Highlights on the Second Week of August, 2017. Mineral Exploration in Mexico

During the 32nd week of the year (August 7th to August 13th, 2017), at least 22 press releases were announced by companies working in Mexico, including eight second quarter reports. ON MEXICO ISSUES, two companies reported the receipt of VAT recovery from the government for $1.3 M and $2.4 M respectively. ON EXPLORATION, in Sonora, Oceanus reported results from underground sampling at El Tigre, while Millrock presented an update on properties under its alliance with Centerra. In Zacatecas, Alset presented drilling results from its lithium property, La Salada. In Guanajuato, Golden Minerals informed on drilling by Electrum of its Celaya property.  ON MINING, Golden Minerals, Torex Gold, Premier Gold, Alio Gold, Pan American Silver, Americas Silver, Primero Mining and Argonaut Gold presented production and/or financial results for the second quarter of 2017. US Antimony reported cost reductions on its operations and Telson resources reported the first concentrates shipment from Tahehueto in Durango. ON FINANCING, no relevant news for the first time in the year.  ON RESOURCES AND DEVELOPMENT, Golden Minerals informed on the acquisition of three more claims and the incoming drilling campaign on its Santa Maria project in Chihuahua. ON DEALS AND CORPORATE ISSUES, Santacruz Silver completed the sale of the Gavilanes project in Durango to Marlin Gold. Colibri completed the acquisition of Canadian Gold, along with its properties in Sonora. McEwen Mining reported on the next semi-annual return of capital instalment.

ON MEXICO ISSUES

  • On VAT recovery. The first company to announce a sizeable VAT recovery in years was Alio Gold, which received $1.3 M in cash before the end of the second quarter. Primero Mining received $2.4 M after the end of the second quarter.

ON EXPLORATION

  • Golden Minerals Co. announced that Electrum Global Holdings L.P. received results of drilling on Golden’s Celaya property in Guanajuato. Results from 5,600 m drilled in seven holes (800 m per hole?) show intercepts of epithermal quartz vein mineralization with Au, Ag, Zn grades that warrant further testing.
  • Alset Minerals Corp. reported partial results from phase one drilling at La Salada salar in Zacatecas, the first of 13 salars to be tested. At La Salada, one deep hole (51.35 m) and 40 auger holes (4.5 – 26.0 m in depth, average 14 m) were completed, both near surface brine samples and extensive lake sediment samples were recovered in the 1,800 m by 900 m salar. Results from five of the holes (the rest are pending) average 14.4 m @ 3.6% K, 975 ppm Li (up to,1860 pm) and 535 ppm B. Water samples average 1.3% K, 1.6% SO4, 258 ppm B, 9 ppm Li, 57 ppm Ca, 36 ppm Mg.
  • Oceanus Resources Corp. presented assay results from sampling at old underground exploration tunnels from the unmined Protectora, Aguilas, Fundadora and Caleigh veins on its El Tigre project in Sonora. The rock chip samples are said to be at least 0.5 m in width (no average width disclosed), and collected every 3-5 m along strike in 13 exploration tunnels. Average results include 3 samples on the Caleigh vein @ 19.9 g/t Au, 2,247 g/t Ag; On the Protectora vein: 20 samples @ 0.2 g/t Au, 437 g/t Ag; 18 samples @ 1.3 g/t Au, 290 g/t Ag; 4 samples @ 2.8 g/t Au, 337 g/t Ag; 16 samples @ 2.2 g/t Au, 473 g/t Ag; 5 samples @ 2.8 g/t Au, 680 g/t Ag; 19 samples @ 0.6 g/t Au, 480 g/t Ag. On the Fundadora vein: 5 samples @ 6.1 g/t Au, 307 g/t Ag; 12 samples @ 1.2 g/t Au, 254 g/t Ag.
  • Millrock Resources Inc. presented an update in exploration, including information on its three properties in Sonora. The La Navidad project was optioned on June, and immediately entered into a JV with Centerra Gold Inc. Presently underway are soil sampling, geological mapping, induced polarization and magnetic surveys. Also in June El Picacho project was optioned and made a “designated project” on the alliance between Centerra and Millrock. Soil sampling, geological mapping, induced polarization and mag surveys are currently being performed. Los Chinos and Los Cuarenta projects options were terminated by Centerra.

