Sunstone Metals Ltd (ASX:STM)’s initial resource at the Bramaderos gold-copper project in Ecuador and further exploration success are important re-rating points over the next 12 months, according to a research update from RaaS Advisory.
Significantly, Sunstone is targeting an initial Mineral Resource Estimate (MRE) over the Brama-Alba area (Bramaderos Project) and add new discoveries by end-2022.
RaaS noted that delivering an initial MRE is an important, indicative first step demonstrating the potential of the play, particularly should concurrent works deliver new, adjacent discoveries.
The following is an extract from the research update:
Putting the copper-gold building blocks in place
Sunstone Metals is an ASX-listed mineral exploration play focussed on its Bramaderos gold-copper and El Palmar copper-gold projects located in Ecuador. Positive results from continuing exploration drilling across both projects are unlocking the highquality potential of the assets through supportive assay results and expansion of mineralised zones…in some ways, these projects are strongly open-ended with overlapping targets. The projects should be considered as still early-stage with the company planning to undertake further drilling activity through the second half of the year across a number of Bramaderos prospects, totalling >8,000m. Significantly, the company is targeting an initial Mineral Resource Estimate (MRE) over the Brama-Alba area (Bramaderos Project) and add new discoveries by end-2022. Sunstone is working its asset base, which is a critical point of differentiation in our view…potential needs to be defined by holes in the ground. The postCOVID global outlook is uncertain with inflation-driven risks to the demand outlook. This is also reflected in the recent volatility of copper and gold prices. However, market data continues to support both metals on a fundamental basis, particularly with the transition to renewables and expected continuing global supply constraints. An initial MRE and further exploration success are important re-rating points over the next 12 months, we suggest.
Heading to a resource declaration at Alba-Brama
The Bramaderos gold-copper project is located in southern Ecuador and is considered to be highly prospective for the discovery of porphyry and epithermal gold-copper deposits. Historical exploration results have identified at least four north-northeast aligned, partially overlapping centres of porphyry gold-copper mineralisation. There will be four drill rigs operating across Bramederos primarily focussed on the Alba-Brama prospect with earlystage exploration continuing across the tenement. Drilling at Bramaderos will continue through 2022 with at least five further holes (2,000m) at Brama and a further six+ holes at Alba (2,400m). Delivering an initial MRE is an important, indicative first step demonstrating the potential of the play, particularly should concurrent works deliver new, adjacent discoveries.
A high-quality option emerging at El Palmar
El Palmar lies within a highly prospective regional porphyry trend highly prospective for giant copper-gold-molybdenum systems. STM is working its way through a staged acquisition agreement with Golden Exploration which commenced in early 2021. Mineralisation has been recorded from the surface and wide intervals of gold-copper porphyries have been identified at >0.4g/t gold and 0.15% copper over 400m including intervals of 100-165m at >0.7g/t gold and 0.2% copper. El Palmar is considered to be a material gold-copper discovery, with further drilling to expand the mineralised zone, particularly at depth. The company is also aiming to test deeper geophysical targets; and evaluate satellite porphyry targets and epithermal prospects.
Inflation headwinds mean uncertainty but fundamentals still strong
Rising interest rates and inflation numbers point to global growth uncertainty driving the short-term sentiment, however, industry fundamentals continue to look positive in a postinflationary phase supported by the continued roll-out and acceleration of renewable energy projects and technology demand.