Alvo Minerals finds itself a new Brazilian target

Every now and then in the mining game you meet people with a knack of finding more than one good project which eventually goes into production. While those people are always bankable, they’re particularly bankable when the upside of their earlier discoveries is reaped by other companies, because that makes the original developers extra-motivated to find, and hold on to, their next success.

 

Meet Rob Smakman, Managing Director of Alvo Minerals (ASX: ALV)

Rob is from Melbourne and studied geology at Monash but has spent a good deal of his working life living in or regularly travelling to Brazil, one of the world’s great mining jurisdictions where the future seems to be finally arriving for the Country of the Future. Rob is fluent in Portuguese, knows how the bureaucracy works, is comfortable working in the ‘Sertao’ – Brazil’s version of the ‘outback’, rednecks and all – and, most importantly, he has an idea where all the interesting projects are.

From 2010 until 2017 Rob’s main focus was the Borborema Gold Project in the northeastern state of Rio Grande do Norte. The company of which he was CEO, Crusader Resources, proved up a resource there in excess of 2 million ounces, but Rob, foiled by low gold prices, eventually resigned and returned to Australia. In 2019 Crusader Resources became Big River Gold, a company our colleagues at Pitt Street Research worked on in early 2020 right after the publication of an updated Definitive Feasibility study that gave Stage 1 of Borborema an NPV of US$203m on an 8% discount rate.

At that time, Big River Gold had a market capitalisation of A$29m. Just two years later, in 2022 a Canadian company called Aura Minerals (TSX: ORA) bought Big River Gold for A$92m. In March of 2025, Aura Minerals started commissioning the plant at Borborema.

Borborema wasn’t Rob’s only success. Early on, Crusader got hold of an iron ore project called Posse, in Minas Gerais, which was a commercial success with Direct Shipping Ore haematite that proved to be in high demand. And in 2014, Crusader picked up a high-grade gold project in Mato Grosso state called Juruena which was eventually sold to Meteoric Resources and helped lift that company before it picked the Caldeira Rare Earths Project as its company maker.

Juruena, which got to 387,000 ounces in June 2021 under Meteoric’s stewardship, is now owned by a company called Keystone Resources, which paid US$20m cash in 2023. Alas, Crusader had sold Juruena to Meteoric in 2019 for only A$3m in cash and scrip in staged payments. Like Aura Minerals, Keystone is getting set to pour its first gold at Juruena this year.

 

Alvo Minerals: Looking for paydirt in Brazil

While his old projects were moving forward Smakman had formed his new company, Alvo Minerals, ‘alvo’ being the Portuguese word for ‘target’, and gone looking for his Next Big Thing, which he intended to own more of. He found it in Palma, a copper-zinc project in Tocantins state in central Brazil. Today Alvo has three projects: The aforementioned Palma project, the Bluebush Rare Earths Project and the Lavra Velha gold-copper project. Let’s look at each of them in turn.

 

 

Palma – a growing VMS copper-zinc play

CPRM, Brazil’s Geological Survey, auctioned off Palma in 2019 under a new, more commercial-focused regime for mining that had been promulgated by the business-friendly government of President Jair Bolsonaro, and Alvo was the successful bidder.

Palma had been discovered in the 1970s, but very little work had been done on the project since then. It’s turned out to be a Volcanogenic Massive Sulphide play on a ‘camp scale’, with more than 70 km of strike. Alvo used this project to go public on the ASX in late 2021, raising $10m at 25 cents. Originally, there were 4.6 million tonnes at 1% copper and 3.9% zinc at Palma. Late last year, after a string of great drilling campaigns, the resource upgraded to 7.6 million tonnes at 0.7% copper and 3.4% Zn.

Throw in lead, silver and gold and this multi-commodity deposit grades a very nice 2.0% copper equivalent, with, potentially, a lot more tonnage to come as new targets from the magnetic work get probed. Palma may not yet be like Glencore’s monster Kidd Creek Mine near Timmins in Ontario, but geologically speaking, it’s in the same class.

