Desert Star has a number of assets located within a 15km radius of major mining projects held by Rio Tinto and BHP (Photo: Cronkite Newswatch)
Today, Desert Star Resources (DSR:TSXV) quietly announced that they had begun the first steps in exploration on their recently acquired southwest US assets. The company completed geological mapping and sampling at its Copper King project located in the prolific Laramide belt of Arizona. The mapping and sampling have identified diorite porphyry dikes which intrude Apache Group statigraphy and diabase sills which looks similar to that seen at Rio Tinto and BHP’s large and high-grade Resolution copper-molybdenum project.
We spoke with Desert Star’s Daniel MacNeil (Project Acquisition and Development) by phone this afternoon and he tells us, “there are two main takeaways from the release today, one, we have begun the exploration permitting process on our projects which is a significant milestone and, two, we have initiated the first steps in defining drill targets on the projects.”
The company has undergone a significant change in focus over the past year with large-potential prospect acquisitions, name change, board and management changes and financings. Recently they closed a ~$1 million raise at $0.18.
Mr. MacNeil told us that “the plan is to complete geophysical and geological mapping and surveys on the projects including Oro which should take us into the fall at which point we should have our permits and targets defined for drilling.”
Desert Star announced in the release that they expect to conduct an additional mapping campaign at Copper King and Red Top in March, 2014.
With the prospects that they have, the company is likely to find a joint venture partner for one, all or some of their assets. This could happen prior to gaining exploration permits, but it would seem rational for it to be after. The company is also more than capable of drill testing these targets themselves.
Also at their Oro project in New Mexico, Mr. MacNeil and Dr. Alan Wainwright (Desert Star’s Chief Geologist) reexamined historic core data and believe they have identified a large copper porphyry target below intense porphyry-style alteration exposed at surface. They shared their excitement about this potential during our last interview and again, Mr. MacNeil reiterated that by phone today.
Disclaimer: Author has a financial interest in Desert Star Resources and the company is an advertiser, therefore the article is not to be considered unbiased and fully independent. Please read Desert Star Resources Ltd.’s Cautionary Statement Regarding Forward-Looking Statements’s carefully.
RAB drilling is a cost effective exploration tool for shallow mineralized targets (Image: Layne)
Simon Ridgeway’s Cordoba Minerals (CDB:TSXV) has begun its 2014 exploration efforts with the mobilization of a RAB (rotary air blasted) rig to begin drilling their Montiel prospect on the San Matias project in Cordoba, Colombia. The company recently closed a $15 million (expanded from $12 million) financing to consolidate the San Matias project as well as to fund exploration plans. The company previously drilled the project and announced 101.1m of 1.1% copper and 0.65g/t gold (November 2013).
On a project like Montiel, RAB drilling is a cost effective way to narrow targets in order to do deeper, follow-up diamond drilling later. There are four main drilling methods in mining with the lowest cost being Auger drilling which can only be completed to roughly 20m depth. Then there RAB which can be drilled to 150m depth followed by RC (reverse circulation) which can be drilled up to 500m. Finally diamond drilling, the most expensive, which can be drilled up to 2,000m.
Drill core from previous diamond drilling encountered up to 101m of 1% copper (Photo: Cordoba Minerals)
The company has designed the RAB drill specifically for the San Matias project and will drill the upper 50 vertical metres of the exposed porphyry copper-gold mineralization. Percussion drilling will move west to east on the project. Once the first pass of RAB drilling is complete, the company will drill narrowed targets with diamond drilling.
Simon Ridgway, CEO of Cordoba, commented: “We are extremely pleased to commence our 2014 drilling program at the Montiel prospect, the first of numerous porphyry Cu-Au targets identified to date, and start unlocking the full potential of the San Matias project.”
The company has identified a 1km in diameter copper-gold anomaly on the Montiel prospect which has mineralized porphyry copper-gold intrusive centres in outcrop and shallow artisanal mine shafts throughout the project. The company expects to close the remaining consolidation of the project in early 2014. Cordoba is well funded for exploration in 2014.
Pilot Gold is advancing two properties in the Biga District that have significant growth potential: TV Tower and Halilaga (Image: Pilot Gold)
Pilot Gold (PLG:TSX) has made a significant breakthrough in Turkey, by finding a major new discovery of supergene copper underlying the oxide gold zones at the company’s K2 project, part of the TV Tower project (40% Pilot Gold/60% Teck). According to the Pilot Gold, drilling and surface work suggest that at least two copper-gold porphyry systems are present at K2. This new supergene copper zone has been identified as a 300m wide and 60m thick zone, so far. However, this is based on minimal drilling but appears to extend over the length of the K2 gold zone.
