Mexico’s proposed higher mining royalties could block nearly $7bn in investments
The Mexican government proposed raising mining royalties under the argument that metal prices have risen in recent years.
While geopolitical risk in South America is growing, Ecuador, Colombia and Peru remain mineral-rich hot spots with excellent potential for new discoveries. Here are eight junior companies searching for tomorrow’s precious and base metals mines in the Andean nations.
Toronto-based Adventus Mining (TSXV: ADZN) and its partner Salazar Resources (TSXV: SRL) are in the midst of an infill drill program aimed at updating the underground portion of the resource estimate for their El Domo copper-gold deposit, part of the 215-sq.-km. Curipamba project in central Ecuador. The updated resource will inform a future feasibility study scheduled for completion this year that will include a potential underground operation in addition to the open pit for which a feasibility study was completed in October 2021.
Results from six drill holes released on Mar. 20 included a 14-metre interval of massive sulphide grading 3.13% copper, 0.79 gram gold per tonne, 4.02% zinc and 27.9 grams silver per tonne (4.4% copper equivalent) beginning at a depth of 200.3 metres. Results from another five holes reported on Feb. 27 included21 metres grading 4.43% copper, 3.4 grams gold per tonne, 2.28% zinc, 40.5 grams silver and 0.1% lead (7.54% copper equivalent) beginning at 190.7 metres.
El Domo has proven and probable open pit reserves of 6.5 million tonnes at 1.93% copper, 2.52 grams gold per tonne, 46 grams silver per tonne, 2.49% zinc and 0.2% lead. Indicated and inferred underground resources account for another 2.7 million tonnes, including 1.9 million indicated tonnes grading 2.72% copper, 1.37 grams gold, 31 grams silver, 2.38% zinc and 0.14% lead.
Salazar discovered El Domo in 2017 and signed an earn-in agreement with Adventus the same year entitling the latter to a 75% stake in the Curipamba project. The conditions of the earn-in option, including C$25 million in exploration and development spending and the completion of a feasibility study, were satisfied in 2021.
Adventus is also conducting regional exploration across the entire Curipamba project, claiming the discovery of 15 “compelling, high-priority targets” based on results from a 2019 airborne MobileMT geophysical survey totalling 2,142 line-km. Among them was the August 2021 discovery of the Agua Santa target, a new VMS system 4.5 km southwest of El Domo, where one drill hole intersected 6.3 metres of 1.77% copper, 1.46 grams gold per tonne, 7.45% zinc, 23.2 grams silver and 0.24% lead.
Adventus Mining has a market capitalization of C$66.5 million.
Anacortes Mining (TSXV: XYZ), owner of the Tres Cruces high-grade gold oxide deposit in Peru’s Quiruvilca mining district has entered into a binding letter of intent to be acquired by Steppe Gold (TSXV: STGO) of Ulaanbaatar, Mongolia. On closing, shareholders of Vancouver-based Anacortes will own 21% of the combined company.
Under the terms of the agreement, Anacortes shareholders will receive 0.4532 of a Steppe Gold common share, representing consideration of approximately C$0.48 per Anacortes common share, a premium of 32% based on the closing prices of both companies at the close of trading on Mar. 3. A non-solicitation covenant in favour of Steppe Gold was extended from Apr. 17 to May 5 “or such earlier or later time” as the two companies agree.
The acquisition would transform Steppe Gold, operator of the ATO gold mine in Mongolia, into a multi-jurisdiction gold miner with a potential development profile of more than 200,000 oz. and a resource base of over 4.5 million gold equivalent ounces.
The 30-sq.-km Tres Cruces property, located 100 km east of the city of Trujillo, has a pit-constrained resource estimate of 2.5 million oz. of gold in 46.5 million tonnes grading 1.65 grams gold per tonne in the indicated category, including 630,000 leachable oz. at an average grade of 1.28 grams gold contained in both oxide and sulphide material.
The Tres Cruces project shares a border with Barrick Gold’s (TSX: ABX, NYSE: GOLD) Lagunas Norte mine, an epithermal gold deposit which has produced over 10 million oz. of gold.
