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Posts tagged ‘EXMIN Resources Inc. (EXM)’

The Fourth Phase

February 14th, 2011

Dia Bras Is Back From The Brink, Producing And Exploring In Mexico

By Ted Niles

Tom Robyn first got involved with Dia Bras Exploration Inc in 2004. And its former Chairman (now head of Exploration) has since seen dizzying highs and terrifying lows. The company’s share price flirted with $18 in 2003 before falling to under $2 in 2005. It then soared again, to $11 in 2007, before crashing to under 50 cents throughout 2009, when bankruptcy threatened. In 2011, with new ownership in place, a recapitalized Dia Bras trades at $2.51, is committed to an aggressive program of mine construction, exploration and acquisition and is, in Robyn’s words, positioned to “become a major player in the mining business in northern Mexico.”

Dia Bras began with the Bolivar copper-zinc property in Chihuahua, Mexico, now 21,620 hectares. This will, in July, with the completion of its Piedras Verdes Mill, fulfil the potential Robyn recognized seven years ago. Dia Bras will then no longer have to send ore 50 kilometres by road, then 220 kilometres by rail, to its Malpaso Mill. “Once that mill starts,” Robyn reports, “Bolivar’s operating costs are cut in half. We’ve done exploration drilling, and we now have around 5.3 million tonnes of internally calculated indicated and inferred mineralization to feed the Piedras Verdes Mill.” The mill will have a thousand tonne per day capacity.

Dia Bras Is Back From The Brink, Producing And Exploring In Mexico

According to a February 2009 NI 43-101 estimate, Bolivar contains, at a 1% copper cut-off, measured and indicated resources of 33 million pounds copper, 61.6 million pounds zinc, 1.17 million ounces silver and 10,600 ounces gold. Inferred resources are 163 million pounds copper, 137.1 million pounds zinc, 5.3 million ounces silver and 61,000 ounces gold.

Robyn comments, “I’ve been an exploration geologist for over 33 years, and the Bolivar property is one of the best ones I’ve seen, because of the large alteration footprint, the high grades and good metallurgy.”

The Piedras Verdes Mill has been long delayed. “Shipping rock to Malpaso was always considered a temporary measure until we could build a mill onsite,” Robyn explains. “To do that we had to have enough resource in front of us to justify raising the money. And we were just about there in 2008 when the wheels came off in the credit market.”

Dia Bras’ second major asset is its 11,319-hectare Cusi silver-gold property, also in Chihuahua. Its measured and indicated resources, according to June 2008 43-101 estimate, are, at a 120 grams per tonne silver equivalent cut-off, 825,710 ounces silver and 1.45 million ounces silver equivalent. Inferred resources are 4.34 million ounces silver and 10 million ounces silver equivalent. “Cusi is probably only 10% to 20% explored,” Robyn says. He believes its potential to be as great as 500 million ounces.

Our objective has always been to move the company into a mid-tier producer of base metals as well as an important precious-metals producer — Thomas Robyn

Currently, Cusi produces only 2,000 tonnes a month at the nearby Malpaso Mill. Dia Bras plans to ramp-up production. Robyn says, “Cusi will take a couple of years, like Bolivar did. But it’s paying for its own mine development, mining, transportation and milling. It’s not paying for the exploration, but it’s essentially a standalone operation.”

Robyn identifies four phases in Dia Bras’ evolution. Phases One and Two were the spectacular ups and downs in equity. Phase Three, where Robyn considers the company to be now, is marked by Arias Resource Capital Fund LP becoming majority (60%) shareholder and the September 2009 acquisition of Exmin Resources and its huge land package containing several Mexico gold plays.

Dia Bras expects big things from three Exmin properties: Batopilas, Bacerac and Melchor Ocampo. Robyn is especially enthusiastic about Melchor Ocampo, which is about 20 kilometres north of Goldcorp’s Penasquito Mine. A 43-101 resource calculation should be calculated within the year. February 1 assay results include 21.8 g/t silver over 15.4 metres, 11.9 g/t over 25.5 metres, 25 g/t over 16.2 metres, 30.8 g/t over 16.8 metres and 72.6 g/t over 129.6 metres (including 182.2 g/t over 4.8 metres).

“Our objective has always been to move the company into a mid-tier producer of base metals as well as an important precious-metals producer,” Robyn declares. This is Dia Bras’ Phase Four, which Robyn expects to begin this year. “Last year we had sales of just over $21 million and essentially no net cash flow because we’re plowing everything back into the company. Today, as a result of warrants that have been exercised, we now have $22 million in our treasury. The Piedras Verdes Mill is on time and slightly under budget. We have an exploration budget of over $10 million for this year, whereas a couple of years ago we hardly had any money to get out the door.”

In addition to its plans for Melchor Ocampo, Dia Bras expects in 2011 to complete “at least one significant acquisition” and to focus on the La Verde and La Cascada gold targets (at Batopilas and Bolivar respectively).

By 2013, Robyn projects, “We will have quadrupled our revenues.” He concludes, “Now we are adequately financed and no longer in danger of going belly-up.”