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Posts tagged ‘Coeur d’Alene Mines Corp (CDM)’

Steady As She Goes

December 13th, 2011

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.

Old Mine, New Lustre

November 7th, 2011

MAX Drills Nevada’s Historic Majuba Hil

By Greg Klein

“We’re excited,” says MAX Resource Corp TSX:MXR President/Director Stuart Rogers. “We can’t call it a new discovery because it used to be a mine. But we’re just thrilled with the results.” The object of his enthusiasm is the Majuba Hill Copper-Silver-Gold Property, now the focus of the company’s foray into Nevada.

“We’ve got long intervals of high-grade mineralization, and we now have gold in the system that hadn’t been identified before,” Rogers continues. “We’ve identified other areas to the east and northwest where we can explore. We’re permitted now, and we’re starting the drill up again now. The next step will be to prove up the size of this resource.”

MAX Drills Nevada's Historic Majuba Hill

MAX initially looked at three other Nevada properties with equal enthusiasm: Table Top (gold), East Manhattan Wash (gold) and Diamond Peak (gold-zinc-silver). Such were Rogers’ conflicting passions that in September 2010 he told, “My favourite property changes day to day, as the results come in.” But when the company began drilling Majuba Hill last June, the object of his ardour was set. The property’s Phase II drill program, announced October 31, confirms his new commitment.

An agreement with Claremont Nevada Mines LLC allows MAX to earn an initial 60% interest in Majuba Hill through US$6.5 million worth of exploration over six years. A further $3.5 million over two additional years would increase the interest to 75%. The vendor gets a 3% NSR, 1.5% of which may be purchased for $1.5 million.

Before 1947, Majuba Hill produced grades up to 12% copper and 1,244 grams per tonne silver. “It was high grade, just like the stuff the old guys mined by hand,” says Rogers. “These types of places are the best places to start when you want an open pit because you can see the high grade that’s left in the system.”

The company’s first Majuba Hill assays, released September 27, include

  • 37.5 g/t silver and 0.38% copper over 42.7 metres
    (including 364.6 g/t silver and 2.23% copper over 1.5 metres)
  • 4.3 g/t silver and 0.05% copper over 257 metres
    (including 12.3 g/t silver and 0.09% copper over 24.4 metres)

A fourth hole released October 12 shows

  • 16.5 g/t silver and 0.28% copper over 89.3 metres
    (including 71.6 g/t silver and 0.95% copper over 1.5 metres)

On October 25 MAX released the final four Phase I assays:

  • 39.2 g/t silver, 0.57% copper and 0.1 g/t gold over 96 metres
    (including 71 g/t silver, 1.14% copper and 0.15 g/t gold over 44.2 metres)
  • 50.8 g/t silver, 0.31% copper and 0.31 g/t gold over 50.3 metres
    (including 100.1 g/t silver, 0.53% copper and 0.56 g/t gold over 19.8 metres)
  • 15.4 g/t silver, 0.56% copper and 0.07 g/t gold over 45.7 metres
    (including 39.3 g/t silver, 0.54% copper and 0.11 g/t gold over 9.1 metres)
  • 3.08 g/t silver and 0.06% copper over 111.2 metres

By the time the last results were released, Rogers’ enthusiasm for Majuba Hill was unshakeable: “We’re getting the drill back on the property, and we’re going to drive this project like a truck. If you’ve got results like these, then follow up on them, maximize them.”

As for Phase II’s direction, “We’ve identified targets a couple of kilometres to the northwest and to the east [of the former producing mine] that we’re going to drill. If those holes show there’s some size to this, it will become a development project. We’re trying to go very quickly with the drilling to prove our theory that there’s size to this system,” Rogers says.

If those holes show there’s some size to this, it will become a development project. We’re trying to go very quickly with the drilling to prove our theory that there’s size to this system —Stuart Rogers

The project has yet to produce a resource estimate. “We could do an estimate with what’s been drilled already, but it’s not going to be the size we need to get attention,” he says. “What we’re looking at here is a copper-silver porphyry. We think it’s open-pitable, and right now the stripping ratio looks like it’ll be basically nothing.”