Highlights of the drilling that intersected the supergene blanket of copper mineralization included:
34.1m of 1.29% copper including 20.8m of 1.90% copper
41.7m of 0.63% copper including 21.8m of 1.07% copper and 0.10g/t gold
“The discovery and recognition of this copper component markedly changes the complexion of the K2 target and may be a game changer for the entire TV Tower property,” said Matt Lennox-King, President and CEO, Pilot Gold. “It is potentially the most significant new development in the Biga district since the 2006 discovery of our Halilaga copper-gold porphyry deposit, 15 kilometres to the southeast of K2.”
Historic drilling in the Karaayi target encountered gold-copper mineralization over long lengths just below the surface. Pilot drilled two holes to test these historic holes and they hit low grade copper gold mineralization in both holes.
224.8m of 0.30% copper and 0.13g/g gold including 37m of 0.59% copper and 0.18g/t gold
154.4m of 0.16% copper and 0.18g/t gold
Pilot Gold’s team also identified a 1,200m by 400m copper and gold in soil anomaly southwest of the Karaayi silica cap. Assays are pending on additional soil sampling to the southeast where the anomaly remains open. The company intends to drill test this soil anomaly in 2014. Porphyry-related stockwork alteration was discovered in outcrop at this second potential porphyry zone.
Pilot Gold’s team drilled off the Agi Dagi and Kirazli deposit in Turkey which was acquired by Alamos. They also discovered and drilled the Halilaga copper-gold porphyry deposit which now hosts an Indicated resource of 1.665 million oz Au at 0.31 g/t Au and 1.112 billion lbs Cu at 0.30% Cu (168,167,000 tonnes); and an Inferred resource of 1.661 million oz Au at 0.26 g/t Au and 1.007 billion pounds of copper at 0.23% copper (198,668,000 tonnes).
The company is the operator of TV Tower and can earn an additional 20% (to bring them to 60%) by funding $21 million in exploration work there over the next 3 years. Pilot had a $2 million per month burn rate between Q2 and Q3 as a result of them actively drilling in Turkey. They were sitting on $17 million as of the end of September.
The company is led by Chairman, Dr. Mark O’Dea and is comprised of a majority of the ex-Fronteer management team including current President & CEO, Matthew Lenox-King who was the senior geologist at Fronteer. Fronteer was bought by Newmont for $2.3 billion in 2011. Newmont remains a major shareholder of Pilot, holding roughly 15% of the company.
Kaizen plans to use its proprietary Typhoon IP technology to generate more world-class targets (Image: Kaizen Discovery)
Kaizen Discovery (KZD:TSXV) has closed its initial 49% earn-in for the Fairholme copper-gold porphyry exploration project in central New South Wales, Australia (Clancy Exploration owns remaining 51%). The Fairholme project is located on the Fairholme Igneous Complex. The company can earn up to 65% in the project by spending $4 million on the ground over the next two years. Depending on those results, they can earn up to 95% by completing several staged developments and delivering a feasibility study.
According to the company, the Fairholme project is highlighted by three prospects; Boundary, Dungarvan and Gateway, which are all located within one high-priority target area. This target hosts basement copper-gold-molybdenum anomalies. The company’s website claims they are of the size and scale that would put them in a similar category to the footprint of several world-class porphyry copper deposits; including Alumbrera.
With HPX TechCo and Clancy, the project had an IP survey completed on a 74 square-kilometer area. This was done using HPX TechCo’s patented deep “Typhoon IP” technology which was used to discover the Oyu Tolgoi deposit in Mongolia, now under the umbrella of Turquoise Hill (TRQ:TSX) and Rio Tinto. According to the company, they began drilling in December at Fairholme, so results should be expected within the first quarter.
The new company with its new management team, led by Matthew Hornor (the guy behind the $300 million investment by the Japanese consortium into Ivanplats Flatreef project), has $10 million in cash with access to an additional $5 million.
Robert Friedland, the resource mogul and billionaire, owns roughly 42.5% of Kaizen stock through his 50% ownership in HPX TechCo (private).
Cordoba Minerals is now being led by the same team that’s behind Continental Gold’s success (Image: Cordoba Minerals Corp.)
Colombian copper-gold explorer, Cordoba Minerals (CDB:TSXV) has announced plans to raise $12 million to finish acquiring the Cordoba project and other exploration work being done there and the San Matias proejct. And, guess who is behind this financing? If you guessed GMP Securities, you are right. This financing is being done on a best efforts basis at $0.50 per subscription receipt (a 12% discount to close of $0.57 per share). The receipts are exchangeable into one share and one $0.75 three year warrant. The money raised will be used to finish the acquisition of the Cordoba and San Matias projects to consolidate the whole play under one roof (now named the San Matias Project).
