SUNSTONE:It is a good time for ASX juniors to bring forward their copper and gold projects with some scale to them for consideration by mid-tier and major companies for a strategic alliance and/or a joint venture arrangement.There is a shortage of quality projects with scale to them out there and the mid-tiers and majors know that they need to be fleet of foot to secure what could be their next big mine because of record gold prices and near record copper prices.For the junior, the arrival of a partner with deeper pockets means the pathway to confirming a project is a sizeable development candidate is overcome because the biggest hurdle – a lack of funding – is removed.It is against that backdrop that Ecuador specialist Sunstone (ASX:STM) has opened a data room with a view to securing a strategic partner(s) at one or both of its advanced projects in the north and south of the country, El Palmar and Bramaderos/Limon in the south.Sunstone has a serious amount of burley in the water with both projects. Only this week it announced an initial resource estimate of 1.2Moz of gold equivalent at El Palmar and an additional exploration target of 15M-45Moz of gold equivalent.Exploration targets can’t be made up. In the case of El Palmar there are three holes that point to the potential upside, with the interpretation coming from a geological brains trust that has found big copper-gold systems in the past, including the giant Cascabel discovery by the London-listed Solgold on the same geological trend.Down south at Bramaderos, one of the cluster of porphyries there (Brama-Alba) has a resource estimate of 2.7Moz of gold equivalent and an exploration target of 3.3-8.6Moz of gold equivalent while a maiden resource estimate for the Limon epithermal discovery is expected next year.From that rundown it can be seen that the north and south projects will appeal to different types. In the north, it would be likely be major mining companies banking on finding the next Cascabel.Down south, mid-cap gold players would likely be attracted to the potential for a development of Limon as a 100,000-150,0000 low-cost producer to fund more exploration on the cluster of gold-copper porphyries.Sunstone last traded at 0.6c for a market cap of $31.So it can be suggested that if the opening of the data room does lead to a value enhancing deal (or a takeover), there is nothing in the current share price to reflect the potential upside from a deal being struck.Fair enough, there is no deal yet. But given the scale of the opportunity demonstrated by the existing resources estimates, and what could come from the exploration targets, it has got to be thought there is a lot of industry interest.No word yet on who is in the data room. What is known is that El Palmar is in the same neck of the woods as projects being advanced by Gina Rinehart’s Hancock prospecting and Chile’s copper king Codelco. As for down south, think cashed up gold companies looking to stretch their wings.
STM Price at posting:
0.6¢ Sentiment: Buy Disclosure: Held
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