18th August, 2023
The Insider: Meet the Fund Manager sessions are a great way to hear directly from leading fund managers. They share their approach to investing, favourite companies and their market view for the year ahead.
Lion Selection Group (ASX: LSX) comes to a high degree of geological confidence before backing a mineral explorer, and Hedley Widdup, who is an experienced geologist and resources fund manager, is especially keen on Alto Metals (ASX: AME). LSX recently cornerstoned Alto’s $5 million placement with a $1 million investment.
Their flagship Sandstone Gold Project has produced over 1.3Moz since the 1890’s, and has had very limited drilling below 100m depth – which is something that Alto has an arsenal of drill rigs in overdrive working to change. Alto’s strategic land position of over 740km2 is surrounded by multi-million ounce deposits and producing mines.
Describing the region Hedley stated: “Sandstone was a very, very rich and high grade mining centre historically, and there hasn’t been any mining there since circa the 90’s. Alto has control of almost all of the greenstone belts in the region. Gold in Western Australia is found in greenstone belts, and the more of them you control – the better possibility you have of discovering things.”
The company has built up an unconstrained Mineral Resource Estimation (MRE of 23.5Mt @ 1.4g/t Au for 1.05Moz of contained gold. However, they have optimised the resource into a pit-shell model that has managed to capture 80% of the resource into a JORC of 17.6Mt @ 1.5g/t Au for 832koz of contained gold. This was done with a $2,500/ounce gold price and 0.5g/t Au cut-off grade, but gold has been consistently trading around $3,000/ounce
The deposit is shallow, open-pittable and has demonstrated excellent metallurgical test work, with recoveries reaching up to 98% and averaging 93% across oxide and transitional ores.
After punching through ~60,000m of drilling in 2021 and another ~50,000m in 2022, during which time the resource grew from 635koz to over 1Moz, Alto backed it up again with an what they consider to be an outstanding 2023 drill program that yielded the highest grade results to date at the part of the project called Indomitable, which contains 210koz of Alto’s resource.
A standout assay was 16m @ 13.1g/t Au from 19m, including 3m @ 62.2g/t Au from 29m and 1m @ 122.6g/t Au from 29m. There was also 25m @ 7.5g/t Au from 41m, including 6m @ 22.3g/t Au from 56m, as well as 80m @ 1.6g/t Au from 21m, including 10m @ 5.2g/t Au from 43m.
There were also numerous standout assays from the section called Lords, which contains 400koz of Alto’s resource. These included 67m @ 2.3g/t Au from 172m, including 6m @ 5.4g/t Au from 179m as well as 45m @ 3.2 g/t Au from 161m, incl. 5m @ 17.5 g/t Au from 162m and 91m @ 2.8 g/t Au from 56m, incl. 27m @ 5.1 g/t Au from 72m.
There may be opportunities for development for Alto’s deposit, especially when considering what their next MRE could look like. This is of particular interest for Hedley, as he stated “The proximity to gold processing equipment leverages them very strongly to this theme that I mentioned before of the potential for gold consolidation in Western Australia.
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