Alvo’s Contracting Division Offsets Costs Amid Exploration and Acquisition Talks
Alvo Minerals reports a 7.2Mt copper-equivalent resource at Palma and promising rare earth element drill results at Ipora, while launching a contracting division to offset costs.
- Palma Copper-Zinc Project totals 7.2Mt @ 2.02% CuEq resource
- Ipora REE Project auger drilling confirms high-grade ionic clay rare earth mineralisation
- Bluebush HREE Project drilling completed, results pending
- Alvo Services division launched with two profitable contracts
- Advanced discussions underway for potential Brazilian asset acquisitions
Palma Project Resource Expansion
Alvo Minerals Limited (ASX: ALV) has delivered a robust update for the quarter ending December 2024, highlighting significant progress across its portfolio of critical minerals projects in Brazil. The standout is the Palma Copper-Zinc Project, where the company reports a total Mineral Resource Estimate (MRE) of 7.2 million tonnes at 2.02% copper equivalent (CuEq). This includes 3.3Mt classified as Indicated at 2.3% CuEq and 4.3Mt Inferred at 1.8% CuEq, underscoring Palma's potential as a globally significant volcanogenic massive sulphide (VMS) district.
Drilling at Palma targeted new regional prospects including Urubu, Anta, and C4NE, with 16 diamond drill holes completed over 4,172 metres. While assay results remain pending, the program has expanded the company's understanding of the district-scale copper and zinc mineralisation, with all deposits remaining open for further expansion along strike and at depth.
Rare Earth Element Projects Gain Momentum
Alvo's rare earth element (REE) projects also advanced notably. At the Ipora REE Project in Goiás State, reconnaissance auger drilling intercepted zones of high-grade ionic clay-hosted REEs, a style prized for its environmentally friendly and cost-effective extraction. Metallurgical testing confirmed excellent recoveries, with ammonium sulphate leach tests yielding up to 90% extraction of magnet rare earth oxides (MREO), including neodymium and praseodymium.
Key intercepts at the Tapir Prospect included 5.5 metres grading 1,294 ppm total rare earth oxides (TREO) with 27% MREO, highlighting the project's promising grade and mineralisation style. Adjacent prospects Tatu and Snapper also returned encouraging results, further validating the project's potential.
Meanwhile, at the Bluebush Heavy Rare Earth Element (HREE) Project, auger drilling and soil sampling were completed across the Boa Vista Prospect and surrounding areas. Results are awaited, but the program has laid the groundwork for advancing this project towards drill-ready status.
Corporate Developments and Strategic Positioning
On the corporate front, Alvo launched Alvo Services, a contracting division leveraging in-house equipment and expertise. The division has successfully completed two service contracts, generating profits that help offset exploration overheads without distracting from core activities. This initiative reflects a strategic approach to managing costs amid active exploration.
Additionally, the company is in advanced discussions regarding potential acquisitions of Brazilian mineral assets. While no binding agreements have been signed, these talks align with Alvo's strategy to leverage its exploration capabilities and logistical advantages in Brazil to build a diversified critical minerals portfolio.
Financial Position and Outlook
Alvo ended the quarter with a net cash position of approximately A$1.07 million after investing heavily in exploration activities. The company acknowledges that operating cash flows will reduce following the completion of major drilling programs but remains confident in its ability to manage funding through potential capital raises and operational efficiencies.
Managing Director Rob Smakman emphasised the company’s commitment to aggressive exploration and growth through discovery, noting the importance of the Brazilian projects in positioning Alvo within the critical minerals sector. The upcoming weeks will be pivotal as assay results from Palma and Bluebush are released, potentially unlocking further value.
Bottom Line?
With key assay results imminent and strategic acquisitions on the horizon, Alvo Minerals is poised for a defining phase in its Brazilian critical minerals journey.
Questions in the middle?
- What will the assay results from Palma's recent diamond drilling reveal about resource expansion potential?
- How will the pending Bluebush HREE drilling results influence Alvo’s rare earth project valuations?
- What are the prospects and timelines for the potential Brazilian asset acquisitions currently under discussion?