The 1,039-hectare property sits on the Western Nevada Gold Belt, about halfway between Allied Nevada’s TSX:ANV Hycroft Mine, which produced 102,483 ounces gold and 233,974 ounces silver in 2010, and Jipangu Inc’s Florida Canyon Mine, which produced 54,975 ounces gold and 39,903 ounces silver the same year. About 48 miles away lies Coeur d’Alene’s TSX:CDM Coeur Rochester Mine, with 2010 production numbers of 9,641 ounces gold and 2.02 million ounces silver.

Apart from productive neighbours, good infrastructure and a mining-friendly jurisdiction, Rogers emphasizes the company’s expertise—especially in Director/VP of Exploration Clancy Wendt. He’s a long-time Nevada hand who’s helped discover 12 gold deposits in that state alone.

Should the company take Majuba Hill into production, Wendt’s contacts would be especially useful. “Clancy knows the people we can bring in when we get to the development exercise,” Rogers says.

Notwithstanding his Majuba Hill passion, Rogers hasn’t forgotten East Manhattan Wash, “a large area of free gold, volcanic tuff and soil samples like 1.2 grams over a large area,” he says. MAX is currently undergoing a 100% earn-in with MSM LLC. MAX can also earn 100% of the Table Top Gold Project from Energex LLC. The company’s other properties include the Diamond Peak Gold-Zinc-Silver Project and the Ravin Molybdenum-Tungsten Project, both in Nevada, and the C de Baca Uranium Project in New Mexico.

“Clancy has expertise in all those areas,” says Rogers.

At press time MAX Resource had 21.7 million shares outstanding at $0.22 a share for a market cap of $4.77 million.

At The Threshold

August 10th, 2011

Heatherdale Proves Up Alaska’s Niblack

By Ted Niles

With nearly all of Alaska’s forests now protected by federal law, its timber industry is in a state of extreme decline. The industry employed about 5,000 people in 1990. Now? Ten percent of that. So the opportunity presented by a company like Heatherdale Resources, with its Niblack copper-gold-zinc-silver project, located on Prince of Wales Island, has been of considerable interest to Alaskans. Heatherdale’s President and CEO Pat Smith reports, “In the last two weeks I’ve been around southeast Alaska, and I’ve talked to the Alaska Delegation, to the regulators, to Sealaska Native Corp and various other stakeholder groups. Everyone is extremely supportive of this project. It’s just unbelievable.”

Heatherdale—a Hunter Dickinson company—entered into a joint venture with Niblack Mineral Development on the Niblack project in 2009. Heatherdale is the project operator and has spent $10 million to earn its initial 51% of the property. “We have the ability to earn 60% by spending another $10 million on the initial $15 million,” Smith explains, “and we’re just reaching that threshold. That’ll be coming around the corner in August. We’ll have the option to increase that to 70% by bringing the project to feasibility.”

Heatherdale Proves Up Alaska's Niblack

The project is located at the southern end of the Alaska panhandle and comprises 2,600 hectares of patented land and state mineral claims. It consists of six deposits—Lookout, Trio, Mammoth, Dama, Lindsy and Niblack. Drilling has focused on Lookout and Trio. Based on drilling up to December 2010, the estimated resource for Lookout and Trio is 103 million pounds copper, 308,000 ounces gold, 207 million pounds zinc and 5.1 million ounces silver, all in the indicated category. The two deposits also contain 67 million pounds copper, 142,000 ounces gold, 126 million pounds zinc and 2.1 million ounces silver in inferred resources.

Smith remarks, “We’ve reached what we consider to be a threshold amount of mineralization at this point. It allows us to advance the engineering and economic evaluation at the deposit. We will move toward the Preliminary Economic Assessment this year. All things positive of course, we’ll take that into prefeasibility in 2012 and then move into feasibility and the initiation of project permitting in late 2012 or early 2013. That’s our objective.”

