ELS pushes to process historic tailings to create cash for new exploration
Most junior explorers face the same quandary. They own a prospective project, or perhaps several, but have no sources of income, which means finding the funds to explore their prospective lands is a constant struggle.
El Tigre Silver (ELS: V) (EGRTF: OTCQX) is in that same…
ELS pushes to process historic tailings to create cash for new exploration
Most junior explorers face the same quandary. They own a prospective project, or perhaps several, but have no sources of income, which means finding the funds to explore their prospective lands is a constant struggle.
El Tigre Silver (ELS: V) (EGRTF: OTCQX) is in that same boat, but hopefully not for long. If things work out according to plan the junior will be producing silver in the near term from historic tailings dumps at its Mexican property, and those ounces will give El Tigre the income it needs to keep drilling for the untapped silver and gold still hiding in those Sonoran rocks.
El Tigre’s namesake project is in northeastern Sonora state, less than 100 km from the US border. The project has deep history: between 1903 and 1938 the El Tigre mine churned out some 75 million oz. silver and 320,000 oz. gold, pulled from three high-grade epithermal veins laced through the hills.
The historic mine was no small operation, with 15 mine levels extending along 1.5 km of strike and reaching across 450 metres of vertical. It was shut down in 1938, not for lack of ore, but for lack of returns. The price of silver had collapsed from 60¢ per oz. to just 30¢, rendering the mine uneconomic.
The result today is a property rife with opportunity.
Figure 1 El Tigre drill roads and surface veins
First, there is certainly still gold and silver in those hills. The property sits at the north end of the Sierra Madre belt, an area renowned for precious metal mineralization, and the old El Tigre mine is proof that the Sierra Madre’s mineralization made it this far north. Ore extracted from the mine averaged roughly 1,200 grams silver per tonne and 8 grams gold per tonne.
The mine’s 15-oz. per tonne silver cut-off grade means miners left behind any rocks carrying less than 460 grams silver. As such the supposedly mined-out sections of the veins still contain a lot of silver. The mine also ceased operations before reaching the known limits of the three main veins, which translates into another stash of remnant mineralization.
The real excitement for El Tigre, though, is the potential to find faulted extensions of known veins and as-yet undiscovered new veins – in other words, to find new mineralization. To test that theory, the company has spent the last few years slowly probing the hills along strike from the old mine.
Between surface mapping and almost 18,000 metres of drill data from owners old and new, El Tigre has mapped the prospective strike for more than 5 km. The company focused on a 1.2-km long segment of the 5.3-km long zone to form a strong initial resource estimate published in a NI 43-101. The southern portion is of interest because El Tigre thinks it might host bulk-tonnage disseminated gold mineralization alongside the known high-grade veins.
Results from recent drill holes support that notion, with good grades over strong widths. Hole 51 returned three such intercepts: 22 metres grading 0.89 gram gold and 6.38 grams silver, 25.5 metres of 2.93 grams gold and 20.9 grams silver, and 25.1 metres grading 1.35 grams gold and 43.9 grams silver, all lying between 22 and 134 metres depth.
Hole 56 cut 70.4 metres of 1.04 grams gold and 55.8 grams silver from surface. Hole 55 hit into 47.5 metres of 0.53 gram gold and 34.7 grams silver from 12 metres depth. And hole 53 returned 46 metres carrying 0.74 gram gold and 14.4 grams silver.
“We did a drill program in 2011 that was broadly spaced,” said Stuart Ross, El Tigre president and CEO. “In 2012 we were a little more targeted. In 2013 it is strictly limited to a 1.2 km length, which will gave us the spacing we need for a block model. There is a lot of ground to test, but for us to get a block model published in the 43-101 we just had to focus on a smaller length.”
Ross is certainly pleased that the drill program at El Tigre went smoothly and produced good results. However, he is somewhat distracted by another task: raising the $5 million his company needs to start processing the silver-rich tailings sitting in dumps around his property.
There are approximately 1.3 million tons of tailings piled at El Tigre that carry approximately 99.8 grams silver equivalent and 1.66 grams gold equivalent. Metallurgical testwork indicates agitated leaching works well to recover those precious metals, at a rate of 78{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} for silver and 93{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} for gold.
Figure 2El Tigre tailings stock pile
El Tigre would like to build a facility that grinds the tailings once and then sends them through the agitation leach process at a rate of 400 tonnes per day (“tpd”). To do that will only cost roughly $5 million.
“We’re currently looking for a reasonable, non-equity type of funding for the procurement of the equipment to go ahead and build it,” said Ross. “At this point there are some funding arrangements available that are either very dilutive or very expensive, so we’re being a little picky in finding one that suits our shareholders and our board of directors.”
Ross says they have been looking for the full $5 million to fund a 400 tpd facility.
“If you look at the grades and the recoveries there’s still a significant amount of cash that will come out of the operation,” said Ross. That cash would let El Tigre focus on its real goal: finding enough new mineralization to get this historic silver-gold mine back in action.
El Tigre’s share price has been range-bound for the last year, moving between 12¢ and 50¢. It currently sits at approximately 30¢. The company has 61 million shares outstanding.
Read more http://financialpress.com/2014/09/17/catch-el-tigre-by-the-tail-ride-the-silver-whale/