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Pampa Metals seeking major copper discoveries along the prime mineral belts of Chile

2021.09.17
When it comes to copper mining, there’s no better place than Chile.
The South American nation is by far the world’s biggest copper producer,…

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This article was originally published by A Head of the Herd

2021.09.17

When it comes to copper mining, there’s no better place than Chile.

The South American nation is by far the world’s biggest copper producer, as well as an important miner of gold and other minerals.

Three of the top five copper mining districts are found in the northern Atacama Desert, home to world-class, copper-rich mineral belts that host the planet’s biggest mines. In fact, four of the leading copper mines (by production) are in Chile.

Despite a turbulent year caused by the covid-19 pandemic, Chile still managed to churn out 5.7 million tonnes of copper in 2020, accounting for over a quarter of global output. Its copper production more than doubles that of Peru, the next highest producer.

Source: USGS

Production of refined gold, mostly as a byproduct of copper mining, also came to a healthy 1.4 million ounces.

Chile is an ideal elephant copper deposit hunting ground for the big-name major and mid-tier mining companies. Boasting the biggest copper reserves worldwide, at 200 million tonnes, means Chile’s dominance isn’t waning anytime soon,

Chile has a long mining history that pre-dates the Spanish Colonial era. The Incas exploited placer gold in northern Chile prior to the arrival of the Spanish. Besides gold, indigenous people mined native copper, producing copper jewelry and weapons. The use of copper in Chile has been traced to 500 BC.

Gold, silver and copper were exported directly to Spain in the 18th century. Following silver discoveries in 1811 and 1825, the North Chico mountains north of La Serena were exhaustively prospected. A silver find at an outcrop 50 km south of Copiano attracted thousands of prospectors and generated significant wealth.

By the start of the 19th century, minerals were being extracted from “Norte Chico”, or the former provinces of Atacama and Coquimbo. The mine known as “El Tofo”, exploited since 1870, was the most important iron mine of its time, operating the first electric railroad in South America to transport the ore to seaport. This led to construction of Chile’s first railway in 1851, which linked the city of Copiapo with the new port of Caldera.

Investments in Chilean mineral exploration peaked in the mid-1990s and declined until 2003. Major discoveries during this period included Escondida, Toki, Candelaria, El Penon, Gaby Sur, Pascua Lama and Spence.

Northern Chile has some of the largest copper and gold deposits in the world, formed from a combination of factors, but generally associated with intrusive-extrusive magmatism and tectonic activity on the western boundary of the South American plate.

Several metallogenic belts developed, reflecting changes in the tectonic setting and igneous activity. They include the Miocene High Cordillera Belt, the Mid-Terciary Domeyko Cordillera Belt, the Paleocene Central Belt, the Mesozoic Coastal Belt and the Overlap Paleocene and Domeyko Belt.

The long, continuous Andean Copper Belt extends from central Chile to Peru and southern Ecuador. Along this belt, Chuquicamata and El Teniente are the largest deposits; also very important are El Abra, Quebrada Blanca, Collahuasi and Cerro Colorado in the north, and Escondida, El Salvador, Potrerillos, Los Palambres, Rio Blanco, Los Bronces (Chile), and El Pachon (Argentina) in the south.

Copper belts in Chile. Source: Sillitoe and Perello, 2005

Around 80% of Chilean copper production comes from copper-gold porphyry deposits, with most situated in northern Chile. These porphyries, which are also rich in molybdenum with silver by-products, provide the ore for some of the world’s most prolific and highest-grade copper mines.

Among the largest are Chuquicamata, Escondida and El Salvador.

Naturally, given northern Chile’s copper riches, some of the mining industry’s largest red-metal producers have flocked to the region. Chilean state-owned Codelco operates El Teniente, the world’s largest underground copper mine, along with Chuquicamata, the second deepest copper mine on Earth and one of the largest open-pit mines.

Other major copper miners, who have undertaken significant exploration and production, include BHP, Freeport McMoran, Rio Tinto and Antofagasta Minerals. The latter has four operating mines in Chile including its flagship Los Pelambres in the Coquimbo region.

Escondida, owned by BHP, Rio Tinto and a Japanese consortium headed by Mitsubishi, is the largest copper mine in the world (and the largest producer of copper cathodes and concentrates) while Collahuasi, another top Chilean copper mine, is jointly owned by Anglo American, Glencore and Mitsui.

Located at an altitude of 3,000 meters in the Atacama Desert of northern Chile, Escondida came on stream in the late 1990s and has a 58-year mine life, as of 2018.

Grades are an important part of the reason why Chile provides 25% of the world’s copper supply.

Chuquicamata hosts 690 million tonnes grading 2.58% Cu, sulfide ore grades at Escondida are between 0.2% and 1% Cu, and El Salvador has proven and probable reserves of 535Mt grading 0.68% Cu. This compares to an average grade of 0.4% Cu for copper mines in British Columbia, for example.

Pampa Metals Corp.

In recent years, there has also been an influx of junior miners looking for the next big copper discovery in Chile.

Of the companies that fit this profile, few are as promising as Pampa Metals Corp. (CSE: PM) (FSE: FIRA), which controls a 100% interest in eight exploration projects prospective for copper and gold in northern Chile.

These projects (Arrieros, Block 2, Redondo-Veronica, Block 3, Block 4, Cerro Buenos Aires, Cerro Blanco and Morros Blancos) are all located along the proven mineral belts of the Atacama region, including the Central Paleocene and Domeyko belts that have dominated the world’s copper production.

