Highlights on the Fourth Week of October, 2017. Mineral Exploration in Mexico

During the 43rd week of the year (October 23rd to October 29th, 2017), at least 30 press releases were announced by companies working in Mexico, including five quarterly reports. ON MEXICO ISSUES: Almost 70% of the silver production in Mexico comes from Zacatecas, Durango and Chihuahua. ON EXPLORATION: eight companies disclosed exploration efforts during the week: In Sonora Azure updated work on Oposura, Sara Alicia and Alacrán projects; SilverCrest released high-grade assays from sampling rehabilitated workings on Las Chispas. In Chihuahua Endeavour confirmed high–grade silver mineralization within an historical resource at Veta Colorada; Golden Minerals released high-grade intercepts from at its Santa Maria property; Mammoth Resources plans to commence a drill program at its Tenoriba property. In Sinaloa, Auxico provided sampling results from a trench at its Zamora project. In Zacatecas Defiance Silver provided results from drilling at San Acacio. In Oaxaca, Gold Resource disclosed drill results from Altagracia.  ON MINING: Agnico Eagle, New Gold, Coeur Mining, Goldcorp and Capstone reported third quarter results. In Chihuahua Sierra Metals announced increased recoveries from its mills at Cusi and Bolivar; Consolidated Zinc presented a Scoping Study on its Plomosas property. In Durango, Argonaut reached commercial production at San Agustin. In Guerrero, Telson reached 1,400 tpd processing at Campo Morado; Alio Gold presented drilling results of two confirmation holes at Ana Paula, and granted the development contract for the 1,200 m decline. ON FINANCING: Azure is proposing a 20 to 1 share consolidation program. ON RESOURCES AND DEVELOPMENT: Bacanora presented its yearly report. Goldcorp announced an update on mineral reserves and resources. Agnico informed that 16,800 m of drilling were performed during the last quarter at its El Barqueño property in Jalisco. Oceanus filed at SEDAR the technical report on the new resource estimate on El Tigre property in Sonora. ON DEALS AND CORPORATE ISSUES: Alamos Gold and Richmont Mines have been granted an interim order from the Quebec Superior Court. Canuc Resources acquired an important concession on its San Javier project in Sonora. Colibri Resources is to retain the investor relations contractor and marketing services on a deal involving a cash payment and shares. Minera Alamos and Vista Gold entered into an acquisition agreement on Vista’s Guadalupe de Los Reyes project in Sinaloa.

ON MEXICO ISSUES

  • On Mexican Silver Production, Zacatecas has 40.8% participation, Durango 14.0% and Chihuahua 13.9%. Located in Zacatecas the Saucito mine is the largest primary silver producer in the world, generating 13% of the Mexican production. Silver production in Zacatecas decreased 11.5% in 2016, due mainly to lower grades at Peñasquito. In Durango, production decreased 23.7% by work interruptions at San Dimas and lesser output from Guanaceví. Construction of the La Preciosa (Durango), Pitarrilla (Durango), El Gallo II (Sinaloa), Cordero (Chihuahua) and Cerro del Gallo (Guanajuato) projects still await better market conditions to go ahead.

