Highlights on the second week of May 2016, Mineral Exploration in Mexico

The second week of May saw a lot of press release activity, fueled by the announcement of first quarter results, with some of these providing insights in exploration and financing. Information from 31 press releases in the week, and nine more from the previous week, was consulted to provide this summary of activities. On exploration, Azure, HECLA, Starcore, Orex and Gold Resources presented good drilling results, while Alamos Gold, Torex Gold and Mag Silver presented exploration results related to their mines/properties. Without knowing the details, the bad news is that Telson Resources made an expensive land-access deal, the kind of deal that if permeates in the country will make exploration almost impossible. On mining, Mexico leads for fifth year in a row silver production in the world. Twelve companies presented their financial results for the first quarter of 2016. To note is the range of production costs, same that are generally considerably lower this year compared with a year ago. AISC range from $8.71 to $16.98 per Ag Eq ounce, and from $848 to $1,095 for Au ounce, in these reports. On financing, seven companies announced getting some cash by share placement or debt subscription, with First Majestic’s closing of its 57.5 million bought deal financing being the most relevant. On deals, two companies joined efforts for exploration in northwestern Mexico, Timmins Gold sold the Caballo Blanco project and Endeavour Silver closed the acquisition of El Compas mine in Zacatecas.

On Exploration

  • HECLA Mining Co. continues exploration activities in, and around its San Sebastian mine in Durango. Recent shallow drillholes intersected up 2 m @ 597 g/t Ag and 0.3 g/t Au on the western extension of the Middle Vein, approximately 485 m away from the pit where the vein is currently being mined, and showing continuity for 120 meters. On the West Francine Vein a continuous structure has been defined for at least 270 meters, having widths between 0.6 and 4.8 meters, and recent intercepts as high as 416 g/t Ag and 1.5 g/t Au over 0.75 m and 68 g/t Ag and 2.2 g/t Au over 1.5 meters. Recent trenching has confirmed new veins associated to geochemical anomalies and RAB drilling from last year program. To the southeast of the East Francine pit a series of trenches have cut a 1.8 to 4 meter wide vein/breccia zone that can be traced for 240 meters along strike (announced on the first week of May).
  • Orex Minerals Inc. released drill results from its recent discovery in the Sandra Escobar project in Durango. All six holes present good numbers which include up to 49 m @ 205 g/t Ag and 32m @ 119 g/t Ag, but even the lowest grade hole presented 24 m @ 70 g/t Ag (All intervals are calculated true widths).
  • Telson Resources Inc. has renewed and extended a 30 years temporary land use agreement with La Bufa community, which includes the yearly payment of US $46,540, to be increased by 5% every year.