And Heatherdale will continue to build on the current resource throughout 2011. “We’ve got two rigs underground going full time,” Smith says. “One is focused on incrementally increasing the resource at Lookout and at Trio. The other drill rig is branching out and doing more exploration from underground.”

We’ve reached what we consider to be a threshold amount of mineralization at this point. It allows us to advance the engineering and economic evaluation at the deposit —Patrick Smith

July 28 Niblack project assays include 19.51 grams per tonne gold, 263 g/t silver, 1.67% copper and 3.32% zinc over 2.4 metres, 1.66 g/t gold, 31 g/t silver, 1.06% copper and 1.85% zinc over 13.7 metres (including 3.12 g/t gold, 57 g/t silver, 1.9% copper and 1.6% zinc over 5.8 metres) and 2.23 g/t gold, 40 g/t silver, 0.99% copper and 1.68% zinc over 2.4 metres. “We’ve come up with a nice zone around the Mammoth area,” Smith comments, “which is new to us and to the resource. The other area that really kind of surprised us (but this play is always surprising us) is the area between Lookout and Trio, which we didn’t connect before. We’re seeing a ballooning out, if you will, of the existing resource and a little bit of a different zone further into the hanging wall.”

Smith compares Niblack to Hecla Mining’s Greens Creek Mine near Juneau—which produced 7.5 million ounces of silver, 67,278 ounces gold, 70,379 tons zinc and 22,254 tons lead in 2009. As to when production might begin at Niblack, he acknowledges that in environmentally-sensitive Alaska, “The permitting end of it is the unknown in terms of a time frame. But we would anticipate 18 months to two years for that. So, optimistically, 2015 or so for production.”

Smith concludes, “I’ve spent probably 17 years of my 30-some years in Alaska with Rio Tinto, Kennecott Exploration and so forth. I enjoy working there. The jobs in southeast Alaska’s timber industry have been devastated over the last 10 years, so they understand the year-round jobs that come with mining at Greens Creek, and [Coeur d'Alene's] new Kensington Mine up near Juneau. We would have a large impact in the Ketchikan area and on Prince of Wales Island.”

Heatherdale has also begun drilling its Delta project in east-central Alaska, which it acquired in February. Delta has an inferred mineral resource estimate of 15.4 million tonnes grading 0.60% copper, 1.7% lead, 3.8% zinc, 62 g/t silver and 1.7 g/t gold.

Heatherdale has 69.1 million shares trading at $0.74 for a market cap of $51.1 million.

It’s Better In Mexico

June 22nd, 2011

Soltoro Has 58 Million Ounces Silver and Counting

By Ted Niles

Andrew Thomson believes he has a distinct advantage over rivals elsewhere. “What the majors want,” the President and CEO of Soltoro Ltd declares, “are primary silver plays, and they want them in either Mexico or Peru.” Soltoro has a substantial silver play in Mexico, and it also enjoys the considerable benefits of a more stable jurisdiction.

“Peru had a little bit of a knock of late,” Thomson explains. The knock to which he refers is the June 5 election of Ollanta Humala, former military rebel and leader of the Peruvian Nationalist Party. Humala’s election raises the possibility not only of higher royalties but also of quasi-nationalization. “Mexico, as a result, has become more attractive,” Thomson argues.

Soltoro Has 58 Million Ounces Silver and Counting

Soltoro’s 10,000-hectare El Rayo silver-gold project is located on the Trans-Mexican Volcanic Belt in Jalisco State. Soltoro acquired the property in 2005 and has focused mostly on the Las Bolas structure and the Highway Zone, for which the company released an NI 43-101 in-pit resource estimate June 14 of 58.3 million ounces silver measured and indicated and 300,000 ounces inferred, both at a 20 g/t cut-off. This more than doubles the initial resource, released May 2010, and Thomson expects it to get even bigger.

“We’re continuing with expansion drilling,” he says, referring to the work currently being done on the Soledad structure—an area of the property not included in the new resource estimate. “In the very short term, I’m really trying to reach the 100-million-ounce silver target. The company announced a 15,000-metre drill program, and there’s serious consideration being given to increasing that.”