ON EXPLORATION

  • Endeavour Silver Corp. informed that drilling has confirmed high grade silver mineralization within the Argentina-Remedios area of the Veta Colorada project. IMMSA operated the Veta Colorada mine until 1990, and left a 32.1 M Oz Ag historical resource contained in 4.0 M tonnes @ 248 g/t Ag. “Twenty-one drill holes totaling 6,928 metres (m) of core were drilled to test the portion of the historic resource located within the Argentina-Remedios area of the Veta Colorada…. The drill holes were spaced at approximately 100 m centres over an area 400 m long by 400 m deep”. True width intercepts highlighted contain 2.2 m @ 213 g/t Ag; 3.0 m @ 1,562 g/t Ag (including 0.5 m @ 8,070 g/t Ag); 2.3 m @ 248 g/t Ag; 9.3 m @ 457 g/t Ag; 7.0 m @ 344 g/t Ag;   2.3 m @ 4,641 g/t Ag (including 0.6 m @ 13,117 g/t Ag); 7.5 m @ 448 g/t Ag; 1.5 m @ 230 g/t Ag; 4.6 m @ 521 g/t Ag; 6.4 m @ 239 g/t Ag; 1.1 m @ 200 g/t Ag; 1.0 m @ 230 g/t Ag. A new resource estimate is to be released on the first quarter of 2018.
  • Auxico Resources Canada Inc. provided sampling results from a single trench on the Aguamas zone of its Zamora project in Sinaloa. The trench returned 50 m @ 0.85 g/t Au, including 3 m @ 13.07 g/t Au. The trench is within 100 m of the Aguamas mine historical workings, where recent sampling returned 14.9 g/t Au, 192 g/t Ag; 34.0 g/t Au, 98 g/t Ag. On these workings a series of quartz veins at multiple angles cut a silicified volcanic breccia.
  • Golden Minerals Co. released high-grade intercepts from the first six holes of a drill campaign on its Santa Maria property in Chihuahua. Intercepts include true width results of 1.06 m @ 604 g/t Ag, 0.84 g/t Au, 0.2% Pb, 0.1% Zn; 0.80 m @ 255 g/t Ag, 0.77 g/t Au, 1.6% Pb, 1.5% Zn; 2.50 m @ 431 g/t Ag, 0.29 g/t Au, 0.5% Pb, 1.0% Zn; 2.50 m @ 217 g/t Ag, 0.49 g/t Au, 0.6% Pb, 0.2% Zn; 0.40 m @ 164 g/t Ag, 0.40 g/t Au, 0.6% Pb, 3.8% Zn; 2.36 m @ 310 g/t Ag, 0.77 g/t Au, 0.4% Pb, 0.9% Zn. These holes potentially extend the strike dimension of the vein resource 110 m to the east, with the remaining drill holes to test an additional 250 m on the same direction.
  • Defiance Silver Corp. provided results from its phase 1 drill program at its San Acacio project in Zacatecas. Highlighted intercept results: 17.0 m @ 110 g/t Ag, 0.13 g/t Au, 0.1% Pb, 0.3% Zn (including 8.1 m @ 222 g/t Ag, 0.22 g/t Au 0.2% Pb, 0.5% Zn); 16.7 m @ 101 g/t Ag, 0.75 g/t Au, 0.1% Pb, 1.8% Zn (including 3.2 m @ 419 g/t Ag, 0.82 g/t Au, 0.1% Pb 0.3% Zn); 6.1 m @ 138 g/t Ag, 0.80 g/t Au, 0.2% Cu, 1.3% Pb, 1.9% Zn; 3.6 m @ 211 g/t Ag, 0.14 g/t Au, 0.1% Pb, 0.2% Zn; 7.4 m @ 159 g/t Ag, 0.52 g/t Au, 0.8% Pb, 1.8% Zn; 7.25 m @ 631 g/t Ag, 0.43 g/t Au, 0.1% Pb, 0.2% Zn; 0.7 m @ 432 g/t Ag, 0.24 g/t Au, 0.2% Pb, 0.6% Zn; 0.75 m @ 331 g/t Ag, 0.10 g/t Au, 0.1% Pb, 0.3% Zn; 2.1 m @ 283 g/t Ag, 0.17 g/t Au, 0.4% Pb, 0.7% Zn; 0 m @ 231 g/t Ag, 0.51 g/t Au, 0.4% Pb, 1.7% Zn; 3.0 m @ 372 g/t Ag, 0.10 g/t Au, 0.2% Pb, 0.4% Zn. The Veta Grande system pinch and swells along strike, with 4.4 km of the 5.6 km Defiance holdings having not seen production or modern exploration in a vein system that has produced close to 200 M Oz Ag.
