Latitude Resources (formerly Latin American Copper on OFEX)

Catching up with my emails found this from the recent minesite

minews/singlenews/article/latitude-resources-goes-for-gold/41.html
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Under its old name of Latin American Copper it wasn’t hard to figure out what this company was about. But its new one of Latitude Resources gives it more, well latitude, in what it does. So its most recent deal to take a £1million stake in Australian gold producer Tanami Gold is less of a surprise under its new moniker than it would have been under its old one. However, the deal to take part in the A$15million placing in July at A$ 0.25 cents to finalise funding of the Coyote gold mine in the Northern Territories is looking a bit painful as Chief Executive Martyn Konig ruefully admits.

That issue was followed by a further placing of A$10million in September, this time at 20 cents then an announcement in October that mining was being suspended pending improvements in the recovery circuit. That was accompanied by a statement that called for the 19 cent contributing shares to be paid up. However, the failure of most of the owners of these shares to pay up has resulted in them being forfeited by the ASX and put up for auction. With the shares trading at 14 cents it hasn’t been knocked over in the rush. Usually the least risky part of a mining operation is commissioning the mine, which was why Latitude felt able to take part in the July placing.

Martyn says it is a property that he had been familiar with ever since it was sold by Anglo Gold. However, the plant is not getting the recoveries it expected from its vat leaching. Bringing in new consultants has been one part of the solution and the mine is now considering converting the whole process to carbon-in-leach to attain the required recoveries. Clearly the exercise has been a painful and bruising one for everyone concerned, but Martyn is confident that the underlying resource and mine are still good assets and that in the longer term the investment will prove to be a good one.

Tanami is a bit of a diversion and only arose as a consequence of the company’s desire to use the £5 million it raised last year effectively and using the in-house technical knowledge. Its other investments have been more profitable, most notably its stakes in Western Goldfields and Romarco Minerals acquired with the intention of merging the two companies. In the end this plan came to nothing, but the 18 per cent stake in Romarco has recently been sold realising £1million and crystallising a £343,000 profit. Latitude still has a 7per cent stake in Western Goldfields which it first bought more than two years ago. Since the merger Latitude has been instrumental in bring in new management in the form of Randall Oliphant, formerly of Barrick.

Good progress is being made on reopening the Mesquite mine where a pre-feasibility study is underway prior to a full bankable study next year. Martyn is keen to point out that despite the problems at Tanami the company has net cash of over £3million and investments worth another £5million so the overall result of the trading has been positive. However, the difference between the value of the investments and the market capitalisation of £11.5m implies that the company’s main assets in Chile are only worth £2million. And Martyn thinks that is a bit on the thin side.





Copper in Chile is really what the company is about and its principal project there is Filipina Grande with an inferred resource of 248,000 tonnes of contained copper in oxide and sulphide material. A 10,000 metre drilling programme was followed by local scoping study that is now being verified by SRK with the expectation of converting the resource into a reserve. The mineralised body is an iron oxide copper gold type found quite widely in Chile but not elsewhere and has the potential to yield significant orebodies. Sally Schofield in the company’s Santiago office enthusiastically described the property as consisted of swarms of lenses ranging from 2 to 50 metres thick starting from 100metres depth and extending to 300metres. This type of body is being profitably mined close by and Sally knows that there is considerable local interest in this one.

In some ways Filipina Grande is now being overshadowed by Santa Dominga, another IOCG type deposit. Exploration drilling is now focussed on this property and early results were encouraging with intersections of 74 metres at 1.6% Cu and 62 metres at 1.58% Cu. Both Martyn and Sally think that Santa Dominga could potentially be bigger than Filipina Grande and assay results due shortly will help clarify the position. Both confirm that there has been a lot of local interest. Lastly the company owns the El Teno property although its location high up in the Andes and close to a national park with environmental sensitivities need to be taken into account. No drilling has been done on the snow bound prospect during the winter but plans are being drawn up now to either do the drilling in house or joint venture it.

While the Tanami exercise has undoubtedly impacted on market perception of Latitude its entrepreneurial attitude is to be commended. With its watchful eye on the market the company is well placed to find the hidden gem that could transform it in addition to the progress it makes in Chile.