Highlights on the First Week of November 2016, Mineral Exploration in Mexico

During the first week of November, at least 32 press releases were published by companies working in Mexico, including a fair amount of quarterly financial reports. ON MEXICO NUMBERS AND NEWS, a letter was delivered to the Mexican president by CANCHEM, suggesting points to be addressed by the government to make the country more competitive for attracting foreign investment. Canadian corporations and the Canadian ambassador ask for surface access conditions akin to those of the energy sector in Mexico. ON EXPLORATION, a technical report was filed from a property in Sonora. A project in Chihuahua is seeing drilling at several targets, while other in the same state reported mapping, prospecting and geophysical surveys. A property was drilled in Zacatecas, showing somewhat narrow but high grade gold intercepts. In Sonora, an agreement has been reached to allow access for drilling, while in a Durango property the drilling continues. A project in Puebla is to see a PFS by early 2017. ON MINING, nine companies reported third quarter production results for its operations in Sonora, Sinaloa, Chihuahua, Durango, Guanajuato, Guerrero and Oaxaca. A fatality was reported on a mine in Guerrero, and a pit in Sinaloa reached the high grade part of the orebody. In Durango, the construction of a new mine has been announced. ON FINANCING, one company filed documents for a private placement for $460 K, and one other sold shares in another junior company for $650 K. ON RESOURCES, a maiden silver resource was announced for a property in the foothills of the Sierra Madre in Durango. ON DEALS AND CORPORATE ISSUES, the closing of the acquisition of three properties in Chihuahua was announced, the lease of a mill was extended in Durango, and the farm-out agreement of another property in Guanajuato was completed.

ON MEXICO NUMBERS AND NEWS

  • Cámara de Comercio de Canadá en México (CANCHAM). In a letter to the president of Mexico, Enrique Peña Nieto, this organization established five points on which the effort to attract foreign investment on the Mexican mining industry is failing. 1) The weakness on the rule of law. The recent illegal blockade at the Peñasquito mine in Zacatecas is an example. 2) Judicial uncertainty. Surface access delays and conflicts are common, and radical rules change a hindrance. 3) Increasingly unfavorable fiscal rules that maim competition on a global market. 4) An aggressive SAT (Mexican IRS) tax collection policy, increasing audits and lengthy delays to recover VAT. 5) Security, evidence of which is found on the gold and silver robberies at mining sites. CANCHAM MÉXICO calls for effective action pairing the internal efforts with the international promotional messages to attract investment, so Mexico can recover the lost positions against other investment recipients in the hemisphere, and expecting an effective coordination among the different government levels in mining.
  • Canada has participated with 45.2% of the direct foreign investment in Mexico in the period 1999-2015, and 42% of that amount was on the mining industry, mostly on the extraction of precious metals. According to Canadian corporations, the Mexican government offered to equalize the scheme to facilitate the access to the surface from the Energy sector (approved on the energy reform two years ago) to the mining sector. As stated by the Canadian ambassador, the Canadian corporations are eager to establish forums with all the involved to promote a better understanding and improve communications.

