Friday 3rd July 2015

Resource Clips


Steady As She Goes

Apogee Nears Bolivian Silver Production

By Greg Klein

Trial mining at Apogee Silver’s TSX:APE underground Pulacayo Silver-Lead-Zinc Project in Bolivia began in October. That same month, a resource update revealed an additional 133% silver ounces indicated and 38% inferred from June 2010. The indicated category showed a 92% increase in silver grade, while inferred came in with a 53% increase. CEO Neil Ringdahl is pleased with the progress but determined to concentrate on the long term. “We’re going slowly because we’re training the local community to become miners,” he explains.

Ringdahl continues, “We want to make sure we’re working safely. So we’re taking it easy, and we’ll continue to do so until the guys are more comfortable with the procedures. But it’s interesting that their parents and grandparents were mining 50 years ago.”

Apogee Nears Bolivian Silver Production

In its time Pulacayo was big, the second-biggest silver mine in Bolivian history, producing over 600 million ounces. Ringdahl hopes to revive at least some of that past glory, pointing to the October update as evidence.

The indicated category estimates 5.96 million tonnes grading 153.14 grams per tonne silver for 29.34 million ounces silver, 0.91% lead for 119.57 million pounds lead and 2.04% zinc for 268.05 million pounds zinc. The inferred category estimates 5.42 million tonnes grading 150.61 g/t silver for 26.24 million ounces , 0.83% lead for 99.18 million pounds and 2.07% zinc for 247.35 million pounds.

“This mine is sitting on a very big resource, and there’s a lot of exploration upside still to come,” says Ringdahl. “Once we get this started it’s going to run for a very, very long time.” The company plans another resource update by 2Q 2012 before going into feasibility. Key to the new project will be the pilot plant and concentrator, planned for commissioning in 4Q 2012.

“It’ll be a 400-tonne-per-day plant, but it’s very exciting that the high grades will let us move up our production quite significantly,” he says. “We might be able to get a million ounces a year from the pilot plant, although we’re not committing to that. Once our concentrator is commissioned, we’ll do commercial mining. The revenues will be used for ongoing expansion of the plant and the mine.” For now, the project is stockpiling ore, having accumulated over 500 tonnes so far.

Some eight kilometres away lies the open-pittable Paca Deposit with a 2007 inferred resource of 18.4 million tonnes grading 43 g/t silver for 25.5 million ounces. “Paca will probably be Phase II,” Ringdahl reports. “Phase I is to get the underground mine running at Pulacayo and, as we expand, we’ll gain additional ounces from an open pit at Paca.”

Farther south, across the Chile border, sits Apogee’s Cachinal Project. Its 2009 open-pit and underground resource estimates an indicated category of 5.66 million tonnes grading 101 g/t silver for 18.41 million ounces silver, 0.13 g/t gold for 24,030 ounces gold and 0.22% zinc for 27.72 million pounds zinc. The inferred category estimates 820,000 tonnes grading 115 g/t silver for 3.02 million silver ounces, 0.12 g/t gold for 3,260 ounces gold and 0.22% zinc for 4.03 million pounds zinc.

This mine is sitting on a very big resource, and there’s a lot of exploration upside still to come. Once we get this started it’s going to run for a very, very long time —Neil Ringdahl

“Cachinal has significant potential on strike and at depth and average grades of about 100 grams a tonne, but it was historically mined at much higher grades,” Ringdahl says. “An open pit could potentially produce one to two million ounces a year.” Apogee currently holds an 80% interest, with Valencia Ventures TSX:VVI holding the rest. “I don’t know if that 20% will be up for grabs, but it’s something we’d like to take on,” he says.

Although Apogee holds a 100% interest in its Bolivian projects, it has a 1.5% royalty agreement with a local cooperative and 2.5% royalty with the state-owned mining company, Corporación Minera de Bolivia (COMIBOL). Bolivian political rhetoric has included talk of a euphemistic “recovery” or nationalization of mines. Ringdahl comments, “As part of the community, the cooperatives support mining, as does the state. The country is looking for partners to contribute to the capital, technology and human resources to bring new development to the mining sector. The remarks that [President Evo Morales] have made recently have been very, very encouraging for mining companies.”

Ringdahl points out that three new Bolivian mines that have begun production since 2007: Sumitomo’s $1.3-billion San Cristobal Silver-Zinc Mine, Pan American’s TSX:PAA $72-million San Vicente Silver-Zinc Mine and Apogee-shareholder Coeur d’Alene’s TSX:CDM $238-million San Bartolomé Silver Mine.

As Apogee makes the transition from explorer to miner, Ringdahl is primed for the challenge. “I’m a mining engineer by trade, and I have 17 years’ experience building mines around the world. I came on because the board was looking for someone who could take the company into production,” he points out.

“We have a multinational crew on the ground—good guys from several countries who know their field. We’ve spent a lot of time getting the right guys. Our chairman, Scott Paterson, specializes in marketing and raising finances and has lots of contacts throughout North America,” he adds. “Director Stan Bharti is CEO of Forbes & Manhattan, the merchant bank that backs a number of juniors. They’re one of our shareholders, and for a small fee we have access to their top-notch legal and technical services.

“So we’re a junior with all the benefits of a large company. That definitely gives us an edge,” Ringdahl says.

At press time Apogee had 292.6 million shares outstanding at $0.16 for a market cap of $46.8 million.


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