Now Prime Mining (PRYM.V) has completed its C$10M offering, issuing 20 million units at C$0.50 per share (with each unit consisting of one share and one full warrant allowing the warrant holders to acquire an additional share of Prime at C$1.10 during a five year period), the company is planning to hit the ground running on the Los Reyes gold-silver project in Sinaloa.
With plenty of cash on the bank (and C$0.50 warrants from last year’s placement being exercised, we also exercised some of those warrants), Prime will embark on a C$6M exploration program which should be completed in the first quarter of next year. The exploration strategy will be based on a three-pronged approach focusing on increasing the confidence in the existing resource, expanding said resource and subsequently focusing on future exploration targets. The application to get 100 drill holes permitted has been filed, and the company is awaiting approval from the relevant authorities.
On top of completing the work program above, Prime will also submit all drill and rock chip sampling material to the lab for additional metallurgical test work. The current resource is amenable to both heap leach as well as a milling option, and further down the road Prime Mining will have to complete a trade-off study to figure out what makes most sense. A heap leach operation will have a much lower initial capex but the more expensive milling option will have much higher recoveries.
But first things first, and we are looking forward to seeing how the new management will be able to increase the current resource. Initial drill results are expected in November.
Disclosure: The author has a long position in Prime, but has been taking profits to exercise warrants. Prime Mining is a sponsor of the website.