Antofagasta Minerals setting the standard for major behaviour

THE CONFERENCE CALLER: The 2013 Australian Copper Conference was treated to a presentation by Dr Alan Wilson, international exploration manager of UK-listed, Chilean-based major copper mining entity Antofagasta Minerals.

Antofagasta has become a name synonymous with cooper and the company currently operates four copper mines in Chile with one more currently in development.

The company has developed a high international profile since it kicked off its strategy of partnering companies overseas in 2009 and now boasts around 30 exploration projects located in 12 countries spanning five continents.

 

Dr Alan Wilson

 

“One thing I have noticed here in Australia is the market and companies are generally aware of what we are doing in Australia, but many people have never heard of Antofagasta,” Wilson told the conference.

“We are very open about where we operate and what we look for. We are porphyry geologists – that’s our background in Chile – we’re not really that fussed, as long as the project has copper.”

Wilson explained that although Antofagasta was on the lookout for copper projects in the classic copper belts of the world, it is also prepared to take a serious look at projects that may be in new and emerging copper belts.

“We have minimal geographical restrictions in terms of where we go – so we have five regions and we are active in all of those regions,” he said.

“We do specifically target junior or mid-tier companies that have high-quality, early-stage exploration projects that we see upside potential.

“We have also partnered with a number of junior companies that have attractive landholdings for the right exploration teams in the right jurisdictions to be able to go out and basically go out and perform exploration on our behalf, so we form exploration alliances.”

The Antofagasta model is innovative and one that many of its major contemporaries would be well-advised to look at when dealing with junior and mid-cap companies.

Instead of marching in and taking over a company, Antofagasta is more comfortable working with the company to ensure it, and its shareholders, receive the maximum benefit of its participation.

“What we have not done, and what we won’t do as part of our strategy, is that we are not interested in setting up large regional offices with a lot of infrastructure and overheads,” Wilson said.

“We would rather leverage from junior companies and make sure the money goes in the ground – drill lots of holes and hopefully find something.”

The Antofagasta strategy has divided the world into five regions – North and South America, Africa, Europe, Central Asia and Australasia.

In each of those regions there are two people – a regional exploration manager and a chief geologist.

Those ten people are supported by a small team from Santiago with senior management providing support from Toronto and now from Wilson, who has set up shop in Brisbane.

“There is senior support around the world, but basically five regional managers and five chief geologists,” Wilson said.

“These guys are empowered to get out and review projects under confidentiality agreements…and come back with recommendations.

“Then if it [prospective project] meets all the technical benchmarks and the benchmarks of the commercial terms of agreement – there’s a very streamlined approvals process in place in Santiago.”

The company’s benchmarks involve its threshold in terms of the minimum size of a project with a resource of one million tonnes of contained copper; a figure Wilson suggested could be achievable in most jurisdictions.

The company’s team of ten people are rarely still, which is exemplified by its achievements during 2012 of signing 112 confidentiality agreements, which led to the review of 182 projects in 34 countries.

However, the high company’s high benchmark meant of those 182 projects reviewed, 12 of them actually were approved.

In Australia Antofagasta has alliances with Monax Mining (ASX: MOX) in South Australia and Sipa Resources (ASX: SRI) in Western Australia.

It also has project-specific farm-ins in place with Diatreme Resources (ASX: DRX) in Queensland and with Encounter Resources (ASX: ENR) for the Yaneena project in the Paterson province of Western Australia.