Life isn’t easy for companies in the exploration phase these days, as most companies are competing for the same amount of cash and attention. Every once in a while, a small financing window opens up and Tocvan Ventures (TOC.C) was able to take advantage of one of those windows as it closed a placement in December, raising almost C$700,000. Just in time as the stock is currently trading about 15% below the placement price as the situation on the markets has worsened.

Fortunately, this cash infusion will help Tocvan to execute its plans for 2024. While more cash will be required to complete all of the company’s plans for 2024, Tocvan is reaching a critical milestone. Subject to the completion of a 10,000-meter drill program, the company should be able to publish a maiden resource calculation on its flagship Pilar project.

Sitting down with CEO Brodie Sutherland


You recently announced you are looking to drill up to 10,000 meters at Pilar in a combination of infill and expansion drilling. Could you break down what percentage of the 10 kilometers drilling will fall in each category?

We will tweak the drill program as needed but we are initially looking at using about 30% for infill drilling with the remaining 70% focusing on step -out and expansion drilling. There are no shortages of targets to go after across the project area. The recent consolidation of 22 square kilometers around Pilar completely opens up the expansion potential. We know mineralization at Pilar continues on multiple trends to the north of Pilar. Active placer mining further to the north and east are uncovering brand new target areas that have never been drilled. The placer miner are providing the most convincing evidence there is much more potential to unlock. Further out, 4.5-kilometers from Pilar we have identified an outcrop exposure of a vein breccia that looks identical to Pilar, that outcrop returned 5.6 g/t Au and 106 g/t Ag over a 2-meter chip sample.

Pilar Gold-Silver Project

What is your anticipated all-in drill cost per meter for the 2024 exploration season?

Right now we are anticipating a cost of CAD$170 per meter all-in (that includes geology team, op costs, assays, and drill costs) for RC drilling. I have spoken to operators in other cost effective jurisdictions like Timmins, Ontario and they are roughly $230 per meter, so we know we have a great cost advantage in Sonora.

You mentioned in the December update you hope to be able to publish a maiden resource estimate by the end of this year – subject to the completion of the 10,000 meter drill program. What’s more important for you at this stage, size or confidence level? Will that dictate the priorities of your drill program?

We want to build towards confidence in 400,000 ounces of gold in anoxide system as we feel that’s the size we need to consider economics. That would give us eight years of mine life at 50,000 ounces per year (before recovery) A great starting point. Obviously, we think the resource size potential is greater than that and we will continue to target additional ounces. But our first objective is to reach the critical mass size.

We realize it’s still very early days, but what strip ratio are you anticipating? A ballpark number is fine.

Very early to announce a strip ratio but we do anticipate a very low and favourable strip ratio due to the core of mineralization at Pilar is exposed on the top of hill. So, in certain areas we expect the strip ratio to be less than 1, however not all areas across the deposit will benefit from the topography and will likely see a higher strip.

You are planning to do more met work at Pilar this year, what exactly are you hoping to achieve?

We want to confirm adding a gravity circuit to the front end of a leaching operation would add a significant boost to overall recovery. Gaining additional insight on this will help us to further finetune the parameters for a maiden resource calculation and potentially an economic assessment later on. The metallurgy at Pilar is fairly unique in that we have shown good recovery of gold and even silver with heap leaching. We have column leach and the bulk sample to really showcase that recovery potential. The interesting thing is that studies have shown the majority of gold and silver is not tied up with any minerals that restrict recovery by simple gravity methods. That mixed with a later agitated leach is showing very (>90%) recovery. We want to continue to evaluate that to see how that improves the overall economics.

How will the expansion of the Pilar project help you to reach critical mass?