  • Gold Resource Corp. disclosed drill hole results from the Alta Gracia drill program in Oaxaca. Alta Gracia hosts the Mirador mine, being 16 km NW from Gold Resource’s El Aguila project. This drill program tested four vein structures that do outcrop at the surface. Highlighted drill results: 0.23 m @ 5.17 g/t Au, 2,990 g/t Ag; 1.06 m @ 1.36 g/t Au, 453 g/t Ag; 1.47 m @ 2.29 g/t Au, 708 g/t Ag; 3.83 m @ 1.13 g/t Au, 194 g/t Ag; 0.98 m @ 0.69 g/t Au, 1,030 g/t Ag; 1.29 m @ 4.33 g/t Au, 1,710 g/t Ag; 1.72 m @ 1.40 g/t Au, 820 g/t Ag; 0.77 m @ 1.13 g/t Au, 690 g/t Ag.
  • Azure Minerals Ltd. announced its quarterly activity report. Oposura in Sonora was acquired, with drill results confirming the potential to host a high grade Zn-Pb-Ag deposit and a 7,000 m resource definition drill program in progress with two drill rigs currently in the property. The Sara Alicia project was acquired in Sonora, with rock chip sampling returning high grade gold and cobalt grades. An exploration 450 m drilling program is in progress. At Alacrán project, also in Sonora, a 5,000 m drilling campaign undertaken by earn-in partner Teck, commenced with three drill rigs operating, targeting epithermal and porphyry copper mineralisation at Loma Bonita, Cerro San Simon and Cerro Colorado areas.
  • Mammoth Resources Corp. plans to commence a diamond drill program from 8 to 24 holes at its Tenoriba project in Chihuahua. The drill targets were selected on a combination of surface geology, trace element geochemistry, gold bearing samples, PIMA sampling results, ground mag and induced polarization surveys and previous drilling by another company. Petrographic work has showed the mineralization to occur as free gold, and metallurgical testing on core material has shown gold recoveries to attain up to 100% on shallow intervals (dominated by oxides), and recoveries of 65% to 72% on the deeper intervals. To note is that the drill contractor accepted to be paid up to 60% of the cost of the program in shares of Mammoth. Core length mineralized intervals on previous drilling include 39.7 m @ 0.44 g/t Au; 34.4 m @ 1.03 g/t Au; 12.0 m @ 0.64 g/t Au.
  • SilverCrest Metals Inc. released additional underground channel sample results from its Las Chispas project in Sonora, where the company is currently exploring nine of the nineteen known veins. The channel sampling in the newly rehabilitated historic underground workings on Las Chispas vein, defining continuous unmined areas with bonanza grades. Composited intervals include an average of 2.9 m @ 5.8 g/t Au, 1,024 g/t Ag over 20 m of length; 3.0 m @ 2.2 g/t Au, 286 g/t Ag over 50 m of length; 3.0 m @ 4.0 g/t Au, 551 g/t Ag over 20 m of length; 5.0 m @ 1.8 g/t Au, 246 g/t Ag over 40 m of length; 4.9 m @ 4.9 g/t Au, 632 g/t Ag over 35.5 m of length. Individual samples as high as 1.1 m @ 15.8 g/t Au, 1,860 g/t Ag; 1.0 m @ 20.6 g/t Au, 2,082 g/t Ag; 0.8 m @ 31.7 g/t Au, 4,390 g/t Ag; 0.8 m @ 28.0 g/t Au, 2,930 g/t Ag are included in those intervals. So far SilverCrest has drilled 35,000 m in 141 holes in the project.

