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Posts tagged ‘Pan American Silver Corp. (PAAS)’

Crisis response

April 3rd, 2020

A look at mining, exploration, infrastructure and supply chains under the pandemic

by Greg Klein | April 3, 2020

A look at mining, exploration, infrastructure and supply chains

 

Idled explorers: Can you help?

“Essential supplies and personnel are needed to create and operate temporary facilities for testing, triage, housing and isolation areas for vulnerable populations,” states the Association for Mineral Exploration. “As mineral explorers, we have access to the supplies needed and are in a unique position to help.”

AME calls on the industry to contribute excess capacity of the following:

  • Insulated structures (both hard and soft wall)

  • Camp gear such as furniture, lighting and kitchen appliances

  • Medical equipment

  • Camp support personnel such as caterers, housekeepers, janitors, etc.

  • Available medical staff including such qualifications as OFA3s, paramedics, RNs, etc.

  • Other supplies or skills

If you can help, please fill out this form and AME will be in touch. 

For further information contact Savannah Nadeau.

Preparing for a wider emergency

Given the danger of one crisis triggering others, essential infrastructure remains at risk. One plan to safeguard Ontario’s electricity service would require Toronto workers to bunk down in employer-supplied accommodation under lockdown conditions better known to isolated locations.

A look at mining, exploration, infrastructure and supply chains

Quarantines might require essential
services to provide job-site bed and board.
(Photo: Independent Electricity System Operator)

It hasn’t happened yet, but the province’s Independent Electricity System Operator stands ready for the possibility, according to a Canadian Press story published by the Globe and Mail. A not-for-profit agency established by the province, the IESO co-ordinates Ontario electricity supply to meet demand.

About 90% of its staff now work at home but another 48 employees must still come into work, CEO Peter Gregg said. Eight six-person teams now undergo 12-hour shifts in two Toronto-area control rooms.

“Should it become necessary, he said, bed, food and other on-site arrangements have been made to allow the operators to stay at their workplaces as a similar agency in New York has done,” CP reported.

Similar plans may well be underway not only for essential infrastructure but also for essential production, processing, manufacturing, communications, transportation and trade. One sign of the times to come could be locked-down camps in supermarket parking lots for our under-appreciated retail-sector heroes.

Meanwhile, retaining and protecting care-home staff already constitute a crisis within a crisis.

Australia guards against predatory foreign takeovers

With China prominently in mind, Australia has taken extra measures to protect companies and projects shattered by the COVID-19 economy. Canberra has temporarily granted its Foreign Investment Review Board extra powers to guard distressed companies and assets against acquisitions by opportunistic foreigners. Although previous foreign acquisitions came under review only when the price passed certain thresholds, now all such transactions get FIRB scrutiny.

The changes follow concerns raised by MPs on Australia’s intelligence and security committee. The Sydney Morning Herald quoted committee chairperson Andrew Hastie warning of “foreign state-owned enterprises working contrary to our national interest. More than ever, we need to protect ourselves from geo-strategic moves masquerading as legitimate business.”

Committee member Tim Wilson added, “We can’t allow foreign state-owned enterprises and their business fronts to use COVID-19’s economic carnage as a gateway to swoop distressed businesses and assets.”

Among protected assets are exploration and mining projects, utilities, infrastructure and an interest of 20% or more in a company or business.

Critical minerals become ever more critical

As Lynas Corp extended the suspension of its rare earths processing facility in line with Malaysian government pandemic orders, the company noted the importance of its products “in permanent magnets used in medical devices including ventilators, and in lanthanum products used in oil refineries for petroleum production.”

A look at mining, exploration, infrastructure and supply chains

The suspension of its Malaysian plant prompted
Lynas to emphasize REs’ criticality to virus treatment.
(Photo: Lynas Corp)

Originally set to expire on March 31, the government order currently stays in force until April 14. RE extraction continues at Lynas’ Mount Weld mine in Western Australia.

