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Posts tagged ‘Rio Alto Mining Limited (RIO)’

Top Of The World

March 27th, 2012

Sienna Finds High Silver and Gold Grades in Peru’s Andes

By Ted Niles

A year ago, Sienna Gold TSXV:SGP was focused on the Domo and Tesoros areas of its Igor project in Peru. Its objective was to turn them into a small but economic near-term mine. But an eight-hole drill campaign on the nearby Callanquitas structure, completed May 2011, led to a 15,000-metre campaign, which might very well transform the company’s prospects. “I’m very excited, and I think the future’s very bright for Sienna,” says President John Rucci.

“We had started a prefeasibility-type study for the small mine at Domo and Tesoros,” President John Rucci explains, “and part of the drilling there was to close in the ounces that we have in the resource. That’s moving forward, but now in light of what’s coming out of Callanquitas, the design would have to be much different than what we’d planned. If in fact it provides what we need, we’ll start investigating opportunities to put the whole thing in production—Callanquitas, Domo and Tesoros.”

Sienna Finds High Silver and Gold Grades in Peru's Andes

Sienna acquired the Igor project in 2005 along with 11 other projects since abandoned. Located in the Western Cordillera of the Andes in northern Peru’s Department of La Libertad, Igor comprises roughly 1,300 hectares and counts numerous producing mines among its neighbours, including Newmont’s TSX:NMC Minera Yanacocha—the world’s second largest gold producer, located 77 kilometres north of Igor—Barrick’s TSX:ABX Lagunas Norte mine and Rio Alto’s TSX:RIO La Arena mine, both to the southeast. In the months preceding the 2008 market crash, Sienna released an NI 43-101 mineral resource estimate for Igor’s Domo and Tesoros areas of 97,000 ounces gold and 2.98 million ounces silver in the indicated category, 49,100 ounces gold and 2.27 million ounces silver inferred.

Exploratory drilling that was done at Callanquitas was followed up only in 2010, but the structure now has the company’s full attention. “Callanquitas is to the northwest [of Domo and Tesoros] and looks very rich,” Rucci relates. “It extends probably over a one-kilometre length, is open at depth and at strike and is open to the north and south. We feel we have a major discovery here, with bonanza-type grades of silver, and even the gold values are very high as well.”

March 22 Callanquitas assays include

  • 1.32 grams per tonne gold and 141.2 g/t silver over 48.7 metres
  • 1.35 g/t gold and 3.1 g/t silver over 18.3 metres
  • 0.9 g/t gold and 19.4 g/t silver over 25.5 metres
    (including 4.48 g/t gold and 48.6 g/t silver over 2.8 metres)
  • 0.79 g/t gold and 24 g/t silver over 27.9 metres
    (including 2.33 g/t gold and 37.5 g/t silver over 4.2 metres)

February 28 results include

  • 2.16 g/t gold and 122.9 g/t silver over 7.3 metres
  • 2.28 g/t gold and 1,024.6 g/t silver over 55.5 metres
    (including 5.58 g/t gold and 5,465 g/t silver over 1.2 metres)
  • 50.7 g/t silver over 15.2 metres
  • 56.2 g/t silver over 15.7 metres
  • 1.7 g/t gold and 110.1 g/t silver over 74.5 metres
    (including 4.67 g/t gold and 403 g/t silver over 17.6 metres)

“These are huge grades,” Rucci declares. “These are phenomenal values. The company is targeting a million ounces of resource after this drilling program, and I think we’re going to achieve it.” The drill campaign is ongoing with two rigs turning. “We’re drilling infill holes and some step-out holes. So we’re going to close it in, get it down to a 50-metre grid if we can, for better resource definition. We’ve got another 5,000 metres to drill on Callanquitas, and we’ve got another 3,000 metres to drill up in the Domo and Tesoros areas.”

These are phenomenal values. The company is targeting a million ounces of resource after this drilling program, and I think we’re going to achieve it —John Rucci

The company expects to have a new resource estimate for the Igor project—”albeit in the inferred category”—by 3Q 2012. Sienna had targeted the Domo and Tesoros areas for production by late 2013, early 2014. However, should Callanquitas’ contribution to the resource prove as positive as hoped, Rucci says, “You’re talking a much bigger development.”

Infrastructure continues to improve in spite of challenging terrain, with access to water and power, as well as the construction of 13 kilometres of new roads since 2010. The company is sufficiently funded to see it through the current drill program, with approximately $3 million in the treasury. “We are looking at raising funds possibly in September,” Rucci adds. “However, if this news continues, and the stock rises to about $0.60, we do have warrants that will bring in about $11 million.”