As shown on the map above, five of those projects are situated along the mid-Tertiary porphyry copper belt of northern Chile — the Domeyko Cordillera — that is host to three of the world’s top five copper mining districts at Collahuasi, Chuquicamata and Escondida (the world’s biggest).

The remaining three are located in the heart of the Paleocene mineral belt, which hosts a series of important porphyry copper deposits and mines such as Cerro Colorado (BHP), Spence (BHP), Sierra Gorda (KGHM & Sumitomo) and Relincho (part of Nueva Union – Teck-Goldcorp).

Note that many, but not all, porphyry deposits in Chile (and worldwide) occur in clusters, and brownfields exploration once a discovery is made can be very productive.

The northern Chilean Atacama Desert extends from the Peruvian border into Peru, down to somewhere north of Santiago; most of the principal mining districts in Chile are located in this sparsely populated, desert area. The main exceptions are the large copper mines (El Teniente, Los Bronces, Andina, Pelambres) to the east of Santiago.

The northern desert is characterized by elevated ranges of mountains, separated by relatively flat, piedmont-gravel-filled “pampas” that conceal the underlying geology. A rough estimate would suggest that at least 50% of northern Chile is covered by pampa deposits. One might consequently deduce that half of the likely mineral deposits are thus concealed by pampas.

These areas remain underexplored because they contain a layer of gravel, 30-50m thick, that was deposited after the formation of the porphyries.

Notwithstanding the important discoveries noted above, there are still very large areas of untested pampas in northern Chile that have potential to conceal important mineral deposits.

The main copper porphyry and related discoveries under cover in Chile are:

  • Ministro Hales (formerly Mansa Mina) — Codelco —discovered 1990 to 1992 (brownfields exploration along West Fault from Chuquicamata. Original drill intercept in 1978 not followed up)
    • Concealed by about 50m of post-mineral pampa deposits.
  • Ujina / Collahuasi — Anglo American/ Glencore and others — discovered 1991 to 1993 (exploration program, including important geophysics, in the Rosario/ Collahuasi District, including Rosario and Ujina deposits — directed by Chevron/Shell/ Falconbridge joint venture)
    • Fringing leached capping at Ujina exposed at surface, but copper mineralization obscured and concealed by thin gravels and about 70m of young, post-mineral volcanic deposits.
  • Spence — BHP — discovered 1996 (greenfields grid-drilling program in large pampa areas — original discovery by Rio Algom)
    • Concealed by 4m to 145m of post-mineral pampa deposits.
  • Gaby Sur — Codelco — discovered 1996 (greenfields exploration program)
    • Concealed by 10m to 70m of post-mineral pampa deposits.
  • Toki Cluster (five discrete but closely spaced deposits) — Codelco — discovered 1999 to 2006 (brownfields/ greenfields exploration drill programs that outlined the five deposits)
    • Concealed by 40m to 200m of post-mineral pampa deposits
  • Pampa Escondida (sandwiched between Escondida and Zaldivar mines) — BHP/ Rio Tinto and others — discovered 2006 to 2007 (brownfields exploration drilling in the giant La Escondida district)
    • Concealed by 10m to 130m of post-mineral pampa deposits and leached capping
    • 25 years between original Escondida discovery and Pampa Escondida discovery, with the latter located <1 km from the Escondida open pit.

All of these deposits are large and some are world-class. Ministro Hales, Ujina, Spence and Gaby Sur are all important mines in Chile. The Toki cluster is not yet a mine, but will likely become a mine, or a series of mines, in the future history of mining in the Chuquicamata District, Likewise, Pampa Escondida is not yet a mine, but will provide multiple decades of future production to the La Escondida District at some point.

Outcrops in the pampa areas of the northern Chilean Atacama Desert are rare, however if found, they can display similar characteristics, in terms of geology and hydrological alteration, as copper porphyry deposits. Pampa Metals’ game plan is to first conduct surveys to find the outcrops, and then sample and drill them.

Brief descriptions of Pampa Metals’ properties are as follows:

Arrieros

The Arrieros property is located about 25 km south of the mining town of Calama, in the center of one of the most geologically productive segments of the principal northern Chile copper belt.

The project is along trend and approximately 43 km due south of the Chuquicamata mining complex (Codelco) and some 37 km northeast of the giant Esperanza copper mine and related deposits in the Centinela copper mining district (Antofagasta Minerals/Marubeni Corporation).

Covering an area of approximately 14,000 hectares, Arrieros is currently the largest project under Pampa Metals’ copper exploration portfolio.

Redondo-Veronica

The Redondo-Veronica project is centered about 150 km east of the coastal port city of Antofagasta, covering a total area of approximately 5,000 hectares.

Redondo-Veronica is situated along trend and approximately 40 km north-northeast of the giant Escondida copper mine and other related copper deposits in the district (BHP, Rio Tinto, Antofagasta Minerals and Barrick Gold).

Block 2

Block 2 is located approximately 120 km east of the coastal port city of Antofagasta. This 3,300-hectare property is along trend and approximately 45 km north northwest of the Escondida copper mine and other related copper deposits in the district.

Cerro Blanco

Cerro Blanco is located approximately 130 km southeast of the coastal port city of Antofagasta, with a total area of 6,500 hectares. The project is in a similar geological setting to, and approximately 200 km south-southwest of, the Spence (BHP) and Sierra Gorda (KGHM & Sumitomo) copper mines, and close to and along trend from both the El Peñon and Guanaco gold-silver mines.