New Oroperu Resources discovered Tres Cruces in 1995 and, together with subsequent joint venture partners Battle Mountain Gold and Barrick’s Peruvian subsidiary, completed more than 72,000 metres of drilling.
In May 2022, Anacortes received authorization from Peru’s Ministry of Energy and Mines for a 22-hole core drilling program to include infill drilling of the known oxide resource, and in an Aug. 4 press release reported an intersection of 142.9 metres of 1.43 grams gold per tonne from 40.5 metres downhole.
Anacortes Mining has a market capitalization of C$17.9 million.
Vancouver-based Aris Mining (TSX: ARIS) was established in September 2022 as a result of the merger of Aris Gold and GCM Mining. The company’s Segovia operations, 180 km northeast of Medellin, Colombia, and its Marmato mine 80 km south of Medellin produced 215,373 oz. of gold last year.
Aris is also the operator and 20% owner of the Soto Norte gold project 350 km north of Bogota. It acquired the interest in March 2022 from a subsidiary of the Mubadala Investment Co. in Abu Dhabi. Aris also has the option to earn an additional 30% interest in the project.
A feasibility study for Soto Norte with an effective date of January 2021 pegs initial capital costs at $1.2 billion and a mine life of 14 years.
The study estimates annual production at 450,000 oz. of gold, with life-of-mine all-in sustaining costs of $471 per ounce. It estimated an after-tax net present value (NPV) of $1.5 billion and an internal rate of return (IRR) of 20.8% at a base case gold price of $1,675 per oz. At a gold price of $1,925 per oz., the NPV rises to $2 billion and the IRR to 24.4%.
The project has an indicated resource of 48.1 million tonnes grading 5.47 grams gold per tonne, 36 grams silver and 0.18% copper containing 8.5 million oz. of gold, 55.3 million oz. of silver and 193 million lb. of copper.
Aris also announced an updated resource for its gold-copper Toroparu project in Guyana on Mar. 14, reporting 115 million measured and indicated tonnes grading 1.45 grams gold per tonne for 5.4 million oz. of gold and 118,000 tonnes of copper. Inferred resources are 21.2 million tonnes grading 1.71 grams gold per tonne for 1.2 million oz. of gold. The Toroparu project covers an area of 428 sq. km in the Cuyuni-Mazaruni region, about 215 km southwest of the capital city of Georgetown.
Aris Mining has a market capitalization of C$468.7 million.
Montreal-based Auxico Resources (CSE: AUAG) announced the approval of an environmental impact study for its Minastyc rare earth property in Colombia on Apr. 12, allowing it to move heavy equipment to the site for bulk sampling and a processing facility. A previously announced authorization of a work plan by Colombia’s Agencia Nacional de Minera gives Auxico permission for a small-scale mining operation of up to 300 tonnes per month.
A March 2022, a technical report for Minastyc, located in the municipality of Puerto Carreno, indicates the presence of tin, tantalum, niobium and titanium. The report also identifies “fine concentrates from bulk sampling with results of up to 68.3% total rare earth oxide content,” including cerium, dysprosium, erbium, gadolinium, hafnium and lanthanum. The report is due to be updated to include a resource estimate pending results for 72 kg of samples from the property.
The critical minerals and rare earth elements are hosted in monazite sands at surface requiring limited infrastructure, which Auxico says will allow it to begin sales and exporting in the near term.
An Apr. 20 press release also announced the results of metallurgical testing of rare earth concentrates from Minastyc, demonstrating the ability to produce commercial concentrates of light and heavy rare earths. Of the light rare earths, testing reported 46.9% concentration of neodymium). Of the heavy rare earths, dysprosium revealed a 16.1% concentration – 20 times compared to the initial feed.
Auxico has a joint venture agreement with a Brazilian mining cooperative for the exploitation and commercialization of rare earths from tin tailings located over an area of 180 sq. km in the state of Rondonia. It also has an agreement with Central America Nickel to act as a trade agent for rare earth concentrates from the Democratic Republic of Congo.