In late February Malaysia granted the company a three-year licence renewal for the processing facility, which had been threatened with closure due to controversy about its low-level radioactive tailings. Among conditions for the renewal are development of a permanent disposal facility for existing waste and putting a cracking and leaching plant in operation outside Malaysia by July 2023 to end the practice of transporting radioactive material to the country.

Committed to maintaining a non-Chinese supply chain, the company plans to locate the C&L plant in Kalgoorlie, Western Australia.

Sharing the disease, hoarding the treatment

A problem recognized in American defence procurement has hit health care—the need to build non-Chinese supply chains. Most of the world’s ventilators and about half the masks are manufactured in China, points out a recent column by Terry Glavin.

The West is learning, finally and the hard way, “that thriving liberal democracies cannot co-exist for long within a model of neo-liberal globalization that admits into its embrace such a tyrannical state-capitalist monstrosity as the People’s Republic of China.”

The U.S., for example, relies heavily on China for antibiotics, painkillers, surgical gowns, equipment that measures blood oxygen levels and magnetic resonance imaging scanners. China effectively banned medical equipment exports as soon as Wuhan went on lockdown, Glavin adds.

“It probably didn’t help that Ottawa sent 16,000 tonnes of gear to China back in February. That was a lot of gear—1,101 masks, 50,118 face shields, 36,425 medical coveralls, 200,000 pairs of gloves and so on—but a drop in Beijing’s bucket. A New York Times investigation last month found that China had imported 56 million respirators and masks, just in the first week of the Wuhan shutdown.

“It is not known how much of that cargo came from the massive bulk-buying campaign organized and carried out across Canada by affiliates of the United Front Work Department, the overseas propaganda and influence-peddling arm of the Chinese Communist Party.”

A look at mining, exploration, infrastructure and supply chains

Desperate need for health care supplies
pits country against country. (Photo: 3M)

Nor does the non-Chinese world display altruism. In response to the crisis, the EU and more than 50 countries have either banned or restricted exports of medical equipment, Glavin states.

By April 3 global health care products supplier 3M revealed that Washington asked the company to stop exporting U.S.-manufactured N95 respirators to Canada and Latin America. 3M noted “significant humanitarian implications” but also the possibility of trade retaliation. “If that were to occur, the net number of respirators being made available to the United States would actually decrease.”

The company did win China’s permission to import 10 million of its own Chinese-manufactured N95s into the U.S.

Meanwhile the Canadian government comes under increasing criticism for discouraging the public from wearing masks.

Chinese supply chains also jeopardized by Chinese disease

As the world’s main exporter of manufactured goods, China’s the main importer of raw materials, especially metals. But, as the world’s main exporter of disease, China managed to threaten its own supplies.

Reuters columnist Andy Home outlined lockdown-imposed cutbacks of copper, zinc and lead from Chile and Peru, and chrome from South Africa; reductions in cobalt from the Democratic Republic of Congo, in tin from already depleting Myanmar, and in nickel from the Philippines, the latter a hoped-for replacement after Indonesia banned unprocessed exports.

The longer the lockdowns, “the greater the potential for supply chain disruption,” Home comments. “As the biggest buyer of metallic raw materials, this is a ticking time-bomb for China’s metals producers.”

Miners’ providence unevenly distributed

Probably no other foreign shutdowns have affected as many Canadian miners and explorers as that of Mexico. Considered non-essential, their work will be suspended until April 30, with extensions more than likely. Mexico’s announcement must have sounded familiar to Pan American Silver TSX:PAAS, which had already pressed the pause button to comply with national quarantines in Peru, Argentina and Bolivia. That currently limits the company’s mining to Timmins, where production has been reduced by about 10% to 20% to allow physical distancing.

A look at mining, exploration, infrastructure and supply chains

Mauritania exempted Kinross Gold’s Tasiast mine
from domestic travel restrictions. (Photo: Kinross Gold)

One company more favourably located, so far, is Kinross Gold TSX:K. As of April 1, operations continued at its seven mines in Nevada, Alaska, Brazil, Mauritania, Russia and Ghana, while work went on at its four non-producing projects in Alaska, Mauritania, Russia and Chile.