Cerro Buenos Aires

Cerro Buenos Aires is located approximately 130 km southeast of the coastal port city of Antofagasta, covering 7,600 hectares of land. Like Cerro Blanco, it is in a similar geological setting to, and approximately 200 km south-southwest of, the Spence and Sierra Gorda copper mines, and close to and along trend from both the El Peñon and Guanaco gold-silver mines.

Block 3

Block 3 is centered approximately 170 km southeast of the coastal port city of Antofagasta. The property is situated along trend and approximately 50 km to 60 km south-southwest of the Escondida copper mine and other related copper deposits in the district. Total area of the property is 10,100 hectares.

Block 4

Block 4 is centered approximately 220 km south-southeast of the coastal port city of Antofagasta. The property is situated along trend and approximately 110 km south of the Escondida copper mine and other related copper deposits in the district. Total area of the property is 4,200 hectares.

Morros Blancos

Morros Blancos is located approximately 75 km east-southeast of the coastal city of Taltal, with a project area of 7,300 hectares. It is in a similar geological setting to, and approximately 320 km south-southwest of, the Spence and Sierra Gorda copper mines, and immediately east of the Amancaya gold-silver mine and close to the Guanaco gold-silver mine.

Altogether, these eight projects cover 59,000 hectares in the heart of Chile’s copper belts, making PM one of the few juniors with significant landholdings in a region dominated by major miners that are operating some of the world’s largest mines.

2021 Exploration Plans

Since its inception in late 2020, Pampa Metals has been rapidly self-funding exploration on projects with the greatest potential for copper discoveries, with detailed geological mapping already completed at the Redondo-Veronica, Cerro Buenos Aires, Block 3 and Arrieros projects.

Redondo-Veronica and Cerro Buenos Aires are currently the focus of a planned 4,000-meter reverse circulation (RC) drill program, which began in June 2021.

The Redondo-Veronica portion of drilling was completed in late July, with a total of 1,956 meters drilled in seven holes testing several targets that are characterized by a combination of geological, hydrothermal alteration and geophysical features previously interpreted to be representative of porphyry copper systems. One of those targets, Cerro Redondo Norte, has been the subject of historic drilling with unknown results.

Drilling has since been mobilized to Cerro Buenos Aires to test additional geological, geophysical and geochemical anomalies. Initial focus was placed on the Cerro Chiquitin area to the north, which is representative of a porphyry-type level of exposure.

In an exploration update this week, Pampa Metals announced that drilling at Cerro Buenos Aires has also been completed, with nine RC holes totaling 2,738 meters. Results so far have shown “highly encouraging indications of a porphyry system,“ the company revealed. Analytical results are still pending.

“Drill hole evidence suggests that the drilling to the north of Cerro Chiquitin is at the periphery of the principal area of interest and reveals quartz veinlets in the pyritic, propylitic halo to the alteration system. Most of the area of interest to the south of Cerro Chiquitin is covered by 40m to 85m of post-mineral gravel cover where the underlying geology is not exposed,” Julian Bavin, CEO of Pampa Metals, commented, adding that further work is required to focus in on this target area.

Could the outcrop at Cerro Buenos Aires be the tip of the iceberg, so to speak, of a large porphyry underneath? Drilling some deeper holes should reveal more about the geology and mineralization.

Austral Gold Agreement

While at early stages of development, Pampa Metals’ projects have had no shortage of backing due to the favorable geography and proximity to world-class mines.

Just months into its exploration campaign, the company signed an agreement with Austral Gold Ltd. (TSXV: AGLD) (ASX:AGD), a major shareholder (19.6% stake), to jointly develop the Cerro Blanco and Morros Blancos properties in northern Chile.

Cerro Blanco and Morros Blancos are considered two of the three “lithocap” projects within Pampa Metals’ eight-project exploration portfolio. Lithocap targets geologically represent the upper portions of potential porphyry copper systems, and, according to the company, often have significant precious metals potential.

Historical results to date at both projects suggest good potential for near-surface gold-silver mineralization possibly associated with deeper copper mineralization.

As a result of the company’s primary focus on copper and desire to advance its portfolio as rapidly and efficiently as possible, it is open to third-party investment in some of its key projects, including this transaction with Austral.

In this way, Pampa Metals is taking a “portfolio-focused approach”. For the company, this means exploring a property to a certain point, then partnering with a larger miner that can come in with deeper pockets and develop the project to production. Pampa Metals would retain a percentage of the project “carried to production”, which is a smart strategy for a junior to take. The company avoids the costly endeavor (and the years), of proving up a resource which in the case of porphyry deposits can take hundreds of drill holes.

Austral currently operates two gold-silver mines (Guanaco/Amancaya) in Chile, has advanced projects in Argentina, as well as an interest in the producing Rawhide gold mine in Nevada.

PM’s projects are located within 50 to 60 km from Austral’s flagship gold-silver mine and processing facilities at Guanaco in northern Chile. Additionally, Morros Blancos is located adjacent to Austral’s Amancaya gold-silver mine, which provides additional feed to the Guanaco plant.

Under the LOI signed in April, which was followed up with a definitive agreement in late July, Austral was granted an option to acquire up to an 80% interest in the two projects. In exchange, the Australian miner will make cash payments, exploration expenditures (at least $1 million in year 1 and $2 million in year 2) and cancel approximately 6% of Pampa Metals’ outstanding share capital) held by subsidiary Revelo Resources Corp.

