President's Message
August 4, 2009
Dear Shareholder,
Our annual meeting will be held on September 4, 2009 in Calgary, Alberta. The meeting materials are enclosed with this letter. Our annual financial statements were mailed earlier this year and are available on SEDAR and our website. As many of you will not be able to attend the meeting, I would like to provide you now with a brief update.
The past year has been one of remarkable exploration success at our flagship Haquira Cu-Mo-Au project in southern Peru. Unfortunately this success has been overshadowed by a global financial crisis. However, with a strong balance sheet and a very robust project at Haquira, Antares is poised to emerge better than ever from the current economic downturn.
The Haquira deposits currently host NI-43-101 compliant interim resources containing 8.6 billion lbs of in-situ Cu Equivalent at a 0.3% Cu cut-off or 9.9 billion lbs of in-situ Cu equivalent at a 0.2% Cu cut-off. These resources will continue to grow as some of our best holes have been drilled subsequent to the latest resource calculation. This includes hole AHAD-159 with 937 m of 1.14% Cu, 0.034% Mo, and 0.10 g/t Au (1.42% Cu Equivalent); arguably one of the best copper holes reported by any company in recent years.
We have filed two NI-43-101 compliant reports for the Haquira project in the past year, both of which are available for viewing on SEDAR and our website. The first report is a preliminary economic assessment (“PEA”) for the leachable secondary copper zones (SX-EW) at Haquira East and Haquira West, showing an IRR of 26.9% and an after-tax net present value (NPV) of US$224 million using $2.00/lb Cu and an 8% discount rate.. This NPV value alone, which represents only a small portion of the Haquira deposit, exceeds our current market capitalization by more than three-fold.
The second report is an interim resource estimate for the primary copper zone at Haquira East showing an indicated resource of 147.9 million tonnes grading 0.57% Cu and 0.015% Mo and additional inferred resources of 304.6 million tonnes grading 0.53% Cu and 0.012% Mo. This resource estimate does not include some of our best holes at Haquira that were drilled subsequent to preparation of the interim resource estimate, including step-out Hole AHAD-159 which intersected 937.30 m averaging 1.14% Cu, 0.034% Mo and 0.10 g/t Au (1.42% CuEQ) and AHAD-130 which intersected 651.05 m of 0.87% Cu and 0.037% Mo (1.12% CuEq).
Drilling re-commenced at Haquira in late July, 2009. The initial phase of the 2009 drill program will utilize four rigs and will test four new exploration targets within the immediate area of influence of the known mineralization at Haquira, including the adjoining Cristo de los Andes property that was optioned last year from Southwestern Resources (since acquired by Hochschild Mining PLC). Porphyry copper deposits commonly occur in clusters and the best place to explore is often nearby a known deposit such as Haquira. All four of these exploration targets have the potential to add significant tonnage to the already sizeable Haquira deposit.
Antares will incorporate the results of the ongoing exploration drilling with our current resource models to better determine the full size potential of the Haquira project. We are also continuing to progress with metallurgical test work and environmental and social baseline studies as well as initiating processes to acquire water and surface rights. Completion of work in progress will better reveal the full value of the Haquira Project.
Our other major project is the Rio Grande copper-gold prospect in Argentina in which we hold a 50% interest with Pachamama Resources Ltd., which was spun-out from Mansfield Minerals Inc. Rio Grande is a large copper-gold prospect with associated IOCG-style (Iron Oxide Copper Gold) alteration located in Salta Province, northwestern Argentina. Earlier this year we reported results from the final 12 holes of the 2008 drill program at Rio Grande. All 12 holes intersected zones of significant grade copper-gold mineralization and confirmed the presence and continuity of mineralization in the Discovery and North zones. The Company and its joint venture partner are in the process of planning further work programs for 2009. This may include a metallurgical test program to determine metallurgical characteristics of the copper-gold mineralization and completion of an initial resource estimate for the project.
In terms of finances, we recently completed a $6 million equity financing with the IFC which allows us to maintain a healthy balance sheet while we continue to advance our Haquira project. We look forward to having the IFC as a new and significant shareholder in the Company. In addition to the new capital that they are providing, we believe that they can greatly assist us in our goal of developing the Haquira project to internationally recognized best environmental and social practices.
Our accomplishments over the past year have been overshadowed by the global financial crises and the accompanying precipitous drop in commodity prices. It appears that the worst is now behind us as markets and commodity prices have been on an upward trend since March of this year. We continue to believe that Haquira ranks as one of the best copper discoveries in South America over the past few years and we are optimistic that our work programs during the remainder of 2009 will enhance the attractiveness of this project.
Yours truly,
John Black
President and Chief Executive Officer