Auxico has a market capitalization of C$24.8 million.
In May, Libero Copper (TSXV: LBC) announced a partnership with Anglo Asian Mining (AIM: AAZ) for the initial design, engineering and financial modelling of Libero’s Mocoa porphyry copper-molybdenum deposit located in Putumayo, Colombia. A strategic partner and Libero’s largest shareholder, London-based Anglo Asian is an experienced project developer, mine builder and operator of several gold, copper and silver projects in Azerbaijan. Anglo Asian acquired a 19.8% stake in Libero in January 2022.
The Mocoa deposit has a pit-constrained inferred resource of 636 million tonnes of 0.45% copper equivalent containing 4.6 billion lb. of copper and 511 million lb. of molybdenum based on a 2021 technical report.
The deposit was discovered in 1973 as a result of a regional stream-sediment geochemical survey conducted by the United Nations and the Colombian government. Exploration programs consisting of geological mapping, surface sampling, ground geophysics, diamond drilling and metallurgical test work were carried out between 1978 and 1983, and again in 2008 and 2012. More recently, Libero began a five-hole, 5,000-metre drill program in February 2022, and announced an intersection of 557 metres of 0.89% copper equivalent beginning at 108 metres depth.
Last May, the Vancouver-based company said it had identified nine new high-priority porphyry targets as a result of magnetic, radiometric and LiDAR surveys carried out in late 2021 over the Mocoa project area covering 87 sq. km.
Libero also holds the Esperanza porphyry copper-gold and epithermal gold project in Argentina’s Huachi mining district. Drilling by Latin Minerals in 2018 at Esperanza returned assays of 0.57% copper and 0.27 gram gold per tonne over 387 metres from surface, including 0.74% copper and 0.33 gram gold per tonne from surface to a depth of 232 metres.
Other porphyry copper-gold properties in Libero’s portfolio include Big Red and Big Bulk in British Columbia.
Libero Copper has a market capitalization of C$11.9 million.
In April, Outcrop Silver & Gold (TSXV: OCG) reported an initial indicated resource of 1.2 million tonnes grading 614 grams silver equivalent per tonne containing 24.1 million oz. of silver equivalent at its 100%-owned Santa Ana project in Colombia. Inferred resources add966,000 tonnes grading 435 grams silver equivalent per tonne for 13.5 million oz. of silver equivalent.
The resource estimate was based on seven veins, each of which was reported to be open at depth and along strike. Dozens of other veins with high-grade samples from outcrops and historical workings have also been identified and will be drilled this year.
Located 15 km southeast of the town of Mariquita and 190 km northwest of Bogota, the Santa Ana project consists of six or more mapped or projected vein zones across a trend 12 km wide by 30 km long. The area is considered to be the highest-grade primary silver district in Colombia with historic grades among the highest in Latin America.
Vancouver-based Outcrop has conducted exploration drilling on approximately 10% of its titled surface, completing more than 300 diamond drill holes. Drill results reported Mar. 14 from four holes testing its Megapozo shoot included an intersection of 5.9 metres grading 426 grams silver equivalent per tonne and 2.7 metres grading 445 grams silver equivalent.
Outcrop also owns the Mallama and Argelia gold-silver projects, the Antares gold project and the Oribella gold-copper project in Colombia.
A public offering that closed on May 10 gave Outcrop aggregate gross proceeds of about C$4.5 million. Participation in the public offering by Eric Sprott in the amount of C$1 million raised his stake in Outcrop to 14.2% on a non-diluted basis and 21.2% on a partially diluted basis assuming the exercise of his 19,400,000 warrants.
Outcrop Silver and Gold has a market capitalization of C$45 million.
Recent drilling by Vancouver-based Solaris Resources (TSX: SLS) at its 268-sq.-km, 100%-owned Warintza project in southeastern Ecuador has confirmed the discovery of a second more intensely mineralized porphyry centre 350 metres south of the original mid-2021 discovery at its Warintza East target. Warintza East is part of a cluster of outcropping porphyrys anchored by a large-scale, high-grade open pit resource at its Warintza Central target.