Moreover, depending on results of a Bankable Feasibility Study (BFS) to be completed by Austral, Pampa Metals can become the project operator and earn back to an 80% interest should copper prove to be the dominant mineralization rather than gold — a win-win for both parties.

Shortly after closing the JV agreement, Austral last month initiated exploration activities at the Morros Blancos project, which is prospective for high-sulfidation epithermal gold-silver, located in the heart of the Paleocene mineral belt.

As mentioned, the Paleocene belt is host to many important gold-silver and copper deposits and mines, and this project is situated along a prolific segment of the prospective belt.

Conclusion

Under the current market environment, copper projects with great discovery potential simply cannot go unnoticed.

At present, the global copper industry is challenged by a lack of new projects and booming demand, and as a result, we’re seeing a supply deficit that is rapidly growing on a yearly basis.

Some forecast that the copper supply gap forecast could reach as high as 15 million tonnes by 2035.

Source: CRU Group

Copper is one of the most important industrial metals with applications across many industries including manufacturing and construction, so its demand isn’t likely to wane barring any unexpected developments.

Plus, the metal is also set to play an integral role in the global drive towards electrification, given its increased adoption in electric vehicles and other energy-related infrastructure.

Source: IEA

Copper prices in 2020 improved by more than 25%, then peaked at an all-time high this past May, showing continued strong support for the industrial metal that has been crucial to economic development since ancient times.

Pampa Metals is working in one of the most highly mineralized regions on Earth. Three of the top five copper mining districts are found in the northern Atacama Desert, home to world-class, copper-rich mineral belts that host the planet’s biggest mines. Four of the leading copper mines are in Chile, which alone produces a quarter of the world’s annual output.

The company has eight properties in its portfolio, most of which are within the “pampas” (plains).

These areas remain underexplored because they contain a layer of gravel, 30-50m thick, that was deposited after the formation of the porphyries.

There are still very large areas of untested pampas in northern Chile that have potential to conceal important mineral deposits. Above we detailed the main porphyry copper and related discoveries under cover in Chile.

All of these deposits are large and some are world-class.

Pampa Metals has a strong management team behind it with a solid record of capital-raising. The board and management carry more than 100 years of combined experience in the exploration and mining business, and with a track record of discovery and project development including multiple decades working in South America in general and specifically in Chile. 

Some of the team have worked for large mining companies that are active in the region including BHP, Rio Tinto and Anglo American. This is a huge plus for a junior, because these individuals already have “the rolodex” for contacting the right people when it comes to cutting partnership deals or financings.

  • Julian Bavin, M.Sc. – CEO, President, Director. 35 years experience. Ex-exploration director at Rio Tinto, living in Chile.
  • Adrian Manger, CPA – Chairman, Director. 30 years experience. 20 years in executive and leadership roles with BHP, including the $US1 billion development of the Spence Cu mine in Chile.
  • Timothy Beale, M.Sc. – 35 years experience. Director. Geologist, BP Minerals, RTZ, Rio Tinto, Hochschild and Anglo American, 20 years living and working in Chile, Argentina and Peru.
  • Yannis Tsitos, M.Sc. – 30 years experience. Director. Physicist, geophysicist, explorer, deal maker. Former Business Development Manager with BHP (19 years).

The old mining/ real estate adage of “location, location, location” is evident here. Pampa Metals’ properties are all situated in a region with many mineralized belts and copper mining districts, which significantly elevates its chances of success. Further tipping the scales in its favor, is the “pampas factor” — the next monster porphyry could well be hiding under a layer of gravel cover.

With a high-quality portfolio of projects scattered across northern Chile, Pampa Metals might be on its way to becoming the next exploration success story in the world’s most fertile copper-producing country.

Pampa Metals Corp.
CSE: PM, FSE: FIRA
Cdn$0.40, 2021.09.16
Shares Outstanding 46.4m
Market cap Cdn$18.5m
PM website

Richard (Rick) Mills
aheadoftheherd.com
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Base Metals

Haywood Raises Nevada Copper Price Target After Debt Extension

On October 12th, Nevada Copper Corp. (TSX: NCU) announced that it has entered into an agreement with senior project lenders
The post Haywood Raises Nevada…

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On October 12th, Nevada Copper Corp. (TSX: NCU) announced that it has entered into an agreement with senior project lenders and a non-binding term sheet to raise capital as well as a deferral and extension of its debt facilities. The company entered into a non-binding term sheet with their largest shareholder to consolidate outstanding shareholder loan promissory notes and increased the credit facility by US$41 million.

Nevada Copper currently only has 3 analysts covering the stock with an average 12-month price target of C$1.75, or a 51% upside. Out of the 3 analysts, 1 has a buy rating and the other 2 have hold ratings. The street high sits at C$2.50 from Paradigm Capital while the lowest comes in at C$1.25.

Haywood Capital Markets raised their 12-month price target to C$1.25 from C$1 and reiterated their hold rating after the news, saying “the debt extensions and added liquidity should provide NCU with sufficient flexibility to achieve its production goals.” This comes less than a week after the firm dropped its price target on the company from $2.00 to $1.00 following production results.

Haywood says that between the agreement with KfW IPEX bank and additional financing, a deferral, and extension of its debt facilities will be able to help the company ramp up its underground mine at Pumpkin Hollow and will let them advance their plans for open pit development.