June 21 Soledad assays include 300 grams per tonne silver over 43.7 metres, 222 g/t over 43.7 metres, 115 g/t over 53.7 metres and 198 g/t over 33.5 metres. May 30 assays included 388 g/t silver over 21.6 metres (including 1,010 g/t over 7 metres) and 527 g/t over 6.9 metres (including 1,070 g/t over 1.6 metres). Thomson comments, “These are just the initial holes going into the structure; we have yet to step back on these holes to really start building tonnage. So we’re pretty excited. We’re getting into high-grade zones. We’re basically now a bulk-tonnage play in addition to a high-grade play, and it’s very consistent mineralization.”

Given the potential, Thomson expects suitors to come calling. He reports, “We’re going to try to grow the resource to something that’s more in the two-million-ounce gold-equivalent range. At that point we’ll have to make a decision. I think there’s going to be a mergers-and-acquisitions period coming up where the majors are finally going to really start looking down the ladder and acquiring juniors, and I suspect if we get to that level, we’ll probably be taken out.”

He adds, “But I’m not ruling out trying to put it into production ourselves. In fact, we have an acquisition that we’ve been looking at that would take us there very quickly. So there is some thought being given to it, but I would feel more comfortable at a slightly higher market cap.”

We’ve got a lot of majors looking at us right now, and we’re becoming more attractive by the day —Andrew Thomson

Between the promise of the deposit, infrastructure which “couldn’t be better,” and its location—with the cities of Puerto Vallarta and Guadalajara on either side of it (“Guadalajara is hosting the Pan Am Games this year, so it’s quite safe”)—Thomson is confident. “It’s one of those good-looking-girl-at-the-dance situations,” he muses, “you can pick and choose who you want to dance with. We’ve got a lot of majors looking at us right now, and we’re becoming more attractive by the day. I think it’s still a really great time to be a silver explorer in Mexico, and we happen to have a project that’s far more advanced than a lot of the projects out there.”

At $43.5 million, Thomson considers Soltoro undervalued. “People are really only valuing us on this one property when there are all sorts of other things going on in the company that are pretty exciting.” Among those is Soltoro’s Chinipas gold project in southwest Chihuahua State, 14 kilometres from Coeur d’Alene’s currently producing Palmarejo Mine, for which a 2,000-metre drill program was announced June 5. “It’s a separate gold property that we’re not seeing too much about,” explains Thomson. “We staked the ground four or five years ago, and there’s been $1.5 billion put into the local infrastructure. So we’re really trying to get our secondary project on stream.”

At press time, Soltoro trades at $0.88 per share with 49.4 million shares outstanding. Thomson concludes, “I think we’re in the middle of a fairly intense bull market, and we’re seeing a lot more interest from the US. The US contingent—whether it’s retail or institutional—is expecting a 20% drop in their currency. There’s a lot of cash looking for homes, and they want to get into hard assets.”

High Grades, Smaller Envelopes

May 31st, 2011

Argentex is Piling Up the Silver Ounces in Argentina

By Ted Niles

Peter Ball is very keen that you grasp the concept. For, impressive as Argentex Mining’s recently reported intercept of 88.8 grams per tonne silver over 61.8 metres may seem, its Executive VP of Corporate Development is more interested in what those numbers include. In this case, an interval of 675.7 g/t silver over 5.8 metres. “We’ve had areas of 277 grams over 24 metres—but our focus is defining mineralized widths of higher-grade material over concentrated or smaller widths. The concept in this area is open slot mining, near surface. Multiple pits. We’re not going to have a pit 300 feet wide!”

The area to which Ball refers is the Deseado Massif in the Patagonia region of Santa Cruz Province, Argentina. In addition to Argentex’s polymetallic Pinguino property, the area hosts Extorre Gold Mines’ Cerro Moro project, Pan American Silver’s Manantial Espejo mine, AngloGold Ashanti’s Cerro Vanguardia mine, Coeur d’Alene’s Mina Martha and Goldcorp’s Cerro Negro project. Ball explains, “They’re all mining these open slots, near surface. The first 50 to 100 metres everywhere on our project has been oxidised, where the gold and silver has been leached out, and it’s high grade. You’ve got this nice meat. That’s what’s going to be mined.”