 

Bluebush – A true ionic clay rare earths project

Alvo picked up its second project, the Bluebush Rare Earths Project, in late 2023. Bluebush is not far away from Palma, just across the border in neighbouring Goias state, and right next door to a major new rare earth mine called Pela Ema, which is being commissioned by a Brazilian company called Serra Verde.

The drilling and metallurgical testwork has confirmed that Bluebush is, like Pela Ema, one of those highly sought after ionic clays that are relatively easy to produce. And the early drilling has shown great intersections like 18.5 metres at 1,396 ppm Total Rate Earth Oxide, and 25% Magnet Rare Earth Oxide, which is great. The only downside for Alvo in 2023 was that rare earths were way out of favour on ASX by the time the company exercised its option, so no one has been paying attention.

 

Lavra Velha – the mine that lets Rob Smakman get back to growing a gold resource

Alvo, however, now has a third trick up its sleeve, and it’s not the Ipora Rare Earths Project which the company pegged shortly after picking up Bluebush. Rather, it’s a gold-copper project called Lavra Velha, in Bahia state, the proposed acquisition of which was announced in late March 2025.

Lavra Velha, whose name means ‘Old Mine’, is being sold by Pan American Silver (TSX: PAAS), a major Canadian producer of gold as well as silver with a sizeable presence in Latin America.

In 2023, Pan American Silver had acquired Yamana Gold mainly to get hold of Jacobina, a gigantic underground gold mine also in Bahia that has a 9 million ounce endowment and is Brazil’s third largest gold mine. Lavra Velha, around 200 km southwest from that mine, had around 520,000 ounces in Indicated and Inferred Resources as per an NI-43-101 estimate, but that size couldn’t move the needle for its new owner. It certainly can for Alvo Minerals.

For one thing, it doesn’t look like Lavra Velha will stay at 520,000 ounces once Alvo switches the estimate to JORC, because the conceptual open-pit was based on a gold price of just US$1,650 an ounce. For another, the resource sits on only 10% of the ground that Alvo is picking up. And then there’s the price, which involves U$1m cash and the rest of the US$8m consideration in staged payments, as well as a 0.8% Net Smelter Royalty.

Geologically, Lavra Velha looks attractive. It’s an Iron Oxide Copper Gold (IOCG) style project where the gold and silver sit close to surface in an oxidised zone of considerable size, and the potential copper discoveries have been leached further down. Brazil has a few sizeable IOCG deposits, notably Vale’s Sossego and Salobo mines up in in Para state.

While Alvo isn’t playing up the potential for a major copper strike, it does like what the drilling at depth has shown, such as 8.1 metres at 5.5 g/t gold, 2.5% copper and 8 g/t silver from 180 metres and 28 metres at 2.81 g/t gold 0.9% copper and 2 g/t silver from 115 metres. And it likes the fact that a conventional flowsheet based on oxide and transitional ore can get gold recoveries in excess of 90% without much cyanide needed. Alvo is in due diligence on Lavra Velha at the moment and the deal can potentially close this month.

To fund Lavra Velha, Alvo is conducting a 1-for-2 rights issue at 5 cents, with every two new shares getting a two year option exercisable at 10 cents. The rights issue can potentially yield $4.4m in new funds, since there is a top-up placement open as well.

 

There’s enormous potential with Alvo

Currently the potential of Lavra Velha, Bluebush and Palma are available on ASX for a market capitalisation that Brazilians would call ‘muito muito pequeno’ – very very tiny – like, about $5m.

We suspect the upside is much more than that given the current price of gold and the recent improvement in sentiment towards rare earths and copper. Not to mention the skill Rob Smakman and his colleagues have shown in building out Alvo’s portfolio.

Put this one on your watch list. If Brazil is the country of the future, Alvo just might be the mining company of the near future.

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