Additionally, Haywood spoke with the newly appointed CEO recently and had some commentary on the event. As per Haywood, the priorities go as follows: improving the availability of mine equipment, completing the commissioning of the paste plant, and getting utilities to face in order advance mining and open up more mining fronts.


Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

The post Haywood Raises Nevada Copper Price Target After Debt Extension appeared first on the deep dive.

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Precious Metals

Mountain Boy Minerals awaits assay results on seven holes drilled at American Creek, surface sampling returns high grades

2021.10.16
Drilling at Mountain Boy Minerals Ltd.’s (TSXV: MTB) (OTCQB: MBYMF) (Frankfurt: M9U) flagship American Creek property in British Columbia…

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2021.10.16

Drilling at Mountain Boy Minerals Ltd.’s (TSXV: MTB) (OTCQB: MBYMF) (Frankfurt: M9U) flagship American Creek property in British Columbia is progressing well so far, with a total of seven holes completed from two drill pads.

Five of the holes were completed in the High-Grade zone, with the remaining two on the High-Grade extension. Core samples have been shipped to the lab, with assays pending.

The drill has since been mobilized to the third pad at the Maybee zone, where drilling is currently underway.

Results from surface sampling of the property earlier this season have also been received, with assays of up to 3,444 ppm Ag (Maybee zone), 6.166% Cu (High-Grade zone), 15.26% Pb (Mann zone) and 17.57% Zn (High-Grade zone).

The recent work by MTB included mapping and sampling along the cliffs north of the old mine, an area that had not previously been examined due to the difficult access.

Geologists skilled in rock climbing traced the structure hosting the High-Grade mineralization approximately 400 m to the north, identifying an area now referred to as the High-Grade extension, where the initial two holes were completed.

Geological work is continuing, focusing on the area between the High-Grade zone and the Maybee zone, a 2 km long corridor within the 33 sqkm property. Multiple veins in that area remain underexplored to this day.

The intent of the current program is to improve the geological context with the intent of identifying further drill targets.

“Silver and base metal mineralization has been identified over multiple kilometers and includes some exceptional grades. We are working systematically toward an understanding of this extensive and robust mineralizing system which we firmly believe has the potential to host the kind of deposit for which the Golden Triangle is renowned,” Mountain Boy CEO Lawrence Roulston commented in a news release dated August 16.

American Creek Overview

The American Creek project is centered on the past-producing Mountain Boy silver mine, located 20 km north of Stewart in BC’s Golden Triangle.

The property has favourable host stratigraphy, including rocks from the Lower to Middle Jurassic Mount Dilworth formation and Lower Jurassic Hazelton Group. Recent geochronology also confirmed the presence of Early Jurassic intrusions on the property.

Geology of American Creek

There is abundant evidence pointing to large, continuous regional and property scale faults, folds and shear zones, which are often related to mineralization in the region. Significant alteration and mineralization have already been observed along these structures forming the American Creek corridor.

Therefore, Mountain Boy Minerals considers the area to have “real potential to host one or more deposits.” While it holds a significant land package, with a variety of targets identified, much of the project area remains underexplored.

Mapping and prospecting on the project so far have already led to multiple discoveries, including a new area of gold-silver-base metal mineralization on Bear River Ridge, a silver and base metal intermediate epithermal system along an approximate 2 km trend, and — more importantly — an Early Jurassic latite porphyry intrusion below the epithermal system.

This previously unrecognized intrusion is similar in age to the many Jurassic Intrusions that are related to several deposits in the area, including the Premier porphyry, which is directly related to what was once considered North America’s largest gold mine.

Ascot Resources is currently focused on restarting the historic Premier mine, which has produced over 2 million ounces of gold and 45 million ounces of silver.

The Stewart mining camp — where American Creek and many other MTB projects are found — is part of the larger Stikinia Golden Triangle and is known to contain well over 200 mineral occurrences.

“The presence of numerous nearby past producers, an evolving understanding of the geology and encouraging results and discoveries in the region all support the highly prospective nature of the area,” the company commented on its flagship asset.

2021 Exploration Program

For this year’s program, detailed structural mapping has concentrated around the many mineralized showings on the American Creek project, including the High-Grade zone.

Results from this mapping suggest that the High-Grade zone mineralization is related to an interpreted shallow westward dipping thrust fault and east-west steeply dipping cross-cutting structures.

It is postulated that the best mineralization occurs at the intersection of these two structures, and this year’s drilling will test this hypothesis.

Geologists have been working with a mountain guide mapping the cliffs around the historic silver mine. This has resulted in the discovery of several new mineralized showings to the north. The mineralization appears to be within the same stratigraphic horizon as the High-Grade zone and is cut by similar steeply dipping cross structures.

Drilling last year demonstrated that the shallow structures intersected in drill holes are rich in base metals and likely represent one of several mineralizing pulses in the epithermal system.

Guided by additional mapping results, the company has turned to steeper cross structures and localized ore shoots during this season’s drilling.

The 2021 drill program is specifically targeting four areas: the High-Grade zone, the newly discovered extension of the High-Grade zone, the Four Bees zone and the Maybee zone to the north.

Drilling of the High-Grade zone occurs at a different azimuth with the intent of testing the intersection of the shallow westward dipping thrust fault and the east-west cutting cross structures.

In 1999-2000, 51.6 tonnes of material were extracted from the High-Grade vein and sent to the Cominco smelter in Trail, BC. The documented grades of 13.6 tonnes of this material were 18.854 kg/t Ag, 1.1% Zn and 2.5% Pb.

