Transcript:
Amalie Schreurs: Alvo Minerals recently announced an update on its regional exploration program underway at the Company’s Palmer Project in Brazil. Here today to tell us about itis Rob Smakman, Managing Director of Alvo. The format today will be a series of questions from myself to Rob with a short presentation, followed by additional questions from the audience throughout the session, both live and those submitted, and investment from the webinar. Rob, could you please tell us a bit about the history of the Palma Project and what do you have and your activities so far?
Rob Smakman: Of course. Hi, Amalie. It’s great to be on this format again. A little bit about the history. The Palmer Project, for those who are completely unfamiliar with Alvo, is in the central part of Brazil. It’s about 4 hours drive north of the capital city called Brazilia. The project sits on a main north south railway. It’s got highways to the site, we’ve got multiple hydroelectric schemes surrounding it. And so it’s a really great location to operate. And now that we’ve established our exploration base in Brazil and in and around the Palma project, we’re really able to take advantage of that infrastructure and also the strong community relationships that we’ve built over time.
So a bit about the history of the project. This project came from the Geological Survey of Brazil. They discovered copper, zinc, lead in the district in early 1970s.They really explored there for about ten years. But in the middle of the 80s they kind of abandoned exploration. They, they drilled over 30,000 metres of diamond and then they just sat on the project for a long time. So this came to auction in, in late 2019. We were the winning bidder and we started exploring after our IPO in 2021. So we’re really quite new on the ground at, at Palma. We’ve been operating now for about 18 months, but the learnings that we’ve had over that period of time have been amazing because we really started working on two main prospects C1 and C3.
So I’ll give you a quick update on what’s happening there. This is a long section that we put out just recently from C3. As you can see, this is the surface here. We’re starting to do some deeper holes, but it’s worth noting that there’s a shallow oxide blanket on surface where the mineralization actually outcrops. And we’ve drilled within this shallow zone and we’ve got high grades and thick widths from surface. Some of the numbers are quite exceptional. We’re talking 15 meters at 4% copper equivalent, 25 meters at 6% copper equivalent. And some of our more recent numbers are deeper down here 15 at 1.7%, 36 at 42% or 20 at 5. So what we’ve defined so far at C3 is it starts at surface and it extends for as deep as we’ve drilled it. And to be frank, the area that we think is the most prospective is this down plunge zone down here. So we’ve got some results outstanding waiting for those to come through, but we’re also planning on drilling some of these deeper extensions over the next few weeks as well. So that’s C3. Currently there was a resource from the Geological Survey estimated in this black line. So we’ve basically gone through and confirmed that that resource is valid. We’ll be updating that that resource this year, probably around mid year, once we’ve completed our extension or drilling down plunge down here. And then the C1 prospect, I wanted to just put up this old section. We haven’t drilled here for about four or five months. And we’re going back now that we’ve completed our phase one drilling at the end of last year, we’re going to come back to C1 and do some deeper holes and some extensions, basically down to the south of C1 and then at depth on the main zone through here. Now this is based upon some of the work that we’ve been doing, which includes downhole EM. So that’s happening at the moment. And what that allows us to do is to really trace where that mineralization is going. And we’re really confident that to the south here, where we’ve previously thought that the mineralization ended our downhill EM is indicating that we’ve got some really good targets down there as well. So C1 and C3 are the prospects of where we’ve spent a lot of our 2022 exploring and really getting up to speed. And by working hard on those two prospects, we’ve kind of understood the geological model that’s that what we’re, which is what we’re looking for. Okay, so what, what I really wanted to show on this slide was that the style of mineralization that we have is called the volcanogenic massive sulfides. And at C1 and C3, we’ve seen classic examples of that mineralization. Now why is that important? Around the world where there’s other VMS districts, what we call camps, you can get multiple deposits occurring within the same camp, so the same groups of rocks and you have multiple deposits occurring within the same area. Some of these are actually really large camps. So Norand, Flin Flon, both in Canada. Snow Lakes, also in Canada. But you have them in Japan, you have them in Europe, you have them in Africa, and you have them in South America as well. And so what we’re hoping is that our district of rocks, our Palma camp, has five known discoveries to date, but we’ve pegged or acquired the ground that extends for around about 60km to the south. What I really wanted to talk about today was what we’re trying to do with our exploration, which is prove up a district camp at Palma. So if we can turn our four and a half million tons into something similar to other camps in the world, I think the exploration kind of thesis is really exciting for shareholders, and certainly for us as well.
