The Argentine mineral district and the family monopoly.
An ex-Geologists quick-take on a mineral explorer which could significantly benefit from the new political environment in Argentina.
I’ve noticed there seems to be a lot of content out there from the finance minds, and a serious lack of content from Geologists.
Also, note that due to the lack of interest in the discipline over the last 10 years, it’s looking like there will be a shortage of Geologists in general.
I racked up about seven years in mineral exploration which spanned from a successful junior that transitioned to a mid-tier before I jumped ship and moved to the dark side of exploration. This was to work for a global mining major, with a big-boy exploration budget, and a lot of people cruising until retirement.
This also allowed me to live a bloody fun life exploring for gold in an extremely bizarre geological terrain where according to textbooks, gold shouldn't exist. Only it did, and seriously, in 10M/oz format.
Those who understand Western Australian Geology will understand immediately what I’m talking about.
I’m a couple of years out of practice from my previous life as a Project Geologist. For the purpose of this post, I will focus on a strong point, which was assessing the potential of exploration projects. This time in my current home base in the Southern Cone of South America, which seems to be the center of the world right now due to the recent presidential election.
Argentina is a beast of a country so I’m going to narrow it down to a mineral region that has caught my eye this year. Why write about this now? Does it get any more obvious than a recent Doug Casey Tweet? 👇🏼
I’m going to focus on a major copper/gold district which is basically controlled by one family of investors.
That group of investors is called the Lundin Group, and the district is called Vicuña.
The discovery of the Vicuña District is a story of successful long-term exploration that has led to four of the most significant grassroots copper-gold-silver discoveries of the last 20 years.
The team won the (Canadian) 2024 Thayer Lindsley Award for the discovery of the Vicuña copper-gold-silver district in the Central Andean copper province in Argentina and Chile.
Many years of patient and systematic exploration by the Lundin Group's Vicuña Exploration Team has resulted in the discovery of an entirely new district that includes four major porphyry copper-gold-silver systems held by Lundin Group companies including Filo del Sol (TSX: FIL), Josemaria (TSX: LUN), Los Helados (TSX-V: NGEX), and Lunahuasi (TSX-V: NGEX).
The projects I’m going to focus on in this post:
Filo del Sol (TSX: FIL), C$2.6B market cap, (Filo corp).
Lunahuasi (TSX-V: NGEX) C$1.1B market cap, (NGEx Minerals).
Introduction: The Filo del Sol project was discovered in 2021. It’s located 6km away from Lunahuasi.
Filo del Sol is a high-sulphidation epithermal copper-gold-silver deposit associated with a large porphyry copper-gold system. So far, Lunahuasi is displaying similar geology.
Both projects/discoveries are at different development stages, easily identified by meters drilled to date. Drilling completed is 122 km at Filo del Sol (has a resource estimate) vs 5 km at Lunahuasi (maiden drill program completed, eight holes total, including the discovery hole).
Filo Corp: Let’s have a look at the 122 km of drilling completed at Filo del Sol.
The Filo del Sol story just keeps getting better with the latest assay results released on 25th October extending mineralisation to the south, and most notably the north (see the above long section).
The mineralisation is still open in all directions and requires further drilling.
Mineral reserves estimate:
The devil’s advocate: When comparing the Filo del Sol resource to other major porphyry copper/gold deposits from around the world such as; Econdida, Bingham Canyon, and Grasberg. The average grades in the latest mineral reserve tables are on the low side. Comparing to those world-class deposits is a bit extreme but I’d generally like to see average grade values above 0.5% Cu and 0.4 g/t Au. However, high-grade zones from recent drilling are not included.
NGEx Minerals: Let’s have a look at the 5kms (1st phase) of drilling completed at Lunahuasi.
How did the NGEx exploration team discover Lunahuasi? They used structural data from the intersection of the Filo-Los Helados Structural Corridor with the northwest-trending Copiapó lineament to pinpoint a drilling target.
With only eight holes drilled in total, and the second hole being the discovery hole, it’s completely fair to say the NGEx exploration team did an incredible job.
What’s even better, both companies (Filo and NGEx) are not really in competition and they both utilise the same geology team/information, which is probably why they nailed this discovery so well. A huge green flag and almost a catalyst for investors in my opinion.
The discovery hole (DPDH002 - 60m @ 7.5% CuEq from 210m) either intersected the guts of this system, or they have plenty more to get excited about. The alteration suggests they might have intersected the halo and not the centre of the deposit.
Here are some recent comments from Wojtek Wodzicki, President and NGEx CEO.
“These results are the best initial drill holes that I have seen in my career”
“It is very important to note that the veins drilled to date overprint propylitic alteration indicating that this mineralization is in the outer halo of a yet-to-be-discovered porphyry copper centre that is likely to be close by. We are very excited to begin working our way towards the centre of the system in the next drill program.”
The current 1500m diamond drilling program commenced this quarter with results expected end of the year / early next year.
Summary: The purpose of this post is to highlight that a pro-free market federal government has come into Argentina and the likely potential for foreign capital to return. This may cast a spotlight on Argentina's resource sector.
The success story of Filo del Sol (20x bagger since discovery in 2021) evolved throughout the extreme political and economic turbulence of the last couple of years.
Now we have the Milei government, some political direction may have returned to Argentina and this may significantly benefit the NGEx - Lunahuasi discovery if they can deliver drilling results in a similar fashion to Filo del Sol.
It needs to be noted that Milei still has a long way to go, and some stocks have run hard since his election win. Very little policy has yet been discussed.
I think Argentina looks great for mineral exploration going forward. It still doesn't produce one ounce of copper, yet it shares the same mountain range as copper-producing powerhouses Chile and Peru. Large chunks are unexplored and it’s easy to access for drilling, mapping, and other exploration activities due to the rain shadow and lack of vegetation.
Thanks for reading, I hope someone gets some value out of that.
If anyone has any questions please let me know.
Cheers,
Jordan - Geólogo Trader 🇦🇺
Disclaimer: I am not a qualified financial advisor, merely document my trades and lifestyle for your enjoyment. If you find value that’s great, but please do your own research and seek appropriate financial advice from qualified professionals when it comes to investing. It’s your money and your responsibility. I don’t currently hold any of these stocks mentioned in this post.
In that regard I'll also have a close look and the Patagonian gold miners like Cerrado Gold and Patagonia Gold. Cerrado at least is doing a good job advancing it's projects but struggles with the capital controls. Exploration potential there is huge also.
And don't forget Navidad in Chubut. That huge silver deposit that can't be mined to due to dust regulations. In a dusty, windy steppe...
And thanks mate for the recommendation of Parilla Don Jorge. Best bife after almost three weeks here in Argentina.
We want MOAR of this! Here are some shitco ideas I'm looking at: Blue sky uranium (bsk.v), Abrasilver resource corp (abra.v), Sable resources (sae.v)
Best