These exceptional grades demonstrated why this is still such a compelling target to drill.

BA Project Update

Elsewhere in the Golden Triangle, Mountain Boy is also moving forward with a drill program on the BA silver-lead-zinc VMS project, located 18 km northeast of Stewart.

The 10,658-hectare BA property was acquired by Mountain Boy in 2006 following the discovery of the Barbara zone, where initial sampling yielded assays of 5.24% Zn, 0.66% Pb and 55.2 g/t Ag over 1.7 m, and 2.17% Zn, 0.41% Pb and 13.5 g/t Ag over 1.2 m.

Drilling continued at the Barbara zone over a three-year period, with a total of 13,570 m in 93 holes completed from 55 different drill pads. Significant silver, lead and zinc mineralization was encountered both in drilling and on surface.

A joint venture was later formed with Great Bear Resources to conduct an aggressive exploration program of the Barbara zone and its surroundings, which brought the total drill count to 178 holes (28,484 m).

A preliminary resource (2016) of the Barbara zone on all the drilling (excluding surface trenching was) showed 8.93 million tonnes of ore at 0.96% Zn, 0.017% Cu, 0.30% Pb and 36.77 g/t Ag, for a total of 188.6 million pounds of zinc equivalent (1.96% zinc equivalent).

The current drill program is designed to target the northern extension of the mineralized horizon at the Barbara discovery that was drilled between 2007 and 2010.

The historic drilling delineated substantial near-surface silver-lead-zinc mineralization extending over 610 m, striking north-northeast. Since then, receding glaciers at the northern end of the zone have exposed further mineralization at surface.

This mineralization has subsequently been sampled in three channel sampling campaigns extending the zone of mineralization to at least 700 m. Assays of up to 601 g/t Ag, 1.98 g/t Au, 3.31% Pb and 9.96% Zn have been returned from these programs.

Silver Rebound

Mountain Boy’s drilling of two highly prospective silver properties comes just as the precious market is experiencing a rebound due to re-emerging inflation concerns around the global economy.

For the month of September, the US consumer price index rose by more than forecast, which underscored the mounting inflation pressures in the world’s #1 economy. This in turn has driven up investor demand for assets that serve as inflation hedges such as gold and silver.

Source: Kitco

Coming off a record year, silver prices have somewhat pulled back in recent months, but the latest economic indicators are suggesting another rally is in the works, especially with the US Federal Reserve looking to tighten its stimulus measures very soon.

Daniel Briesemann, an analyst at Commerzbank AG, wrote in a Bloomberg note that he expects the tapering to be announced at the next meeting early in November, he said.

“The market is now seeing a major pivot here as far as how inflation is showing more signs of being persistent than transitory, and that’s likely to force the Fed’s hand to deliver a rate hike well in advance of what people were anticipating,” Oanda’s senior market analyst Edward Moya told Reuters this week.

The anticipated Fed tapering has so far led to a retreat in 10-year Treasuries and the greenback, both of which are traditionally investment alternatives to safe-haven metals.

In silver’s case, the outlook is particularly bright given its strong industrial demand on top of the monetary driver. In fact, much of silver’s value is derived from industrial demand and supply fundamentals. It’s estimated around 60% of the metal is utilized in industrial applications such as solar panels and electronics, leaving only 40% for investing.

A report by BMO Capital Markets shows that silver consumption by the solar industry alone could grow by 85% to about 185 million ounces within a decade.

In addition, silver demand for “printed and flexible electronics” is forecast to increase 54% over the next nine years, rising from 48Moz in 2021 to 74Moz in 2030.

Then there are the automotive and 5G sectors, which are likely to become even bigger demand drivers in the future. A comprehensive report by Sprott titled ‘Silver’s Clean Energy Future’ found that three areas of growing demand for silver — solar, automotive and 5G — potentially account for more than 125 million ounces in 10 years.

The question is whether the world will have enough supply of the metal by then.

According to the 2021 World Silver Survey, global demand for silver in 2021 is expected to outpace supply by 7% (+8% supply vs +15% demand), at which rate a significant market deficit will begin to surface.

Conclusion

In an article earlier this year, we showed the world has already reached peak mined silver. At the moment, there are simply not enough projects in development to generate the kind of production to match an accelerating demand.

When it comes to mining precious metals, the prolific Golden Triangle of British Columbia has never disappointed. Having consolidated a large property position within the region and integrated a wealth of exploration results, Mountain Boy Minerals could be well on its way to making an important silver discovery.

At American Creek, which is centered on a past-producing high-grade silver mine, work to date has supported the hypothesis of a large mineralized system capable of hosting deposits of the same scale as many others in the Triangle.

This year’s drilling at American Creek will test the true extent of this geological system, which, by the end of the program, could be demonstrated to extend over a 2 km length, containing several areas of silver-rich mineralization.

The fact that MTB compares this geological setting to the Premier camp, an important historic gold-silver producer, is also encouraging.

Mountain Boy Minerals Ltd. (TSXV: MTB) (OTCQB: MBYMF) (FSE: M9UA)
Cdn$0.16, 2021.10.14
Shares Outstanding 54m
Market cap Cdn$8.64m
MTB website

Richard (Rick) Mills
aheadoftheherd.com
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Marvel positioning itself as a major landowner in Exploits Subzone of Central Newfoundland

2021.10.16
Marvel Discovery Corp. (TSXV:MARV, Frankfurt:O4T1, MARVF:OTCQB) is a company on the move, with active projects in the Exploits Subzone of Central…

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2021.10.16

Marvel Discovery Corp. (TSXV:MARV, Frankfurt:O4T1, MARVF:OTCQB) is a company on the move, with active projects in the Exploits Subzone of Central Newfoundland and the Atikokan gold camp in northwestern Ontario where the junior has been reporting visible gold at its Blackfly project.