Expanded shutdowns ordered by Ontario on April 3 include many construction and industrial projects but exempt mining. Earlier that day New Gold TSX:NGD announced Rainy River’s restart after a two-week suspension to allow self-isolation among employees. Many of the mine’s workers live locally and made short trips into Minnesota before the border closed.

Quebec border restrictions have hindered the Ontario operations of Kirkland Lake Gold TSX:KL, cutting off a source of employees and contractors. As a result the company reduced production at its Macassa mine and suspended work at its Holt complex, comprising three gold mines and a mill. Kirkland reduced operations at its Detour Lake mine effective March 23, after a worker showed COVID-19 symptoms and self-isolated on March 14. He tested positive on March 26. Production continues at the company’s Fosterville mine in Australia.

Some explorers have been idled by government restrictions, others by market conditions. Still, some companies have money and jurisdictions in which to spend it. Liberty Gold TSX:LGD, for example, resumed drilling its Black Pine gold project in Idaho on March 31.

Some jurisdictions, like B.C. and New Brunswick, have extended work requirement deadlines to help companies keep exploration claims active.

“China needs to be held responsible”

A few Canadian journalists are saying what we might never hear from our politicians. Here, for example, is Toronto Sun columnist Lorrie Goldstein:

“China needs to be held responsible. The problem is, because of its political power— and you see it in the World Health Organization announcements, in Canadian announcements—they’ve been praising what China did. There would have been a virus anyway. China made it worse. More people are dying, more people are being infected, and its dictators need to be held to account.”

Association for Mineral Exploration names 2018 award winners as Roundup approaches

December 6th, 2018

by Greg Klein | December 6, 2018

As Roundup approaches, the Association for Mineral Exploration names 2018 award winners

The Chidliak discovery brings another potential diamond mine to Canada’s Arctic.
(Photo: De Beers)

 

Mine finders, financiers and builders will be honoured, but so will others including educators and a gold panner, as well as leaders in social and environmental responsibility and in health and safety. It takes a wide range of abilities to supply the world with the stuff we need and the Association for Mineral Exploration recognizes diverse achievements in its Celebration of Excellence awards. Winners were announced on December 6 in advance of AME’s annual Roundup conference scheduled for January 28 to 31 in Vancouver.

As Roundup approaches, the Association for Mineral Exploration names 2018 award winners

Yukon Dan Moore shares an award with geologist
and social responsibility practitioner Peter Bradshaw.

Al McOnie, Seymour Iles and Jared Chipman of Alexco Resource TSX:AXR win the 2018 H.H. “Spud” Huestis Award for Excellence in Prospecting and Mineral Exploration. The trio gets credit for the recent discovery and delineation of over 60 million silver ounces in the Flame & Moth and Bermingham deposits in Yukon’s Keno Hill Silver District.

John McCluskey wins the Murray Pezim Award for Perseverance and Success in Financing Mineral Exploration. McCluskey played a crucial role in acquiring, financing and encouraging the discoveries of La India (Grayd Resources, bought out by Agnico Eagle Mines TSX:AEM in 2012), Mulatos (Alamos Gold TSX:AGI) and Kemess East (AuRico Metals, acquired by Centerra Gold TSX:CG in January), as well as his ongoing success as CEO of Alamos.

Eric Friedland, executive chairperson of Peregrine Diamonds (acquired by De Beers in September), Geoff Woad, former head of world diamond exploration for BHP Billiton NYSE:BHP and Brooke Clements, former Peregrine president, win the Hugo Dummett Award for Excellence in Diamond Exploration and Development for their part in discovering the Chidliak Diamond Province in Nunavut.

Tom Henricksen wins the Colin Spence Award for Excellence in Global Mineral Exploration  for “outstanding contributions to mineral discovery, and being involved in some monumental discoveries and/or acquisitions across the world.”

Matt Andrews and Monica Moretto win the Robert R. Hedley Award for Excellence in Social and Environmental Responsibility for their work with Pan American Silver TSX:PAAS.