And in terms of exploration, this is where we put out an announcement the other day, really trying to explain how we’re going with our exploration management. So on this diagram, which is quite complicated, it basically shows the extension of the belt and our areas within that belt. But I really wanted to point out a couple of things in here, Amalie, historically, the work that was done by the Geological Survey focused the same as us. On C1, C2, 3, 4 and 5. So they’re the known known deposits within the district. So we’ve focused our work on C1 and C3 being the best and the most advanced targets. But around that, the other work that they’ve done in historically included these included some geochemistry and some geophysics, which we’ve obviously taken on board. And now we’re expanding on that information because it’s our premise that we can build an exploration camp in this district and hopefully find new deposits that they haven’t discovered utilizing the most modern techniques, the most systematic exploration program possible. And so, if you look at the purple outline here, these are the areas that were done historically with geochemistry. And what we found from that historical work, there’s tens, if not hundreds of kilometers of geological sorry, geochemical anomalies which stretch throughout this district. But a lot of this area hasn’t been covered. So one of the things that we’ll be doing over the next year is covering the areas in terms of geochemistry that haven’t been touched historically. The other thing is the VTEM or the Heliborne EM Survey that was completed in 2008 is in the blueline here, and that extends a long way further south to what was completed by the geochemistry. So what that VTEM survey has done is shown us about 60 different anomalies or conductors, potential conductors, which we need to follow up one by one. We’ve identified around 15 to 20,which are high priority ones. And so we’re going to follow those up with basically geochemistry mapping, and then we’ll go on the ground and do some geophysics as well. Does that answer the question of Amalie?
Amalie Schreurs: Yes. Thanks very much for that, Rob. Just to remind everyone, feel free to ask some questions throughout the session. The question box is at the bottom there. So, just getting to a couple of questions we got here. So what’s getting you most excited about the project there, Rob?
Rob Smakman: Well, I think the most exciting thing is to try and progress these targets, which we haven’t even got names for half of them. We’re just giving them labels like TG 1, Three to Seven, which are the ones where we’ve started working on. So as we progress those targets from sort of conceptual through mapping and soil sampling on to the point where we can go and confidently go and drill test, I think that’s a pretty that’s the exciting part. Because if we can prove that this is potentially a district. We’ve got tens, if not the potential to build an asset or to build a resource. Inventory plus 10-15 million tons is going to be a real game changer for the company. So progressing those regional targets through to a point where we’re confident to go and put a drillhole in them, I think that’s really exciting.
Amalie Schreurs: This is definitely exciting for Alvo. So the upcoming exploration program looks really exciting. Is Alvo funded to complete the regional exploration program?
Rob Smakman: Yeah, look, I think one of the real I’m going to show you next slide, one of the key things that I think differentiates Alvo from other explorers within Brazil and in other parts of the world. There are parts of the exploration process that are quite expensive. And especially in Brazil, when you go and get contractors in to do geophysical surveys or to do drilling, you tend to pay for it. So what we did, we took the decision early onto buy some of the equipment that we need. And the photo on the right is a couple of the guys in the bush doing an EM survey. So EM is almost like the jewel in the crown for VMS kind of exploration. Because what it does is it looks under the earth for conductive ore bodies or conductive ore now, obviously, you can get false signals, but if you’ve got a conductive ore body with geochemistry on top and perhaps a different technique of like, a different geophysical technique. Doing that, it can really create a high percentage chance that when you go and drill, you’re going to hit a new discovery. And so what we’ve done is we’ve gone and purchased EM equipment, IP equipment. We’ve got an XRF on site. We do a field testing without having to send things away from an assay. And our most recent purchase is on the lefthand side, which is a truck mounted auger rig. Now these auger rigs are fast. They penetrate the surface layer and they can cover vast territories really quickly. And so this is really important for us because this technique, this auger drilling technique, has revolutionized exploration in other parts of the world, places like West Africa and Australia, where you have some sort of COVID This machine is able to penetrate really quickly through that top surface and give you a proper geochemistry and a sample. So we’re going to use this auger rig in two ways. First of all, when we’ve got a geochemistry target or we’ve got a geophysical target, we’ve run lines of this auger across it and we can get higher confidence in terms of the geochemical signature of the surface. The second way we’re going to use it is on our regional exploration. So I’m just going to flick back to one of the previous slides. So this area that hasn’t been covered by any Geochemistry in the past, the area to the south and there’s areas to the north as well and in the central zone which haven’t been covered by any geochem, we’re going to run regional lines across those areas using the auger. But the way we’re going to do it is we’re going to use existing tracks and fence lines so that we don’t have to do any disturbing of farms or cut down any trees or any native scrub and basically we’ll be able to cover a really big area really quickly. So I think that’s a pretty unique kind of approach to the exploration in the area. And we think it’s going to be a good one.