  • Gold Resource Corp. announced additional drill results from the Switchback system, located 500 to the NW of its Arista mine in El Aguila District, Oaxaca. For brevity, only one hole results will be displayed here, as several veins were intersected: 1 m @ 4.1 g/t Au, 51 g/t Ag, 0.7 % Cu 2.7 % Pb and 7.9 % Zn; 28.9 m @ 1.9 g/t Au, 104 g/t Ag, 0.4 % Cu, 3.2 % Pb and 13.4 % Zn; 24.5 m @ 1.4 g/t Au, 143 g/t Ag, 0.6 % Cu, 3.5 % Pb and 11.9 % Zn; and 8 m @6.8 g/t Au, 462 g/t Ag, 0.5 % Cu, 2 % Pb and 5.2 % Zn. Individual assays can be as high as 26.5 g/t gold, or 1,192 g/t Ag, over intervals ranging from 0.7 to 2.3 m.
  • Starcore International Mines Ltd. announced the highest grade intercept to date in its San Martin mine in Queretaro. “This hole intercepted a zone of limestone breccia followed by manto mineralization. High grade manto mineralization with visible gold was recovered between 48.65 and 58.9 meters. The weighted average grade of this 10.25 meter wide intercept is 65.17 g/t gold with 128.26 g/t silver”. The intercept is within 15 meters of existing workings.
  • Azure Minerals Ltd. presented drilling results from two holes at the Loma Bonita target, part of its Alacran project in Sonora, and adjacent to Azure’s Loma de Plata recent silver discovery. Results include 18.4 m @ 1.6 g/t Au and 40 g/t Ag, and 48 m @ 2.7 g/t Au, 32 g/t Ag, which includes 27 m @ 4 g/t Au.
  • Alamos Gold Inc. has increased its exploration budget to $16 million at Mulatos, specially for La Yaqui area, and with lesser priority at Cerro Pelon area. Over 5 K meters of drilling were completed at La Yaqui during the first quarter of 2016, in 24 holes. Alteration at La Yaqui is evident over an area approximately 1 km by 0.9 km in size. The 2016 program has focused on exploration drilling along the northwest trending ridge and to the northeast on the downslope side of the ridge, as well as delineation, definition and infill drilling on all new zones. At Cerro Pelon “drilling activities have been mainly focused on engineering support for mine development. A total of 2,770m of geotechnical and condemnation drilling were undertaken. Exploration drilling re-started towards the end of the quarter. The main objectives of the 2016 exploration program are conversion of the recently discovered mineral resources to mineral reserves and exploration beneath the large silica cap (approximately 800m by 300m) to the north of the current reserve pit. Mapping and sampling undertaken in 2015 indicate positive signs for mineralization beneath this silica cap”.
  • Torex Gold Resources Inc. reported that the El Limón deposits sits on top of an intrusive sill. “The chemical conditions that allowed the gold to deposit above the Sill also exist below the Sill. Four of six holes that pierced the Sill produced grades and thicknesses that have the potential to be economic. This area will be investigated with a drill program in the near future and has upside potential for the operation.”
  • Mag Silver Corp. and Fresnillo PLC are targeting the deep part of the Valdecañas vein system with 10 K meters of drilling, with surface and underground stations currently operating. “The holes range from 850 to over 1,200 metres in depth. Seven of the planned nine deep holes in the program are now complete and three additional deep holes have been drilled from underground from within the ramp. The final two deep holes being drilled from surface are currently in progress and are expected to be completed by mid-June. All assays are currently pending”.