There are numerous ways we see that expansion area of Pilar greatly improving our overall resource potential. We believe within Pilar’s old boundaries there is enough to reach a critical mass. The expansion completely opens up that upside potential. I look at it in three parts: 1) Immediate extension of the known trends at Pilar, historic surface sampling shows that Pilar continues immediately to the north on multiple trends, we have completed channel samples confirming this; 2) Where the placer miners are currently operating to the north and east of Pilar, it is clear they are on newly untested parallel trends to Pilar and we can see rock exposures confirming that; 3) We have multiple targets kilometers away from Pilar that have tremendous potential, I see these as potential satellite deposits to Pilar that could be grouped into a greater resource estimate in the future. Our best target there so far, is where initial sampling returned 5.6 g/t Au and 106 g/t Ag over a 2-meter ship, which I have to say the rock exposed there looks very similar to Pilar.

Pilar Expansion Area in Red

It’s our understanding you have artisanal miners on the Greater Pilar project. Are they helpful for you to find new targets? What are they ‘mining’?

The artisanal placer miners have been very active across greater Pilar over the past few years. They are extremely helpful, all the workers are from the local community and we have great relationship with them to discuss what they are seeing and targeting. They are excavating (with large equipment) alluvial and colluvial material (that is material that hasn’t moved far from source). They run that material over a screen (<1/2” inch), then truck it to a local sluice box where it is washed and any free gold is collected. From our conversations with them it sounds like they are targeting approximately 2 g/t gold material to make a profit. What is great about their presence is that: 1) they provide stark evidence that there is more gold systems in the area; 2) they provide new road access to previously inaccessible areas with nice road cuts exposing new alteration zones and mineralization; 3) in some cases they are literally on top of structures that are hosting mineralization, we see evidence of that in the rocks they leave behind and in old mine workings adjacent to where they are operating.


Will anything happen at Picacho this year?

Yes, if the cash is available, we will complete a small drill program. We continue to do small surface work programs on the property and we are continuously encouraged with the potential at Picacho. It’s a great secondary asset for us with tremendous upside and scale potential. But of course capital needs to be deployed first at Pilar where our focus lies.


You recently closed a financing raising C$675,000 at a price of C$0.45 which, given the circumstances, was the best thing to do to avoid your treasury running on empty. Who were the participants in the financing? Was it a blend of existing and new shareholders?

We had a mix of participants; the majority were new shareholders which was great to see in this challenging market. I think we have done everything we can to advance towards production; many new shareholders see that and want to take advantage of the current market conditions.

The presidential elections in Mexico are coming up later this year. As Sonora generally is a mining-friendly state, how important are the presidential elections? As Pilar would for sure be an open pit mine, are you looking for an update on the open pit permitting process directives passed down from the federal government?

I think the elections are important on a timing aspect, as I expect some mine development permits in less mine friendly states will be held back until the election. I don’t think the outcome of the election will have a major impact on the advancement of mining projects especially in Sonora. I also don’t think there is anything negative or restrictive related to open pit permitting process that will prevent development, again especially in Sonora. There has been a lot of rhetoric over the past year but I think all posturing around the elections with very little changes expected.

Your agreement with Sorbie Bornholm is ending in June of this year. Would you be willing to look at similarly structured agreements in the future? Would they be interested in continuing the relationship on a similar basis? Or is the current share price in the mid-30s too low for you to consider a similar structure?

We have established a great relationship with Sorbie Bornholm over the past two years. I think it is likely we will see more follow-on investments from them. My take on the share price is that we are undervalued, so we can use that to our advantage in any new agreements with them. Of course, I think there will be opportunities to align with new institutions as well, so we are not closed off from that.


Including the shares issued as part of the December financing, Tocvan Ventures currently has a share count of 43.3 million shares resulting in a market capitalization of C$16M. We hope a resource estimate by the end of this year will provide a backstop to the valuation and although 400,000 ounces may not sound like much, it could be a valid starting point to start working on proving up the economics of a small oxide-hosted gold project.

No one should complain about the current gold price as it is holding remarkably steady at over $2000/oz, but unfortunately, the market isn’t convinced yet that $2000 gold is a very reasonable price to advance heap leach projects.

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Disclosure: The author has a long position in Tocvan Ventures. Tocvan Ventures is a sponsor of the website. Please read our full disclosure.

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