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Aterian upbeat despite losses in 2022

2nd May 2023

By: Darren Parker

Creamer Media Contributing Editor Online

     

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Despite LSE-listed Aterian making a loss of about £4.38-million in 2022 – a significantly larger sum than the loss made in 2021 of about £1.35-million – the company reiterated its firm belief in the market fundamentals for copper going forward.

Executive chairperson Charles Bray described the market fundamentals as “excellent and specifically linked to the nascent growing demand for renewable energy and the related electrification of transportation globally”.

“We are keen to invest in Morocco to demonstrate the potential of our assets there and we are keen to demonstrate the full potential of our assets in Rwanda,” he said on May 2 upon the release of the company’s year-end financial results for 2022.

On October 24 last year, Aterian completed the acquisition of 15 copper/silver and base metal exploration projects covering 762 km2 in Morocco, and also moved the market listing to the main market of the LSE, and changed the name of the company from Eastinco to Aterian.

This transaction transformed the company into a multijurisdictional, multicommodity, critical- and strategic metals-focused exploration and development company, with gold royalty company Elemental Altus Royalties added as a significant shareholder.

“Importantly, the listing on the LSE will provide us with exposure to a broader investor profile and greater liquidity in our shares, providing a more solid platform to support . . . growth,” Bray said.

He explained that the rationale for this acquisition was to acquire attractive prospective assets that fit into Aterian’s strategy of targeting critical and strategic metals for exploration.

“Currently, the renewable energy, automotive and electronic manufacturing sectors are driving the requirement to develop secure supply chains of critical and strategic metals. This is the energy transformation from carbon-based sources to renewable sources and storage systems.

“The exploration conducted on the Moroccan assets highlights the strong potential for the discovery of strategic metal deposits, in particular copper and silver,” Bray said.

RWANDA

In Rwanda, the main operational focus for 2022 shifted from the Musasa project to the company’s southern projects, where Aterian’s geological team identified 22 zones of potential tantalum, niobium and lithium-hosting pegmatite.

Bray said the HCK-1 prospect had been targeted, where shallow exploration pitting had outlined a potential target zone of about 2.5 km in strike length.

He said the width of the target zone was uncertain but, in several locations, pitting intersected pegmatite over a horizontal distance of about 100 m.

“A further positive outcome from our work is that 800 m of the identified pegmatite target zone occurs in a ‘greenfield’ environment to the southeast of the main ridgeline hosting HCK-1. [It is] an area where there are no observed artisanal workings, pegmatite outcrop, or surface expressions, where the pegmatite remains blind to the surface, covered by soil and regolith of variable thickness up to 4.5 m.” Bray explained.

He said a drone survey had been flown over HCK-1 to provide detailed imagery with topographic data and a current view of the earlier artisanal workings.

In conjunction with the company’s year-end results, Aterian announced that it had now completed a multimethod geophysical survey over the HCK-1 target area covering about 2.4 km2, with four sub-cropping pegmatite bodies identified from the survey.

The survey highlights the strong structural control on pegmatite emplacement, with at least three deformation events having been interpreted. In addition, the HCK exploration licence has been transferred to the 70% Aterian-owned joint venture company, Kinunga Mining.

"I am highly encouraged by these results from HCK-1. The confirmation of the potential for lithium discovery, in addition to the identification of additional pegmatites and a new pegmatite zone, is very exciting,” Bray said.

The multi-method survey of induced polarisation (IP), electrical IP tomography and ground magnetics was designed to provide additional information allowing for a determination of the geological contacts of the main pegmatite zone with the schistose country rock, controlling geological structures and an estimate of the depth of weathering.

Bray said a limited scout drilling programme would be planned based on these findings, providing an opportunity to test the fresh bedrock for the underlying lithium potential.

Aterian suspended operations at the Musasa project at the end of June last year based on the recommendation of processing consultants Quiver.

Quiver’s assessment was to reconfigure the wash plant and undertake additional metallurgical test work to improve overall metal recoveries.

Bray explained that Aterian's view was to rather refocus its activities on the southern projects and suspend further investment in production until a new licence at Musasa was granted, whereupon the company would reassess the situation. The original application for a licence was made in May 2021.

“While suspending production was a disappointment, we are excited at the prospect of . . . expanding our potential exploration licence area. As a result, management made the decision to fully impair the carrying value of goodwill and property, plant and assets related to the . . . Musasa project,” Bray said.

This amounted to about £2.17-million and £877 000 respectively, and was cited as the key reason for the loss made in 2022.

This led to the Eastinco MD and Rwandan country manager Daniel Hogan resigning.

Fieldwork undertaken at Musasa has been limited to geological examination of the Kassava prospect. Kassava is one of five identified mineralised LCT pegmatite targets occurring on the project, where historic artisanal miners have excavated a 20-m- x 30-m-wide cut to a depth of about 13 m, close to the centre of the prospect.

Field observations indicate Kassava to be a lens-shaped body, with a maximum horizontal width of 80 m, with the exploration pits covering a strike length of 250 m.            

“We believe the outlook for Aterian remains very positive. We recently attended the Mining Indaba in Cape Town where we received strong trade interest that supports and vindicates our strategy to target critical and strategic metals through the expansion of our portfolio. I remain firmly optimistic about the group's prospects going forward and am encouraged by our developing relationships,” Bray said.

He said the company would continue to build the trading business, with construction work on the mineral upgrading facility progressing well.

“The trading team has visited over 25 potential mineral suppliers nationwide with many positive indications that a consistent supply chain will be established and maintained. We intend to work with the small-scale miners to provide investment and technical advice to improve their recoveries and production rates to benefit the miners and the company,” Bray said.

In addition, Aterian has received its first Headline Risk Report from social licence reporting firm Mundaly – formerly called 1Villager – which was engaged to provide environmental, social and governance support to Aterian’s operations in Rwanda.

The overall headline risk score from Mundaly’s assessment came to 83/100, comprising two components, a social licence and a whistleblower risk score. The overall score is weighted 60% towards the social licence and 40% towards the whistleblower risk score.

The social licence score measures public acceptance and approval of the company's operations and practices, where Arterian achieved 73/100.

The whistleblower risk score is a scale measuring the likelihood of unethical behaviours, where Arterian achieved 97/100.

“We strive to achieve 100%,” Bray said.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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