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Explorer Commences Drilling at Flagship Alvalade Copper-Zinc Project
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The Critical Investor examines the latest news from Avrupa Minerals, noting drill results are expected in January 2021

With a second wave of COVID-19 in full swing now across the globe, Avrupa Minerals Ltd. (AVU:TSX.V; AVPMF:OTC; 8AM:FSE) has finally commenced drilling at its flagship copper-zinc Alvalade project in Portugal, which is operated together with joint venture (JV) partner MATSA (joined company of Trafigura and Mubadala, two commodity giants). Delays due to permitting of land and water caused a five-week setback, but although such limited delays aren't uncommon in mining, it is good to have things arranged and get into action.

Avrupa and MATSA are focusing first on the Sesmarias massive sulfide discovery, and have planned to drill 7¬,000–8,000 meters over the coming months at Sesmarias and at other targets around the Alvalade license.

A first hole of over 500 meters (500m) has just been completed, with the assays expected in mid- to late January 2021. The hole was drilled halfway between SES008 and SES028 (see green star below) to test the area between the massive sulfide in SES008 and the stockwork zone intercepted in SES028. Additionally, the geo team thought that there could be a second target at depth, based on careful re-logging of previous Avrupa drilling, as well as several historical, pre-Avrupa drill holes collared in the Sesmarias area.

The drill crew has taken time off for the year-end holidays, but will set up in January to continue to drill at northern end of the Sesmarias massive sulfide mineralization, targeting both strike-length and dip-length extensions of the copper-zinc-iron sulfide zone.

The re-logging of previous drilling provided new and better insights into potential targets for new, additional mineralization, and the currently ongoing drill program will test this expansion potential, among other goals. According to CEO Paul Kuhn, MATSA's strong experience in the Pyrite Belt of Spain has been a driving force for the technical team, and along with the Avrupa geologists has greatly refined the continually developing geological model. The Sesmarias-Lousal District has great potential for significant mineralization, but the targeting is complicated and needs time and experience to unravel the mystery.

Avrupa previously outlined four target zones around the massive sulfide discovery at Sesmarias, beyond down-dip targets along the actual mineral lenses, Lens 2, Lens 8 and Lens 10. See these targets in the map below; I have projected the defined lenses (in orange) as well:

As Lens 8 has seen the least amount of development, the first holes are intended to extend Lens 8 northwest toward the area of the Northern Deep targets, from now on being called the Brejo area. Besides drilling, Avrupa and MATSA have other exploration tools at their disposal. Since I consider the historical resource estimates at Lousal from the former mining days (roughly estimated at 20–30 million tons [Mt]) low-hanging fruit, I am particularly interested in the helicopter-supported VTEM electromagnetic survey, which will commence any day now, covering a large part of the Alvalade License. The area of the survey can be seen on the map below (green dotted line):

For your understanding, the historical Lousal Mine is located at the southern part of the Monte da Bela Vista target panel (green star):

It is anticipated that results from the geophysical program will assist in delineating further massive sulfide targets, particularly in the license area between Sesmarias and the historical Canal Caveira massive sulfide deposit, located at the north end of the license. The survey should normally take a couple of weeks, but according to Kuhn, as the survey takes place about a 100m above surface in hilly terrain, they can't always fly with the helicopter when it is very cloudy and rainy, which it is right now, so they anticipate the survey to possibly last one to two weeks longer.

As a reminder, the current work program is fully funded by MATSA. MATSA can initially earn a 51% interest in the Alvalade Experimental Exploitation License property by completing funding requirements set out in the JV agreement between the companies. MATSA may then increase their interest in the project to 85% by preparing a bankable feasibility study.

Notwithstanding a second wave of COVID-19, and Trump trying to cause as much trouble possible for Biden before surrendering the presidency, the Chinese economy seems to have recovered, and is picking up steam, which is translating into increasing copper imports and production at smelters, which in turn, besides any ongoing strikes at Latin America copper mines, results in higher copper prices, as can be seen in this chart by Macrotrends:

Copper prices are even closing in on eight-year highs set in 2012, much quicker than I thought, although I must say that the steep rise to multiyear highs can't go on forever. I cannot imagine there not being any disruptions in copper demand now, with Europe going into staged lockdowns and the U.S. undoubtedly following suit, as their policy isn't as stringent or effective, and other parts of the world probably suffering as well. The economy of China is still for a considerable part export driven, so a decrease in exports will sustain a dent in copper demand.

On the other side, the quick and seemingly successful development of COVID-19 vaccines by multiple pharmaceutical giants is a strong and very positive signal, which could bring a halt to the upcoming lockdowns shortly. In that case, I view any correction, being it copper demand and pricing, or stock markets, as short-lived. The Biden presidency has a colossal stimulus package standing by, which will undoubtedly kick in when stock markets could start to waver, or might even be used preventively.