ON EXPLORATION

  • Almaden Minerals Ltd. expects to complete ongoing studies in 2016, and complete a Pre-Feasibility Study early in 2017, for its Ixtaca property in Puebla. Continued metallurgical work backs the amended Preliminary Economic Assessment (PEA) recovery projections of 90% for gold and silver for the limestone domain, which in turn represents about 90% of the metal to be produced under the amended PEA. Gravity concentration and flotation are to be used to obtain those recovery levels.
  • Kootenay Silver Inc. reported that 11 core drill holes totaling 2,100 m have been completed and submitted for assaying on the Ram Zone as part of its initial 3,000 m drill program on its La Cigarra project in Chihuahua. The drill rig is to test now the La Soledad zone, 1 km south from the La Cigarra defined resource. An extended multi-phase drill program is expected to be executed on the next 12-18 months, focusing on several new prospective targets on the property.
  • Candelaria Mining Corp. announced the results of the completed diamond drill program at its Pinos project in Zacatecas. The program initiated last May and was carried out on the Cinco Estrellas vein, over a strike length of 2.2 km. Significant intercepts include 1.95 m @ 5.88 g/t Au, 28 g/t Ag (including 0.8 m @ 14.2 g/t Au, 40 g/t Ag); 0.9 m @ 4.84 g/t Au; 6.4 m @ 1.65 g/t Au, 18 g/t Ag (including 0.75 m @ 5 g/t Au, 17 g/t Ag); 1.8 m @ 2.87 g/t Au, 71 g/t Ag (including 0.32 m @ 11.05 g/t Au, 275 g/t Ag); 6.9 m @ 2.52 g/t Au; 4.25 m @ 4.32 g/t Au.
  • SilverCrest Metals Inc. has filed a technical report on its Las Chispas property in Sonora, which is available on SEDAR (sedar.com).
  • San Marco Resources Inc. has reached surface right access with the local ejido at its Chunibas project in Sonora. San Marco is now to advance the permitting process for trenching and drilling. Past drilling on the property include 42.6 m @ 1.04 g/t Au, 22.9 m @ 2.04 g/t Au and 15.2 m @ 2.8 g/t Au. “Mineralized shear/veins are generally 1 – 2 metres in width, but are surrounded by haloes of lower grade stockworks, breccias and fractures that constitute broader targets. This disseminated style of mineralization occurs in intrusive host rock without visible vein or shear development”.
  • Consolidated Zinc Ltd. has identified several new mineralization occurrences while realizing regional geological, geochemical and geophysical exploration work around its Plomosas project in Chihuahua. Geological mapping and prospecting was followed by gravity and helicopter-borne magnetic surveys. Prospecting identified two main gossanous occurrences: El Fenomino area is 2.5 km NW from the Plomosas mine, where a manto outcrops over a 100 m,  and 5 – 7 m in thickness, with anomalous Pb (up to 4.4%) and Zn (up to 1%). At Los Alfonsitos mine several gossanous outcrops were noted while mapping, with samples away from the workings returning 8 – 39 g/t Ag, 0.4% – 1.9% Pb and 0.6% – 1.1% Zn. The magnetic survey identified similar magnetic signatures to the mine sequence, and confirmed structures detected by the gravity survey.
  • Golden Minerals Co. announced that the Santa Maria underground drilling results will be used to update the resource estimate, and a 2,000 m drilling program in the Rodeo property in Durango is to be finished by the final quarter of 2016.

ON MINING

  • Torex Gold Resources Inc. announced a fatality at its Guajes mine in Guerrero, where a contractor employee suffered a rock fall fatal accident on the pit.
  • Excellon Resources Inc. reported third quarter 2016 financial results. The company sold 228,172 AgEq Oz, the production cost per mined tonne was $298, the cash cost $17.95 and the all-in sustaining cost per silver ounce was $40.85. The quarter numbers were negatively affected by the optimization effort that reduced output while increasing development costs. Production is to increase as the water table is lowered, and the bulk of the optimization has already being paid for. Net working capital totaled $14.7 M by the end of the period (Platosa, Durango).
  • Marlin Gold Mining Ltd. provided an update on its La Trinidad mine in Sinaloa. Reflecting the mining of the higher grade part of the deposit, 17 K, 25.7 K and 130.7 k tonnes were crushed in August, September and October respectively, with grades of 0.82, 1.8 and 4.3 g/t Au. 450 Oz Au were stacked in the heap in August, 1,484 in September and 18,052 in October. Daily recovered ounces went from 14 in August and September to 210 in October.
  • Argonaut Gold Inc. is to proceed with the construction of the San Agustin mine in Durango, with an estimated capital expenditure of $42.6 M and average annual production of 80 K Oz Au during 6.5 years of mining, for a total production of 488 K Oz Au and 3.8 M Oz Ag. Production is expected to start during the third quarter of 2017.
  • Gold Resource Corp. reported production results for the third quarter 2016, of 6,066 Oz Au, 431.3 K Oz Ag, 213 tonnes copper, 1 K tonnes lead and 3.2 K tonnes zinc. 113.9 k tonnes of ore were milled (1,278 tpd) @ 1.86 g/t Au, 128 g/t Ag, 0.24% Cu, 1.18% Pb, 3.45% Zn, with recovery rates of 89% and 92% for gold and silver, and 78%, 74% and 82% respectively for copper, lead and zinc. Cash cost stood at $623 and all-in sustaining cost at $1,021 per Au Oz on a by-product basis. Cash and cash equivalents stand at $17.1 M. (El Aguila mine, Oaxaca)
  • Torex Gold Resources Inc. announced its financial and operational results for the third quarter 2016. At its El Guaje mine in Guerrero 869 K tonnes were mined, 5.65 tonnes of waste moved with a waste/ore strip ratio of 6.5, and a 10.1 K tpd plant throughput. The average grade was 3.08 g/t Au, for a quarterly production of 77.9 K Oz Au at a total cash cost of $517 per Au Oz and all-in sustaining cost of $699 per gold ounce. Cash and cash equivalents stand at $93.6 M.
  • Timmins Gold Corp. reported its financial results for the third quarter 2016, period during which the company produced 24,052 Oz Au at a cash cost of $785 per Oz Au and all-in sustaining cost of $846 per gold ounce on a by-product basis. Cash and cash equivalents stand at $18.5 M. During the period a new 43-101 report was produced for the San Francisco mine in Sonora, The Caballo Blanco property in Veracruz was sold and the pre-construction phase of the Ana Paula project started.
  • McEwen Mining Inc. released its production figures for the third quarter 2016, which include numbers from its El Gallo mine in Sinaloa, where 11,754 Oz Au and 7,151 Oz Ag were produced at a $598 per AuEq Oz, and all-in sustaining cost of $680 per AuEq Oz on a co-product basis. The company ended the quarter with $62.5 M on liquid assets.
  • Greath Panther Silver Ltd. reported financial results for the third quarter 2016. 95.2 K tonnes were milled, producing 510.5 K Oz Ag and 5,432 Oz Au at a cash cost of $10.99 per AgEq Oz and all-in sustaining cost of $15.43 per AgEq Oz. Cash and cash equivalents stand at $52.9 M.
  • Golden Minerals Co. reported third quarter 2016 results. The Celaya property in Guanajuato was optioned (see below), excess mine equipment was sold for $0.7 M, and the 50% stake in the San Diego Property was sold, Cash and cash equivalents were $3.4 M, and debt balance of zero at the end of the period.
  • Endeavour Silver Corp. reported Q3 2016 financial results. The company produced 1.284 M Oz Ag and 14,364 Oz Au. At Guanaceví in Durango, plant throughput was 892 tpd, at Bolañitos and El Cubo, in Guanajuato, plant throughput was 1,442 and 1,531 tpd respectively. Capital investment for the fourth quarter is planned at $2.8 M in Guanaceví, $1.7 M at Bolañitos and $1.6 M at El Cubo. Cash costs were $5.27 per Ag Oz, and all-in sustaining costs were $11.47 per silver ounce, net of gold by-product credits. Cash increased to $83.2 M and working capital increased to $91.9 M, $13.9 M were raised during the quarter.