ON MINING

  • United States Antimony Corp. reported major cost reductions at its Mexican antimony smelter, as a result of metallurgical changes while increasing production rates. Production at Wadley, San Luis Potosi, is growing with more miners. USAC intends to use its Los Juarez explosives license at Soyatal, Queretaro, which will save money and time. Guadalupe is undergoing road work to re-establish the production of high-grade concentrates. The application for the cyanide permit for the Los Juarez project was resubmitted to SEMARNAT (EPA equivalent) at the end of July, after one item change requested by the agency.
  • Telson Resources Inc. announced that the first shipment of lead and zinc concentrates processed at the Atocha mill has been delivered to Mercuria Commodities Trading, S.A. de C.V.. As of August 1, 2017, the Company has processed approximately 1600 tonnes of ore through the Atocha toll mill producing approximately 66.1 dry tonnes of lead concentrate and 94.5 dry tonnes of zinc concentrate which have been delivered to Mercuria.
  • Golden Minerals Co. presented financial results for Q2 2017. Approximately $1.7 M revenue was received from the oxide plant lease to Hecla, and costs of $0.5 M to the services provided under the lease, for a net operating margin of $1.1 M. The company spent $0.5 M in exploration related primarily to work at the Santa Maria (Chihuahua), Rodeo (Durango) and other properties, as well as holding costs. Cash and cash equivalents balance of $2.7 M at the end of the period.
  • Torex Gold Resources Inc. reported financial and operational results. At El Limón Guajes mine in Guerrero 74,487 Oz Au were produced, as ramp-up continues, with design throughput achieved in June. Plant throughput was 1.2 M tonnes, or 13,063 tonnes per day (tpd), while mine production was 8.4 M tonnes, or 92,044 tpd. The gold recovery rate was 86% on a 2.37 g/t Au average grade, at cash cost $709 per Oz Au and AISC $991. Cash balance of $77.2 M including restricted cash of $15.7 M at the end of the period.
  • Premier Gold Mines Ltd. announced its operational and financial results for the second quarter of 2017. At Mercedes in Sonora 177.9 K tones were milled (1,954 tpd) @ 4.03 g/t Au, 36 g/t Ag; with recoveries at 94.9% Au, 43% Ag, to produce 21,893 Oz Au, 89.5 K Oz Ag. By-product cash cost per Oz Au was CAD$550 and by-product AISC per Oz Au of CAD$688. Quarter end cash balance of $156.8 M (US$120.9 M).
  • Alio Gold Inc. reported second quarter 2017 results. Production at the San Francisco gold mine was 22,011 ounces during the period, at AISC $954 per Oz Au. The San Francisco mine revitalization plan was initiated and the definitive feasibility study (DFS) after the positive pre-feasibility study (PFS) was released and a CAD$50.4 M bought deal financing was completed. The pre-stripping campaign envisions moving 22 M tonnes of waste from the Main and La Chicharra pits over the next 20 months. Cash and cash equivalents at the end of the period were $35.9 M.
  • Pan American Silver Corp. announced Q2 2017 results, including figures from its operations in Mexico. At Dolores in Chihuahua the construction of the agglomeration plant was completed and development for underground mining advanced, with initial stope ore mining expected to initiate before the end of 2017. At La Colorada mine in Zacatecas production achieved 1,800 tpd rates during the last month of the quarter. At La Colorada 1.73 M Oz Ag, 0.94 K Oz Au were produced at cash cost $3.38 per Ag Oz. At Dolores 1.04 M Oz Ag, 22.44 K Oz Au were produced at cash cost $0.12 and at Alamo Dorado in Sonora 0.26 M Oz Ag, 0.69 K Oz Au were produced at cash cost $11.18. Cash and short-term investments of $198.2 M at the end of the period.
  • Americas Silver Corp. disclosed consolidated financial and operational results for the second quarter of 2017. The figures of its operations in Mexico were informed in a previous release. San Rafael in Sinaloa remains on budget and on time to start production by the end of Q3, 2017. Cash balance at the end of the period was $12.8 M.
  • Primero Mining Corp. reported operating and financial results for the second quarter, 2017, including figures form its Mexican operations. At San Dimas 11,903 Oz Au, 0.97 Oz Ag were produced at cash cost $1,144 per AuEq Oz, and AISC $1,650 per AuEq Oz, with operations being impacted by bad relations with unionized employees. “…the Company believes that labour disruptions may continue to adversely affect the Company’s ability to profitably operate the San Dimas…” and “Primero highlights the significant liquidity risk imposed by the pending RFC maturity date of November 23, 2017, and notes that it may not be able to fully repay its debt obligations…”. Cash stood at $12.1 M and $10.0 M available under its existing revolving credit facility (RFC) at the end of the period, with a $33.5 in VAT and $22.8 M income taxes receivable outstanding.
  • Argonaut Gold Inc. announced its financial and operating results for the second quarter of 2017. The consolidated production was 29,730 AuEq Oz at cash cost $785 and AISC $906 per AuEq ounce. At El Castillo in Durango 2.0 M tonnes of ore @ 0.39 g/t Au and 2.65 M tonnes of waste were moved (51 K tpd) to produce 16,927 Oz Au at cash cost $893 per ounce. At La Colorada in Sonora 1.22 M tonnes of ore @ 0.64 g/t Au and 4.77 M tonnes of waste were moved (66 K tpd) to produce 12,098 Oz Au and 38.2 K Oz Ag at cash cost $590 per AuEq ounce. At San Agustin (10 km from El Castillo) mining commenced during the quarter, leach pad and pond construction was completed and the crushers installed, with ore beginning to be staked on the pad in late June. Construction was 75% complete by the end of July. Cash and cash equivalents stood at $53.8 M at the end of the quarter.