Zinc, the second most important metal for Avrupa, has been on fire as well lately, as can be seen here in this chart of Kitco:

I predicted US$1.20/pound (lb) levels for next year a few months ago, but it is already trading at US$1.27/lb. As explained before in my last article about Avrupa, the zinc market is much more complex, as it is controlled by zinc smelters, which can singlehandedly influence zinc pricing and supply. As a reminder, according to the International Lead and Zinc Study Group (ILZSG), a platform formed by the United Nations consisting of all major producing countries and industry players in the lead and zinc sector, several mines could experience problems to nameplate capacity again, but global supply for refined zinc metal will exceed demand significantly in 2020 (620,000 tons), and for 2021 this surplus is expected to be 463,000 tons. In my view, this will prevent the zinc price to go to the lofty 2018 levels, topping even US$1.60/lb levels briefly at the time.

These developments regarding base metal prices are obviously positive for Avrupa, and will encourage MATSA to probably funnel much more money into the project, depending on drill results of course.

As a reminder, the Sesmarias discovery combined with the Lousal historical resources/workings is the obvious target for MATSA, as it generates a 40–50Mt resource potential (Sesmarias 10 Lens is guesstimated by me in an earlier article to contain about 19–20Mt, Lousal a potential 20–30Mt, both guesstimated at 1% copper [Cu] or better). Avrupa and MATSA are looking to see if Sesmarias, Lousal and also Monte de Bela Vista, all several kilometers apart from each other, could form a district scale system.

In an earlier article about Avrupa, I calculated JV project/NPV [net present value] potential estimates for the company at many multiples of the current share price (CA$0.035 now versus CA$0.29-0.45 at feasibility study (FS) stage, unconsolidated, at US$3.00/lb copper, US$1.20/lb zinc). Even the rock-bottom cash compensation for the Avrupa interest per the JV deal (CA$10M) is almost threefold the current market cap, and as this compensation has been negotiated with metal prices at significantly lower levels, I see potential to renegotiate terms if these prices remain at current levels or go even higher in the next few years.

This is all very much forward thinking of course, so let's focus again on the present. Since Avrupa and MATSA had to wait five more weeks before they could commence drilling, there was more time to do re-logging, sampling and other detective work on old core. I asked CEO Paul Kuhn on the current state of affairs, and he was happy to give me an update on their program again, as he did in October:

  • Re-log historical Avrupa-drilled Sesmarias core with MATSA to integrate their knowledge of the Pyrite Belt into the overall understanding of the massive sulfide deposit (remember that they have three operating Pyrite Belt mines in Spain, and at least one new un-announced discovery in the same rocks).

    Paul Kuhn (PK)(Oct): We are continuing with this work and have expanded it outwards to several other very attractive zones around the old Lousal Mine, Monte da Bela Vista (7–10 kilometers (km) north of Sesmarias), and around the old Caveira Mine, a further 10 km north of Lousal. While looking for old core for their own projects in several remote storage areas, MATSA also discovered more old drill core from the Lousal and Caveira areas.

    PK (Dec): This work will continue until drilling restarts in mid-January.

  • Initial logging and possibly sampling of historical core prior to Avrupa's involvement at Alvalade. They have access to at least 10,000 meters of old core that has not been looked at for years.

    PK (Oct): MATSA discovered at least eight holes drilled a long time ago around Lousal and Caveira. The old core was stored and basically forgotten over the years, partially because of the hazardous condition of the boxes stacked in piles 3–4 meters high, and leaning dangerously. We are working on properly locating the old drill collars corresponding with those cores, and have already successfully located three of the eight collar locations. We are working on the others, in the vicinity of the Lousal workings.

    PK (Dec): For the moment, we are still at three locations. Work on other historical core, close to our present drilling area, has taken some priority, as it directly assists in planning and expectations.

  • Considering use of ionic leach geochemistry, to help identify and follow the trend of the Sesmarias mineralization. This is a relatively new geochemical technique that utilizes ultra-trace detection methods to find ions of many different elements that may indicate the presence of buried massive sulfide mineralization. We have done some orientation surveys over known mineralization at Sesmarias, and it seems to work quite well.

    PK (Oct): We have proposed doing this, at least in a first trial orientation survey of some 500 samples. The only issue at the moment is manpower and access.

    PK (Dec): Access permits are in place, but drilling and drill-related work are taking priority over any other tasks.

  • Review all of the old Lousal Mine data and geology in order to consider new drill targets. It is reasonable to assume that Lousal and Sesmarias were all part of the same deposit a long time ago. Are there more sulfide lenses out there between Lousal and Sesmarias (7 km apart)? How much more of the remaining Lousal mineralization might be available for exploitation? Possibly 30–35 million metric tonnes of massive sulfide remaining within the old Lousal workings?

    PK (Oct): Continuing work here seems to point to that possibility. One of the reasons for the re-log is to consider this in detail and provide new drill targets between Sesmarias and Lousal, as well as around Lousal itself. Some of the newly discovered historical drilling may help us with very near exploration at/around the Lousal Mine.

  • Review old core from the Monte da Bela Vista (MBV) stockwork zone to see where the ore deposit may be hiding. MBV is located 1.5–2 km north of Lousal, giving us over 9 km of strike length in this district.