Paycore Drilling wins the David Barr Award for Excellence in Leadership and Innovation in Mineral Exploration Health and Safety for the Paycore crew’s rescue operation following a helicopter crash.

Yukon Dan Moore and Peter Bradshaw share the Gold Pan Award for separate endeavours demonstrating “exceptional meritorious service to the mineral exploration community.”

As Roundup approaches, the Association for Mineral Exploration names 2018 award winners

Norman Keevil’s award honours his achievements
in B.C. and adjacent parts of the Cordillera.
(Photo: Teck Resources)

J. Greg Dawson and Victoria Yehl win the Frank Woodside Award for Distinguished Service to AME and/or Mineral Exploration for achievements that include Dawson’s research in land use planning and Yehl’s work as an AME organizer.

AME’s 2019 Outreach Education Fund grants $10,000 each to two groups: MineralsEd for the Kids & Rocks Classroom Workshop, and Britannia Mine Museum for its Education Program.

Norman Keevil, chairperson emeritus/special adviser for Teck Resources TSX:TECK.A/TSX:TECK.B and author of Never Rest on Your Ores: Building a Mining Company, One Stone at a Time, wins a Special Tribute for his achievements and contributions to exploration, discovery and development.

Congratulating the winners, AME chairperson ‘Lyn Anglin said, “The theme of AME’s 2019 Roundup conference is Elements for Discovery and these individuals and teams, through their remarkable efforts in elements of exploration, development and outreach, have generated discoveries and advancements which will bring benefits to the many diverse communities throughout British Columbia and Canada.”

Winners will be feted at the January 30 Awards Gala, part of AME Roundup from January 28 to 31 at the Vancouver Convention Centre East. Two days of short courses precede the event. Discounted early bird registration remains open until 4:00 p.m. December 14. Click here to register.

Read more about AME’s Celebration of Excellence award winners and their achievements.

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.

Mine Low, Sell High

November 2nd, 2011

Silver Pursuit Finances With Mexican Waste Rock

By Ted Niles

Mexico’s northernmost “Silver City”—Alamos in Sonora State—was founded in 1681 and built with the mineral wealth from the mines surrounding it. Silver Pursuit Resources Ltd’s TSXV:SPF La Quintera project comprises a sizeable portion of those mines. “In 1683, they discovered epithermal-type vein mineralizations at [the mining camps] La Aduana and Mina Nuevas,” President and CEO Adrian Robertson relates. “And they worked along that trend. I think there’s over a dozen different discrete mine workings along that trend that are within our claim boundary.”

Located seven kilometres west of Alamos in the foothills of the Sierra Madre Occidental Range, the 4,673-hectare La Quintera project is close to current producers. Pan American Silver Corp’s TSX:PAA Alamo Dorado Mine is 40 kilometres to the southwest, and it mined 6.72 million ounces of silver in 2010. Fifteen kilometres north of the project is Frontera Copper Corporation’s TSX:FCC.NT.B Piedras Verdes mine, with annual copper production of approximately 70 million pounds.

Silver Pursuit Finances With Mexican Waste Rock

Quintera and Promintorio, the two largest past-producing mines on the La Quintera project, have total historical silver production estimated at 40 million ounces. “They’ve been mining on and off since 1683,” Robertson says, “but they’ve never gone in with modern geological modeling, modern mining methods or mineral processing methods. As a result they were stockpiling, as waste rock, material that runs five and 10 ounces per ton of silver. The tailings are running three ounces. So there’s value that’s already been mined. A lot of it has already been milled, and it’s just sitting there. Not to mention that most of the ore body is probably intact because they weren’t able to get very deep due to ventilation and de-watering issues.”

While the company could go the traditional route of raising money to drill off a resource, Robertson explains that the mine dumps provide Silver Pursuit with a unique advantage towards financing exploration at La Quintera. “Thirty-dollar silver is very rich,” he says. “Based on market volatility, I’m very interested in pursuing any opportunity to use those ounces that we have sitting there in the tailings and the waste dumps to help fund exploration. I’m interested in doing a bit of mineral processing. Not on a large scale; I think if you have 500 tonnes a day you could certainly finance a lot of activity based on the grades we have.” Robertson further notes the potential synergy with neighbour Pan American, whose Alamo Dorado mine is anticipated to run out of ore in 2013.