ON FINANCING

  • No relevant news.

ON RESOURCES AND DEVELOPMENT

  • Golden Minerals Co. entered into an agreement to acquire three additional claims at the Santa Maria project in Chihuahua for $0.7 M over four years, with an initial payment of $50 K and $30 K in six months. The targets in these claims are to be tested in an upcoming 2,000 m drill program in the third quarter of 2017, while the environmental study to obtain the permit to perform the 200 tpd underground mining envisaged on the preliminary economic assessment (PEA) has been completed.

ON DEALS AND CORPORATE ISSUES

  • Santacruz Silver Mining Ltd. entered into a definitive agreement to sell 100% interest in the Gavilanes property in Durango to Marlin Gold Mining Ltd. Santacruz is to settle the outstanding balance on some of the claims by making a $500 k payment and issuing 1.25 M Santacruz shares to the property vendor. Gavilanes is a low sulphidation epithermal deposit in the San Dimas mining district with NI-43-101 compliant 6.1 M AgEq indicated ounces (953 K tonnes @ 200 g/t AgEq), and 28.2 M AgEq inferred ounces (5.4 M tonnes @ 163 g/t AgEq).
  • Santacruz Silver Mining Ltd. settled the outstanding balance owing on certain of the claims included in the Gavilanes project (in Sinaloa) by making a cash payment of US$500 K and 1.25 M Santacruz shares.
  • Colibri Resource Corp. completed the acquisition of Canadian Gold Resources Ltd. Colibri acquired all outstanding shares of Canadian Gold for $4 M, paid by way of issuance of 24.2 M shares to the vendor. Colibri now owns 100% interest in Minera Bestep S.A. de C.V., a private Mexican company that holds 100% (no NSR’s) of the Pilar and the Sun properties near Suaqui, in Sonora.
  • McEwen Mining Inc. reported a revised record date for the next semi-annual return of capital instalment of a ½ cent per share which will be distributed to shareholders of record on August 14, 2017. The distribution will be paid on August 17, 2017.

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, vuggy silica fragment within a felsic tuff in Chihuahua. Photo by Jorge Cirett.

Vuggy quartz at Moreno

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