Amalie Schreurs: Sounds great, Rob. And obviously, you’ve touched a little bit to the south there, the Canabrava. We’ve got a question that’s coming in. You’ve also reported multielement exploration. Where do you see opportunity for the nickel copper PGMs at Canabrava and the gymless style deposits.
Rob Smakman: Yeah. So that’s something that we haven’t spent a lot of time or explain to the market very well what’s going on. But basically, the light. Green on this map here is the Palmaropolis Sequence. The darker green in this purple zone down here is what we call a mafic, ultramafic laid intrusion. Now, their perspective around the world for July mar style or nickel copper. pge. So Platinum group elements their perspective for that area. And we’ve got some granted areas in that Canabrava zone. And these areas were explored by companies like Falcon Bridge back in the when they were looking for Platinum. And nickel in the area. And we know that some of the local companies that are exploring that district have found nickel sulfides within that belt. And so this layered intrusion is something that we’re about to start some exploration. On as well. We’ll go in here and we’ll do some like the same as what we’ll be doing for the VMS style. We’ll be doing regional geochemistry but following up on some of the historical work that was done. By falcon Bridge and some of the local explorers. I really see that as a pretty exciting new style of potential mineralization for us. And interestingly enough, it was explored not only by Falcon Bridge, but BHP’s predecessor when they were exploring in the district in the 1970s and 80s were also looking in that area as well. So there’s some interesting pedigree on this kind of Canabrava and this little layered intrusion outcrops further to the south and then further twice more into goyer different state. And where that? Outcrops in those southern areas. Anglo American has been mining nickel for the last 50 years. It’s one of their biggest nickel projects in the country. So we know that these layered intrusions in the area can be quite prospective. And yeah, we’re hoping that we can advance some targets in this area and get them ready for some drilling. Going back to the way that we’re doing our exploration, I think having the auger and having the ground EM and the ground IP allows us to go and advance those targets on the nickel side really quickly. Because if you look back at the history of discovery at Julimar, you’ll note that they’ve done exactly the same thing. They’ve started off with some regional geochemistry, gone in there, mapped it, and then, of course, gone through and followed it up with EM. So that’s been quite a good example for us to follow along and follow along with, of course.
Amalie Schreur: So that all sounds great. I just got a little bit of question about Brazil and the region. So last month there were some fairly widespread protests in Brazil’s capital, which were reported in the media. What’s the current sentiment in Brazil and do you see any issues with your forthcoming expiration objectives?
Rob Smakman: No issues. From a political perspective, I think those protests were basically the last from the previous government. So we had a change of government in November federal election, and the government changed over from Bolsonaro to Lula, who’s a new president. That power change happens on the 1 January, and some of the supporters from the previous president decided that they would protest and invaded the capital city and the main square. But it really was a storm at a tea cup in my mind. I was in Brazilia at the time, and it was quite a localized protest and it was pretty quickly cleaned up afterwards. So, honestly, I don’t see any issues with the political situation in Brazil at the moment. Lula, who is a moderate left wing president, has been in charge before, and I’ve certainly operated in Brazil underneath that government and had no issues. So I don’t expect that to be any particular problem now.
Amalie Schreur: Okay, so that was our final question for today. Do you have a last kind of, I guess, highlight for listeners today as to why they should invest in elbow?
Rob Smakman: Yeah, for sure. I think what’s really exciting from our perspective is that 2022 we really focused in on the C1 and C3 areas. Now we, we’ve spent time and effort understanding that mineralisation style, and we now really want to apply that across our tenure. And now during that period, we’ve expanded our footprint up to we’re now over 780 km². So it’s a massive land package that’s had some geochem, some geology, some geophysics done. What we’re doing now is we’re going to be consistent, systematic, and we’re going to spread ourselves across that belt to try and find the best targets so that we can prove that Palma is a VMS district. And if we can do that, then that JORC mineral resource that we’ve got here, which is based on only C1 and C3 so far. We can see that our aim is to try and make that number much, much bigger by making new discoveries. So I think that’s the real, I guess, thrust of our exploration program is to try and turn the known five deposits that are within the district into any number with a much bigger mineral resource inventory. So, yeah, that’s where I think is the big thrust for Alvo this year.
Amalie Schreurs: That’s great. Thanks very much for that, Rob. So it’s been a really great update today, and it’s great to hear about the forward plan and the opportunity ahead for elbow. Thank you, everyone, for joining the webinar today. Just a reminder to stay up to date with elbow, you can subscribe for news on the company’s website, which is alvo.com.au. Thank you very much, everyone. Thanks.