On October 21 Silver Pursuit announced surface-sampling results from the historic mine dumps at La Quintera. Thirty-eight samples were taken at the Promontorio waste dump showing an average grade of 171.9 g/t silver and 0.33 g/t gold. Thirty-six samples were taken at the Quintera waste dump averaging 325.5 g/t silver and 0.22 g/t gold. Surface and underground samples of the ore body itself yielded March 25 assays including

  • 1,160 grams per tonne silver over 2.5 metres
  • 550 g/t over 4.5 metres
  • 476 g/t over 4 metres
  • 398 g/t over 6 metres
  • 382 g/t over 4 metres
  • 326 g/t over 3 metres
  • 282 g/t over 3 metres
  • 192 g/t over 10 metres
  • 162 g/t over 23 metres

With permits expected by November, and roughly $800,000 cash on hand, Robertson anticipates a busy winter season. In addition to further sampling and a 3,000- to 4,000-metre drill campaign, Silver Pursuit intends to develop a resource estimate on the waste dumps and tailings. Robertson believes that the latter should be completed by 2Q 2012 and that drill results should begin to appear by 1Q.

Once we actually start putting the money to work and doing some drilling on this property I think you’ll see considerable appreciation in the share price —Adrian Robertson

While La Quintera itself doesn’t have much by way of infrastructure, Robertson emphasizes that this isn’t a significant issue. “Everything’s nearby. Alamos is a centre with labour and power, and there’s adequate water to do a core-drilling program. It’s not like we’re in the middle of the Gobi desert.”

He continues, “Even at $30—which is 25% off of where silver was sitting for quite a while—it’s a very profitable operation to go into these Mexican mines and mine this silver. Do it for $5 an ounce and sell it for $30.”

Refreshingly, Robertson does not consider Silver Pursuit undervalued at its current share price. He argues that a junior’s value is a function of drill results and, to the extent that La Quintera is very early stage, the market isn’t likely to respond. “Once we actually start putting the money to work and doing some drilling on this property, I think you’ll see considerable appreciation in the share price.” He adds, “I don’t like dilution; I don’t want to print a lot of stock. I want to do this in a sustainable way, and I think we have the infrastructure and the personnel to move this thing pretty far down the field.”

Silver Pursuit has 34.5 million shares trading at $0.14 for a market cap of $4.82 million. The company’s other two properties—La Luz and La Tuna—are also located in Sonora State.

Out Of Many, Goliath

September 6th, 2011

Treasury Moves Toward Feasibility in Ontario

By Greg Klein

It began as a case of fragmented ownership, explains Treasury Metals President/CEO Martin Walter. Teck Resources made the discovery in the early 1990s while exploring Ontario’s Kenora Mining District. Corona Gold came in as a JV partner. Then Laramide Resources staked the down-dip portion of the project. “Corona Gold and Laramide decided to put both parts of the project together, and that’s what constitutes Treasury Metals today,” Walter says. And, as if completing an Old Testament genealogy, Treasury begat Goliath.

The Goliath Gold Project, that is. Once the properties were assembled into a single 49-square-kilometre entity, Treasury began drilling in earnest. A resource estimate came out in 2009 and a PEA in 2010. An updated resource is scheduled for November with full feasibility to follow.

Treasury Moves Toward Feasibility in Ontario

Despite a mining history dating to the 19th century, the Kenora Mining District remains underexplored, the company maintains. Walter calls the local infrastructure “perfect—probably among the best in the world.”

Goliath’s 2009 43-101 estimated 3.4 million tonnes grading 2.5 grams per tonne for 270,000 gold ounces indicated and 10.6 million tonnes grading 2.7 g/t for 930,000 ounces inferred.

Based on that resource and a gold price of $1,200 per ounce, the July 2010 PEA projected a combined open-pit/underground operation with an initial CAPEX of $76 million, an after-tax net present value at 5% of $91 million and a 43% internal rate of return.

