Highlights on the first week of March 2016, Mineral Exploration in Mexico

During the first week of March Golden Minerals started a drilling campaign in Durango, and Firma Holdings acquired a fully permitted tailings project, in the same State. Baja Mining is in course to present red numbers in 2016 for its Boleo mine in Baja California Sur. Cash chasing had a good week, with Mag Silver, Telson Resources, Silver Spruce, Canarc resource and Kootenay announcing news on financing rounds. The lion’s share of that cash goes to Mag Silver, which gets US $ 74 million dollars. On mining several issuers disclosed their results for the year 2015: Baja Mining,  Avino silver, Endeavour Silver and Great Panther. Most miners are producing at an all sustaining cash cost which is too close to the actual spot prices for metals. Primero Mining announced some high grade results from San Dimas in Durango, while Impact Silver released some high grade intercepts from its operation in Mexico State, and Starcore Intl announced commercial production at its Matehuala plant. Bacanora Minerals presented the Pre-Feasibility Study (PFS) on its Sonora Lithium Property, in which purports plans to produce lithium carbonate and potassium sulphate. Goldgroup detailed the ramping up of production at Cerro Prieto in Sonora. On properties, Riverside Resources got a new concession in Sonora, while Silver Spruce amended the terms of its option on a property in Chihuahua.

On Exploration. Bacanora Minerals LTD presented the summary of work on its Sonora Lithium Project for the last six months, highlighting the increase in reserves to 5 million tons of lithium carbonate equivalent contained in 364 Mt of clay, at a Li grade of 2,600 ppm, and the CAD 17.8 M financing obtained in the period.  Golden Minerals Co has started a 3,000-meter drilling program on the Santa Rosa vein in the San Luis del Cordero Project in Durango State, which holds under option from Prospero Silver Corp. Drilling will test for vein extensions to the northwest and east of the known resource. “Management believes that an area of surface alteration and antimony and arsenic geochemical anomalies with dimensions of 200 by 1,000 meters along strike to the northwest of the known resource is prospective for additional vein extensions. In addition, the vein deposit is open to the east and at depth. The Company plans to drill 11 to 14 holes in this initial drill program with depths between 150 and 300 meters.”

On Resources. Firma Holdings Corp  acquired the fully permitted Magistral Tailings Project in Santa María del Oro, Durango by paying a nominal price and assume a structured accounts payable and environmental remediation obligation of approximately $1,440,000. “The acquisition includes a 500 TPD Dynamic Cyanide counter current system plant. Construction of the plant was completed in 2013, for approximately $4.5 million. It is unencumbered, fully permitted, is production ready, and is in excellent condition. The Magistral project includes the exclusive rights to process approximately 1.2 million tonnes of mineralized mill tailings, grading an average of 2.06 gold per tonne (79,000 ounces of gold).”

On Financing. Baja Mining Corp reported a project cash shortfall of US 300 million dollars for 2016, requesting further funding from its owners. Mag silver Corp announced on Tuesday the completion of the bought deal financing for US 65 million dollars, to be used mainly to fund development and exploration expenditures at the Juanicipio Project in Zacatecas. Later on the week Mag Silver released the “Over-Allotment Option” for additional gross proceeds of 9.7 M, raising the total gross proceeds to US $ 74.7 M. Telson Resources Inc made a non-brokered private placement for $ 1.5 M to be used on preparation of an internal scoping study to pre-feasibility standards on its Tahuehueto property in Durango. Silver Spruce Resources Inc completed the first tranche of its non-brokered private placement and raised gross proceeds of $333,295. The company has the Pino de Plata property in the Chihuahua Sierra Madre. Canarc Resource Corp also completed the first tranche of private placement equity financing, for total proceeds of CAD $ 1.6 M. Canarc owns and plans to develop its high grade El Compas gold-silver underground mine in Zacatecas to production. Kootenay Silver Inc announced the closing of a private placement with Panamerican Silver for CDN 2 M dollars.

On Mining. Baja Mining Corp reported on issues affecting production at its Boleo mine in Baja California Sur, after 2015 achieved only a third of the planned quota. Underground mining has not been able to keep the 1,000 to/day target consistently due to bad ground conditions. Primero Mining Corp found a new vein, named Convención, under post-mineral cover in its San Dimas mine (Tayoltita), and reports a new high grade ore shoot on the Regina vein, up to 3.8 m TW @ 9.4 g/t gold and 1,376 g/t Ag and 2.7 m TW @ 13.3 g/t gold and 1,400 g/t Ag. Results on the Victoria vein are impressive, with up to 22.8 g/t gold and 841 g/t silver over 4.3 m TW, 16.5 g/t gold and 1,062 g/t silver over 2.4 m TW and 10.1 g/t gold and 519 g/t silver over 4.7 m TW. Impact Silver Corp released some high grade results from drilling the Deeps Zone at its San Ramón mine in Zacualpan, Mexico State. Results include up to 432 g/t Silver over 6.80 meters TW and 185 g/t Silver over 11.44 meters TW. Avino Silver & Gold Mines Ltd announced the year 2015 results for its operations in the Avino mine, Durango, which include the milling of over 0.5 M tons and production of 1.6 M Oz Ag, 7 K Oz Au and 4.7 M Lb Cu. At an all sustaining cash cost (ASCC) of $12.14 (US$9.49) per silver equivalent ounce. Endeavour Silver Corp released results from its operations in Mexico, for a total combined output from its mines Guanaceví (Durango), El Cubo (Guanajuato) and Bolañitos (Guanajuato) of 7.2 M Oz Ag and 60K Oz Au. This production was achieved at an all sustaining cash cost (ASCC) of US $ 15.62 per silver ounce, or a cash cost (CC) of US 8.39 per silver ounce.  Great Panther Silver LTD reported financial results for year 2015, which include production of 4.1 M AgEq Oz, or 2.38 M Oz Ag and 21.7 K Oz Au, a 30% increase form year 2014, at a cash cost (CC) of $  7.50 per silver ounce, or an all sustaining cash cost (ASCC) of US $ 13.76 per silver ounce.

Primero drilling in San Dimas1








On Development.  Starcore International Mines LTD announced commercial production at its  Altiplano Plant located in Matehuala, San Luis Potosí, Mexico, with the production of a 21.1 kg doré bar. Bacanora Minerals LTD released the completion of the Pre-Feasibility Study  (PFS) at its Sonora Lithium Property near Husasabas, Sonora. The study highlights the potential to mine up to 35,000 tons of lithium carbonate (Li2CO3) and 50,000 tons per year of potassium sulphate (“K2SO4“), the first for use in batteries and the second for use in the fertilizer industry. Goldgroup Mining Inc announced the production of 9.1 K Oz Au in 2015, as part of the ramping-up production aiming to obtain 15 K Oz Au during 2016 at an estimated all sustaining cash cost of less than $ 900 Oz/Au.

On Properties.  Riverside Resources Inc. won the lottery process held to stake the Ariel Project in Sonora, near to La Caridad mine, reporting epithermal alteration zones typical of other gold-silver districts in Sonora, with the main zone at Ariel possibly distal to a porphyry copper target. Silver Spruce Resources Inc announced the revised terms of its option in the Pino de Plata property in Chihuahua, near the Palmarejo mine. The terms include the reduction of the full amount to be paid from US $ 1 M to $ 0.5 M in two years, part of the payment in shares, a capped 3% royalty and a advancement payment accruable to the royalty to begin once the acquisition is completed.

In the image below, a fine grained banded quartz vein fragment from El Escarpe, Querétaro (Field of view, ~4cm).

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