Salazar Resources (SRL) - Spoilt for Choice as Drilling Intensifies

Salazar Resources Ltd. is Ecuador's proven and trusted exploration company, focused on creating value and positive change through discovery, exploration, and development. The company has 100% ownership of the following deposits in Ecuador, Los Osos, Los Santos, Macara Mina, Rumiñagui, and Columbia.

We met with Merlin Marr-Johnson, Executive Vice President and Corporate Secretary, Salazar Resources. Merlin has over 25 years of experience in the minerals sector and has worked on projects located in South America, Africa, Central Asia, and Europe. His educational credentials include a Bachelor's degree in Geology from Manchester University and a Master's degree in Mineral Deposit Evaluation from the Royal School of Mines, Imperial College. 

Company Overview

Salazar Resources is an exploration company founded in 1987, headquartered in Vancouver, Canada. The company is listed on the Toronto Stock Exchange (TSX-V: SRL), the OTC Markets (OTCQX: SRLZF), and the Frankfurt Stock Exchange (FSE: CCG). Exploruminahui S.A.,Perforaciones Andesdrill S.A., Mataje Columbia S.A., and Mariana S.A. Comador are the company's subsidiaries. 

Salazar Resources has a current market cap of CAD$50M. The company has a carried 25% interest in the highly valuable, advanced stage VMS (Volcanogenic Massive Sulfide Ore) Deposit which is currently in the feasibility stage. The company will move the project into the permitting stage once the final feasibility is complete. The company is looking to discover the next major Copper-Gold project in Ecuador. 

The Ecuador Elections

Ecuador recently held its elections where the winning candidate was Guillermo Lasso, an ex-banker with a strong understanding of investments, security of law, and tenure. He recently signed Ecuador to the convention on international settlements, which is run by the World Bank. The country is back to a pro-mining environment following the election results. 

There was a recent meeting with the Chamber of Mines, the President, and representatives from various mining companies including Salazar Resources. This was a landmark moment as the last such meeting between these entities was held over 10 years back. The government has shown keen interest in FDI (Foreign Direct Investment), showcasing the country's inclination towards prioritizing mining development in the Curipamba and Cascabel regions. 

Permitting and Licensing

Since Salazar Resources has a 25% carried stake, it has affected the company's evaluation in the market. To remedy this, they have partnered with Adventus Mining, bringing their combined market cap to $150M. The project's NPV (Net Present Value) currently stands at USD$500M. The company has posted strong infill results in 2021 so far and their feasibility study is scheduled within the next 3-4 months.

The company's Curipamba project has been in operation for the past 14 years and has led to the grassroots discovery, various community programs, a soccer school, a dance school, and a well-developed community program. Salazar Resources is currently the largest employer in the region and has a strong working relationship with the regional governors and local authorities. 

Once the feasibility study is completed, Adventus will have 75% ownership of the project while Salazar will retain a 25% stake. 

Salazar Resources recently published a joint press release with Adventus Mining stating the purchase of a construction camp from Lundin Gold, which was previously utilized at the Fruta del Norte deposit. The company is also on track to publish its feasibility study in Q4 2021. Based on the infill results of the last 8 months, the company is anticipating a 5% increase in the overall grade. 

Targets 2021 and Beyond

Salazar Resources currently has an ongoing exploration around the El Domo mine which is a 9Mt measured resource located within the Curipamba Project. As the company explores the broader area around this license, a potential discovery could lead to a doubling of the original USD$500M NPV by adding 10Mt - 15Mt to their existing supply.

The company has also deployed drill rigs at the Los Osos deposit and based on the initial results from the 4 drilled holes, they have discovered extremely large intersections with low grades. The company is looking to switch testing laboratories as the assays from holes 5 and 6 are still pending. They plan to drill 4 projects in the second half of 2021 and are on track with the defined targets. 

The company is currently drilling the Los Santos deposit and is working towards finalizing a definitive agreement. Once that is in place, the company will start working towards extensive fieldwork at the site. 

Salazar Resources is also looking to drill the Rumiñagui deposit, a copper-gold free target along with Cascabel and Llurimagua where a number of deals are in discussion. Once the licenses are processed, the company will start drilling the Macara Mina deposit, a gold target next year. 

The company has sufficient funds to carry out key drilling and evaluation work, based on which further assessment towards 100% acquisition or a farm out will be made. 

Cash Position

Salazar Resources raised USD$5M in February 2021 and has been generating a healthy cash flow through the 4 deployed drill rigs. This cash flow has helped the company cover its G&A (General and Administrative Expenses). The company currently has the financial capacity to drill 9,000m - 10,000m throughout 2021. The company is looking to make a transformative discovery for their Copper-Gold Project which could lead to substantial growth in the company's market cap.

To find out more, go to the Salazar Resources Website