Monday 26th September 2016

Resource Clips



Argentex VP Peter Ball on Argentina assays of 675.7 g/t silver over 5.8m

“We are 100% focussed in the province of Santa Cruz in Argentina. We have about 136,000 hectares of land. Our top priority focus of all our projects is Pinguino. Pinguino is about 100 square kilometres. We have about 75 line kilometres of veins. We are actively exploring and developing the resource within that one project. We’ve drilled, up to today, probably 50,000 metres. We’ve done over 500 holes. We have an old resource from October 2009 that had about 180 million ounces of silver equivalent, contained in this polymetallic resource. The program this year was to expand that resource, but also to develop a near surface silver-gold oxide resource. Since discovering the discovery hole near surface of 2,428 g/t silver over 6 metres, we started drilling around all these veins outside of the polymetallic. Because there are two separate geological mineralized events; they can be mined and explored separately. Since then we’ve had some phenomenal hits: 500 g/t over 12 metres, 1000 g/t over 5 metres, 1000 g/t over 10 metres, yesterday we had 700 g/t over 5.75 metres, plus also we’re starting to discover some interesting gold values. We hit about 6 g/t gold over 5.75 metres. So it’s a huge, very high grade system. We believe it’s the second largest mineralized vein swarm in Patagonia—second only to AngloGold Ashanti’s Cerro Vanguardia mine, which is along strike to the southeast. They’ve been mining there for 14 years, it was their first mine.

“We’re consistently seeing width in the range of six to 12 metres within the first 100 metres of surface. Open at depth, open along strike. And some of these veins are 8 kilometres long, 2 kilometres long, 5 kilometres long. Wherever we drill, we appear to consistently and continuously hit high-grade silver. A lot of people are very interested in the story, because of the high grade and the size of the project. We’re not talking about one vein, we’re talking about at least 50-some veins, and we keep finding more as we go along. All sitting directly on surface.

Wherever we drill, we appear to consistently and continuously hit high-grade silver. – VP Peter Ball

“I would say that the Pinguino deposit would be categorized as advanced exploration or early development. One reason is we’ve done a heck of a lot of drilling; we’ve got drill results coming out probably until September. We’re going to have two resource estimates completed this year, probably October Q4. One will be an update on the polymetallic, the second will be for the brand new near surface stuff, which will probably be giving us a nice re-rate. The only reason I say early development is because we completed a preliminary economic assessment, a scoping study, announced in March. Basically, at today’s prices, we could build the mine for $20 million. Internal rate of return would be just under 200%, a payback period of less than six months. That small mine would run 650,000 ounces of silver for eight years, and less than 10,000 ounces gold. But what one must realize, is that the PEA was done on our resource from two years ago.

“But we’re not the next emerging silver producer. We’re going to have a significant silver resource, and sure, if we wanted to, we could push forward; but the goal is to build value through ounces in the ground first, and get some re-rates, then focus on that. Because this year and most of the next year we’re working on prefeasibility studies and more drilling and such.

“We control 100% of all of our projects. We actually own the land of the Pinguino deposit. We purchased it for less than $1 million late last year. Our major shareholder is International Finance Corporation which is an arm of the World Bank, one of the largest funds in the world.They went to Argentina, looked at a number of projects, and selected ours for their first investment, and their only investment, I believe, in Argentina. They purchased 19.9% of us. As of today we have 57 million shares out, but we just announced a $20 million financing this morning, led by a syndicate of bankers that are looking to get on our side. The financing is being led by GMP Europe, which is a phenomenal name to have representing us. And the company has never been marketed until about two and half months ago! Very tight and lean management structure. Very low burn rate. Probably less than $150,000 a month, including the whole company, including Argentina—unless we’re drilling. If we drill you can add $500,000 per month, per rig. We have $4 million in the bank. We have great shareholders, a great management team, great board of directors. And we’ve been having excellent feedback.

“We’re looking forward to having some analyst coverage here fairly soon. Two weeks after I joined the company I had pretty much all the banks phone me, and I had six analysts down on site after they requested to go down. It’s one of the few stories I’ve ever worked on where they phone me.”

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