Sunday 4th December 2016

Resource Clips


Economy of size

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Despite last year’s bankruptcies among solar panel manufacturers, “over the next five-plus years there’s likely to be more and more solar panel production. There are jurisdictions like India which are bent on getting more renewables in place. China is going to be the largest solar panel manufacturer on earth. An offtake agreement would be an ideal scenario for Deer Horn.”

There’s always engineering risks when working in a mountainous area in winter. So the board decided we would not look at a year-round operation. That would mean less time and money to put it into production.—Tony Fogarassy,
Deer Horn Metals chairman

End users “are not concerned about price sensitivity. They’re more concerned about security of supply,” he explains. “About 90% of tellurium production results from a byproduct of copper refining. If copper demand drops, there’s that much less tellurium. As technology advances in refining copper, the result is proportionately less and less tellurium production.”

Although it’s about as rare as gold worldwide, Fogarassy emphasizes that tellurium constitutes “about 5% of the value of the Deer Horn deposit. So it’s not going to make or break the success of the potential mine. But it gives us some flexibility. It allows us to position ourselves a bit better when we want to raise capital.”

Nevertheless the PEA’s economics remain focused on gold and silver. But the numbers are based only on about a fifth of a 2.4-kilometre vein system. Sampling results released in January “found the silver and tellurium values held over that distance. The gold values came down a little in spots. But we’re encouraged that this looks like a pretty continuous system,” Fogarassy says.

Last year’s exploration also suggests a potential porphyry copper system and supports historic accounts of tungsten showings as well.

The PEA sees 74,000 tonnes of mill production a year, exempting the mine from the provincial environmental assessment required for projects handling 75,000 tonnes or more. “There’s always engineering risks when working in a mountainous area in winter. So the board decided we would not look at a year-round operation,” he points out. “That would mean less time and money to put it into production.”

Additionally, “the positive reaction that we’ve heard from two first nations is they like the concept of a small mine.” As the project progresses, so will talks with the region’s four native bands, who Fogarassy says are potential contractors, employees and even investors. “I’ve dealt with a number of first nations and indigenous communities in B.C. and other places and I’ve established many successful relationships,” he adds.

Deer Horn has an option with privately held Guardsmen Resources to earn 75% of the project.

Deer Horn stock opened March 13 on its previous close of $0.035, then ended on the daily high of $0.04. With 104.35 million shares outstanding, the company’s market cap came to $4.17 million. The 52-week low and high are $0.03 and $0.125.

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