|
 Larger Font |  Smaller Font |  Printer Friendly
Prospero Silver's Rapid Phased Approach to Exploration
By James West and Claire O'Connor
MidasLetter.com
Wednesday, March 24, 2010
Prospero has a few things going for it that make us giddy here at Midas Letter. First of all, the company is financed by its founders and management as to 35%.
Secondly, the company is focused on silver, which for risk-happy resource investors is great, because the investing public doesn’t really have a clue how to value silver deals, which means they are horribly undervalued relative to their peers in say, the gold sector. That means even when they get into production, it takes a while for the instiutional money that shies away from exploration to cotton to the fact that there are some great deals out there in the primary silver production world.
They are drilling now and believe if the grades hold up they can go to production for around $10 million. Back of the envelope calculations seem like pay back would be 18 months at 250 tons per day. When we sat down with Tawn Albinson at the Prospectors and Developers Association Convention in Toronto two weeks ago, we were pleased to observe in Tawn a dedicated, non-nonsense geologist who was basically a Mexico geology specialist who has signed option deals with major mining companies like Teck, Noranda, Apex Silver and Newmont.
“I’ve worked in Mexico all my life, even though a US citizen I grew up there. My parents moved there when I was 2, so Spanish is my main language,” Albinson explained. “My English has a little accent… Ever since the early 90s I started up a Mexican junior company, lets call it private, not public. I was supported by old New England money. Wealthy individuals from northeastern US who had the Mal de Piedra, the illness of the rock. Gold fever.”
A New Business Model
Public companies in the precious metals space have typically been of the mindset that if its not a million-ounce-plus (of gold or gold equivalent) deposit, then its not worth pursuing, because nobody’s going to want to finance it to production and no major will be interest because its too small.
Prospero’s idea is to seek out the high value, lower tonnage deposits that can be defined and scoped quickly and cheaply, and then get them into production with a similarly inexpensive capital requirement and short timeline to production.
It’s a strategy that’s gaining traction in places like Mexico expecially, where cheap labour makes construction and development very economic.
“Right now we are ready,” says Albinsoin. “We have funds and immediately we got the rig and weve been drilling now for 2 - 3 weeks and we’re not gonna stop drilling. Were gonna go for results, no messin’ around trying to show that were claiming or whatever… We have projects, well keep looking, well keep generating as much as possible.. well keep the pipeline of new ones.”
This is the kind of atitude we value in smaller exploration and mining companies. They’re not going to eradicate the bank account through a slow program of exploration and more exploration. They’re going to define a target and mine it.
Besides Albinson, the other heavyweight on the management team is Bill Murray, who currently doubles as Execitive Chairman of Polymnet Mining, a US$330 million base and precious metals miner based in Minnesota.
Murray was part of the owner's team that built Quintette Coal, a $1.3 billion, grass-roots, six million-tons-per-year development in northern British Columbia. In 1988 he worked in business development for the mining group Fluor Daniel, a large, multi-disciplined engineering and construction contractor that built projects all over the world.
The Project Pipeline
Prospero’s collection of advanced and past-producing properties reflect the company’s model of finding economic smaller deposits that can be quickly and inexpensively put back into production. With management’s lifetime of experience in Mexico, the company has the advantage of regional knowledge and local relationships. Thus the company’s project portfolio is of a higher than normal quality for a company that only listed on the TSX Venture three months ago.
Baborigame Project, Chihuahua, Mexico
Earlier production took place in a number of high grade gold and silver bearing veins in ore shoots several thousands to tens of thousands of tons in size with average grades in the order of 20 g/t (2/3 oz) Au and 100-200 g/t Ag. A stamp mill was built to treat these ores.
Elevated levels of Cu, Pb, Zn, Au and Ag have been documented from the Aurora vein including a sample with 90 g/t Au and 370 g/t Ag with heavy chalcopyrite mineralization. The Aurora vein is about 450 meters vertically below the surface exposures of the Los Angeles vein. Late veins are multistage crustiform banded green quartz veins with late stage barite and/or calcite vein fill and visible gold in the green quartz.
