Minaurum Gold (MGG.V) has several promising Mexican projects in its portfolio. We talked with Sunny Pannu, the company’s investor relations representative, about the future exploration plans and the safety situation in the Guerrero Gold Belt.
– COULD YOU ELABORATE ON HOW IMPORTANT IT WAS FOR MINAURUM TO RECEIVE THE DRILL PERMIT FOR VUELCOS DEL DESTINO?
Receiving the permit is a major milestone for Minaurum as we have the last untested major target in the Guerrero Gold Belt. The belt has grown rapidly over the last 12 years from 8 million ounces gold to over 31 million ounces gold, and consequentially the belt has seen four mergers/takeovers over the last 2 years. The timing is right for us to drill a 10,000 meter program this summer.
– CAN YOU ELABORATE A BIT ON WHY VDD IS AN INTERESTING PROJECT? WHAT MAKES YOU SO EXCITED ABOUT IT?
Vuelcos was the first project our Senior Geologist & Director picked up right after he discovered Los Filos, which grew from 4 million ounces to over 16 million ounces today. David Jones’ geological model is responsible for several of the discoveries in the Guerrero Gold Belt. Vuelcos represents the last large undrilled intrusive complex in the GGB with a primary target measuring 12km². The targets at Vuelcos have the same rock type, VTEM and aeromag signature as well as age as those found at Los Filos.
– CAN YOU COMMENT ON THE SAFETY SITUATION IN THE GUERRERO GOLD BELT? THERE HAS BEEN MORE BAD NEWS THAN GOOD NEWS LATELY WITH SEVERAL KIDNAPPINGS AND NYRSTAR HAS EVEN CLOSED ITS MINE UNTIL THE SAFETY SITUATION IMPROVES.
The security situation is project specific. If one is doing basic exploration with local people there are not too many issues except for the low-level possibility of petty theft. If a project is well-established for the long term (ie. with well-known travel patterns) one needs to consider using local people and/or contracted security employees to provide a ‘presence’ on road access and in the general project area. This is neither expensive nor complicated, but it needs to be done.
The media would suggest it is worse, but Minaurum’s geologists have been working there for 20 years and have been seen firsthand only a marginal difference. Most of the incidents have only affected a single operation. The majority of explorers and miners in the belt have worked in the region for years and in some cases decades with few and rarely significant security problems.
General rule: The lower the profile the better.
– WHAT ARE YOUR EXPLORATION PLANS AT VDD FOR THIS YEAR? HOW MANY METERS WOULD YOU LIKE TO DRILL?
We will be conducting a 10,000 meter drill program during the summer. The program will test a primary central target and four peripheral targets, spearheaded by Minaurum’s Senior Geologist David Jones who discovered the Los Filos deposit. As mentioned previously, at Vuelcos the rock intrusions are found in a large central complex 4×3 kms in size, and four peripheral areas that will be tested during a first round of drilling. Drill testing will focus on the margins of the stock where strong calcite stockwork veining, iron oxides, and clay alteration are extensively distributed at the surface.
– YOU ALSO HAVE A JOINT VENTURE WITH LOWELL COPPER ON ANOTHER PROPERTY, WHAT’S THE PLAN THERE?
We joint ventured Santa Marta to David Lowell’s Lowell Copper (JDL.V) whereby drilling permits are expected this fall. They are spending $6 million over 3 years and need to complete a pre-feasibility to earn a 70% interest.
– WHY WAS DAVID LOWELL SO IMPRESSED WITH SANTA MARTA?
David Lowell is a porphyry copper expert and having 15 world class discoveries to his name, he definitely knows what to look for in a project. In his own words, “…Santa Marta represents a very unique and rare opportunity to discover a world class VMS deposit with a relatively low amount of exploration expenditure” (Dec 20 2013, News Release). Reknowned VMS expert, Dr. Jim Franklin stated “Santa Marta appears to have all of the classic features of highly productive VMS systems, such as the semi-autonomous deposit set at Flin Flon comprised of the main mine, Callinan and Triple 7”. (Dec 20 2013, News Release).
– HOW MUCH OF THE REQUIRED $6M HAS ALREADY BEEN SPENT ON THE PROPERTY?
The clock starts ticking on the $6 million once drill permits have been received.
– CAN YOU BRIEFLY DESCRIBE THE OTHER PROJECTS IN YOUR PORTFOLIO?
We have two other projects in our portfolio that we own 100% that have excellent infrastructure, have access to labour and have already seen first phase drill programs. Aurena is a gold-skarn project located in Oaxaca and Adelita is a silver-copper skarn-porphyry project in Sonora. We drilled 7,000m at Aurena and discovered a 1.8km long gold zone, the two best holes were at the tailends along strike where were 29.05m of 1.99 g/t gold including 19.15m of 2.6 g/t gold and concession 43.50m of 1.01 g/t gold including 19.50m of 1.64 g/t gold. Adelita is a 12,292 hectare concession located next to Pan American’s Alamo Dorado mine. We have drilled the skarn portion of the project and returned 105.2m @ 1.03% Cu, 0.43 g/t gold, 36.3 g/t silver and 47.64m @ 0.98% Cu, 0.3 g/t gold, 46 g/t silver. There remain an additional 4 skarn targets over a 1.5km strike length. The potential lies in connecting these high-grade zones as well as on a 23km2 porphyry target adjacent to the skarn system. Minaurum is in joint venture discussions at both projects and is solely focusing its resources on Vuelcos.
– WHAT’S YOUR CURRENT CASH POSITION AND BURN RATE (EXCLUDING EXPLORATION ACTIVITIES)?
Our cash balance is approx. $500k with a burn rate of $35k per month, all-in. We have run a very tight ship since the beginning at Minaurum and with the current markets we continue to find ways to save money. For example, with the Vuelcos drill program, we have approached our service providers to quote in CDN$ to protect us from forex fluctuations.
– WILL YOU BE LOOKING FOR JOINT VENTURE PARTNERS FOR THE OTHER PROJECTS AS WELL?
Yes, we envision Minaurum being a hybrid project generator, where we joint venture all of our projects except for Vuelcos. We are in continuous talks with groups interested in Adelita and Aurena, so I anticipate we will have another JV partner working with us by second half of the year.
Disclosure: The author holds a long position in Minaurum Gold. Please see our disclaimer for current positions.