Marvel’s business strategy is fairly straightforward: identify virgin ground that has been “passed over” by larger companies, acquire the claims and begin exploring, first running geophysics to identify targets, then drilling them.

An example of this tactic is what Marvel has been doing in Central Newfoundland.

Exploits Subzone

The Vancouver-based company has assembled a sizeable land position, over 100,000 hectares, right in the thick of the Exploits Subzone of Central Newfoundland — potentially one of the world’s last easily accessible, district-scale gold camps. 

It is known to contain deep-seated gold-bearing structures of the Dog Bay-Appleton Fault — GRUB Line deformation corridor, and is home to the high-grade Keats Zone of New Found Gold (TSX:NFG).

See below for Marvel’s map of the area including the major faults shown as heavy black lines.

The Exploits Subzone of Central Newfoundland

This past summer, Marvel was busy snapping up claims and adding to its land package.

The Victoria Lake project is among the most prospective of Marvel Discovery Corp.’s seven Newfoundland properties.

Located within the Exploits Subzone, the property is bolted onto Marathon Gold’s 4-million-ounce Valentine gold project, which is Atlantic Canada’s largest undeveloped gold resource.

Victoria Lake and Valentine exhibit a similar style of gold-bearing veins and have structural and geological settings in common. Preliminary work on Victoria Lake identified several quartz-arsenopyrite veins returning grab samples ranging from 15.5 to 24.9 g/t gold and 18.6 to 139.3 g/t silver.

In 1995, grab samples from Vein #3 featured 162.7 g/t gold and 220 g/t silver.

Marvel’s Victoria Lake project is bolted onto Marathon Gold’s 4Moz Valentine gold deposit.

In mid-September Marvel acquired an additional 53 mining claims at Victoria Lake comprising 1,325 ha, increasing its land position to 7,650 ha. The company says the acquisition is located along the Exploits Subzone and covers a large, highly prospective structural zone proximal to the Valentine Lake Shear Zone hosting Marathon Gold’s (TSXV:MOZ) Valentine Gold Project with  resources of 4M oz. of gold…

Victoria Lake Gold Project is host to interpreted extensions of the Valentine Lake Shear Zone and two major thrust faults, a wide structural corridor interpreted to play an integral part in the Marathon Gold Deposit.

In fact the claims, acquired via an option agreement with a vendor, contain the highest regional gold-in-till sample — 785 parts per billion (ppb) Au. This high-grade surface gold area was never followed up with additional exploration, making it a juicy target for Marvel Discovery Corp.

“These claim additions were a strategic move, not only in expanding the size and potential, but tying up ground with the highest gold till-in-soil samples in the province of Newfoundland,” Marvel CEO Karim Rayani commented in the Sept. 14 news release. “This shows we are in the right place for a potential discovery adjacent to what will likely become Newfoundland’s next and largest gold mine.”

An important part of Marvel’s Newfoundland narrative is the ground it has acquired near Falcon Gold (TSXV:FG), a sister company to Marvel Discovery also headed by Rayani.

Combined, the two juniors are the largest landowner next to Marathon Gold’s monster 4Moz Valentine gold project, and they each have claims on the Hope Brook gold project.

At Hope Brook, Marvel’s land position straddles both the eastern and western extents of recent land acquisitions by the Sokoman/Benton JV partnership, with Marvel now controlling areas of considerable structural complexity marked by large-scale fold and fault structures, which provide important structural controls (traps) for gold mineralization.

Rock lithologies and structures on the property are also related to those associated with Marathon Gold’s Valentine gold deposit, Sokoman’s Moosehead gold project and New Found Gold’s Queensway gold project — the first mover in the highly prospective Central Newfoundland Gold Area Play.

Marvel’s Hope Brook gold property is contiguous to First Mining and the Sokoman-Benton joint venture.

The Hope Brook mine was in production from 1987 to 1997, producing 752,163 oz. Coastal Gold outlined 6.3Mt at an average grade of 4.68 g/t Au, for 954,000 oz in the indicated and inferred categories.

In a phone call with me on Thanksgiving Monday, Rayani positioned the expanded Hope Brook project (19,075 ha now owned by Marvel) in relation to its neighbors:

“To the north you have Matador which I believe is 800,000 oz, to the south you have another deposit by First Mining optioned to Big Ridge which is another million oz of identified [gold], and we have all of the ground right in the middle so we’re tied onto major structures, we’ve got ground at Valentine Lake, we’ve got ground on three of the largest systems out there.”

He emphasized, “Our objective is to cover off whatever is not covered by government mag [magnetic survey] and fly the rest of it ourselves, then package it up and see what we’re going to do. I would like to try and do as much of the work ourselves and then make a decision as to what we’re going to drill.”

Initial permits have been filed for a first phase of exploration at Hope Brook which includes high-resolution magnetic gradiometry surveys that help to sort structural complexities in geological terranes. The company will also be sending prospecting crews to begin baseline prospecting to determine if the magnetic trends highlighted in regional government surveys are due to similar mineralized structures as those hosting the nearby Sokoman/Benton lithium discovery — the first documented occurrence of lithium in the province of Newfoundland-Labrador.  