ON FINANCING

  • Riverside Resources Inc. sold 3 M common shares on privately held Croesus Gold Corp. for total proceeds of $650 K CAD. Riverside continues to hold 3 M common shares as part of the sale of the Sugarloaf Peak project.
  • Alset Energy Corp. filed with the TSX documents for its private placement financing, aiming to $460 K in gross proceeds.

ON RESOURCES

  • Orex Minerals Inc. and Canasil Resources Inc. announced a maiden resource estimate for its Boleras Silver deposit on the Sandra Escobar project in Durango, which is being advanced by Orex under an option agreement with Canasil.  At a “Base Case” of 45 g/t Ag cut-off, the Inferred Resource Estimate yields 9.8 M tonnes @ 106 g/t Ag, for a total of 33.3 M Oz Ag. “The resource is not pit constrained as this is an initial resource and the deposit limits are not fully constrained”.

ON DEALS AND CORPORATE ISSUES

  • Endeavour Silver Corp. closed the acquisition of a 100% interest on the Parral properties (in Chihuahua) from Silver Standard Resources Inc. The properties cover 3,432 hectares, and contain large veins traceable for eight km. Endeavour has issued 1,198,083 common shares to Silver Standard, and is to spend US$2 million on exploration on two years, after which will have a year to deliver a NI-43-101 report including a resource estimate, and issue US$200 k in common shares to Silver Standard for each million Oz Ag in M&I resources defined on the San Patricio and La Palmilla properties.
  • Oceanus Resources Corp. and Mackie Research Capital Corp. signed an agreement under which Mackie will provide market making services to Oceanus, providing market stabilization and liquidity services.
  • Golden Minerals Co. reported that the lease to HECLA of the Velardeña plant in Durango was extended to the end of the second quarter 2017, and can be extended to the end of 2018. The farm-out agreement of the Celaya property in Guanajuato to Electrum Global Holdings LTD. was completed. To earn a 60% interest Electrum paid $200 K, and has to invest $2.5 M on the property over three years. Electrum can gain another 20% interest by investing additional $2.5M. Golden sold its 50% interest on the San Diego property to Golden Tag Resources for $0.4 M, 2.5 M shares of Golden and 2% NSR.

Content like what you have just read can be seen at https://gambusinoprospector.com/ and at LinkedIn’s Mexico Mineral Exploration Group.

On the picture below, epithermal quartz vein fragment with lattice calcite textures. El Geyser area, Queretaro.

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