Goliath assays released August 26 included 8.1 g/t gold over 6.4 metres (including 11.6 g/t over 4.4 metres), 3.1 g/t over 13.4 metres (including 6.2 g/t over 3.7 metres), 2.3 g/t over 13.5 metres (including 4.4 g/t over 3.6 metres) and 2.9 g/t over 10.5 metres (including 8.2 g/t over 2.6 metres). On August 30 Treasury released one additional result: 22.3 g/t over 6 metres.

“We still have two machines turning on site,” Walter reports. “We started off talking about a program of 20,000 metres. But the results have been so encouraging, our knowledge of the deposit has increased so much and the targeting is getting much better, so we’re starting to really understand the geometry of the ore body. Because of that, the program has just been ongoing. Now we’re touching 45,000 to 50,000 metres. There was some drilling late last year too, so we’ll have something like 60,000 or 65,000 metres to add to the resource.”

The updated estimate is scheduled for early November, with feasibility beginning late this year or 1Q 2012.
Walter also hopes to get an advance exploration permit by January. “When Teck had the project they actually put a portal and a decline into the footwall of the project, down to 75 metres. We need to get that permit, reopen the decline and extend it down to 400 metres. That’s going to be a big part of next year.”

Last July the company finished a heli-borne EM survey over Goliath and Goldcliff, Treasury’s early-stage project 40 kilometres away. “We’re expecting those results to come in very shortly,” Walter says. “That will further drive exploration on both properties.”

Everything is looking positive and, as long as we keep up the good work, we’ll make that decision in the next eight to 12 months. And yes, the plan is to put it into production ourselves —Martin Walter

Although Goliath is the company’s flagship, negotiations are underway to pick up another gold property that’s closer to production. Pico Machay in Peru could open as early as late 2012. A simple open-pit dump-leach operation, it would require a very low CAPEX of $15 million to $20 million, Walter says. Once in production, it’s projected to produce 50,000 gold ounces a year. Negotiations with Pan American Silver Corp include Treasury issuing Pan Am 11.5 million common shares, paying US$21 million and turning over Treasury’s 3% NSR from Goldgroup’s Cerro Colorado Gold Project in Mexico.

In early August, Treasury filed a preliminary prospectus for a $16-million share offering to help finance the deal. On August 31, the two parties extended the closing date to September 21, their second extension since July 31.

Pico Machay became Pan Am property in 2009 when the company bought Aquiline Resources. Walter, Treasury chairman Marc Henderson and CFO Dennis Gibson are all former Aquiline alumni—hence their interest.

“Over the past six to eight years we’ve been involved in all the drilling, all the metallurgy and all the engineering work that has been completed on that project. So we know it very, very well,” Walter says.

Pico Machay has a 2011 resource estimate of 10.6 million tonnes grading 0.78 g/t for 270,000 gold ounces measured and indicated and 23.9 million tonnes grading 0.58 g/t for 450,000 ounces inferred.

“We want to put that into production and use the cash flow to further the development of Goliath,” Walter says.

As for Peru’s mining outlook, “I think it’s business as usual. The new government [of President Ollanta Humala] has given out positive signs that the mining industry will continue as it did under the previous government. There may be some minor changes, but nothing earth shattering.”

Back to Goliath, “We’re still probably about eight to 12 months from a production decision,” Walter says. “Everything is looking positive and, as long as we keep up the good work, we’ll make that decision in the next eight to 12 months. And yes, the plan is to put it into production ourselves.”

At press time Treasury had 47.71 million shares trading at $1.11 each for a $53.9 million market cap. About 54% of shares are held by retail, 35% by institutions and 11% by management. Top shareholders are Laramide and Corona with 11% each.

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.

How Far Does It Go?

