Revelo Resources courts big-name partners in Chile

VANCOUVER — It’s a new year and a new direction for junior Revelo Resources (TSXV: RVL). After a merger in late 2014 the newly minted company is aiming to leverage its exploration experience and expansive property portfolio in Chile to attract some major joint-venture partners.

According to president and CEO Timothy Beale, Revelo first pitched potential investors on the prospect generator model early last year. At the time the company was known as Iron Creek Capital, and like many explorers it was struggling to raise enough money to advance its projects. The idea was apparently well received, as in April Iron Creek announced a non-brokered private placement wherein it raised gross proceeds of $5.6 million.

“Like many other juniors we were going through a tough time. We’d been using our resources to look at a lot of companies with interesting projects as potential acquisitions or mergers in the belief that small mining companies will inevitably struggle, and we needed to get bigger,” Beale explains during an interview in Revelo’s Vancouver offices.

“We did a financing earlier in the year on the basis of adjusting our business model,” he says. 

“Our team does have a lot of experience in Chile. I lived and worked in South America for twenty years, with most of that experience with major corporations. Our exploration team is predominantly Chilean, and collectively our board of directors has a lot of experience in Latin America.”

One of the opportunities management explored was a project generator called Polar Star Mining, which controlled large swathes of prospective land in Chile. 

Beale says Polar Star initially appeared to be an “unattainable” target, but as stock prices fell the idea gained traction, and the companies began discussions in mid-2014.

In October Iron Creek and Polar Star finalized an agreement that set the stage for Revelo. Each Polar Star shareholder received 0.26 of a share in the new company for each share held. The result was a combined company with 91 million shares outstanding and Polar Star shareholders owning 58% of the new company.

The combined vehicle controls 3,000 sq. km of wholly owned exploration tenements along proven mineral belts in northern Chile. Revelo has 16 exploration properties in the country, with five active projects under option or joint-venture agreements.

The company’s active agreements include: the Las Pampas gold-silver project with Kinross Gold (TSX: K; NYSE: KGC); the Montezuma venture with Newmont Mining (TSX: NMC; NYSE: NEM); and an agreement with BHP Billiton (NYSE: BHP; LSE: BLT) that involves three concessions named Blocks 2, 3, and 4 that cover 1,200 sq. km along 150 km of the Domeyko fault system. Revelo also has a royalty interest on Hoschild Mining’s (US-OTC: HCHDF) Victoria copper-gold-silver project.

“Porphyries form a substantial part of what we’re looking for, especially in terms of copper,” Beale continues. “The gold-silver projects are more epithermal targets with higher-grade vein potential. Two of the precious metal prospects we have on the central belt also have porphyry potential, but the main thing we’re focusing on right now are the high-grade precious metal vein systems. The old adage ‘grade is king’ really works there.”

In July Revelo provided an update on Kinross’ exploration work at Las Pampas. The gold producer reportedly confirmed potential for gold-silver veins along the Cerritos trend and possibly the Acarreos trend, and identified a new area of interest at the southern end of the property at the Cerro Jarosita target. Kinross plans to continue detailed geological mapping, trenching and rock chip sampling at the site, which lies south of Yamana Gold’s (TSX: YRI; NYSE: AUY) El Penon and Fortuna mines.

Kinross signed an initial option in mid-2013 where it can acquire a 60% interest in Las Pampas by funding $5 million in exploration and subscribing for up to 20% in Revelo’s outstanding shares by 2017. The gold producer can exercise another option to bump its interest to 75% by funding $20 million in exploration over five years, or doing a feasibility study.

The company broadened its exposure to Chile in July by acquiring five gold-silver-copper properties in the northern part of the country from a privately owned exploration company. For 3.5 million shares Revelo picked up the San Guillermo, Calvario-Mirador, San Valentino, Reina Hija and Bronce Weste tenements.

“Our methodology is to understand and organize. It’s a real value-add to use existing databases and interpret the geology as best we can,” Beale says. “By doing our own mapping and surface work we can add high-quality understanding to these projects. We’re reinterpreting quite a bit of geophysics.

“Electromagnetic data has proven to be quite interesting on the epithermal vein targets. We’ve been doing quite a bit of work on the new assets, and have a good amount of interest in potential deals. We’ve been improving our targeting models so we have something more substantial to discuss with prospective partners.”

Revelo has traded within a 52-week window of 5¢ to 10¢ per share.

The company began trading on the TSX Venture Exchange under its new name on Dec. 17, and closed at 9¢ per share at press time. Revelo has 91 million shares outstanding for an $8.2-million market capitalization.