Aldebaran’s Altar copper project may generate $11B

Aldebaran Resources (TSXV: ALDE; US-OTC: ADBRF) says a preliminary economic assessment (PEA) for its Altar copper-gold project in Argentina establishes “robust” economics and sets the stage for new studies in the next 18 months.

Altar would cost $1.59 billion to build and produce 108,579 tonnes of copper, 43,199 oz. of gold, and 570,217 oz. of silver annually for the first 20 years of a potential 48-year mine life based, the company said Thursday. The study envisions a 60,000-tonne-per-day concentrator and an open-pit and underground block-caving operation.

The project has an after-tax net present value at an 8% discount rate of $2 billion with a 21% internal rate of return, according to the PEA. The company reports total life-of-mine after-tax free cash flow of $10.7 billion using a base-case metal prices of $4.35 per lb copper, $2,500 per oz. gold, and $27 per oz silver. Production costs would be $1.71 per lb. payable copper for the first 20 years, with all-in sustaining costs at $2.25 per lb., Aldebaran said.

“The manageable initial capex and proven processing method reinforce Altar’s appeal as a highly developable project at a time when copper is at record highs,” Red Cloud Securities mining analyst Taylor Combaluzier said in a note. “Altar is one of the largest undeveloped copper projects in the world and we believe it should be sought after by major mining companies.”

Shares in Aldebaran Resources closed 4.1% higher on Thursday at C$3.83 apiece in Toronto, valuing the company at C$651 million ($462 million). The stock price has doubled this year.

Copper demand

The company is advancing the porphyry Altar as the world demands more copper for the energy transition and mining-friendly President Javier Milei tries to boost Argentina’s economy. While the project won’t start producing until at least the early 2030s, it may be ripe for government funding along the way. Meantime, Aldebaran is planning to carve out its six green-field exploration assets in the country’s north to be part of a new publicly traded company called Centauri Minerals next year.

“This PEA confirms that the Altar project has the potential to become a long-life, high-quality copper operation capable of generating substantial production and cash flow,” CEO John Black said in a release. “The next 12 to 18 months will be transformative for the company, with multiple key catalysts — including a resource update, completion of the prefeasibility study, and the proposed Centauri Minerals spin-out — positioning us to unlock significant value for our shareholders.”

Resource

The report also notes that at higher metal prices — for example, $5 per lb copper, $3,963 per oz gold and $47 per oz silver — the after-tax NPV at an 8% discount rate rises to $3.34 billion and the IRR increases to 28%. This would imply substantially higher cumulative free cash flow.

The PEA builds on a February 2024 resource update, which defined 2.4 billion measured and indicated tonnes grading 0.42 % copper and 0.07 gram gold per tonne for 22 billion lb. contained copper and 5.1 million oz gold.

Aldebaran is collaborating with Nuton, a Rio Tinto (NYSE, LSE, ASX: RIO) processing venture, which may limit expenses and help in environmental areas, Black said.

“Life-of-mine capital expenditure and operating costs were reduced, leading to higher life-of-mine free cash flow,” the CEO said. “When you combine the economic results with the ESG benefits of Nuton’s sulphide leaching technology, the Nuton case is quite compelling and warrants further evaluation.” 

High altitude

The Altar project lies in the Cordillera Frontal range of San Juan province, about 180 km west-northwest of the city of San Juan and at elevations between 3,000 and 4,500 metres above sea level. The high-altitude location, roughly 10 km east of the Chilean border, may limits access and construction windows as part of the project’s challenges.

The capital cost could be a financing risk for a junior developer, while permitting, power and water supply will require close coordination with provincial authorities and communities. Metallurgical complexity, particularly elevated arsenic in some zones, demands careful processing design and blending strategies. Disciplined execution, strong local engagement, and continued investor confidence in Argentina’s copper sector will help the company.

Altar sits within the Andean porphyry copper belt, near other large deposits such as El Pachón, owned by Glencore (LSE: GLEN), and Los Pelambres, operated by Antofagasta (LSE: ANTO), just across the border in Chile. The project area is accessed by road from the town of Calingasta, which serves as the main local service centre for exploration logistics.

Aldebaran owns 80% of the project with the remaining 20% held by Sibanye-Stillwater (NYSE: SBSW; JSE: SSW). Sibanye acquired its interest through a 2018 earn-in agreement with Regulus Resources (TSXV: REG), which later spun out Aldebaran to hold its Argentine assets. Aldebaran now manages and funds exploration and development at Altar, while Sibanye retains its 20% non-operating interest.

Classic porphyry

The geology of the Altar project reflects a classic porphyry copper-gold system with important structural and alteration controls. The Altar zone is described as “a cluster of several, intermediate composition porphyry intrusive centres occurring within an area of about 5 km by 8 km and emplaced during Middle to Late Miocene times,” about 10 to 12 million years ago. The basement rocks correspond to the Pachón Formation, consisting of volcanic and volcanic-sedimentary units overlain by rhyolitic ignimbrites.

Mineralization is recognised to transition from “the basal roots of a high-sulphidation epithermal lithocap to the sub-volcanic porphyry copper environment at depth.” The company describes the system as “telescoped because of the close spatial distance between the porphyry and high-sulphidation alteration systems”.

Aldebaran’s 2021 geological-structural work identified distinct zones of higher-grade mineralization and constrained arsenic-bearing veinlets to narrow structural corridors. They should improve future resource modelling and potentially lower arsenic exposure in concentrates, the company said.