In August of last year Cordoba announced they would acquire a 100%-interest in the Cordoba copper-gold porphyry project from Minatura Group as well as acquire the San Matias project from Sabre Metals. The goal of these acquistions was to consolidate the targets under one large land package which will lend itself better to potential takeover or development in the future.
As part of the agreement Minatura would become 36% shareholders in CDB and Sabre would become 32%. The company has to pay $4 million to close he transaction which will be taken from the $12 million raised in this round. Minatura is backed by Continental Gold (CNL:TSX) and Grupo de Bullet (Robert Allen’s private exploration company).
Cordoba’s Montiel target represents a significant copper-gold prospect with success in trenches and geochem (Image: Cordoba Minerals Corp.)
Cordoba has undergone change at the board and management level with a new slate of directors including Ari Sussman coming on as Chairman and Robert Allen a director as wel a new CEO in Mario Stifano (current CEO of Sabre).With the cash left over after the closing, roughly $11 million in the treasury and will be able to drill any of the mirad of high-priority targets the company has. These include the Montiel and Costa Azul where strong geochemical anomolies and trenching confirm copper and gold occurances. The company has no shortage of anomolies in their identified 13km corridor of megnetite rich intrusives.
It’s early days, but the company is clearly onto something. Now they have to prove it with the drill bit, which the company intends to do with a active drill campaign this year.
Riverside is actively exploring in BC and Mexico with majors Antofagasta and Hochschild (Source: The Courier-Mail)
Riverside Resources (RRI:TSXV), the North American focused prospect generator, announced their plans for 2014 this morning. The company highlights the strategic partnerships created in 2013 and how they intend to build on them in 2014 and beyond. During 2013, the company secured two new strategic alliances with Antofagasta and Hochschild for gold and copper prospects in Mexico where the companies are intending to spend at least $4 million over the next three years. Riverside is also focused in BC on the Flute and Lennac projects where Antofagasta and Riverside discovered a new massive sulphide zone.
In 2014, the company plans to follow-up on drilling of the high-grade Penoles silver project, located near the historic Jesus Maria mine in Mexico. Riverside recently announced an update to their partnership on the Penoles project whereby they will get $750,000 spent on the project by March 31, 2014 and get $1.5 million in stock and $1.35 million cash by the end of June 2014 from Morro Bay Capital. The company is targeting a maiden modern resource here in 2014.
Riverside is also intent on generating new gold targets in Mexico with Hochschild. Riverside expects to receive results back from their target definition drilling at he Clemente silver-gold project under option with Hochschild in Mexico.
In Canada, Riverside will also drill the Swift Katie Copper Project with Antofagasta as well as continue exploration at the Flute and Lennac projects in BC. The company hopes to generate a substantial new copper-porphyry discovery in BC.
John-Mark Staude, President and CEO, stated: “We now have three active strategic alliances with major metal producers and are confident that our team will deliver new high-quality projects into each alliance within the first half of 2014. We are in position to deliver discovery exposure through several partner-funded drill programs this year and look forward to strengthening Riverside’s core assets.”
The company continues to be diligent with their capital. They are sitting on $5 million cash (roughly the same balance as they came into 2013 with) and they received roughly $6.5 million worth of work expenditures on their projects last year. With the success of 2013, the company expects their partnerships to continue to fund existing projects and for project generation. In an email this morning, the company said they are expecting greater than $6 million in funding in 2014. The company strongly believes they will be able to deliver additional strategic alliances and find new prospects for option or joint venture.
Below is an interview Riverside’s President and CEO, John-Mark Staude did with Beacon Research:
Capstone Mining (CS:TSX)announced today that it would acquire the right to earn up to 70% of the Project Providencia from Sociedad Quimica y Mineral de Chila S.A. (SQM). The property is somewhat strategic in that it sits approximately halfway between Capstone’s Santo Domingo Project and Anglo American’s Mantos Blancos copper mine.
Project Providencia located 50km East of Taltal
SQM is a domestic producer of specialty fertilizers and other chemicals and as a result, the project has had no modern exploration work for hard rock metal deposits. Capstone will narrow the original 350,000 hectares down to 50,000 hectares by performing airborne geophysics. The exploration efforts will be led by the highly successful team that discovered the Santo Domingo iron oxide-copper-gold deposit (IOCG). Capstone believes this property could host a large IOCG, copper porphyry or Mantos Blancos type deposit. Capstone paid $1 million on signing and can earn up to 70% in the project by making exploration expenditures over the next 7.5 years, but should Capstone not like what they see, they can withdraw from the agreement at any time.
