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.
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.