ON MINING

  • Telson Resources Inc. initiated ore processing at Campo Morado in Guerrero, at an approximate rate of 1,400 tonnes per day (tpd). “The first two years of production are planned to be mined from the G9 and El Largo ore bodies in areas of elevated gold and silver values within polymetallic base metal zones having average grades of 1.8 g gold/t, 142.7 g silver/t, 3.99% zinc, 0.62% copper and 1.07% lead”. Metallurgy tests have resulted in new processes added, including the removing of carbon organic matter and new types of reagents. The plan is to increase the production rate to the mill’s capacity of 2,500 tpd over the next six to twelve months.
  • Alio Gold Inc. released results from the first two confirmation holes on its Ana Paula project in Guerrero. The 2,000 m drill program is to twin 11 holes to confirm previous drilling and to obtain samples for metallurgical testing. The holes intercepted 99.4 m @ 10.8 g/t Au; 74.0 m @ 6.2 g/t Au.
  • Argonaut Gold Inc. announced commencement of commercial production on October 1, 2017, on its San Agustin mine in Durango. The project was delivered on schedule and more than 20% under budget, on the initial capital estimate of $43 M.
  • Sierra Metals Inc. informed an increase on recoveries from its mills in Mexico, to an average level of 82% at its Piedras Verdes mill in the Bolivar mine and to 83% at its Malpaso mill in the Cusi mine, both in Chihuahua. Production at Bolivar is expected to reach 3,000 tonnes per day (tpd) in Q1 2018 through the commissioning of 13 new pieces of equipment. At Cusi, the focus in on completing access, development and production of the Santa Rosa de Lima zone, with wider structures and grades than the narrow veins being mined now. Currently selected higher grade material from the old mine and development ore from Santa Rosa de Lima is being sent to the mill. Tonnage from the Santa Rosa de Lima structure is to be gradually increased until the mill operates at its 650 tpd capacity. A geological reinterpretation led to the discovery of the Santa Rosa de Lima zone, which averages 3.8m @ 372 g/t AgEq after two drill campaigns totaling 29,500 m. (Note of compiler.- There are two very informative graphics on how the metallurgical recoveries were improved within the press release).
  • Agnico Eagle Mines Ltd. reported third quarter 2017 results, including figures from its Mexican operations, on which 15.9 M were spent in sustaining capital and 2.0 M in development. At Pinos altos in Chihuahua, 587 K tonnes were processed at a rate of 6,380 tpd @ 2.65 g/t Au, and total cash cost of $376 K per Oz Au. Exploration focused at the Madroño zone, immediately SE from the Creston Mascota pit. Selected results: 15.8 m @ 4.3 g/t Au, 23 g/t Ag (including 4.2 m @ 10.6 g/t Au, 55 g/t Ag); 6.7 m @ 1.0 g/t Au, 11 g/t Ag; 11.3 m @ 1.7 g/t Au, 11 g/t Ag; 9.8 m @ 1.0 g/t Au, 14 g/t Ag; 10.9 m @ 0.9 g/t Au, 12 g/t Ag; 5.8 m @ 3.0 g/t Au; 16.5 m @ 5.8 g/t Au, 68 g/t Ag; 22 m @ 1.3 g/t Au, 24 g/t Ag. At La India in Sonora, 1.54 M tonnes were processed at a rate of 16,762 tpd @ 0.69 g/t Au and total cash cost per Au ounce of $657. Drilling is ongoing at the Main Zone, El Realito, Cerro del Oro and El Cochi zones. Promising results from ongoing exploration have led to the search of location options to construct additional pad capacity.
  • New Gold Inc. released third quarter 2017 results, which includes the production of 7,951 Oz Au, 0.1 M Oz Ag from the residual leaching of the closed San Pedro mine in San Luis Potosi, at an All-in sustaining cost of $1,532 per Au Oz.
  • Coeur Mining Inc. reported third quarter 2017 results, including figures from its Palmarejo mine in Chihuahua, where 413.1 K tonnes @ 172 g/t Ag, 2.49 g/t Au were milled. Average recoveries were 83.6% for Ag and 83.1% for Au to produce 1.91 M Oz Ag, 28,948 Oz Au. Production reached the end of year target of 4,500 tpd during the period. As many as nine rigs were operating at Palmarejo, focused on resource expansion at the Nación–Dana deposit.
  • Alio gold Inc. has awarded the contract for developing the underground decline at the Ana Paula project JDS Energy and Mining to manage the contract and underground mining operation. The 1,200 m decline is expected to take seven months to complete, at a rate of 5-7 m per day, and cost of approximately $10 M. A definitive feasibility study (DFS) is currently under way, and expected to be completed in the second quarter of 2018.
  • Goldcorp Inc. presented the third quarter report for 2017, without including figures by project. The company produced 633 k Oz Au at an AISC of $827 per gold ounce.
  • Capstone Mining Corp. announced third quarter financial results, including figures from its Cozamin operation in Zacatecas, where 4,242 tonnes of copper were produced during the period, at all-in cost of $1.86 per Lb Cu. The signing of an agreement that provides access to Capstone to the lower depths of the adjoining Endeavour Silver claim to the south is providing access to a zone with higher grades and greater widths, some 580 m away from the current indicated resource of the Mala Noche Footwall Zone.
  • Consolidated Zinc Ltd. completed the Scoping Study on its Plomosas property in Chihuahua with positive results at a base case level. The study focused on mining the Tres Amigos resource (544 K tonnes @ 11.2% Zn, 2.1% Pb, 14 g/t Ag) on level 5 using existing infrastructure. Contractor mining is to be used with a cut and fill method on mineralization on which 90% to 95% Zn and up to 70% Pb recoveries have been achieved, to produce a concentrate free of penalized elements. The process is to include crushing, grinding, bulk flotation roughing and cleaning stages to produce a concentrate.

ON FINANCING

  • Azure minerals Ltd. has proposed a 20 to 1 consolidation, reducing the current shares on issue from 1.67 billion to 83.6 million. Shareholder approval is to be sought at the AGM on 20 November 2017. Cash balance at quarter end is $5.9 M (Oposura and Sara Alicia, Sonora).

