Bolivia-focused Andean Precious Metals lists on TSXV

Silver producer Andean Precious Metals (TSXV: APM) listed on the Toronto Venture Exchange on March 29 with US$70 million in cash and the only producing oxide plant in Bolivia.

Its predecessor company acquired the 5,500 tonne-per-day (1.65 million tonnes-per-year) San Bartolome plant in 2017 from Coeur Mining (NYSE: CDE), which had built it in 2008 at a cost of about US$188 million.

Last year the plant churned out 5.9 million oz. of silver — about 34% of which came from a combination of feedstock supplied from private Bolivian companies and through contracts with Bolivia’s state-owned mining company, COMIBOL. The remainder was extracted from mineralized material taken from Andean Precious Metals’ owns deposits in the area.

“It’s a good model and it can be a very healthy model and I think there are opportunities to grow it,” says Luis da Silva, the company’s president and CEO, in a telephone interview from his home outside London. “This is the only commercial oxide plant in the country, which gives us an advantage.”

The plant is near Potosi, in country’s southern highlands, an area with a long mining history based around Cerro Rico, a silver mine south of the city.

“San Bartolome was built in a very historical area,” da Silva says. “It is extremely well-endowed geologically, and Cerro Rico, which is on the national flag, is the foundation of the industry there going back 500 years so it’s incredible to think there are still surface deposits being mined. We have some of those locally, and then there is a need to service the various smaller miners that exist.”

Another benefit the model offers is to secure “higher grade of our choice and blend it with what we have,” he continues. Andean is mining three surface deposits: Antuco, Santa Rita, and Huacajchi.  “Those are all historic surface deposits that have been there since God left them there, and the oxides haven’t been mined for the last 500 years, but those would normally have COMIBAL as a third party, so we pay them a royalty,” says da Silva.

A view of the primary crushing system and ore stockpile at the front end of Andean Precious Metals’ San Bartolomé processing plant in Potosi, Bolivia. Credit: Andean Precious Metals.

Looking ahead, the mining executive says Andean Precious Metals “will continue to build the relationship with COMIBAL, screening further projects for third-party ore sourcing — because there are significant opportunities to add to that,” and at the same time drill its own exploration project, San Pablo.

Its San Pablo gold project is about 90 km southwest of Potosi and its other project, Rio Blanco, sits about 117 km to the south of the city, and the company says it started drilling at both in February. At Rio Blanco, 21 trenches were completed with results including 10 grams gold per tonne over 2 metres; 2.2 grams gold per tonne over 17 metres and 3.7 grams gold over 9 metres.

“Rio Blanco is exciting because it had been forgotten about by Coeur Mining … it was left in a drawer and subsequently we were approached by COMIBAL and told that if we put the licence in good standing we could own 100% of it,” da Silva says. “So we’re doing mapping, geophysics in the first half of this year and looking to drill as soon as practical.”

In addition, the company is contemplating opportunities to re-process San Bartolome tailings to recover silver and tin. The concept would be hydraulic mining or dredging the tailings and moving them to a process plant that would have a new tin gravity concentration circuit with an upgraded leach circuit to recover the silver. The company plans a study that would include auger drilling of the resource; met testwork; flow sheet designs and opex and capex estimates.

“This is a significant opportunity,” he says, “and that’s something we’re actively going to put in place now and we hope within 12 months to have substantial results. We know there are 10 million tonnes, we know the grade that has been put there [about 40 grams silver per tonne], and we know it contains tin [about 0.25% tin]. So for a modest investment to reprocess those tailings it could extend the life of San Bartolome but also deliver on the revenue side.”

With free cash flow of roughly US$5 million a month, da Silva says, the junior is “very well positioned to take on other projects — be it in Bolivia or outside Bolivia.”

“We have an exceptionally strong board that is well known in terms of building and growing companies,” he says.

“We started life as a small junior but we don’t intend to stay junior very long. We intend to become a mid-tier as quickly as we can and that will come from looking at Bolivia and looking outside to diversify jurisdiction and look at smart acquisitions.”

Da Silva won’t divulge where in Latin America Andean is looking at new opportunities, but says the company has signed five non-disclosure agreements.

An aerial view of the leaching tanks at Andean Precious Metals’ San Bartolomé processing plant in Potosi, Bolivia. Credit: Andean Precious Metals.

As for Bolivia, da Silva says, a new administration came in last year in November after general elections for president, vice-president, and the Senate and Chamber of Deputies on October 18. (The Movement for Socialism (MAS) party’s Luis Arce, was elected president with 55% of the vote.)

“We have a new mines’ minister and new president of COIMBAL,” da Silva says. “I have not met them, but our in-country president met with both of them on multiple occasions and they both come from the private sector, which I think is very helpful to building the way forward with investors. The mining industry is significant for Bolivia and they want to attract more.”

Corporate taxes in Bolivia are current 32.5%, he adds, and while royalties on production can vary, it’s typically around 5%.

At presstime in Toronto Andean was trading at $1.34 per share and since listing has traded in a range of $1.19 and $2.00 per share. The company has about 157 million common shares outstanding for a market cap of about $210.4 million.