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Fidelity Minerals pursuing a portfolio approach to advancing quality gold, copper assets in Peru

Snapshot

In Peru, Fidelity has three 100%-owned high impact gold and copper exploration properties and a 44.5% interest in the advanced Las Huaquillas project

Fidelity Minerals Corp. -

Quick facts: Fidelity Minerals Corp.

Price: 0.015 CAD

TSX-V:FMN
Market: TSX-V
Market Cap: $1.92 m
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  • Operating a strategic project generator model.
  • Experienced management
  • Peru ranks highly in Latin America and globally as a mining leader

What Fidelity Minerals does:

Fidelity Minerals Corp (CVE:FMN) is a non-exploration junior resource group focused on mining friendly Peru. It has developed a state-of-the-art strategic project generator (SPG) model, which, it says, combines the key advantages of a prospect generator, mine owner, royalty and streaming company to have enhanced exposure to project success at a lower cost.

In simple terms, the model means the Vancouver-headquartered company acquires what it believes are high potential (in this case) gold or copper projects, which can have limited work applied to them before being potentially farmed out to major metals firms.

Fidelity would still retain a minority stake or a net smelter royalty (NSR) on production at the projects to retain exposure to upside.

Thus it pursues a portfolio approach rather than concentrate on one or just a few projects.

How is it doing:

In Peru, Fidelity has three 100%-owned high impact gold and copper exploration properties and a 44.5% interest in the advanced-stage Las Huaquillas project, where it has also acquired 100% of the surrounding Greater Las Huaquillas concessions.

In April this year, it bought a 100% interest in a porphyritic copper project (1,200 hectares) in La Libertad, northern Peru and also an initial 25% interest in a company that holds a portfolio of project concessions (3,500 hectares) also in La Libertad, including an advanced-stage polymetallic project.

The porphyritic copper project hosts near surface visible copper mineralization, as well as small-scale artisanal workings. The polymetallic project comprises six concessions covering 3,500 hectares in an active mining and development district in La Libertad, Northern Peru.

In June this year, the firm acquired 100% interests in the Las Brujas and Cerro El Bronce projects, which lie in prolific gold-copper districts in Peru that are subject to active exploration by major mining companies.

Las Brujas spans 1,900 hectares within 10 kilometers (km) of the La Zanja open pit gold mine in which Newmont Goldcorp has a 46.9% stake. Historical sampling included a results of 10 meter (m) grading 1.5 grammes per tonne (g/t) of gold from surface rock chip work. The project has extensive mineralization and anomalous gold values reported from three different zones.

Cerro El Bronce consists of two concessions totaling 600 hectares in an area surrounded by concessions controlled by gold miners such as Newmont Goldcorp, which is actively exploring. Historical sampling at Cerro El Bronce revealed copper and gold mineralization, up to 6.8% copper and 20.3 g/t gold,  with previous exploration showing relatively shallow high-grade gold resources.

At the group's core Las Huaquillas gold project, a previous explorer in 1998 estimated that a 500m section of the 2,200m long Los Socavones Zone hosted a resource of 6.57 million tonnes (Mt) grading 2.12 g/t gold and 25.2g/t silver, which is equivalent to 446,000 ounces of gold and 5.3 million ounces of silver at a 1 g/t gold cut-off. The resource was reported to remain open at depth and along strike.

At the Greater Las Huaquillas project, Fidelity Minerals also has nine concessions for around 3,800 hectares of contiguous mineral title, of which it has acquired a 100% interest.

On October 2, the firm revealed it is to sell another previously core asset, the Cerro Dorado gold plant in Arequipa, Peru for US$1.43 million. The group said the rationale is to remove costs and focus on its project generator model.

The sale to certain private Peruvian interests will be staged over 12 months, and the binding agreement means the buyers must make certain capital improvements to the processing mill.

The transaction concludes with the final transfer of Fidelity's Cerro Dorado SAC subsidiary to the purchaser. The subsidiary holds four concessions, including the Rey Salomon mine and the Cerro Dorado gold plant.

Inflection points:

  • Newsflow on work at the firm's advanced high quality projects
  • Farmout news
  • Gold and copper price moves

What the boss says:

In June this year, executive chairman Bahay Ozcakmak outlined to Proactive the groups' broad strategy: "We're after high quality projects - projects that have sufficient scale to attract the majors and projects where a small team such as Fidelity Minerals  could add value in a relatively short time frame."

He added: "We don't see Fidelity Minerals as pursuing these projects or certainly embarking on large scale drilling programs, so we've been able to acquire these projects under attractive terms, be able to add value by performing some geophysical studies, some early stage appraisal work, but they're certainly in attractive geological settings."

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Watch

Full interview: Fidelity Mineral signs deal to sell gold plant Cerro Dorado...

Fidelity Minerals (CVE: FMN) CEO Ian Graham dropped into the Vancouver office pf Proactive to discuss Fidelity’s sale of a gold plant in Southern Peru for 1.4 million U.S. dollars. Graham talked about the structure of the deal and why they did it. Graham also told Proactive what the company...

1 week, 5 days ago

4 min read