Recap & Outlook: Ecuador Site Visit – Adventus Mining
We recently travelled to Ecuador to visit projects owned by portfolio holding Adventus Mining Corporation (TSXv:ADZN). Over the last few years, Ecuador has made changes to their mining code that demonstrate the government’s commitment to mining, increasing the attractiveness of this jurisdiction to investors. Adventus recognized the potential in Ecuador early on and amassed large, strategically selected land packages in a relatively underexplored region through a partnership with local mining exploration company Salazar Resources Limited (TSXv:SRL).
Adventus has three properties in partnership with Salazar, their flagship asset Curipamba and two exploration concessions, Pijili and Santiago. Curipamba is a large property hosting the El Domo deposit, a Volcanic Massive Sulphide (VMS) deposit that recently showed attractive initial economics via a PEA, highlighting an NPV (8%, after-tax) of US$288M and an IRR of 40%. VMS deposits can be thought of as the equivalence to ancient underwater hot springs (or black smokers) that form flat lenses of a mixture of metals (Cu, Zn, Pb, Ag, and Au) at or near the seafloor. The continual volcanic activity and on-going venting from today’s black smokers on the sea floor will eventually become the VMS deposits of tomorrow.
As Adventus advances the El Domo deposit, they will look to make additional nearby discoveries at Curipamba and launch initial drill programs on their exploration concessions at Pijili and Santiago. Based on our field visit, we are optimistic about the potential for all three properties. At Curipamba, we visited multiple high-grade showings throughout the property which highlighted the possibility for additional discoveries. At Pijili, we encountered historic artisanal mining tunnels. This is important, as the tunnels indicate near-surface, high grade potential. Pijili is located in the Andes and we encountered outcrops as we descended the mountain, indicating what appears to be a complete mineralized system with large tonnage potential.
“This means that” site visits are an integral part of our research process that give us increased company knowledge and an edge in stock selection. Fun fact: out of over 20 institutional investors who participated in the recent Adventus financing, we were the only group that visited the project in person.
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*All returns are time weighted and net of investment management fees. Returns from the Pathfinder Partners’ Fund and Partners’ Real Return Plus Fund are presented based on the masters series of each fund. The Pathfinder Core: Equity Portfolio and The Pathfinder Core: High Income Portfolio are live accounts. These are actual accounts owned by the Pathfinder Chairman (Equity) and client (High Income) which contain no legacy positions, cash flows or other Pathfinder investment mandates or products. Monthly inception dates for each fund and portfolio are as follows: Pathfinder North American: Equity Portfolio (January 2011), Pathfinder North American: High Income Portfolio (October 2012) Pathfinder Partners’ Fund (April 2011), Pathfinder Real Return Plus Fund (April, 2013), Pathfinder International Fund (November 2014) and Pathfinder Resource Fund (May 2018).
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