“Marvel and our sister company Falcon Gold have made a lot of noise as of late not only in acquiring sizable land positions tied on to major structures but also following the structures to find what we believe are hidden gems that have been overlooked and passed by. Sokoman-Benton’s new Lithium discovery is less than 10 km away and is a testament to our business model,” Rayani stated in the Sept. 20 news release.

Blackfly

The Atitokan gold camp in Ontario is one of the country’s most prolific, and the Blackfly project is one of the camp’s earliest gold occurrences, dating as far back as 1897.

The property is in a highly enriched gold neighborhood, located within the Marmion Lake fault zone about 14 kilometers from Agnico Eagle’s Hammond Reef gold deposit, which hosts an estimated 3.32 million ounces of gold in reserves.

Marvel’s Blackfly project is 14 km from Agnico Eagle’s Hammond Reef gold deposit, with 3.32Moz in gold reserves.

Marvel’s mission is to see whether the historical exploration around the Blackfly mine has more to offer. So far the results look promising.  

Drilling commenced on June 24, with nine diamond drill holes out of 16 completed to date for 1,116m. Drilling has concentrated around the historical shaft area with four holes drilled at the Blackfly Northeast Zone.

Visible gold has been discovered in a number of surface samples and in multiple drill holes, a very good sign that MARV may have hit upon a gold system of yet to be determined size. Four sub-parallel gold mineralization trends have been confirmed by drilling.

Specks of visible gold in hole BF21-19 drilled at the Blackfly Northeast Zone.

“We’re just waiting on the final numbers.” Rayani told me, adding that there is a new zone he expects will report better results than former operator Terra-X.

According to Terra-X’s assessment report, the lineament containing the Blackfly vein has alteration and mineralization traceable over a 4.4-km strike length, as shown by the distribution of samples collected along it.

The best gold values from this lineament occur within the historical work, where Terra-X’s grab samples included results of 167 g/t and 85.6 g/t Au.

Conclusion

Marvel represents an intriguing opportunity for investors looking for an undervalued junior in one of the most exciting gold plays on the planet, the Exploits Subzone of Central Newfoundland.

Larger players like New Found Gold and Marathon Gold have seen success at the drill bit and their market capitalizations have grown accordingly. NFG currently trades at $8.82 per share with a market cap of $1.3 billion while MOZ has a market value of $734 million @ a share price of $3.02. Most of the money here, imo, has already been made. Penny stocks like Marvel offer much better opportunity for share price appreciation.

Central Newfoundland is shaping up to be a classic area play, with over a dozen companies having established a presence there, either buying up claims around the big gold deposits, like Queensway and Valentine, conducting exploration programs or in the case of Marvel Discovery Corp., both. Marvel has applied for exploration permits at Hope Brook and has significantly expanded its land position at Victoria Lake.

I wouldn’t be surprised to see further consolidation in the Central Newfoundland Gold Area Play. If a company like NFG, backed by big money, with Eric Sprott and merchant bank Palisades Goldcorp owning a combined 51% of the shares, were to start making acquisitions, the boost to smaller juniors like Marvel could be dramatic.

Over at Blackfly, Marvel’s mission is to see whether the historical exploration around the Blackfly mine has more to offer. So far the results look promising.  

Nine diamond drill holes have been completed to date for 1,116m. Drilling has concentrated around the historical shaft area with four holes drilled at the Blackfly Northeast Zone.

Visible gold has been discovered in a number of surface samples and in multiple drill holes, a very good sign that MARV may have hit upon a gold system of yet to be determined size. 

Marvel Discovery Corp. has everything we like to see in a gold junior, starting with a great property in an established gold jurisdiction. However, the company understands it’s never a good idea to put all your eggs in one basket. Management has acquired claims close to the big players in the Exploits Subzone of Central Newfoundland. The company already has one of the best prospecting teams in the province, and from what I’ve seen so far, great management that understands the lifeblood of a junior is a steady flow of news. Rayani hinted there will be more announcements from MARV before the year is out. Stay tuned.

Marvel Discovery Corp.
TSXV:MARV, Frankfurt:O4T1, OTCQB:MARVF
Cdn$0.10, 2021.10.15
Shares Outstanding 73.8m
Market cap Cdn$7.9m
MARV website 

Richard (Rick) Mills
aheadoftheherd.com
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Any AOTH/Richard Mills document is not, and should not be, construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment.

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AOTH/Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness.

Expressions of opinion are those of AOTH/Richard Mills only and are subject to change without notice.

AOTH/Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission.

Furthermore, AOTH/Richard Mills assumes no liability for any direct or indirect loss or damage for lost profit, which you may incur as a result of the use and existence of the information provided within this AOTH/Richard Mills Report.

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Our publications are not a recommendation to buy or sell a security – no information posted on this site is to be considered investment advice or a recommendation to do anything involving finance or money aside from performing your own due diligence and consulting with your personal registered broker/financial advisor.

AOTH/Richard Mills recommends that before investing in any securities, you consult with a professional financial planner or advisor, and that you should conduct a complete and independent investigation before investing in any security after prudent consideration of all pertinent risks.  Ahead of the Herd is not a registered broker, dealer, analyst, or advisor. We hold no investment licenses and may not sell, offer to sell, or offer to buy any security.

Richard does not own shares of Marvel Discovery Corp. (TSXV:MARV). MARV is a paid advertiser on Richard’s site aheadoftheherd.com

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