Market watchers are starting to show an increased interest in silver. Many, in fact, believe that the price of silver is ripe for a rally. The “pick of the week” is therefore Aterian Resources’ Agdz silver and copper project in Morocco.
Although Morocco’s economic growth has been on a downward trajectory over the past two years, and the impact of Covid-19 pandemic has been substantial, the country is one of the most developed on the African continent. Infrastructure is great compared to other developing countries. This accessibility makes Agdz an attractive target in a relatively stable political and economic environment.
The outlook for both silver and copper remains good, despite recent volatility. According to David Smith of the Morgan Report the growing demand and declining supply of silver will lead to significant price growth.
“Silver grades have dropped more than 50% in the last 10 years,” says Smith. He adds that because silver is a by-product of base metals output and some gold production, silver supply cannot be easily ramped up to meet rising demand. That supply/demand imbalance should eventually lead to elevated prices.
The Moroccan government has approved the Environmental Impact Assessment (EIA) and baseline study for the Agdz project recently. Agdz, which is being developed by AIM listed Altus Strategies’ Moroccan subsidiary Aterian Resources, is located about 14km southwest of the Bou Skour copper and silver mine in the eastern Anti-Atlas of the Kingdom of Morocco. Bou Skour is operated by the Moroccan state mining group Managem. The EIA approval represents a key milestone in the conversion of the current exploration license into a mining licence.
According to Steven Poulton, CEO of Altus, the company has been working in partnership with the University of Orléans and the BRGM in France to generate new targets based on cutting edge predictive mapping techniques. “This work has defined a 1km long, northeast striking priority target in the vicinity of the Makarn Prospect, where sampling by the company has yielded multiple high-grade silver and copper results, including 448 grams per tonne of silver (g/t Ag) and 8.0 % copper (Cu) from outcrop. This target will be the next priority for our field team to assess, along with the Minière Prospect, where sampling of spoil from historic mine shafts, adits and exploratory pits has returned grades of up to 13.0 % Cu,” says Poulton.
Altus commissioned an independent Moroccan environmental consultancy to undertake the EIA for Agdz. The EIA specifies the baseline environmental conditions and details considerations relevant to a potential conversion of the current exploration permit into a mining licence. The EIA was completed in quarter one of 2020 and, following public consultation, was accepted, and approved by the Ministry of the Interior, Administrator of the Draa Tafilalet Region and Regional Centre of Investment. The approval is valid for a period of five years and is renewable thereafter.
Although Morocco provides its fair share of challenges for the private sector and is not always the easiest country to do business in, the Moroccan government has shown commitment to improve the ease of doing business. In the aftermath of Covid-19, governments across Africa will aim to kickstart their economies, and Morocco will be no exception. Altus Strategies has a solid management team with good vision and a diversified portfolio, and with the outlook for silver and copper slightly optimistic, this is certainly a project to keep an eye on. Even with a fantastic geology, Morocco is probably best suited for high-risk takers. Enter with caution.