On Mining

  • HECLA Mining Co. presented first quarter results of its operations, which include its San Sebastian mine in Durango, where 1.2 M Oz Ag and 9.3 K Oz Au were produced at a negative cash cost of $3.26 per silver ounce after by-product credits. 31 K tons of ore were milled at a grade of 1,282 g/t Ag and 10 g/t gold (announced on the first week of May).
  • In 2015 the country achieved a record production of 189.5 million ounces of silver, the highest global production for the metal in history, according to the Silver Institute. The record was attained by production increases from Fresnillo’s Saucito mines and Endeavour’s El Cubo mine in Guanajuato. The second place went to Peru, with a production of 135.9 million ounces. This is the fifth year on a row that Mexico leads the silver production ranks, on a world that saw last year production of the metal decrease by 2% (published on the first week of May).
  • Fortuna Silver Mines Inc. released first quarter 2016 results, which include the processing of 179 K tonnes of ore at a grade of 240 g/t Ag and 1.73 g/t Au at recovery rates of 93 and 92 % respectively, for a production of 1.28 M Oz Ag and 9.1 K Oz Au. The cash cost per silver ounce was $2.36, whereas the All-in sustaining cash cost amounted $8.71 per silver ounce, net of by-product credits from gold.
  • First Majestic Silver Corp. reported 2016 first quarter results, which include the production of 5.1 M Oz AgEq from its 6 mines in Mexico: Santa Elena in Sonora, La Encantada in Coahuila, La Parrilla in Durango, Del Toro in Zacatecas, San Martin (de Bolaños) in Jalisco and La Guitarra in Mexico State. Taken all together processed 789 K tonnes of ore and produced 3,074 K Oz Ag, or 5,083 K Oz AgEq, at cash cost of $5 per silver ounce or All-in sustaining cost of $8.97 per silver ounce.
  • Excellon Resources Inc. reported financial results for the first quarter of 2016, which include the processing of 14.7 K tonnes of ore at 483 g/t Ag, 4.8 % Pb and 6.1 % Zn, for a total production of 211 K Oz Ag, 1.3 M Lb Pb and 1.6 M Lb Zn. Recovery rates were 91, 83 and 79 percent respectively for silver, lead and zinc. Highlighted is the improved access to previously flooded mantos, which will provide high grade feed for the plant. Cash cost per silver ounce was $10.38/oz and AISC of $16.98 per silver ounce.
  • Starcore International Mines Ltd. reported production results for the quarter ending on April 2016, with 74 K tonnes milled at 1.66 g/t gold and 13 g/t silver, resulting in 3,476 AuEq ounces produced.
  • Pan American Silver Corp. reported 2016 first quarter results, having produced 1.37 M Oz Ag and 0.7 K Oz Au at La Colorada mine in Zacatecas, 1.07 M Oz Ag and 21.4 K Oz Au at the Dolores mine in Chihuahua, and 0.56 M Oz Ag and 3.3 K Oz Au at the Alamo Dorado mine in Sonora. Cash cost was $8.03 per silver ounce sold, and all-in sustaining cost was $13.12 per silver ounce sold.
  • Alamos Gold Inc. released first quarter 2016 results, which include 37.6 K Oz Au from Mulatos and 17.9 K Oz Au from El Chanate, both mines in Sonora, at cash cost of $811 and $1,086 per gold ounce, and All-in sustaining cost of $878 and $1,095 per gold ounce respectively. At Mulatos, 1.6 M tonnes of ore were mined by open pit, at a grade of 0.82 g/t Au, while 38.9 K tonnes of ore from the underground operations were milled, at a grade of 14.94 g/t Au, the recovery rate was 62%. At El Chanate, 1.2 M tonnes of ore were open-pit mined at an average grade of 0.6 g/t Au, and a recovery ratio of 73%.
  • Torex Gold Resources Inc. announced results for the first quarter 2016. On March 30 El Limon-Guajes mine achieved commercial production, reporting 38 K Oz Au in the quarter, with recovery rates of 80%.The life of mine (LOM) has been reduced from 10 to 8.5 years, consequence of re-interpretation of the geology of the deposit.
  • DynaResource Inc. reported 1,546 tons processed at an average grade of 12.9 g/t gold during April in its pilot plant in the San Jose de Gracia project, Sinaloa.
  • MAG Silver Corp. reported first quarter 2016 financial results. The ramp development has reached 2,800 of the 3,500m needed to reach the Valdecañas Vein.
  • Americas Silver Corp. Presented first quarter report 2016, which includes the PEA presented at the end of April for the San Rafael property at the Cosalá operations in Sinaloa. The mine is expected to produce 5.5 M Oz Ag, 100 M Lb Pb and 250 M Lb Zn over a mine life of 5.5 years.
  • Timmins Gold Corp. reported first quarter 2016 financial results. Production was at a cash cost on a by-product basis of US$761 per gold ounce, and an all-sustaining cost on by-product basis of US$848.
  • Sierra Metals Inc. reported 2016 first quarter results, which include its Bolívar and Cusi mines in Chihuahua.  At Cusi 42 K tons of ore mined from three veins at grades of 0.29 g/t Au, 174 g/t Ag, 1.4 % Pb and 1.4 % Zinc; with a total production for the quarter of 326 K  Oz AgEq. Mine development at Bolívar during the quarter totaled 1,422 m. Bolivar’s cash cost per copper equivalent payable pound was $1.32 and AISC per copper equivalent payable pound was $2.21 for Q1 2016. Cusi’s cash cost per silver equivalent payable ounce was $3.77 and AISC per silver equivalent payable ounce was $12.50 for Q1 2016.
  • GoGold Resources Inc. released financial results for 2016 first quarter, having produced 222 K Oz Ag and 1,382 Oz Au, or 335 K AgEq ounces. The cash cost per AgEq ounce was $6.78, and All-in sustaining cost per AgEq ounce was $9.44.

