viewSalazar Resources Ltd

Salazar Resources aiming to be a model explorer, with quality assets in Ecuador and Colombia


The firm is headed up by Fredy Salazar, the ex-head of major Newmont's Ecuador unit, and comprises a 40-strong team, including 15 geologists

Salazar Resources Ltd -

Quick facts: Salazar Resources Ltd

Price: 0.31 CAD

Market: TSX-V
Market Cap: $39.29 m
  • Experienced geological team

  • Quality assets in pro-mining Ecuador and Colombia

  • Well-funded, generating income, fully carried at Curipamba

What Salazar Resources does:

Salazar Resources Ltd (CVE:SRL), which has copper and gold assets in Ecuador and Colombia, says it's aiming to be a 'model exploration company' and boasts a proven discovery team.

The firm is headed up by Fredy Salazar, the ex-head of mining major Newmont's Ecuador unit, and comprises a 40-strong team, including 15 geologists. The team has been involved with many discoveries in Ecuador, including Aurelian's Fruta Del Norte discovery, the Mozo deposit, ex-Newmont's Cangrejos project and International Minerals' Rio Blanco and Gaby Deposit.

In Ecuador, Salazar holds the Rumiñahui project, the Macara mine and the Los Osos license. Its most advanced project in the country is the Curipamba VMS discovery, which is a joint venture with Adventus Zinc Corporation (CVE:ADZN).

Salazar is fully carried to production at Curipamba (the El Domo copper, gold, zinc deposit). It owns 25%, while Adventus has 75%, while the latter must fund exploration worth US$25 million before October, 2022. A feasibility study is expected in 2021, after which the partner is required to fund 100% of the development and construction expenditures to commercial production.

A preliminary economic assessment (PEA) showed a post-tax net present value (NPV) of US$288 million with pay-back of less than two years and 40% post-tax IRR (internal rate of return), while a resource estimate for El Domo showed an indicated resource of 7.5 million tonnes at a grade of 2.02% copper, 0.26% lead, 2.81% zinc, 2.33 grams per ton (g/t) gold and 49 g/t silver.

Adventus and Salazar have identified several areas, which may offer significant costs savings and improved economics for the project. In addition, further exploration will continue on the 21,500-hectare (ha) Curipamba project on potential regional targets. Santiago, for example, is a 2,350 ha exploration license (one concession area) within the Adventus-Salazar exploration alliance, as is Pijili, a 3,246 ha exploration license consisting of three concessions.

Pijili was granted to Salazar by the government subject to US$5 million of exploration investment before 2023.

Salazar has also applied for five mining concessions where several porphyries and vein systems have been found in the department of Nariño, Colombia.

Alisales is a license area of 2,701 ha due east of the Cascabel porphyry discovery, and Ramos la Verde is a license area of 17,129 ha in southern Colombia due north of the Cascabel porphyry discovery.  It hosts copper-gold targets and is at an early stage of exploration.

The firm also owns Perforaciones Andesdrill S.A, which owns three diamond drill rigs, allowing it book income of between C$1mln and C$2mln every year from a wholly-owned drilling company, plus a ballpark C$350,000 management fee chargeable for work within the Adventus joint venture.

How's it doing:

Salazar has big plans for 2020 and the board has given its approval to drill Rumiñahui, Los Osos and Macara in Ecuador this year.

The group has a budget of US$2.6 million for 2020, with the option to drill up to 8,500 metres (m) at its 100%-owned portfolio. It also has a guaranteed income from the Curipamba joint venture of a minimum of US$600,000 a year.

Water use permits are pending at the Rumiñahui and Macara sites prior to drilling. The firm has allocated 3,000m of drilling at Rumiñahui and Los Osos, with 2,500m at Macara.

In Colombia, ratification of the Alisales licenses is ongoing, with a view to starting fieldwork in the second half of 2020.

Salazar continues to monitor options regarding access to the Ramos and La Verde license areas prior to starting the license ratification process, it has also told investors.

Inflection points:

  • Exploration results
  • Permitting news

What the boss says:

In Salazar's most recent statement, chief executive Fredy Salazar told investors: "We are aiming to grow our portfolio of highly prospective assets through our expertise and our unrivalled grass-roots network, and we eagerly await the reopening of the national mining register."

"In parallel, funded work at the Curipamba, Pijili and Santiago joint venture projects continues to progress well," he added.

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