The Atascosa Ranch is walking distance from the US/Mexico border, just outside of Nogales, Arizona. It’s owned by Dave Lowell, an affable 84-year-old man who’s spent the past 75+ years hunting for buried treasure. Today, he’s known as the most successful mining explorationist of the past century, having discovered an unprecedented seventeen ore bodies, including the world’s largest copper mine. Last week, Lowell and his wife, Edith, invited us to Atascosa for lunch. We brought our cameras and sound equipment, and recorded a conversation with one of mining’s greatest outliers of all time.
J. David Lowell was born February 28, 1928, to a modest family, not too far from Atascosa (the ranch belonged to his uncle at the time). Lowell was first exposed to mining at age 7, when his father, a mining engineer, put him to work. When Lowell pursued his college education at Arizona and then Stanford, he concurrently worked at mines and on exploration programs. Not too long after he had completed his degrees, Lowell had become one of the foremost experts on copper deposits.
Lowell is probably best known today for co-authoring the Lowell-Guilbert Model, a guide to large, low-grade porphyry copper deposits published in 1970. Throughout most of his career, Lowell used the model to locate some of the most profitable mineral finds in the history of mining, such as the 1981 discovery of the Escondida deposit in Chile. Containing hundreds of billions of dollars worth of ore, Lowell and his colleagues found it at the cost of a mere $2.5 million.
Escondida at night, the world’s largest copper mine, and a Lowell discovery. Photo: BHP Billiton
Over lunch of elk tacos and Mexican fried beans, Lowell was modest about his success. But he offered a theory as to why major mining companies don’t make discoveries as efficiently as prospectors like Lowell. Major mining companies have a “don’t make mistakes” approach, which “doesn’t fit at all with the profile of the mad scientist who discovers mines,” he said. “When something like one in five hundred good-looking targets will become a mine, a successful explorationist needs permission to be wrong four hundred and ninety-nine times.” Here he paused. “If there’s anything my career says about me, it’s that I’m very good at being wrong.”
Despite being a pro about being wrong, Lowell does admit to limitations. Having “no taste for shareholder relations,” he recalled giving a presentation to investors in 1995 that resulted in the share price of one of his companies falling from $35 to $15 during the time it took him to finish his talk. The shares recovered shortly thereafter.
On the changing impact of technology on mineral exploration over the span of his lifetime, Lowell holds that it’s been “very little.” He believes that “geophysics has been very oversold,” instead favoring “drill holes and geochemistry… The best guide to ore is ore.” Lowell also voiced doubts that technology would be able to revolutionize mineral exploration the way 2D and 3D Seismic has for the oil and gas business, at least in the near future.
The commodities super-cycle is intact, Lowell believes. There’s elasticity in mining companies’ profit margins, he told us, but not in the demand for the underlying commodities they produce. For that reason, large, undeveloped, low grade copper deposits will need to be put into production, sooner than later.
When asked about his favourite jurisdictions for exploration currently, he told us he favors Chile, Peru, New Guinea, Mongolia, Nevada, and some parts of Africa. But he qualified his dispositions by recalling that attractive jurisdictions are constantly changing. “Places like Arizona were very attractive as a place to explore for copper deposits, and now Arizona is about as bad as Venezuela,” he chuckled.
When we moved on to the role luck has played in his career, Lowell avoided answering directly. Instead he responded that “minefinders who make one discovery are much more likely to find another.” His basic philosophy is that of persistence, and it shows — his career is equally productive after retirement age as it was before.
At age eighty-four, Lowell is not slowing down. With financiers Dave De Witt and Marcel De Groot of Pathway Capital (“as efficient, honest and reliable as partners get”), Lowell is developing several projects, including a titanium-iron deposit in Paraguay, which he believes is the largest of its kind in the world. Other active projects are under wraps for now, as to avoid competition. Investors who rode his Arequipa Resources shares from .20 to $30.00 in 1995 will surely be watching Lowell’s upcoming public ventures. An autobiography is also in the works.
It was an honor to spend time with Dave at his ranch, and we’re pleased to share some video, pictures, and sounds of the day. We hope you enjoy the following short film about the greatest outlier and maverick the mining industry has known in recent memory, J. David Lowell.
With special thanks to Odgers Berndtson, global leaders in executive search, who are working with us to grow their Resources practice. We look forward to introducing them to you over the coming weeks.