He concludes, “I’m very happy with the project. We’ve had about five different drill programs on it. We have a resource on the property, and if we found nothing else, we’d still generate about $1 million net a month for the company with these prices. Now we have this huge find, and the question is, how big is it? I think it could be very large.”

At press time, Sienna had 100.4 million shares trading at $0.385 for a market cap of $38.6 million.

Rio Alto reports Peru Assays including 0.49% Copper, 0.27 g/t Gold over 793m

March 5th, 2012

Resource Clips - essential news on junior gold mining and junior silver miningRio Alto Mining Ltd TSXV:RIO announced results from La Arena Project in La Libertad Region of northern Peru. Highlights include

0.49% copper, 0.27 g/t gold and 0.78 g/t silver over 793 metres
(including 0.68% copper, 0.39 g/t gold and 1.25 g/t silver over 198 metres)
0.49% copper, 0.37 g/t gold and 0.92 g/t silver over 684 metres
(including 0.73% copper, 0.52 g/t gold and 1.14 g/t silver over 234 metres)
0.48% copper, 0.26 g/t gold and 0.79 g/t silver over 618 metres
(including 0.97% copper, 0.55 g/t gold and 2.08 g/t silver over 104 metres)
0.31% copper 0.2 g/t gold and 0.53 g/t silver over 752 metres
(including 0.69% copper, 0.66 g/t gold and 1.12 g/t silver over 43 metres)
0.58% copper, 0.51 g/t gold and 0.95 g/t silver over 396 metres
(including 0.64% copper, 0.6 g/t gold and 0.74 g/t silver over 250 metres)

The project lies within a multimillion-ounce gold district that includes three mines including Barrick Gold’s Lagunas Norte mine, which in 2010 produced 808,000 ounces of gold at total cash costs of $182 per ounce.

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by Greg Klein

Risk Vs Reward

February 6th, 2012

Miners Calibrate the Costs of Operating in Lawless Lands

By Greg Klein

Part 1 of this story here

The Democratic Republic of the Congo is famously rich in mineral deposits. It is also notorious for destitution, corruption, sectarian violence, child soldiers and atrocities. Last November, election violence forced African Metals TSXV:AFR to evacuate expatriate personnel constructing its Luisha South Copper-Cobalt Property in Katanga Province. The workers have since returned following the re-election of Joseph Kabila, although his record of expropriation can hardly be reassuring to miners. Luisha’s plant is slated for production early this year.

Last October, in South Kivu Province, on the DRC’s eastern border with Tanzania, Burundi and Rwanda, Banro Corp TSX:BAA opened the country’s first gold mine in 50 years. Banro plans to use cash flow from the Twangiza Mine to open a second operation within 18 months, the Namoya Gold Mine in Maniema Province, immediately east of South Kivu.

Miners Calibrate the Costs of Operating in Lawless Lands

Both provinces have suffered some of the country’s worst atrocities, including mass rapes by soldiers. However, Banro IR Manager Naomi Nemeth emphasizes, “We are not one of the pockets of disturbances that you do see in the northeast. The area that we’re in, having no incidents over the last however-many years, is not a concern. We have successfully built a mine, gotten it into production and built a road to it with no incidents. I don’t think we would expect them to start at this point.

“We have the same level of security there that we’d have anywhere,” she continues. “We don’t have anything over and above what we’ve always had during construction and early production. We hire a mine security service; they’re a Congo firm.”

Security is just one approach. Like Gran Colombia TSX:GCM and other companies, Banro also employs a hearts-and-minds strategy. Since 2005, its registered charity, the Banro Foundation, has built schools for 3,300 students, promoted adult literacy, funded a women’s health centre and provided infrastructure, including a hydroelectricity rehabilitation project.

Alex van Hoeken has worked in the DRC for 12 years. Now President/CEO of Kilo Goldmines TSXV:KGL, he says, “I know my way around; I’ve got my network; my wife is a lawyer there. I’m quite comfortable. It’s not the easiest place to work, but if you know your way around, it’s doable.”

Kilo holds a 71.25% interest in the Somituri Gold Project, with the remainder held by local companies. The drilling program takes place in Orientale Province, bordering the Central African Republic, South Sudan and Uganda in the DRC’s northeast corner.

Kilo’s DRC work has just received a vote of confidence from Rio Tinto, a joint-venture partner along with Suez Holdings Ltd, in the Isiro Iron Ore Project, also in Orientale Province. Last December, Rio acquired a 15% interest from Suez and, one year ahead of schedule, made an option payment to Kilo of US$1.43 million. “The fact that Rio has purchased the option from the local partner and given us the accelerated payment just means that the project is on track and highly prospective,” says van Hoeken.

