Aldebaran Resources (ALDE) - Technical Analysis & Due Diligence

• Aldebaran Resources, led by CEO John Black, specializes in identifying and de-risking large copper or copper-gold deposits, aiming to sell them to major mining companies.
• The company's current focus is on the Altar project in central Argentina, with plans to launch a significant drilling program.
• The Altar project was previously owned by Peregrine Minerals and then by Stillwater Mining, who invested significantly in it. Aldebaran is working to earn up to an 80% interest in the project through partnership with Sibanye-Stillwater.
• The project's valuation seems undervalued given the potential mineral resources. There are zones with arsenic, but the company believes they can manage it.
• Aldebaran's upcoming drilling season will be its most extensive yet, targeting various zones and possibly needing to raise more capital. They remain optimistic about Argentina's potential as a major copper producer.

A Promising Junior Explorer With a World-Class Copper-Gold Project in Argentina

Aldebaran Resources is a junior mining exploration company focused on advancing its wholly owned Altar copper-gold project in Argentina's San Juan province. With demand for copper surging and prices at record highs, Altar offers major upside potential for investors looking to gain leverage in an exciting new copper district.

The Altar Project: A World-Class Asset

Altar is a district-scale project covering over 200 sq km with several porphyry centers. It already hosts a huge mineral resource with long mine life potential, but also has substantial room for additional discoveries.

• Current resources stand at 1.2 billion tonnes Indicated and 200 million tonnes Inferred grading 0.43% CuEq. This makes Altar one of the largest undeveloped copper-gold projects globally.
• The resource is contained within two main porphyry deposits, Altar Central and Altar East. However, recent drilling has uncovered a new high-grade porphyry discovery called Radio with 100m+ intersections over 1% CuEq.
• The project was previously drilled out and sold to Stillwater Mining in 2011 for $487 million. But it was non-core to Stillwater's focus and sat on the shelf, presenting an opportunity for Aldebaran.

Acquiring a Prized Asset for a Bargain

In 2018, Aldebaran Resources negotiated earn-in terms with Stillwater's successor Sibanye-Stillwater to acquire up to an 80% interest in Altar:

• Initial 15% interest earned by paying $15 million upfront
• 60% interest by spending $30 million over 5 years (on track after spending $17 million so far)
• 80% interest by spending an additional $25 million

This allowed Aldebaran Resources to pick up a world-class asset without excessive dilution or upfront payment. Sibanye-Stillwater also maintains an upside via its 20% project interest and 19.9% stake in Aldebaran.

Major Exploration Program Now Underway

Aldebaran Resources launched its largest-ever drill program in November 2021 to unlock Altar's full potential:

• 25,000m drill program using 4 rigs planned over the next 6 months
• Main focus on expanding the new high-grade Radio discovery
• Also drilling for extensions at the main Altar Central and East deposits
• Fully funded with current $7 million treasury; additional capital raise likely later in 2022

With over 40 rigs now operating in the Altar district from various companies, it is primed to become Argentina's next major copper mining jurisdiction.

Upside Potential as an Early Mover

Aldebaran Resources offers substantial upside for investors looking to get exposure early:

• Tight share structure with management & key shareholders owning ~70%
• Undervalued relative to peers at just $70 million market cap
• Leverage to higher copper prices as Altar moves towards development
• Nearology benefits as surrounding projects help highlight district potential
• Argentina mining sentiment improving with government incentives on the horizon

With a world-class asset, experienced team, and drill bit now turning, Aldebaran is poised to create significant value for shareholders as it systematically unlocks Altar's world-class potential. The company offers exposure to a rising copper market with the electric vehicle revolution just beginning. For risk-tolerant investors, Aldebaran may represent an overlooked opportunity in the copper space.

The Investment Thesis for Aldebaran Resources

Leverage to Copper Price Upside

• Copper demand is surging with electrification and Aldebaran provides leverage to higher copper prices. Altar is a large project that could be developed into a major mine as prices continue to rise.

World-Class Asset with Exploration Upside

• Altar is already one of the world's largest undeveloped copper-gold projects with over 1 billion tonnes of resources. But early drilling at the new Radio discovery suggests there is significant potential to expand the resource base.

Early Mover Advantage in a New District

• Aldebaran acquired the Altar project before the area was recognized as a new copper district. With over 40 rigs now exploring the region, Altar is poised to benefit from the attention as Argentina emerges as a mining destination.

Undervalued Relative to Peers

• Trading at just a $70 million market cap, Aldebaran appears undervalued relative to copper explorer peers with similar-sized projects. A new discovery hole could rapidly re-rate shares higher.

Tight Structure and Strong Support

• With management and key shareholders owning 70% of shares, the stock has a tight float that could see sharp moves higher on positive news. The company also has strong financial backing.

Aldebaran Resources offers investors an early-stage opportunity in an emerging copper district with a major exploration upside still to be unlocked. For investors bullish on the copper thematic, Aldebaran provides strong leverage potential as the Altar project advances towards development.

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