The best surface gold geochemistry (up to 43 and 90 g/t Au) was derived from these green quartz veins. The most important ore shoot of the late veins is in the Los Angeles vein where a resource of 76,000 tons with an average grade of 13.3 g/t Au and 65 g/t Ag was obtained from an old longitudinal section of the vein showing samples with gold and silver assays.
C ampana Project, Durango
The Campana property is located in north-central Durango, 70 kilometers west of Torreon, Coahuila, and 150 kilometers north-northwest of Durango City. The claim mosaic consists of 9 titled claims which total 6035 hectares, and one surrounding as yet untitled claim with 7226 hectares.
During 2007-2008 a total of 12 diamond drill holes (3,600 meters) were carried out in the inmediate vicinity of Tepalcateño Hill which exhibits a set of diatreme breccias dikes. Three of the 12 holes were drilled at the Campana Hill target, 6 kilometers further north. Diatremes are explosive "blow outs" initiating at the top of a magma chamber, and carry upwards fragments of the different rock types along their path, usually rounding the fragments as a result of physical attrition.
The Campana-Tepalcateño target area exhibits strikingly similar characteristics to the Peñasquito setting and styles of mineralization which exhibit robust hydrothermalism which alters and introduces mineralization into all rock types in the vicinity of the diatreme breccias bodies. The best mineralization may not be located in the inmediate vicinity of Tepalcateño hill but could be located close to and adjacent to it.
The intensity of alteration, mineralization, and continued presence of diatreme bodies to the east under alluvium cover, as well as the presence of the Agua Nueva dome complex 2 kilometers further to the east, suggest the most inmediate target zone could be located east and north of Tepalcateño hill. On the other hand, the airborne magnetic survey maps produced by the Servicio Geologico Mexicano (at spacings of 1 km) indicate a series of mag anomaly highs are located along a N-S trend 2 kms further west, suggesting possible intrusive bodies (and hence more deeply eroded diatremes) under alluvium cover in the valley to the west.
San Luis Del Cordero Project, Durango
The San Luis del Cordero district is located 155 kilometers NNE of Durango City in the heart of the semi-arid Altiplano of Durango state. Exploraciones del Altiplano presently holds 2825 hectares and covers the full extent of known mineralization in the district.
The San Luis del Cordero district is a typical polymetallic vein-replacement-skarn type deposit which exhibits strong structural controls and vein-hosted mineralization. The more important known vein is Sta. Rosa which was mined during the mid part of the 20th century. Earlier production came from an orebody of approximately 70,000 tons mined to a depth of 100 meters.
During the late 50's and early 60's about 300 tons/month of Cu-Ag ore with a grade of 600-700 g/t Ag and 2%-2.5% Cu was shipped directly to the San Luis Potosi copper smelter. The Sta. Rosa oreshoot exhibits a marked zonation with high grade Ag-Cu mineralization associated with coarse crystalline quartz hosted in La Casita Formation, zoning vertically upwards within a distance of 50 meters into geochemically anomalous stibnite-bearing japsperoids hosted in Aurora limestones.
Summary
This is a team whose focus has been putting projects into production for much of their professional lives. Considering the advanced state of exploration on this initial property collection, it will likely not be long before at least one of these projects is producing. Unlike many juniors trading in the same price range, Prospero has a group of properties with known economic deposits present. Its not so much a matter of “if” they will go into production – simply a question of when.
Company Website: www.ProsperoSilver.com.
SOURCE: http://www.midasletter.com/news/10032401_Prospero-silvers-phased-approach-to-production.php
**************************************************************
|
Silver Mining
Sign up for the Midas Letter Free Edition and get a free sample of the "Midas Letter Premium Edition".
