Wednesday 26th November 2014

Resource Clips


Unlocking Treasure Mountain

Huldra Silver takes an unconventional route to mining and exploration

by Greg Klein

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Update: On June 26, 2013, Huldra put its mine and mill on care and maintenance “to minimize cash obligations.” On July 9 Ryan Sharp stepped down as CEO and was replaced by director Peter Espig acting as interim CEO. On July 26 Huldra announced that it would seek creditor protection under the Companies’ Creditors Arrangement Act and that Sharp had resigned as a director “effective immediately upon the granting of an initial order under the CCAA.”

 

We’re about three and a half hours north of Vancouver, bouncing up a rough mountain road in a four-wheel-drive. The objective? To check out what Ryan Sharp calls “a grassroots exploration company with a producing mine. Or the other way around—a mining company with blue sky exploration potential.” He wants people to see for themselves Huldra Silver’s TSXV:HDA Treasure Mountain and Thule projects because, he says, “We’re not a paper company.” In particular, the nearly 3,000-hectare Treasure Mountain silver-lead-zinc operation hasn’t been divulged on paper nearly to the same extent as most working mines.

Huldra Silver CEO Ryan Sharp

Huldra Silver CEO
Ryan Sharp

“Other mines have gone into production without a feasibility study,” he points out. “Others have done it without a PEA. But very few have gone into production without a resource estimate.”

Well, there was a resource back in 2009. But Sharp maintains it was based on limited data. After investigating the company and its assets, he became convinced of far greater potential. That was in March 2010, when he was invited to join the company as president/CEO/director. Two months later he visited Treasure Mountain for the first time, driving up the logging road without a map. “I got all the way to the mine property without seeing another vehicle, and got out. I started walking through the snow, came across grizzly tracks and ran back to the vehicle. I found my way back to the Coquihalla Highway even though I’d never been up here before, and went home that night.”

But he returned, spending months at a time living in a trailer furnished with an air mattress. “I hiked the hills, I studied the rocks. I was the first person in 40 years to question the geology.” And to complement the geology was some infrastructure—a four-level underground mine built by Huldra in the late 1980s but never put into operation.

He sunk “pretty much 100% of my savings in it” and enticed investors to the site, including Coeur d’Alene TSX:CDM, which currently holds about 10% of Huldra. Financing continued with, most recently, $10 million in convertible debentures that closed last February.

Uphole drilling has brought better core recovery from Huldra’s underground stations

Uphole drilling has brought better core recovery
from Huldra’s underground stations.

To get the mine up and running Sharp hired manager Al Beaton, whose worldwide experience includes a past stint with Huldra during Treasure Mountain’s 1980s development stage. Experienced workers signed up, attracted in part by one of the best locations and climates Canadian miners could hope for. Sharp attributes considerable cost savings to using his own staff, instead of contract mining.

Sharp’s background, on the other hand, might be atypical. But he says, “I have the background for what mining CEOs are going to become.” In addition to seven years as a broker, he headed an environmental construction/remediation firm. “It’s similar to mining in that it’s labour-intensive and equipment-intensive, with lots of permitting and red tape.” His geology is self-taught. Nevertheless the University of British Columbia took him on as an adviser and marker on an honours thesis about Treasure Mountain geology. “I’ve seen more rocks up there than anybody other than Magnus,” he says, referring to Magnus Bratlien, a Huldra director and veteran prospector.

For all that, Sharp insists he’s “the world’s lowest-paid mining CEO.”

Treasure Mountain mining began in November 2011, with commercial production achieved last March. Now Huldra typically sends three trucks hauling 42 tonnes of ore twice a day each to its mill outside Merritt, an hour and 20 minutes away. April totals show 233 tonnes of lead-silver concentrate and 199 tonnes of zinc-silver concentrate went to the smelter, a 42% and 18% increase respectively over the previous month.

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