Argentex is Piling Up the Silver Ounces in Argentina

Argentex has 100% control of over 124,000 hectares of property in the Santa Cruz and Rio Negro provinces, of which its Pinguino property is the most advanced. Pinguino comprises 10,000 hectares and has a 2009 indicated resource estimate (at a 50 g/t cut-off) of 7.32 million tonnes grading 169.64 g/t silver equivalent and inferred resources of 35.4 million tonnes grading 123.63 g/t silver equivalent (totalling approximately 180 million ounces silver equivalent).

Last year, a discovery hole at Pinguino graded 2,428 g/t silver and 0.22 g/t gold over 6 metres, bringing new attention to the near-surface vein systems.

Pinguino assays released May 26 include 88.8 g/t silver over 61.8 metres (including 675.7 g/t silver over 5.8 metres), 1.33 g/t gold and 92.9 g/t silver over 29 metres (including 3.83 g/t gold and 271.3 g/t silver over 9 metres), 1.14 g/t gold and 38.8 g/t silver over 17.8 metres and 1.03 g/t gold and 112.7 g/t silver over 11 metres.

May 5 assays revealed 118.1 g/t silver over 19 metres (including 3.21 g/t Au and 678 g/t silver over 3 metres), 205.5 g/t silver over 20 metres (including 1.64 g/t gold and 470 g/t silver over 8 metres) and 86.2 g/t silver over 21 metres (including 2.77 g/t gold and 121.9 g/t silver over 7 metres).

Ball reports, “We’re consistently seeing veins with widths in the range of four to 12 metres within the first 100 metres of surface, with the vein systems open at depth and open along strike. And some of these veins can range longer than a couple kilometres. Wherever we drill, we appear to consistently and continuously hit high-grade silver with positive associated gold grades. We currently have in excess of 50 veins measuring over 75 line-kilometres, and we keep finding more as we go along. All sitting very close to surface. So it is quite a large, very high-grade system. We believe it’s the second-largest mineralized vein swarm in Patagonia—second only to the Cerro Vanguardia mine, which is along strike to the southeast.”

Wherever we drill, we appear to consistently and continuously hit high-grade silver with positive associated gold grades – Peter Ball

Ball characterizes the Pinguino property as “advanced exploration or early development.” He notes that, to date, Argentex has drilled greater than 50,000 metres on the property and that a preliminary economic analysis has been completed. “At today’s prices, we could build a small mining operation for under $22 million. Internal rate of return would be just under 200%, a payback period of less than six months. That small mine would run over 650,000 ounces of silver for eight years and approximately 6,000 ounces gold.” And that’s based on the resource calculated two years ago.

But Ball does not see production in Pinguino’s future. He says, “This year and most of next we’re working on prefeasibility studies and more drilling and such. We’re looking to have two resource estimates completed by the fourth quarter of this year. One will be an update on the polymetallic; the second will be for the new near-surface stuff, which will probably be giving us a nice re-rate. We are looking to build a significant silver resource and build value through ounces in the ground first.” He adds, “We will worry about building a mine when we have done the due diligence.”

Argentex has not been wanting for interest. Its major shareholder is International Finance Corporation—a member of the World Bank Group—who holds 19.9% of the company. And, Ball adds that the company’s $20-million financing announced May 26 is being led by GMP Europe, “an excellent financial group to have representing us, supported by a solid syndicate including Byron, Northland Capital, LOM, Casimir and Haywood.”

Ball concludes, “Shortly after I joined Argentex, the phone was ringing. I was contacted by most of the investment houses and banking groups looking to be involved in the Argentex story. Within a month I had six analysts on site in Argentina. It’s one of the few stories I’ve had the pleasure of working for where the calls coming into the office outmatched the calls going out.”

Argentex currently has 59.8 million shares trading at $1.17 per share. The company has a market cap of $69.97 million.