The discovery, announced on May 2, was based on drill hole SLSE-28 which showed “strong mineralization from 19 metres to the end of the hole (at 309 metres) characterized by chalcopyrite-pyrite-molybdenite in stockwork veins and disseminations similar to the high-grade portions of the Warintza Central deposit.” Assay results were still pending at press time.
An April 2022 in-pit indicated resource estimate for Warintza Central reported 579 million tonnes grading 0.59% copper equivalent for 2.7 million tonnes of copper, 150,000 tonnes of molybdenum and 930,000 oz. of gold at a 0.3% copper equivalent cut-off. Inferred resources totalled 887 million tonnes at 0.47% copper equivalent for 3.5 million tonnes of copper, 130,000 tonnes of molybdenum and 1.1 million oz. of gold. The resource also includes 180 million tonnes at 0.82% copper equivalent in the indicated category and 107 million tonnes at 0.73% copper equivalent for an “indicative starter pit.”
Solaris also has options to earn up to a 75% stake in two projects in Peru: Caprichio, a 460-sq.-km property with outcrop samples grading up to 3% copper, and Paco Orco, a 440-sq.-km polymetallic property located in the northern extension of the Southern Peru Copper Belt for which it reports surface samples grading up to 0.5% lead, 0.26% zinc and 58 grams gold per tonne.
Projects in Chile include the 160-sq.-km Ricardo property where drilling encountered rock types and alteration similar to those seen at Chuquicamata, and Tamarugo, a 51-sq.-km property 65 km southwest of Codelco’s El Salvador copper mine for which Solaris has an option agreement with Freeport-McMoRan (NYSE: FCX) to earn up to a 75% interest for $5.5 million in spending and the delivery of a prefeasibility study.
Solaris also has a 60% stake in the La Verde copper-silver-gold project in Mexico’s Michoacan state. Teck Resources (TSX: TECK.A/TECK.B; NYSE: TECK) holds the remaining 40% interest.
Solaris Resources has a market capitalization of C$956.1 million.
Brisbane-based SolGold (TSX: SOLG, LSE: SOLG) completed its acquisition of Cornerstone Capital Resources in February, consolidating the ownership of its flagship copper-gold Cascabel project in Ecuador. Prior to the merger, SolGold held an 85% stake in Cascabel with the remaining 15% held by Cornerstone. The friendly, all-stock deal, originally announced in October 2022, valued Ottawa-based Cornerstone at C$107.9 million.
The results of a preliminary feasibility study announced in April 2022 confirmed Cascabel as a large, long-life mining operation. With an initial capital investment of $2.7 billion, the study forecast the project’s after tax NPV of $2.9 billion, its IRR of 19.3%, and its mine life at 26 years.
Located in Ecuador’s Imbabura province, a three-hour drive north of Quito, the Alpala deposit at Cascabel has measured and indicated resources of 2.7 billion tonnes grading 0.37% copper, 0.25 grams gold per tonne and 1.08 parts per million silver for 9.9 million tonnes of contained copper, 21.7 million oz. of gold, and 92.2 million oz. of silver.
During the first 25 years of mining, Cascabel is expected to produce 207,000 tonnes of copper, 438,000 oz. of gold and 1.4 million oz. of silver per year.
In February, SolGold also reported on a strategic review and organizational optimization of the company that will include a workforce reduction, “the direct or indirect sale of an interest in Cascabel” and the spin-out of assets other than Cascabel. However, SolGold is well funded, having raised $86 million in gross proceeds as a result of a $50 million royalty investment by Osisko Gold Royalties in November and a $36 million capital raise with the participation of China’s Jiangxi Copper.
SolGold has several other projects in Ecuador, including Porvenir, where it has discovered significant copper-gold mineralization, and Helipuerto, Rio Amarillo and Cisne Loja, which contain geochemical and geophysical indications of large porphyry deposits. It also holds six properties in Australia and the Kuma concession in the Solomon Islands.
SolGold has a market capitalization of C$940.8 million.