May 25th, 2011

Aura is Proving Up Its Mexico Silver-Gold Project

By Ted Niles

Robert Boaz’s assessment is about as straightforward as they come. “We’re going to have a mine there,” the President/CEO of Aura Silver Resources says of the Higo Blanco prospect on its Taviche silver-gold project. “This is a system that is approximately two kilometres long. If you’ve got two kilometres of fairly decent mineralization over wide widths, you have a mine.”

Aura currently holds a 46.8% interest in the Taviche project, located in Oaxaca State, Mexico. Its joint venture partners, Pan American Silver and Intrepid Mines, hold 30% and 23.2% respectively. The project consists of three property concessions—West Taviche, East Taviche and Alma Delia—covering 52,340 hectares of the San Jose Mining District. Aura has been concentrated mostly on Higo Blanco, a mineralized complex running through the East Taviche and Alma Delia concessions.

Aura is Proving Up Its Mexico Silver-Gold Project

Boaz remarks, “We started to do some significant drilling [on Higo Blanco] back in 2008. What we’ve been doing since is trying to step out from those initial holes and determine two things: How far does the mineralization go, and where is the source?” May 24 assays of Higo Blanco include 89.8 grams per tonne silver over 5.8 metres, 33.2 g/t over 27.5 metres and 23.1 g/t over 122.7 metres (including 68.4 g/t over 22.9 metres). Notable gold results include 0.81 g/t gold over 7.5 metres and 0.62 g/t gold over 4.4 metres.

“At this stage, we have not found the source,” he continues. “The geology, as anywhere in Mexico, is difficult. However, we have identified that, with the mineralization from surface to 200 metres, we have this continuous stratified layer of silver and gold mineralization. That is quite exciting.”

Aura plans to have a resource estimate for Higo Blanco completed before September 1. “That’s a requirement of the option agreement with Pan American,” Boaz explains. “Then they can make a decision whether they want to continue with their 30% or allow us to dilute them down. My guess is that Higo Blanco will not be huge yet, because we haven’t got enough drill holes in the ground. But we’re excited about the prospect. There’s something there. And it’s something that no one can walk away from. We just have to continue to drill.”

There’s something there. And it’s something that no one can walk away from. – Robert Boaz

It is also worth noting that the West Taviche concession shares a boundary with Fortuna Silver’s San Jose Project. With silver equivalent resources of 37.6 million ounces indicated and 30.36 million ounces inferred at a 150 g/t cut-off, their San Jose Mine is slated to begin production in Q3 2011. “It’s obvious that their resource goes onto our property,” exclaims Boaz. “We have yet to get approval from the community to drill on that part of our property, but we’re coming very close. I think we’ll be drilling there in a couple of months, which means we’ll probably find the other half of Fortuna’s San Jose Mine resource.”

While Aura has the potential to earn in excess of a 70% interest in the Taviche project, Boaz does not expect that Aura will take it to production by itself. “We are not production people,” he says. “Unless we make a conscious decision to bring people in who understand how to mine, my guess is we’ll enter into partnerships with established miners. In my discussions with Pan American Silver—and we have a great relationship with them—they’ve told us that once we’ve put the resource together, once it becomes mineable, they would like to be operators. And, quite frankly, who else would you want to operate a mine but Pan American?” He adds, “The quid pro quo is they would like us to develop other properties that they have as operators.”

Aura Silver has a market cap of $19.6 million and traded at press time at $0.24 per share. The company’s other major project, Greyhound, is a high-grade silver and base-metals property in Nunavut, 32 kilometres south of Agnico-Eagle’s Meadowbank Mine.

Aura President Robert Boaz on Mexico assays of 23.1 g/t silver over 122.7m

May 25th, 2011

“We started working with our joint venture partner, Intrepid Mines, back in 2006 on the Taviche Property. Intrepid Mines have an option with Pan American Silver on these properties—East Taviche, West Taviche and Alma Delia, a property acquired after that agreement—and Intrepid asked us to come in and be a joint venture with them. We started to do some significant drilling back in 2008 in an area called Higo Blanco, and that year we released the first holes. And that’s what propelled the stock. Since that time we’ve had very good holes, and we’ve been continuing to deliver more.