    PK (Oct): As soon as we finish with Sesmarias, we will tackle the MBV core. We've already looked at a couple of the MBV holes, and this is helping us define how we plan to drill at MBV.

    PK (Dec): The new work that we have been doing is closely related to what we will see at MBV. The whole area has been heavily deformed by geological processes since deposition of the massive sulfide mineralization, making it more of a challenging detective job to make the best target decisions. However, there are many geological similarities between the target areas, so this new Sesmarias work will be quite helpful in future work at MBV and Lousal.

  • Review the old Caveira Mine data and drilling. Caveira is under-explored and is located only 9.5 km north of Monte da Bela Vista. We only drilled one or two holes in the area when we were working with Antofagasta years ago.

    PK (Oct): This is the same as at Lousal. Two of the guys are looking at the historical Caveira drill holes right now.

    PK (Dec): However, Sesmarias work is taking big priority right now. We will have more time to get back to Caveira and other places in the coming year.

  • Review and compile exploration data for the rest of the license, as there are lots of targets to be explored.

    PK (Oct): We are really concentrating on Sesmarias, Lousal and Monte da Bela Vista right now. Just started on the Caveira holes, and we are also reviewing the old gravity and magnetics studies to help with the targeting between MBV and Caveira. The partner's geologist is quite interested in anomalism (geophysical and geological) located at a place called Cabeça Gorda, which is located about halfway between Caveira and MBV.

    PK (Dec): The VTEM survey will give us a whole new package of targeting data!

  • Drill targeting with the hope of starting drilling by the beginning of September.

    PK (Oct): We were delayed in starting up by general pandemic considerations impacting, for example, holiday seasons. As well, we have found a real lack of employable persons in the immediate area of the project. We are now realizing that we need to continue with the re-logs of Sesmarias in more detail than expected, and integration of the two partners' databases has taken time. Land access has been more difficult than expected or planned for in the Sesmarias area, so we are utilizing the time to push ahead on other attractive targets in areas of already known mineralization close to Sesmarias. We are looking at starting our drilling to the north of Sesmarias at Monte da Bela Vista and around the Lousal area, most likely in November.

    PK (Dec): Obviously now we are up to speed in the program. The first drill hole has been finished, we are working on sampling that one and continuation of review of previous work. Technicians and geologists are all in place, the database coordination is ongoing but doing well. Access to areas of interest is fine in the northern half of the Sesmarias area and on into the Brejo zone.

While MATSA is doing most of the heavy lifting at Alvalade, together with the geologists of Avrupa, Kuhn has some more time on his hands now and is looking for other interesting projects. It is anticipated after the upcoming 4-to-1 share consolidation at the end of December, which has been approved at the latest AGM on Dec. 14, that the company could raise more money easily, at a share price that is more interesting for funds, which already indicated their interest. Avrupa is still trading at rock-bottom prices (market cap of just CA$3.8M), which, at least in my view, isn't entirely justified considering developing fundamentals:

Share price Avrupa Minerals; 5-year time frame (Source:

According to Kuhn, a new raise is being discussed for January-February.

On a closing note: COVID-19 isn't going by unnoticed in Portugal, but fortunately a complete lockdown isn't in the cards yet. The area Avrupa is working in is very remote, and drill/helicopter crews can work very independently as they have brought in all materials by themselves, all paid for by MATSA.


Finally, Avrupa has been able to get all necessary drill-related permits, and the first drill hole has been completed at Alvalade, with drilling continuing in mid-January next year. The airborne VTEM survey is about to begin, and will hopefully, and likely, bring in lots of targets, as can be expected with several historical mines and remaining historical resources being present. After a 1:4 roll-back, new funds could come in within a few months, making it possible for Avrupa to look into other projects as well.

Alvalade, being an intensively drilled and mined brownfield project in the past, with 40–50Mt copper/zinc potential, could be brought back to life on the hands of JV partner and powerhouse MATSA, especially with copper prices riding at seven-year highs, and as such Avrupa represents an interesting investment opportunity, in my view, but is still hovering at very modest prices.

I hope you will find this article interesting and useful, and will have further interest in my upcoming articles on mining. To never miss a thing, please subscribe to my free newsletter on my website, in order to get an email notice of my new articles soon after they are published.

The Critical Investor is a newsletter and comprehensive junior mining platform, providing analysis, blog and newsfeed and all sorts of information about junior mining. The editor is an avid and critical junior mining stock investor from The Netherlands, with an MSc background in construction/project management. Number cruncher at project economics, looking for high quality companies, mostly growth/turnaround/catalyst-driven to avoid too much dependence/influence of long-term commodity pricing/market sentiments, and often looking for long-term deep value. Getting burned in the past himself at junior mining investments by following overly positive sources that more often than not avoided to mention (hidden) risks or critical flaws, The Critical Investor learned his lesson well, and goes a few steps further ever since, providing a fresh, more in-depth, and critical vision on things, hence the name.


Critical Investor Disclaimer: The author is not a registered investment advisor, and currently has a long position in this stock. Avrupa Minerals is a sponsoring company. All facts are to be checked by the reader. For more information go to and read the company's profile and official documents on, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.

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