Almadex Minerals (AXDDF) recently reported probably the best hole yet in the drilling on its El Cobre project, with 534.9 meters grading 0.9 g/t gold and 0.3% copper.
This was in the Norte zone where most of the earlier drilling had been focused and follows a series of results that lacked the very high grades that had been seen earlier, leading some to conclude the zone appeared to be weakening.
A high-grade core seems to be taking shape and the zone remains open at depth and horizontally. We need more ounces before we can call this a mine, but there is progress.
A second target, Encinal, saw drilling recently conclude and assays are awaited. Drilling has now started at the prospective Raya Tembrillo zone; some think this is the best target on the large property.
This is mostly due to improved base metals prices. Copper now represents about 40% of revenues, with coal down to 27% of revenues.
Equally importantly, the project generator business is beginning to bear fruit, with 22 projects vended to third parties. One joint venture in the James Bay area reported a discovery of a new zinc-bearing belt. They also just announced another discovery of a nickel-copper-cobalt showing.
The balance sheet remains strong, with another $25 million in debt reduction, from cash flow and the sale of some equities in junior companies. Right now, Altius has $35 million in cash, $64 million in public equities and $80 million debt.
Altius is a core holding for us, and a great way to gain exposure to a broad range of resources as well as to some of the best management in the industry.
The company has shown itself to be astute at deploying capital at the right time and able to take advantage of the cycles inevitable in the resource sector. We would add to positions on any weakness.
Adrian Day is chairman and CEO of Adrian Day Asset Management.
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