A Recent Geological Love-In Has Highlighted The Massive Untapped Exploration Potential Minera IRL's Portfolio.
By Alastair Ford / www.minesite.com
Minera IRL has just reported the results of scout drilling on its Pan de Azucar gold-silver prospect on the Deseado massif in Argentina. On their own, these didn't rock anybody's world, as it turned out Pan de Azucar is relatively eroded, which is unusual for a vein structure in this part of the world. Even so, among the highlights was 3.25 metres at 5.81 grams per tonne gold and 5.55 grams per tonne silver, and 1.98 metres grading 3.51 grams per tonne gold and 8.28 grams per tonne silver. Furthermore, drilling on splays and associated mineralisation returned 1.1 metres at 5.10 grams per tonne gold and 650 grams silver. So, still a lot to play for, and much more work to be done.
"The drilling at Pan de Azucar was interesting", says Minera executive chairman Courtney Chamberlain. "We've learned a lot from it. The more we understand it the better". And it was with that sentiment in mind that the company recently held what Courtney describes as a geological "love-in", comprised of 30 geoscientists from all parts of the company. Minera is, it seems, at last big enough for it to be worth bringing all of its rock specialists together in one place for a bit of a brainstorm.
And they'd have had plenty to talk about. Pan de Azucar is just one of the properties that came into the company when it acquired Hidefield Gold back in 2009, in a deal that rescued Hidefield's flagship Don Nicolas gold project from cash-starved obscurity, and which also brought a many and varied collection of exploration prospects into the Minera IRL fold. In total, the company now holds 2,700 square kilometres of ground on the Deseado Massif, a holding so vast that two years on Minera representatives have still yet to visit some of the licences.
But it has had Noel White, a leading expert on epithermal systems, look much of the ground over, and he's been effusive in his praise, according to Courtney. The official Minera release on the latest from Pan de Azucar perhaps underplays this a little: "With only two exceptions", it reports Dr White as saying, "the many prospects and veins that I visited showed clear evidence for exposure at shallow level. Whilst the vein is largely preserved, gold grades this high in the system are typically depressed. The implication is that drilling below outcrop has a good chance of finding better results."
No surprises then, that Minera is setting aside US$4 million for exploration in Patagonia this year, with hopes, perhaps of delivering more spectacular results. "It takes a little while to get the ducks lined up and to get the priorities right", says Courtney. "We will do follow-up helicopter surveys, two lots of IP work. The consultants have been hoping to identify new targets, but we've already got quite a lot of targets that have been surface sampled, but have never been drilled. And as the results come in we will do more follow-up work."
With gold riding high at US$1,471 at the last count, there's no better time to be looking for more ounces. No better time to be producing either, or to be bringing new mines on stream. Minera's doing all three, which partly accounts for its perennial popularity among the junior miners listed on Aim. The beating heart of Minera has always been the small-scale Corihuarmi mine in Peru, and this continues to pump out ounces. Total production for 2010 was 32,533 ounces at cash costs of US$383 per ounce, with an average selling price for the final quarter of US$1,367 per ounce. But coming along rapidly now are two other projects, Ollachea in on the eastern escarpment of the Andes Mountains in Peru, and Don Nicolas on the Deseado Massif Argentina.
Work at both is going well, reports Courtney, although the main focus, he says is the much bigger Ollachea, where two rigs are currently working, one to move resource ounces up to measured and indicated, and one to add ounces. Already Ollachea boasts 1.2 million indicated ounces and 500,000 inferred, and Courtney is now able to say, without hesitation, "we can see over two million ounces in sight". The ongoing pre-feasibility study into a potential development at Ollachea should be ready by June, but it may be hitting the two million ounce mark that really wakes the market up to its potential. "Psychologically", reckons Courtney, "once it goes over two million ounces it will be recognized as a major discovery".
In its wake comes the small, but sweet, Don Nicolas project, with its 360,000 ounces at the feasibility stage, and potential production by 2012. It's a nice pipeline to have, and one that Courtney is keen to talk up as he seeks to move the shares on from the 80p to 90p range in which they've been trading since September. "It's a big year for us", he says, "and the newsflow over the next few months should be positive". Let's hope so. ------------------------------------------------------------------------ and let's hope so for DEG exactly the same as Courtney's last remarks. Let DEG's "luvin" begin with upcoming initial results report. yeah yeah
DEG Price at posting:
5.7¢ Sentiment: LT Buy Disclosure: Held
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