphyry targets within the El Palmar concession. In addition to the porphyry potential, there is epithermal Au-Ag prospectivity at both projects that has been confirmed by drilling at Bramaderos.
An initial MRE for the Brama porphyry prospect at the more advanced Bramaderos Project in Southern Ecuador is expected in H1, 2022, however a recently completed hole delivered an unforeseen intersection of 111 m @ 2.35 g/t Au in a possibly later stage of mineralisation at the adjoining Alba prospect, which will now be followed up by drilling in addition to the Resource work.
In summary Sunstone is a well credentialed company (and fully funded for the medium term) that looks to have made a major discovery at El Palmar, and with significant exploration and delineation upside at Bramaderos – both projects have the potential to deliver at multiple prospects.
Key Points
- Quality assets in a highly prospective region: Both projects are highly prospective (as confirmed by work to date) and located within the highly prospective productive cordillera of Western South America, currently the world’s largest copper producing region.
- Cashed up, insulated from the vagaries of the market: By virtue of the sale of Viscaria and the other Northern European assets, the Company is well cashed up with ~A$21 million in cash and liquid assets. This is an important consideration for porphyry explorers, given that they can, by virtue of the style of mineralisation, take significant drilling to “crack the code”, and even when that is done some drill holes may not be up to investors’ expectations. As such Sunstone is largely insulated from the short-term thinking on what are longer term projects.
- Personnel with the right experience: The key personnel in Sunstone have extensive applicable and successful experience, including being involved in the Tujuh Bukit (Indonesia) and Cascabel (Ecuador) porphyry discoveries – this experience is now being applied successfully to El Palmar and Bramaderos.
- Well served by infrastructure: Both projects are in areas of good transport and utility infrastructure, and are located at relatively low RLs (up to 1,500 m) and manageable topography in the Cordillera Occidental of Ecuador – the tenements cover a mixture of farming and wooded land, with the Company having good relationships with locals.
- Ecuador has turned the corner: A change to more mining friendly politics over recent years has made Ecuador a more attractive destination, with several majors now committed to exploration and mining.
- Ongoing news flow: The Company has significant exploration and evaluation programmes going forward which should result in steady newsflow. This includes ongoing drilling at both projects, and an initial Mineral Resource Estimate (“MRE”) at Bramaderos, due in H1, 2022.