Sunstone this week released the latest batch of assays from its 3.6 million ounce Bramaderos project in Ecuador, with all 12 holes assayed so far from the Porotillo, Copete and Melonal prospects returning long mineralised intersections outside the resource.

The sixth and seventh holes at the Porotillo prospect returned 200m at 0.62 grams per tonne gold equivalent (0.38g/t gold and 0.14% copper) from surface, including 19m at 1.01g/t AuEq (0.77g/t gold and 0.15% copper); and 151m at 0.54g/t AuEq (0.34g/t gold and 0.12% copper) from surface, including 26m at 0.84g/t AuEq (0.53g/t gold and 0.19% copper).

“This consistent discovery of gold-copper porphyry outside the current footprint points toward a substantial resource upgrade later this year,” Shaw and Partners senior analyst Peter Kormendy said.

Kormendy maintained a buy recommendation and a $2.10 price target for Sunstone.

That’s 650% higher than Sunstone’s trading levels this week of 28c.

MST Access analyst Chris Drew is even more bullish with a price target of $2.31.

The stock has halved over the past quarter and is trading near a 52-week low, something that is frustrating Sunstone managing director Patrick Duffy.

In April, Sunstone released a scoping study for Bramaderos that outlined a 23-year mine that could produce 135,000 ounces of gold-equivalent a year for the first eight years.

However, the company was forced to retract the production targets and economic forecasts in the study due to the reliance on inferred resources later in the project’s life.

Duffy said Sunstone was ticking off milestones, including a resource upgrade in November 2025 and a share consolidation in February.

“We’re working towards a resource upgrade later this year, which will be significant,” he said.

Duffy is hoping the 2026 resource update will take Bramaderos closer to 5Moz, as well as lifting the indicated component.

The company has a porphyry exploration target of 315-505Mt at 0.41-0.68g/t AuEq for 4.1-11.2Moz of AuEq, as well as an epithermal exploration target of 30-44Mt at 0.9-1.2g/t AuEq for 900,000oz to 1.7Moz of AuEq at the Limon prospect.

“Everything’s moving in the right direction, and we’ve got our pathway to a PFS to start next year, and there’s clearly a very profitable project there,” Duffy said.

Apart from its scale, Duffy said Bramaderos had a lot going for it as a potential development due to its location and access to infrastructure.

“It’s in a large valley, 900m above sea level, and it’s quite remote with a small community that’s very supportive,” he said. 

“It’s quite arid, so it only rains for three or four months of the year, but we have access to a river and water there, so it’s as good a location as you’ll find in South America, compared to the some of these projects that are either in the Amazon or 5000m above sea level.

“Everything’s going for Bramaderos.”

Process underway

Sunstone’s Bramaderos, as well as the 1.2Moz AuEq El Palmar project in Ecuador’s north, have attracted interest from external parties in the past and earlier this year, it appointed RBC Capital Markets to run a formal partnering process.

Duffy said the process was going well as RBC had a deep network of global connections.

“There’s a huge amount of appeal to bigger producers, so that’s I think it’s just a matter of time,” he said. 

“Meanwhile, we just keep trying to keep options open and continue growing the resource, advancing the studies and putting ourselves in the best position longer term.”

Ecuador has been a hot spot for gold and copper M&A activity.

Last year, China’s CMOC Group paid C$581 million cash for Toronto-listed Lumina Gold Corp, owner of the Cangrejos gold project in Ecuador and it is now working to get the project into production by 2028.

Earlier this year, SolGold agreed to an £842 million cash takeover offer from its 12.2% shareholder Jiangxi Copper Company.

SolGold’s held the Cascabel copper-gold project with reserves of 3.2Mt of contained copper, 9.4Moz of gold and 28Moz of silver.

Last year, China’s Lingbao Gold Group paid US$10 million for a 9.9% stake in Australia’s Titan Minerals, which is developing the Dynasty project.

Duffy said the Chinese were extremely active in Ecuador.

“They’re the most active at the moment, despite the Western producers making huge profits and margins, and sitting on all this cash,” he said.

“But it seems to me that it’s the Chinese who are moving the fastest.”

Development-wise, Ecuador is far less advanced than its southern neighbours Peru and Chile but is home to arguably one of the world’s most profitable gold mines, Lundin Gold’s Fruta del Norte.

“Ecuador has this whole pipeline of huge world-class projects now that in the next 5-10 years will absolutely change the whole mining landscape and follow in the footsteps of Lundin Gold with Fruta del Norte,” Duffy said.

Kormendy believes Sunstone’s assets have the potential to be a tier one production hub.

“The current environment, characterised by high levels of M&A in Ecuador and record gold prices, is surely the perfect backdrop to conclude a transaction that reflects the true value of Sunstone’s current and potential resource base,” he said.