“This is a system that is approximately two kilometres long. If you’ve got two kilometres of fairly decent mineralization over wide widths, you have a mine. So what we’ve been doing is trying to step-out from those initial holes and determine two things: how far does the mineralization go, and where’s the source. At this stage we have not found the source, although in hole 35 there seems to be some indication that we’re coming closer to it. However we have identified that with the mineralization close to surface—from surface to 200 metres—we have this continuous stratified layer of silver and gold mineralization that is quite exciting. In the last press release we showed a couple of holes that we did—28 and 29—that had lower grades, but over an extensive width. Which according to our geologist is very important. We’re getting over 100 metres of gold and silver mineralization. We’ve got 57 metres of over 90 g/t silver, and then we have the gold-bearing side.

“It’s an ongoing process. After hole 35 we’ll be regrouping. I’ll be flying down to Mexico next week, to take a look at the geology, figure out exactly where we want to go in terms of the next drilling program.

“We have to put a resource estimate together before September 1. That’s a requirement of the option agreement with Pan American. They have to see that resource September 1, and then they can make a decision whether they want to continue with their 30% or allow us to dilute them down. We have diluted Intrepid down to a point where if the JV was exercised today we would own over 46% of the entire property, Intrepid 23% and Pan American 30%. So we do have to put the resource together. At this stage, we don’t know. We basically have to sit our geologists down and have them compute the numbers and see what we have. My guess is that Higo Blanco will not be huge yet—because we haven’t got enough drill holes in the ground. But we’re excited about the prospect. When you get 300 grams, 500 grams, 600 grams, and there was one interval that had 2.5 kilograms of silver over a reasonable width—there’s something there. And it’s something that no one can walk away from. We just have to continue to drill.

“We are not production people. We don’t have miners in our management. Unless we make a conscious decision to bring people in who understand how to mine, my guess is we’ll enter into partnerships with established miners. In my discussions with Pan American Silver—and we have a great relationship with them—they’ve told us that once we’ve put the resource together, once it becomes mineable, they would like to be operators. And, quite frankly, who else would you want to operate a mine but Pan American? And I’d be happy to be a partner with them. The quid pro quo is they would like us to develop other properties that they have as operators. So there’s going to be a working relationship going forward with Pan Am.

“Where we are in Mexico is great. We have not had any problems at all. The bad guys tend to be further up north. It’s basically a rural community where we are. Our office is in a very small town that’s very supportive of us. There’s been no violence in our area—well, in 2005, there was a teachers’ strike in Oaxaca where a few people were injured, but that was negotiated away. Since that time there has been no violence, no threats. The towns love us because we have an ongoing policy 1) to employ people, and 2) to help them out with infrastructure in their area in terms of road building, bridge building. And we’ve helped with the purchase of computers for some schools. That’s the type of relationship we want with the communities. And we’re becoming well known in the Oaxaca State for being a community-friendly company.

“Moreover, the first time I went down there—we were doing a lot of trenching to determine what the grades were—and the locals were doing the work. They were great workers; the trenches were impeccable, they did a fabulous job.

“We’re going to have a mine there. I firmly believe we’ll have a mine there. The geology, as anywhere in Mexico, is difficult. Where we thought we would find the source of this close-to-surface silver we went empty; now we think the whole system dips to the southwest, so we’re changing our drilling pattern to try to hit that dip. But it’s a very positive gold-silver district, and it’s going to work out.

“The other thing to think about, is that our West Taviche concession surrounds Fortuna Silver’s San Jose Mine. The San Jose Mine will be operating by Q3 this year. It has a reserve of 25 million ounces silver—that’s silver equivalent, which includes gold—and they have an inferred resource of another 25 million ounces. And we surround it. San Jose’s resource butts-up against the boundary between ourselves and Fortuna, and it’s obvious that their resource goes onto our property. We’ve yet to get approval from the community to drill on that part of our property, but we’re coming very close. We’ve had great discussions with the Mayor, and they do want to work with us. I think we’ll be drilling there in a couple of months, which means we’ll probably find the other half of Fortuna’s San Jose Mine resource.”

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