Apparently unfazed by any frying-pan-to-the-fire comparisons, van Hoeken has gone from the DRC to Afghanistan. As part of a group led by financier David Buckle, van Hoeken is now negotiating with the Afghan Ministry of Mines for rights in the Hajigak Iron Ore Deposit. If the bid is successful, Kilo will hold a 20% interest in a new company created to develop the deposit, located in Bamyan Province, 130 kilometres west of Kabul.

“We’ll be working with locals for security,” van Hoeken explains in an interview from the Afghan capital. “The province where the project is located is considered one of the safest in the country. The need for security probably won’t be as high as you might think.”

This Buckle-led bid concerns one of four Hajigak concessions. A group of Indian state-run and private companies has dibs on the other three. They’re among the trailblazers of what could be a huge minerals rush, danger or no danger. The country has a potential treasure chest of iron, copper, cobalt, gold, lithium and rare earths worth up to $1 trillion, an oft-repeated number first reported in June 2010 by the New York Times, which attributed it to “senior American government officials.”

According to the Afghanistan Support Investment Agency, “The mining sector is crucial to the reconstruction and rehabilitation of Afghanistan.” A government website states, “The country is much less risky than the media portray. Insurgent activities are restricted to limited pockets of the country.” Even so, the Ministry of the Interior has a 1,500-person Mines Protection Unit guarding the Aynak Copper Mine, a $4-billion exploration project operated by China Metallurgical Group and Jiangxi Copper 560 kilometres south of Kabul. To guard future projects, Afghanistan plans to increase its specialized security unit to 7,000 people.

Another omen concerning the possible future of mining companies operating in dangerous lands was revealed January 3, when Afghan police arrested four employees of the Montreal security company GardaWorld, which offers a range of services including risk analysis and protection. The employees were caught in a vehicle with 30 unlicensed AK-47s. That same day the company issued a statement: “They were taking the weapons to be tested at a firing range before being purchased and properly licensed by GardaWorld.”

You have to look at the potential value of a deposit. In other words, a very large deposit might justify investment in a riskier jurisdiction if the price was right —Brien Lundin

Brien Lundin, President/CEO of Jefferson Financial, editor of the Gold Newsletter and host of the New Orleans Investment Conference, agrees that crime, violence and social unrest increasingly threaten mineral resource companies. “I think some ways to mitigate risk are to build community support through community relations efforts that are typically not very expensive in the grand scheme of things. But from a purely political standpoint, there’s not a lot a company can do to alter the risk in any particular area.”

From an investor’s standpoint, he says, “You have to look at the potential value of a deposit. In other words, a very large deposit might justify investment in a riskier jurisdiction if the price was right. So there is a value argument to be made there. You’re willing to take greater risk in riskier places for a potentially greater reward. There isn’t an absolute either way. There are a lot of factors that need to be brought into the equation.

“One of the ways an investor can get a relative idea of the risk in any particular regime is through the Index of Economic Freedom, compiled by the Heritage Foundation and the Wall Street Journal,” Lundin says. “The Fraser Institute started this years ago. That has a numerical ranking of every country in the world. I find it’s a fairly good barometer of investment risk. It encompasses ease of doing business in various regimes and also rule of law.”

Is the rule of law threatened only in distant countries? Last November, Taseko Mines TSX:TKO applied for an injunction to prevent aboriginal protestors from blocking the road to its New Prosperity Gold-Copper Project in south-central British Columbia. The company played a video in court showing Marilyn Baptiste, chief of the 400-member Xeni Gwet’in Band, telling a Taseko employee, “The provincial government does not have authority in our territory.”

The Taseko employee responded, “Well, we’ve been asked to come and conduct an exploration drilling program there…. We’re not aware of anything that would stop us from going about this work.”

Baptiste countered, “You do not have our authorization to be into our territory.”

He showed her some papers and declared, “We have a permit, as I’m sure you’ve received a copy of this.”

She responded, “As I advised, BC has no authority.”

He reiterated, “We intend to continue here because we have a permit, and this is a public road.”

“As I advised, your permit does not have any authority on our territory. BC does not have authority in our territory.”

“Unfortunately, we do have a permit, and we believe we’re going about our legal work.”

“We have not authorized you to be in our territory.”

Eventually, he asked, “We wish to bring our equipment out here. Will it be safe?”

“It will not be safe. I cannot guarantee your safety or anything’s safety, anybody’s safety, because as I said you do not have authority to be on our territory.”

In December, the BC Supreme Court turned down Taseko’s application. Instead, it granted the Xeni Gwet’in an injunction to stop the exploration project. The injunction remains while the band applies for a judicial review of the exploration permits.

The New Prosperity Project is located on provincial Crown land.