On Financing

  • Minera Alamos Inc. announced the closing of the second tranche of its previously announced private placement for aggregate proceeds of $500,000 (announced on the first week of May).
  • Consolidated Zinc Ltd. has announced commitments by which expects to raise AUD 6.5 million. The funds raised will be used to accelerate the resource drilling at the Plomosas Zinc Project in Chihuahua, focusing on the Cuevitas and Tres Amigos zones (announced on the first week of May).
  • Norvista Capital Co. announced the increase in equity interest in Minera Alamos Inc. from 11.7% to 18.3 %, by means of a non-brokered private placement of $500 K (announced on the first week of May).
  • Millrock Resources Inc. closed the first tranche of a non-brokered private placement, for gross proceeds of$501 K.
  • Silver Bull Resources Inc. announces its intention to complete a non-brokered private placement, which might net gross proceeds of up to CDN $1.5 million.
  • First Majestic Silver Corp. announced the closing of C$50 million bought deal financing, for gross proceeds of $57.5 million. “The Company intends to use the net proceeds of the Offering towards the mill and mine expansion at La Guitarra mine to 1,000 tpd, to further advance the roasting analysis and testing at La Encantada mine, and to allow the Company to increase the amount of development and exploration across the Company’s six operating mines as well as for general corporate and working capital purposes”.
  • Odyssey Marine Exploration Inc. reported first quarter results, which include two loan agreements for 1.825 and 3 million respectively.

On Deals

  • San Marco Resources Inc. and Globe Trotters Resource Inc. signed an alliance to generate and acquire mineral targets in northern Mexico, focused in Sonora (announced on the first week of May).
  • Endeavour Silver Corp. entered a definitive agreement with Canarc Resource Corp. to acquire 100% interest in Oro silver Resources Ltd. Oro Silver holds the El Compas gold-silver mine property and a five-year renewable lease on the 500 tonne per day (tpd) La Plata ore processing plant in Zacatecas, Mexico. Pursuant to the agreement, Endeavour will pay Canarc CAD$10.5 million and assume Canarc’s obligation to pay an aggregate of 165 troy ounces of gold from production to Marlin Gold Mining Ltd.
  • Timmins Gold Corp. entered into a definitive agreement with Candelaria Mining Corp. to sell 100% of its interest in the Caballo Blanco gold project, in Veracruz, for US$12.5 million and the assumption of US$5.0 million contingent payment to previous owner Goldgroup Mining Inc.

On Resources

  • Southern Silver Exploration Corp. released a technical report on its Cerro Las Minitas property in Durango. The resource estimate provides initial grade and tonnage for three mineral deposits, the Blind, El Sol and Santo Niño zones. The report establishes 3.7 M tonnes of ore as indicated resources, at 90 g/t Ag, 0.05 g/ Au, 2.3 % Pb 2.5 % Zn and 0.09 % Cu for a total of 10.8 M Oz Ag, 6 K Oz Au, 189 M Lbs Pb, 207 M Lb Zn and 8 M Lb Cu. For inferred resources, the numbers are: 6.6 M Tonnes at 82 g/t Ag, 0.17 g/t Au, 1.6 % Pb, 4.3 % Zn and 0.2 % Cu, for a total of 17.5 M Oz Ag, 35 K Oz Au, 237 M Lb Pb, 626 M Lb Zn and 29 M Lb Cu.
  • Azure Minerals Ltd. delivered a JORC compliant mineral resource for its Mesa de Plata deposit in Sonora. The report states a high-grade indicated resource of 2.2 M tonnes at 219 g/t Ag and a mid-grade indicated resource of 7.4 M tonnes at 44 g/t Ag. The total indicated resource is 9.6 M tonnes @ 83.9 g/t Ag, for 25.9 M ounces of silver.
  • Torex Gold Inc. presented its resource estimate to the end of 2015, With El Limón-Guajes deposit having 48.3 M tonnes at 2.65 g/t Au and 4.37 g/t Ag in the Measured and Indicated categories, for 4.4 M Oz Au and 4.1 M Oz Ag, as well as 6 M tonnes at 1.86 g/t Au and 3.45 g/t Ag in the Inferred category, or 0.36 M Oz Au and 0.66 M Oz Ag.

Content like what you have just read can also be seen at at LinkedIn’s Mexico Mineral Exploration Group.

On the picture above, geologist Jorge Cirett trying to obtain a good GPS signal while looking at a rockface in the La Caridad District in Sonora.

DSCN0276

One thought on “Highlights on the second week of May 2016, Mineral Exploration in Mexico

  1. Pingback: Highlights on the second week of May 2016, Mineral Exploration in Mexico – mexicominingcenter

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s