ON RESOURCES AND DEVELOPMENT

  • Bacanora Minerals Ltd. presented its annual financial results for the year ended on 30 June 2017. During the period Bacanora secured a strategic partnership with Hanwa Co. Ltd.; a feasibility study (FS) is to be completed in Q4 2017; lithium carbonate has been produced at the Pilot Plant since May 2016, enabling optimization of the beneficiation process; 4,000 m of infill drilling was completed to upgrade resources; acquired 50% interest on the Zinnwald Lithium project in Germany.
  • Goldcorp Inc. presented an update on its mineral reserve and mineral resource estimates to the end of June 2017, including figures from its Mexican operations. At Peñasquito in Zacatecas, proven and probable gold mineral reserves totaled 9.0 M Oz Au, compared with 10.0 M Oz Au in 2016. Mine depletion accounted for 0.7 M Oz Au, while higher input costs and updated metallurgical recoveries led to a change in cut-off grade, resulting in the reclassification of 0.4 M Oz Au into the measured and indicated mineral resource category. 0.22 M Oz Au stand in the inferred category. Reserves also include 545.6 M Oz Ag, 3,684 M Lb Pb, 8,927 M Lb Zn; Measured and Indicated resources (M&I) of 5 M Oz Ag, 1,270 M Lb Pb, 2,858 M Lb Zn; Inferred resources of 14.2 M Oz Ag, 85 M Lb Pb, 307 M Lb Zn.
  • Agnico Eagle Mines Ltd. reported approximately 16,800 m of drilling at El Barqueño, in Jalisco, during the last quarter. The focus has been on extending known deposits and testing other areas as Tecolote, El Rayo and Camino. Drilling has now extended the mineral resources over one km to the W of the Azteca-Zapoteca zone. Six rigs are operating on El Rayo, Cuauhtemoc, Pilarica, Zateca-Zapoteca and Socorro. Agnico believes in the potential to develop a series of open pits utilizing heap leach and/or mill processing similar to its Pinos Altos mine in Chihuahua.
  • Oceanus Resources Corp. has filed a 43-101 compliant Technical Report disclosing the mineral resource estimate announced in September on its El Tigre property in Sonora. The resource includes two open pit and two underground operations at the El Tigre and Fundadora veins. The total hard rock resource is 25.9 M tonnes @ 0.52 g/t Au, 19 g/t Ag, containing 436 K Oz Au, 15.7 M Oz Ag and 6.6 M tonnes @ 0.52 g/t Au, 89 g/t Ag as indicated and inferred resources respectively. The tailings resource is 939 K tonnes @ 0.27 g/t Au, 78 g/t Ag, containing 8 K Oz Au, 2.3 M Oz Ag and 1 K Oz Au, 254 K Oz Ag, as indicated and inferred resources respectively.

ON DEALS AND CORPORATE ISSUES

  • Alamos Gold Inc. and Richmont Mines Inc. have been granted an interim order from the Quebec Superior Court (Commercial Division) authorizing various matters, including the holding of special meetings of Alamos and Richmont shareholders to consider the proposed plan of arrangement whereby Alamos will acquire all of the issued and outstanding shares of Richmont, and the mailing of the joint information circular.
  • Canuc Resources Corp. entered into a definitive agreement to acquire the Carobens 151 hectares concession from Minerales y Carbones de Mexico S.A. de C.V. by issuing 150 K common shares (valued at US$50 K) and US$50 K in cash. “The newly acquired mining concession envelops existing land holdings to the northeast. Early exploration has determined that silver-gold mineralization strengthens to the northeast.”
  • Colibri Resources Corp. announced the retention of FronTier Consulting Ltd. to provide investor relations and marketing services. Under the 12-month period Colibri is to pay $110 K plus out-of-pocket-expenses, and grant 150 K stock options at an exercise price of $0.15. FronTier and its related companies currently own 1.34 M share purchase warrants of Colibri.
  • Minera Alamos Inc. entered into an option agreement with Vista Gold Corp. to acquire Vista’s subsidiary Minera Gold Stake S.A. de C.V., which owns the Guadalupe de Los Reyes project in Sinaloa. Guadalupe de Los Reyes has an indicated resource of 380 K Oz Au and 155 K Oz Au of inferred resources. The agreement includes US$6 M in staged payments: US$1.5 M on closing, US$1.5 M on each of the 12 and 24 month anniversary and a final purchase price of US$1.5 M on or before the 48 anniversary. A minimum 1% NSR will apply to gold production from a heap leach open pit, which could increase to 2% if gold prices exceed US$1,600 per ounce. The royalty is capped at a cumulative amount of US$2 M. Vista Gold retains the right to acquire a 49% non-carried interest in the development of underground gold resources, if Vista’s interest is diluted below 10% interest, an NSR like the one used to open pit mining is to apply.

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

Collage2

On the picture above, collage of mineralized rock fragments from a prospect on the Durango Altiplano. Photo by Jorge Cirett.

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