Altamira Gold: Unlocking a Multi-Million Gold Ounce Potential in Brazil

• Altamira Gold is a gold and copper company in central-western Brazil, focused on its Cajueiro project with a 700,000 oz resource at 1.2 g/t
• A new virgin discovery called Maria Bonita was made in 2020, with drilling showing consistent mineralization from the surface down to 228m, including 1.46 g/t Au over 22.8m
• Maria Bonita's shallow, oxidized material is amenable to low-cost heap leaching with 88% recovery, providing potential near-term cash flow with <$10M capex
• The company owns the land at Maria Bonita and has hydroelectric power and road access, enabling simple and low-cost development
• Altamira is looking to grow the Cajueiro resource into a multi-million-ounce deposit, while also advancing its Apas and Santa Helena projects for gold and copper

Altamira Gold (TSXV:ALTA) presents a compelling opportunity for gold investors seeking exposure to Brazil. The company is focused on growing resources at its flagship Cajueiro project in the central-western part of the country. A new discovery called Maria Bonita has opened up the potential for near-term production via a low-cost heap leach operation.

Cajueiro Project Overview

Cajueiro currently hosts 700,000 ounces of gold at an average grade of 1.2 grams per tonne (g/t). The project spans 30,000 hectares and has excellent infrastructure, with hydroelectric power lines running right past it and an asphalt road 40 km away. The drive to the site takes only 1 hour and 20 minutes from the nearest town of Alta Floresta.

Maria Bonita Discovery

The real excitement is the discovery of the new Maria Bonita, which was made in 2020. As Altamira president Mike Bennett describes it: "It's a virgin discovery never ever discovered before, not even by the local miners." Drilling has returned long intercepts of consistent gold mineralization starting right at the surface. Hole 29, for example, cut 1.46 g/t gold over 22.8 meters starting at the surface, with only two individual 1-meter samples grading less than 0.1 g/t.

The key is that Maria Bonita features 10-20 meters of soft oxidized rock from the surface that is highly amenable to heap leach processing. Initial metallurgical testing returned 88% gold recoveries with very low reagent consumption.

"Quinton Hennigh from Crescat said, 'I've never seen such low cyanide use in any heap leach'", notes Bennett. "And the reason for that is because all that's in this rock is gold. There's no copper, there's no arsenic, there's no sulfide, there's nothing in there which would mess up the heap leach."

Interview with President & CEO Michael Bennett

Near-Term Cash Flow Potential

The oxidized blanket at Maria Bonita measures about 800m x 800m, so there is potential for a meaningful heap leach operation. Bennett estimates a throughput of around 200,000 tonnes per year, requiring a capex of less than $10 million,

"It's on the surface," he explains. "We could start heap leaching as soon as we get the permit. It's as simple as that."

Even at a relatively small scale, such an operation would be highly beneficial for a company of Altamira's size.

"Let's just say, for argument's sake, our cash flow was $5 million a year," Bennett muses. "For a little company like ours, that is all we need. We don't need any more than that. We can easily use that money to explore our other two projects and look at the other targets we have in Cajueiro."

Long-Term Resource Growth

While a heap leach operation would generate important near-term cash flow, the ultimate goal is to establish Cajueiro as a multi-million-ounce gold camp. There is good potential to grow the resource through extensional drilling and new discoveries.

"We're turning Cajueiro now into a multi-million-ounce target. That's where we're going with this, and with the cream on the cake sitting there in our own farm in the saprolite in Cajueiro, which can give us a cash flow." - President & CEO Michael Bennett

Maria Bonita is open at depth, with hole 29 bottoming in mineralization at 228 meters. The deposit has a chance to get a grade boost as well. Recent drilling has encountered visible gold, which creates a potential "nugget effect" that standard fire assays can miss. Altamira is sending core samples to a lab that uses a technique allowing for a larger 400-600 gram sample size. "We think there's a very good chance those values will go up," says Bennett.

Other Targets & Projects

At Cajueiro, several additional targets have yet to be drill-tested. Structural studies and geophysical surveys are underway to define new targets within the 30,000-hectare land package. Bennett explains:

"We took all that geophysical information. We've put it all together, and our consultants are putting it together as one package. We believe we will have 3 or 4 new targets to go out and look at in the next 2 or 3 months."

Apiacas is Altamira's second most advanced project, located 50 km west of Cajueiro. It produced over 1 million ounces of gold from garimpeiro workings. Altamira drilled 14 holes in 2023, encountering grades up to 7.6 g/t gold. Follow-up geophysics are underway ahead of additional drilling later this year.

The early-stage Santa Helena project provides copper-gold exposure. It is within a two-hour drive of Cajueiro, 60 km from Anglo American's Jaca copper discovery.

"We have three targets there which look like copper porphyries," says Bennett. "Those could certainly light the market up, as copper looks really good right now."

Altamira has a tight share structure. Only 153 million shares are outstanding, of which management owns 7%. Retail investors make up 60% of the shareholder base, with key institutional support from Crescat Capital (17%) and Aura Minerals (11%). The company recently raised $6 million through private placement to fund ongoing exploration and development.

Altamira Gold offers investors a combination of near-term production potential, resource growth, and exploration upside in a top mining jurisdiction. The company's Maria Bonita discovery has a chance to deliver rapid cash flow from a low-capex heap leach operation. Importantly, this would fund aggressive exploration across the company's extensive land package in Brazil. With a market cap of just $20 million, Altamira is an attractive speculation for investors looking for gold exposure.

The Investment Thesis for Altamira Gold

• Near-term production potential: Maria Bonita oxide cap is amenable to low-cost heap leaching, with 88% gold recoveries and <$10M capex
• Resource growth: Drilling ongoing to expand 700,000 oz resource at Cajueiro, with multi-million-ounce potential
• Exploration upside: Numerous untested targets at Cajueiro, Apas, and Santa Helena projects
• Attractive valuation: Market cap of just $20 million, with $6 million cash, provides a low-risk entry point ahead of near-term catalysts
• Strong management: Experienced team with a track record of discoveries and mine development in South America
• Tight share structure: Only 153M shares out, with management owning 7% and key institutional backing

Actionable Advice

• Take a position ahead of initial resource estimate and economic studies for the Maria Bonita heap leach project
• Results from analysis of Maria Bonita's visible gold could provide a positive grade reconciliation and share price catalyst
• Drilling of new regional targets in coming months could demonstrate district-scale potential and attract a major
• Consider building a position over time to mitigate short-term volatility ahead of de-risking events

Macro Thematic Analysis

According to the World Gold Council, central banks added a record 1,136 tonnes of gold worth around $70 billion to their stockpiles in 2022, the biggest increase since 1967. This points to the ongoing importance of gold as a safe-haven asset and a hedge against inflation. While the gold price can be volatile in the short term, the long-term fundamentals remain attractive.

On the supply side, gold production has stagnated for several years. The world's largest gold miners are struggling to replace reserves, with new discoveries becoming increasingly rare. This is forcing companies to look to emerging markets like Brazil for growth. However, there is a scarcity of quality development-stage projects, particularly those with near-term production potential.

This is where Altamira Gold stands out. The company's Maria Bonita discovery has the potential to rapidly transition into production, generating cash flow to fund exploration across a highly prospective land package. With a tight share structure and strong institutional backing, Altamira is well-positioned to capitalize on the positive long-term fundamentals for gold.