High-grade copper/ gold VMS project
Andean is a mineral exploration company with 100% ownership of the El Dovio project in Colombia, South America. Andean purchased the El Dovio high grade copper/gold VMS project from Newrange Gold a TSX listed company.
The purchase included the highly prospective mineral rights, all the surface rights over the known mineralisation, a comprehensive database and a great local team, covering not only the geological and mining expertise but also the administrative, regulatory and social aspects necessary to operate successfully.
El Dovio is an advanced-stage exploration project which has already been drilled and has exceptional Cu-Au grades. Underground developed onto the main structure at El Dovio facilitated the extraction of a bulk sample from the sulphide ore for metallurgical testwork, which has shown outstanding recoveries. The planned drilling campaign is designed to provide in-fill and step out drilling on the main El Dovio structure to lift the known mineralisation to JORC status. Together with the very high grades recorded at El Dovio, the proven metallurgical recoveries and the expected tonnages means this project has the ability to turn into a low capital cost high value mine quickly.
The resource potential is a combination of High-Grade lower tonnage and or a lower grade high tonnage option. Depending on feasibility studies the Company will have a choice of how to best develop El Dovio
Starting with the high-grade lower tonnage project that focusses on the high value lenses similar to the El Roble Mine in Colombia or, in the Australian context, similar in grade to Sandfire’s DeGrussa mine in Western Australia. This development option will be less capital-intensive.
The second is for a larger medium grade operation with a much larger tonnage potential, focussed on the stockwork system at El Dovio where sampling has indicated mineralisation with widths up to 68m. This pathway will be more capital intensive.
El Dovio is situated at a relatively low elevation (1400mamsl) in rough but easily accessible terrain with roads and infrastructure nearby. There is ample local labour and a community eager to see mining development.
The metallurgical test work at El Dovio created copper and zinc concentrates with proven recovery rates of around 95% for all metals. Importantly the majority of the gold and silver identified in the test work reported into the copper concentrate at approximately 93.6% of the gold and 86.0% of the silver, which makes it easier to recover the value in the precious metals.
The pre-existing test work and the location of El Dovio gives confidence that the planned exploration and 15,000m drilling program will help define a maiden JORC resource that will inform the optimal approach to developing the project. It is expected that the JORC resource will be completed in year one and to commission detailed feasibility studies later in year 2, which is a comparatively short time frame.
The experience of the team both in Australia and on the ground in Colombia covers all the bases. From detailed geological knowledge, Colombian operational know how, and ASX management experience.
The Company has an experienced Board and management team with a broad range of exploration, mining, project development, financing and legal skills in the resources industry and a successful track record of managing listed companies, value accretive mineral exploration and successful mining project development. The Managing Director and CEO, Mr William Howe, has considerable experience in Colombia.
With an EV of just over $9m, Andean presents as an attractive investment proposition given its stage of development and the known high-grade potential, combined with the accessibility of the resource and the relatively low costs of exploration, development and mining in Colombia compared to more developed countries.
Use of Funds
Approximately 70% of the funds raised in the IPO will go directly into proving up the resource potential through the planned 15,000m drilling program. The remainder of the funds will cover the IPO fees, working capital and administration over the next 2 years.
Colombia occupies a significant tract of the well-mineralised Andean mountain terrain. The El Dovio property is located in western Colombia 120km north of the city of Cali and 250km west of Bogota, the capital. It lies within the provincial government area of Department of Valle del Cauca, and in the Municipality of El Dovio.